The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, has upheld an order of the National Company Law Tribunal (NCLT), Mumbai, permitting amendments to a decade-old company petition while clarifying that objections relating to limitation should be examined at the stage of final adjudication. 

The bench of Justice Yogesh Khanna (Officiating Chairperson) and Ajai Das Mehrotra (Technical Member) dismissed two connected appeals challenging the amendment order, holding that allowing the amended pleadings to be taken on record did not prejudice the parties since the issue of limitation had expressly been kept open for determination during the final hearing. 

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Background of the Dispute

The dispute arises from a long-running family and corporate battle involving the transfer of 1,00,300 shares allegedly gifted by late industrialist Prahlad Parasram Chhabria to one of his sons. According to the appellant, the transfer of these shares was approved by the Board of Directors in its meeting held on March 31, 2016, in which the contesting respondent was also present.

Following the transfer, a company petition was instituted before the NCLT in 2016 challenging the validity of the Board meeting and the resolutions passed therein. Over the years, further corporate developments took place, including amendments to the company’s Articles of Association through Extraordinary General Meetings (EOGMs) held in 2019 and 2021, which also became part of the controversy. 

Amendment Application Challenged

In January 2026, the respondent sought permission to amend the pending company petition. Through the amendment, he sought several additional reliefs, including:

• Rectification of the company’s register of members by deleting the appellant’s name in respect of the disputed shares;
• Restoration of the shareholding position existing prior to March 31, 2016;
• Return of the original share certificates;
• Declaration that certain amendments and deletions to the Articles of Association carried out through the 2019 and 2021 EOGMs were illegal and void; and
• Consequential reliefs under Sections 58 and 59 of the Companies Act. 

The NCLT allowed the amendment application but specifically recorded that all objections relating to limitation would remain open and would be decided while adjudicating the main company petition.

Appellants Argued Amendment Was Time-Barred

Before the NCLAT, the appellants contended that the amendment sought to introduce entirely new reliefs nearly ten years after the original petition had been filed. They argued that the respondent had never sought rectification of the register within the prescribed limitation period and that permitting such amendments would extinguish the valuable right accrued to the appellants by operation of limitation.

The appellants relied upon several Supreme Court decisions, including K. Raheja Constructions Ltd. v. Alliance Ministries, Vishwambhar v. Laxminarayan, and South Konkan Distilleries v. Prabhakar Gajanan Naik, to contend that amendments introducing time-barred reliefs should not ordinarily be permitted. 

Supreme Court Had Earlier Allowed Filing of Amendment Application

An important factor considered by the NCLAT was that the Supreme Court, while disposing of an earlier appeal on January 12, 2026, had directed the NCLT to conclude the company petition within three months and had also clarified that if any amendment applications were filed, the NCLT should decide them in accordance with law.

The Appellate Tribunal noted that the NCLT had acted within the scope of this liberty granted by the Supreme Court. 

NCLAT Finds No Error in NCLT’s Approach

The Appellate Tribunal observed that the NCLT had not finally adjudicated the merits of the newly introduced claims. Instead, it merely permitted the amendments to be brought on record while leaving the question of limitation completely open.

According to the Tribunal, where subsequent corporate events occur during the pendency of litigation, amendments incorporating those developments are generally permissible if they assist in resolving the real controversy between the parties.

The Bench also noted that if the Board meeting of March 31, 2016 is ultimately declared illegal, the legality of subsequent resolutions and amendments to the Articles of Association may also require examination, making the proposed amendments relevant to the dispute. 

Limitation Can Be Examined at Final Hearing

The NCLAT relied on several judicial precedents, including Ragu Thilak D. John v. S. Rayappan and MC Davar Holdings Pvt. Ltd. v. Aurosagar Estates Pvt. Ltd., reiterating that where the plea of limitation itself involves disputed questions, courts should ordinarily allow amendments and leave the limitation issue to be decided after evidence and final hearing.

The Tribunal emphasized that amendments should not ordinarily be rejected merely because an objection regarding limitation has been raised. Instead, such objections can appropriately be determined after framing issues in the main proceedings. 

Existing Pleadings Already Invoked Sections 58 and 59

The Bench also accepted the respondent’s submission that the original company petition had already invoked Sections 58 and 59 of the Companies Act and contained allegations regarding illegal transfer of shares. According to the Tribunal, the subsequent amendment merely introduced a formal prayer for rectification of the register, which was consequential to the original challenge rather than an entirely new cause of action.

This weighed against interfering with the NCLT’s discretionary order permitting the amendment. 

Appeals Dismissed

Finding no arbitrariness or legal infirmity in the NCLT’s exercise of discretion, the NCLAT dismissed both appeals. It clarified that the NCLT would independently decide all objections relating to limitation as well as the merits of the amended pleadings while finally adjudicating the company petition, without being influenced by any observations made in the appellate judgment. All rights and contentions of the parties were kept open. 

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