Amendment Petition Cannot Be Allowed Without Reasoned Order: NCLAT Remands Amendment and Maintainability Matter [Read Order]

In a recent ruling, the National Company Law Appellate Tribunal (NCLAT) Chennai has held that amendment petitions in company law matters cannot be allowed without a reasoned order and quashed two NCLT orders, one permitting amendments to add fresh relief and another rejecting objections to maintainability.

The appeal was filed by the appellant, Apex Luminaires Pvt. Ltd, along with others, were against the proceedings under sections 241–244 of the Companies Act, 2013, where allegations of oppression and mismanagement were raised. Two appeals were filed against the NCLT orders, which deal with the amendment petition and maintainability objection.

In the amendment petition, the respondent, G.N. Thirumalesh, argued that he filed the company petition on 19.09.2022, seeking to declare the Board Resolution dated 31.12.2021 null and void, along with a forensic audit and valuation.

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It is also added that in his amendment application dated 14.04.2023, he claimed to hold 24,99,000 equity shares (50% of total shareholding) as a subscriber to the memorandum.

On the other hand, the appellants argued that the amendment sought to introduce an altogether new cause of action which was already available at the time of filing the original company petition but was deliberately omitted.

It is also argued that the respondent was not a “member” of Apex Luminaires Pvt. Ltd. under Section 2(55) of the Companies Act, 2013, at the time of filing the petition and the annual return filed on 31.12.2021, which showed that the respondent had no shares.

They also contended that under Section 241, only a member can complain of oppression and mismanagement, and under Section 244, a petitioner must hold at least one‑tenth of the issued share capital or meet the numerical threshold of members and since the respondent had already transferred his shares, the petition filed nine months later was belated, mala fide, and based on concealment of material facts

The appellate tribunal noted that the National Company Law Tribunal (NCLT) order about the amendment application merely reproduced pleadings and submissions without applying judicial reasoning and pointed out that adjudication requires a conscious and judicious application of mind, not “single‑line observations.”

NCLAT highlighted that amendments at a belated stage must be tested against principles under Order VI Rule 17 and Order II Rule 2 CPC, even if not directly applicable, and about the maintainabily, the appellate tribunal noted that the NCLT failed to record any finding on the admitted case of the respondent that he was not holding shares when the petition was filed.

The bench of Justice Sharad Kumar Sharma( Judicial member), Jatindranath Swain(Technical member) ruled that both the amendment order and the Maintainability Objection were quashed. It is also ruled that both matters were remanded to NCLT for fresh consideration with proper judicial analysis.

Accordingly, all pending interlocutory applications were closed.

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