Case Note & Summary
The plaintiff, Messer Holdings Limited, a company incorporated in British Virgin Islands, filed a suit in 2008 seeking a declaration that it is the owner of 1,00,000 equity shares of Bombay Oxygen Corporation Ltd (defendant no.1) and for rectification of the register of members by recording its name. The plaintiff alleged that it had acquired the shares in 1994 through a series of transactions, but its name was removed from the register in 1998 without notice. The defendants, including the company and its directors, contended that the suit was barred by limitation as the cause of action arose in 1998 when the plaintiff's name was removed, and that the plaint did not disclose a cause of action. The court examined the pleadings and found that the plaintiff's name was removed from the register in 1998, and the plaintiff was aware of this fact as early as 1998. The court held that the right to sue for declaration accrued in 1998, and the suit filed in 2008 was beyond the three-year period prescribed under Article 58 of the Limitation Act, 1963. The court also noted that the plaintiff had an alternative remedy under Section 111 of the Companies Act, 1956, which was not availed. Consequently, the court allowed the defendants' application under Order VII Rule 11 CPC and rejected the plaint as barred by limitation and for not disclosing a cause of action.
Headnote
A) Limitation Act - Article 58 - Declaration of Rights - Suit for declaration that plaintiff is owner of shares and for rectification of register of members - Cause of action arises when right to sue first accrues - In the present case, the plaintiff's name was removed from the register in 1998 and the suit was filed in 2008 - Held that the suit is barred by limitation as the right to sue accrued in 1998 and the suit was filed beyond three years (Paras 10-15). B) Companies Act, 1956 - Section 111 - Rectification of Register of Members - Remedy under Section 111 is summary and discretionary - The plaintiff had an alternative remedy under Section 111 which was not availed - Held that the suit for rectification is not maintainable in view of the availability of a specific statutory remedy (Paras 16-20). C) Code of Civil Procedure, 1908 - Order VII Rule 11 - Rejection of Plaint - Plaint can be rejected if it does not disclose a cause of action or is barred by law - In the present case, the plaint was found to be barred by limitation and did not disclose a cause of action - Held that the plaint is liable to be rejected under Order VII Rule 11 CPC (Paras 21-25).
Issue of Consideration
Whether the suit for declaration and rectification of register of members is barred by limitation under Article 58 of the Limitation Act, 1963, and whether the plaint discloses a cause of action.
Final Decision
The court allowed the defendants' application under Order VII Rule 11 CPC and rejected the plaint as barred by limitation and for not disclosing a cause of action.
Law Points
- Limitation Act
- 1963
- Article 58
- cause of action
- declaration of rights
- rectification of register of members
- Companies Act
- 1956
- Section 111
- Section 155
- Order VII Rule 11 CPC
- abuse of process of law
- delay and laches
