1. In this order we are considering an interesting question of law as to the jurisdiction of the Company Law Board to adjudicate petitions under Section 111 of the Companies Act, 1956, against public limited companies, filed after the promulgation of the Depositories Ordinance, 1995, on September 20, 1995. There are three petitions before us in which this issue has been raised and even though arguments were advanced by counsel representing the parties in these petitions on different dates, since the issue is common we are considering the arguments of all counsel in this common order.
2. The Depositories Ordinance was promulgated on September 20, 1995, and was repromulgated twice on January 7, 1996, and on March 27, 1996.
It later became the Depositories Act on August 10, 1996. Through this Ordinance/Act, certain provisions of the Companies Act were amended, one such provision being Section 111. Before the amendment, grievances relating to delay in as well as refusal to register/transfer of shares as also rectification of the register of members of any company-whether private or public (both listed and unlisted)--could be sought through a petition to the Company Law Board under Section 111. The Depositories Ordinance inserted a new Sub-section (14) in Section 111 of the Companies Act which reads : "In this section 'company' means a private company and includes a private company which had become a public company by virtue of Section 43A of this Act." 3. Simultaneously, a new Section 111A was also inserted in the Companies Act, Sub-section (1) of which reads : "In this section, unless the context otherwise requires, 'company' means a company other than a company referred to in Sub-section (14) of Section 111 of this Act." 4. The stand taken by counsel for the respondents in all these petitions, is that, by virtue of the newly inserted Sub-section 111(14), the right to petition the Company Law Board under Section 111 is limited to matters relating to private companies only and the rectification of register of members of public limited companies can be sought only on the grounds specified in Section 111A. They also contended that this sub-section has taken out the jurisdiction of the Company Law Board to deal with public limited companies in matters specified in Section 111. Counsel for the petitioners counter this stand on various grounds as elaborated hereinafter.
5. Shri Arvind P. Datar, counsel appearing for the petitioners in C. P.No. 1 of 1996, which was filed on December 26, 1995, submitted that the cause of action to file the petition arose on May 14, 1994, and the Ordinance was promulgated only on September 20, 1995. Thus, on the day when the cause of action arose, the petitioners had the right to approach the Company Law Board under Section 111. This right which accrued to the petitioners cannot be taken away by an enactment without any such specific expression in the repealing enactment. The right to seek rectification by the Company Law Board is a vested right and there are innumerable decisions of various courts to the effect that vested rights cannot be taken away by subsequent enactments and will continue in spite of changes in the statutes. Since he had already acquired the right to move the Company Law Board, he continues to have that right to approach the Company Law Board under the then existing provisions of Section 111.
6. For this proposition, he relied on Section 6(c) of the General Clauses Act, 1897, according to which : "Where this Act or any Central Act or regulation made after the commencement of this Act, repeals any enactment, hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not affect any right, privilege, obligation or liberty acquired, accrued or incurred under any enactment so repealed." 7. He cited the following decided cases in which the provisions of Section 6(c) of the General Clauses Act have been applied :In State of Punjab v. Mohar Singh Pratap Singh, AIR 1955 SC 84, the Supreme Court held (headnote) : "Whenever there is a repeal of an enactment, the consequences laid down in Section 6 of the General Clauses Act will follow unless, as the section itself says, a different intention appears. In the case of a simple repeal there is scarcely any room for expression of a contrary opinion. But when the repeal is followed by fresh legislation on the same subject the court would undoubtedly have to look to the provisions of the new Act, but only for the purpose of determining whether they indicate a different intention." 9. According to Shri Datar, the insertion of Sub-section (14) has not repealed Section 111, but it has only amplified to state that the provisions of that section are applicable to private limited companies and that there is nothing to indicate that the remedy through the Company Law Board has been barred for a cause of action that arose before the amendment.Brihan Maharashtra Sugar Syndicate Ltd. v. Janardan Ramchandra Kulkami [1960] 30 Comp Cas 468, 472 ; AIR 1960 SC 794, 796, in which the court, while examining the jurisdiction of the District Courts, consequent to the repeal of the Indian Companies Act, 1913, by the Companies Act, 1956, observed : "Section 10 of the Act of 1956 deals only with the jurisdiction of courts. It shows that the District Courts can no longer be empowered to deal with applications under the Act of 1956, in respect of matters contemplated by Section 153C of the Act of 1913. This does not indicate that the rights created by Section 153C of the Act of 1913 were intended to be destroyed . . , It seems to us that since under Section 6 of the General Clauses Act, the proceeding in respect of the application under Section 153C of the Act of 1913, may be continued after repeal of that Act, it follows that the District Judge continues to have jurisdiction to entertain it. If it were not so, then Section 6 would become infructuous". Shri Datar submitted that since the Company Law Board had jurisdiction in respect of public companies when the cause of action arose, the petitioners were entitled to approach the Company Law Board and this right has not been extinguished by the Ordinance.Mohd. Idris v. Sat Narain, AIR 1966 SC 1499, in which case also certain powers conferred on the District Munsif by the repealed Act were conferred on the Assistant Collector by a new Act and the issue that arose was whether after the repeal of the old Act, the munsif had jurisdiction to proceed with matters pending with him at the time of repeal. The Supreme Court held (at page 1502) : "In our judgment, therefore, the proceedings before the Munsif were with jurisdiction because they were not affected by the passing of the Abolition Act or the amending Act 1953, regard being had to the provisions of Section 6 of the U. P. General Clauses Act, in the first instance and more so in view of the provisions of Section 23 of the amending Act 1956, which came before the proceedings between the parties had finally terminated." 12. He further submitted that in another case CIT v. Dhadi Sahu [1993] 199 ITR 610 the Supreme Court has made a similar observation (headnote): "The general principle is that a law which brings about a change .
in the forum does not affect pending actions unless an intention to the contrary is shown by making a provision for change over of proceedings from the court or the tribunal where they are pending to the court or tribunal which under the new law gets jurisdiction to try them ... It is also true that no litigant has any vested right in the matter of procedural law ; but where the question is of change of forum, it ceases to be a question of procedure only. The forum of appeal or proceedings is a vested right as opposed to pure procedure to be followed before a particular forum. The right becomes vested when the proceedings are initiated in the tribunal or the court of the first instance and unless the legislature has, by express words or by necessary implication, clearly so indicated, that vested right will continue in spite of the change of jurisdiction of the different tribunals or forums."P. V.Mohammad Barmay Sons v. Director of Enforcement [1993] 76 Comp Cas 27, 32 ; AIR 1993 SC 1188, 1191 in which the court observed : ". . . despite its repeal the penalty, liability, forfeiture or prosecution for acts done while the repealed Act was in force were kept alive, though no action thereunder was taken when the repealed Act was in force . . . rights, liabilities, penalties, forfeiture of punishment due to repeal shall not lapse. .. . There is a distinction between a legal proceeding for enforcing a right acquired or accrued or liability, penalty, forfeiture, punishment incurred and the legal proceeding for acquisition of a right ; the former is saved whereas the latter is not." Thus, according to Shri Datar, even though this instant petition was not filed before the issue of the Ordinance, because of the vested right the same is alive and he is entitled to agitate the matter before the Company Law Board.Isha Valimohamad v. Haji Gulam Mohamad and Haji Dada Trust, AIR 1974 SC 2061 and CIT v. Shah Sadiq and Sons [1987] 166 ITR 102, 109 ; AIR 1987 SC 1217.
15. In the former case, the court held that a right had accrued and the right survived the repeal of an enactment and would be enforceable and in the latter, "A right which had accrued and had become vested continued to be capable of being enforced notwithstanding the repeal of the statute under which that right accrued unless the repealing statute took away such right expressly. This is the effect of Section 6 of the General Clauses Act . . . Section 6(c) saves accrued rights unless they are taken away by the repealing statute".
16. Summing up his arguments, Shri Datar submitted that his clients had filed the petition for rectification of the register of members of the respondent company alleging that their name had been deleted therefrom fraudulently and such act took place in 1994, much before the coming into force of the Ordinance. By virtue of the right conferred on the petitioners by the then existing provisions of Section 111(4), the petitioners had acquired the right to move the Company Law Board for rectification of the register of members and as such in the absence of anything contrary in the Ordinance, the petitioners still have the right to move the Company Law Board, subject of course, to limitation, if applicable.
17. Shri Seshadri, counsel appearing for the respondent company, submitted that liberty to apply for a right is not itself an accrued right or privilege and selection of a forum is a procedural one.
According to him, in the facts of the case, Section 6 of the General Clauses Act has no application.
18. He also relied on various decided cases to substantiate his proposition that a litigant cannot choose a forum when such forum has lost its jurisdiction in the matter of dispute. He differentiated between two circumstances--one the status of proceedings already initiated before a forum prior in time to the repeal and the proceeding started after the repeal. According to him in the former case the proceeding will go on in the forum in which it is pending and in the latter, the litigant has to move the new forum, if any, as per the new Act. In the present case, he stated that since the petitioners had not filed the petition before the Company Law Board before the coming into force of the Ordinance and as no forum has been named in the new Act, the petitioners have to only file a suit to set up their claim and cannot move the Company Law Board since it has no jurisdiction. He relied on the following cases : In Ram Karan Singh v. Ram Das Singh, AIR 1931 All 635 [FB], in which the court held (headnote) "a substantial right is not assumed to be taken away by a new Act, unless it expressly says so. But a right to sue in a particular court rather than another or a right to wait for a particular period of time before suing is not a substantive right.
The selection of a forum and the period of limitation are ordinarily matters of procedure only. The selection of a court in no way affects the right of a suit itself". He cited V. C. K. Bus Service (P.) Ltd. v. H. B. Sethna, AIR 1965 Mad 149, 151, wherein the court observed "I take it as irrefutable law that no litigant has or can have, a vested right in a particular forum, he cannot say as a matter of right that his suit or application should be tried by this or that forum which existed on the date his cause of action arose.
Forum belongs to the realm of procedure and does not constitute substantive right of a party or a litigant. It should also be kept in mind that cause of action is not to be confused with a forum, and a cause of action, whatever vested right it may carry with it, does not include a right to insist upon a particular court or tribunal or judge or any other. It follows, therefore, that any statutory law which changes a forum, may not raise a question of retrospective operation, unless, of course, in exceptional cases, it is inseparably intertwined with vested rights". He submitted that in New India Insurance Co. Ltd. v. Smt Shanti Misra, AIR 1976 SC 237, 240 ; [1977] 47 Comp Cas 453, 457, the court held "It is a well established proposition that a change of law operates retrospectively and the person has to go to the new forum even if his cause of action or right of action accrued prior to the change of forum. He will have a vested right of action but not a vested right of forum." According to him, if a lis has commenced, then unless the new enactment takes away the right to such lis, it will continue in the forum in which it is pending, but any new lis has to commence only in the new forum. For this proposition, he relied on Maria Christine De Souza Soddar v. Maria Zurna Pareira Pinto, AIR 1979 SC 1352 and Manujendra Dutt v. Purnedu Prosad Roy Chowdhury, AIR 19. The second petition C. P. No. 16/111/96 was filed on April 6, 1996, under Section 111(4) seeking rectification of the register of members of the respondent bank, which is a listed company, on the ground that the bank had, without sufficient cause, refused to allot rights shares to which the petitioners had applied in February, 1996. In this case, both the cause of action as well as the filing of the petition occurred after the Ordinance came into force.
20. Shri Murali, counsel appearing for the respondent bank, submitted that the petition is not maintainable under Section 111(4) inasmuch as the provisions of Section 111 have been made applicable only in respect of private limited companies and any reference to the Company Law Board in Section 111 is only with reference to shares in a private company.
The Company Law Board has been conferred jurisdiction to entertain petitions relating to shares of public companies only under Section 111A which itself stipulates the grounds under which such petitions can be filed. Therefore, he argued to state that this petition filed under Section 111(4) should be dismissed for want of jurisdiction.
21. Shri K. G. Raghavan, counsel appearing for the petitioners, submitted that the views expressed by Shri Murali cannot be sustained and that, as far as rectification of register of members of a public company is concerned, the Company Law Board continues to have jurisdiction under Section 111. He submitted, in support of his proposition, that Section 111A deals only with matters relating to transfer of shares of a public company, and also rectification arising out of transfers. It does not deal with rectification of register of members which may become necessary on other grounds as is the case in the present petition. He stated that we should keep in mind that the insertion of Sub-section (14) to Section. 111 of the Companies Act was necessitated on account of the proposal to set up depositories, through the Ordinance. Therefore, any interpretation of this section should be only with reference to the provisions of the Ordinance. Relying on the observation of the Supreme Court in Reserve Bank of India v. Peerless General Finance and Investment Co. Ltd. [1987] 61 Comp Cas 663, 692 ; AIR 1987 SC 1023, 1042, in which the court observed "The interpretation must depend on the text and context . . . Neither can be ignored. Both are important. That interpretation is best which makes the textual interpretation match the contextual. A statute is best interpreted when we know why it was enacted. With this knowledge, the statute must be read, first as a whole and then section by section, clause by clause, phrase by phrase and word by word. If a statute is looked at, in the context, its scheme, the sections, the clauses, phrases and words may take colour and appear different than when the statute is looked at without the glasses provided by the context. With those glasses we must look at the Act as a whole and discover what each section, each clause, each phrase and each word is meant and designed to say as to fit into the scheme of the entire Act. No part of a statute and no word of a statute can be construed in isolation." 22. The third petition C. P. No. 18 of 1996 was filed on May 15, 1996, under Section 111(2), (3) and (4) praying for a direction to the respondent company which is a listed public company, to register certain shares lodged for registration on February 23, 1996, as the company has been unnecessarily delaying registration of transfer. In this case, both the cause of action as well as the filing of the petition occurred after the Depositories Ordinance.
23. This petition (C. P. No. 18 of 1996) was heard on April 8, 1997, by which time there have been certain amendments brought about in Section 111A. Shri Krishna Srinivasan, appearing for the respondent company, argued to state, relying on Sub-section (14) of Section 111 as introduced by the Ordinance, that since this petition is under Section 111, the same cannot be maintained before the Company Law Board for want of jurisdiction. This petition can also not be maintained under Section 111A(3), as this section does not talk of aggrieved person. He maintained that the petitioner's remedy lies in a civil suit and not in a petition before the Company Law Board. He submitted that entertainment of the petition by the Company Law Board would be without jurisdiction and any order passed on the merits would a nullity. He quoted, in support of this argument, the decision of the Madras High Court in R. Venkataswami Naidu v. South India Viscose Ltd., AIR 1985 Mad 257, 264 ; [1986] 60 Comp Cas 142, 153 "If the court had no jurisdiction "at all to entertain the suit, anything done by it, by assuming such jurisdiction, would be totally without competence on its part to do so." He further submitted that as held by the Madras High Court in India Pistons Ltd. v. A. C. Central Excise [1987] 27 ELT 651 (Mad), the petition should be returned to the petitioner for presentation to the proper forum and the Company Law Board itself cannot transfer the same to another forum on the ground of justice and fair play. He drew our attention to the headnote to Kiran Singh v.Chaman Paswan, AIR 1954 SC 340, which reads "It is a fundamental principle that a decree passed by a court without jurisdiction is a nullity and that its validity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. A defect of jurisdiction, whether it is pecuniary or territorial, or whether it is in respect of the subject matter of the action, strikes at the very authority of the court to pass any decree and such a defect cannot be cured even by the consent of parties. Summing up his arguments, counsel submitted that with the issue of the Ordinance, the jurisdiction of the Company Law Board to deal with matters in Section 111 of the Act in relation to public companies has been taken away and as such the Company Law Board, on its own, cannot assume jurisdiction to proceed with the petition.
24. When we asked him as to what would be the effect of the new amendments to Section 111A on this petition, he submitted that in the absence of specific mention in the Amendment Act, the new provisions will have only prospective application and as such the instant petition cannot be saved before the Company Law Board.
25. Shri Harikrishnan, counsel for the petitioners, pointed out that the amendment to the Companies Act was brought about through the Depositories Ordinance/Act to meet the objectives of the Ordinance/Act.
The objective of the Ordinance was to set up depositories and to facilitate the same, certain consequential amendments were brought in some other statutes like the Companies Act, Stamp Act, etc. Therefore, according to him, interpretation of these amended provisions will have to be in line with the object with which these amendments were brought about and should not be read in isolation. He drew our attention to Section 2(e) of the Depositories Act which defines a depository.
26. This, according to counsel, makes it clear, that consequential changes made in other statutes would be applicable only to those companies which are in depositories and the new provisions of the Companies Act would be applicable only to the shares which are in a depository. As far as other companies and shares which are not in a depository are concerned, the provisions of Section 111 will continue to apply and not Section 111A. He supported his arguments by drawing attention to sections 28 and 30 of the Depositories Act. He attempted a distinct difference between amending a particular statute straightaway and amendment through schedules to a different enactment. In the latter case, he submitted that the amendments would cover only matters in the statute so enacted and not matters not covered in that enactment which would continue to be governed by the provisions existing before the amendment. He also raised a question as to what would happen to matters like theft of certificates, fraudulent removal of names from the register of members, transmission of shares, etc., for which there is no provision in Section 111A. He, therefore, submitted that the Company Law Board should take a pragmatic view and entertain the instant petition filed before it.
27. On the basis of the detailed submissions made by counsel appearing for the parties in these three petitions, we have framed the following issues for our consideration : 1. Does the Company Law Board have jurisdiction to entertain applications filed under Section 111 of the Companies Act seeking rectification of register of members on the grounds specified in Section 111(4) in respect of public limited companies 2. Does it have jurisdiction to entertain appeals filed under Section 111(2) in respect of public limited companies 3. If the answer to the above two issues is in the affirmative, then what is the implication of the new Sub-section (14) to Section 111 and new Section 111A 4. If the answer to the first two issues is in the negative what is the alternate remedy available to the investors 28. The answer to these issues lies in the proper construction and interpretation of the amendments brought into the Companies Act by the Ordinance, keeping in view the broad principles of interpretation as laid down by the apex court in Reserve Bank of India v. Peerless General Finance and Investment Co. Ltd. [1987] 61 Comp Cas 663 ; AIR 1987 SC 1023. According to the Supreme Court, interpretation of a statute should not be purely on the basis of the text of the statute but should also be with reference to the context, taking into consideration as to what was the position that existed before the enactment of the statute in question and the object that it seeks to achieve. This is what even Shri Harikrishnan pleaded. Therefore, it is essential for us to recapitulate the position obtaining before the Ordinance came into being.
29. Section 111 was recast by the Companies (Amendment) Act, 1988, and came into effect from May 31, 1991. Before the amendment, the provisions of this section were contained in two sections, namely, Section 111 and Section 155. While the provisions relating to refusal and delay in registration of transfers were found in Section 111, provisions relating to rectification were contained in Section 155. One could appeal against refusal to the erstwhile Company Law Board as provided in Section 111. However, a person aggrieved had to move the High Court for rectification, as provided in Section 155. On the recommendation of the Sachar Committee, the provisions of both these sections were assimilated into a single statutory provision in the present Section 111 and the Company Law Board has been empowered to deal with both the matters, namely, refusal or delay in registration as well as rectification. In other words, the powers of the High Court to deal with rectification have been transferred to the Company Law Board.
Appeal against delay in and refusal to register transfer of shares as well as application for rectification of the register of members, in respect of all types of companies--whether private or public--could be considered by the Company Law Board. Thus remedy for the two separate sets of grievances has been provided in Section 111.
30. The first set relates to refusal to or delay in transfer of shares against which an "appeal" could be preferred to the Company Law Board.
In this connection, it is relevant to note the opening words of Section 111 "If a company refuses, whether in pursuance of any power of the company under its articles or otherwise, to register the transfer of .
. .", to point out, that a company had the right to refuse registration of transfer. Under what circumstances such right could be exercised have been dealt with in a number of cases, with which we are not concerned, except to note that a company, whether private or public, had the right to refuse registration, only subject to the condition that it had provisions to that effect in the articles. However, in respect of a listed company, its right to refuse was governed by the provisions of Section 22A of the Securities Contracts (Regulation) Act (SCRA). This section specifically provided four grounds under which such right could be exercised and not on any other grounds and even such refusal had to be confirmed by the Company Law Board.
31. The second set relates to rectification of the register of members.
Whenever anyone alleges that anyone's name has been entered or removed from the register of members of a company, without sufficient cause he may, by an "application" to the Company Law Board, seek rectification of the register. Rectification of the register of members could be sought in respect of any company, whether private or public--both listed as well as unlisted.
32. Thus Section 111 as it existed before the Ordinance was a comprehensive one covering matters relating to transfer as well as rectification and was applicable to all types of companies. While the transfer matters could be agitated by an appeal by the transferor or transferee, rectification could be sought by a member, by an aggrieved person or by a company.
33. The Depositories Ordinance/Act has brought about comprehensive changes in matters relating to transfer of securities, through amendments to various related statutes, like the Companies Act, Indian Stamp Act, Securities Contracts (Regulation) Act, Income-tax Act and Benami Transactions (Prohibition) Act. The preamble to this Act reads "An Act to provide for regulation of depositories in securities and for matters connected therewith or incidental thereto". Thus this preamble makes it dear that the amendments brought in various statutes are only to further the above object. A perusal of the amendments to various statutes would also reveal the same.
34. With the above background let us examine the issues we have framed : 35. First issue.--This issue relates to rectification of register of members of a public company under Section 111(4). This sub-section reads as follows: (i) is, without sufficient tause, entered in the register of members of a company, or (ii) after having been entered in the register, is without sufficient cause, omitted therefrom, or (b) default is made, or unnecessary delay takes place, in entering in the register the fact of any person having become, or ceased to be, a member, including a refusal under Sub-section (1), the person aggrieved, or any member of the company, or the company, may apply to the Company Law Board for rectification of the register." 36. Sub-section (14), as introduced to Section 111, now provides that in this section, the term "company" would mean a private company. That would mean that the term "company" as used in Sub-section (4) would also mean only a private company and as such the provision relating to rectification of the members of a public company under this sub-section does not arise. This is the stand taken by the respondents in the first and second petitions. However, the petitioners in the second case, through their counsel, Shri Raghavan, contend that one cannot literally and tex-tually apply the provision, but should also take into consideration the object, purpose and the background under which the same has been enacted. He submitted that Section 111A deals with matters connected with transfer of shares of public companies and it does not cover rectification arising out of matters not connected with transfers. In the absence of a provision to cover rectification on account of non-transfer matters in Section 111A, the right of a member of a public company to seek rectification under Sub-section (4) of Section 111, should be deemed to have been continued as it is a valuable right which could originally be enforced through the High Court, now through the Company Law Board.
37. While we are in agreement with Shri Raghavan, that the newly introduced Section 111A, which is applicable to public companies, does not provide for rectification for entry or omission from the register of members without sufficient cause, we are not in a position to agree with him, that, in view of this, rectification through the Company Law Board as provided in Section 111(4), is available in respect of a public company. We are conscious that the amendment to the Companies Act through the Depositories Ordinance/Act, was with a view to the furtherance of the achievement of the object of the Ordinance/Act. The main object sought to be achieved through the Ordinance/Act was to set up depositories which would keep the shares of a company in an electronic mode, thus obviating the need for physical certificates.
Transfers are also to be recorded electronically. Physical handling is not visualised. Under these circumstances, we have to examine, whether the omission to provide for rectification in non-transfer matters in public companies is accidental or intentional or the legislative intent was to allow application under Section 111(4) to the Company Law Board in such cases. It is to be remembered that even though Section 111A(2) introduced by the Ordinance and the Act, provides that "subject to the provisions of this section, the shares or debentures and any interest therein of a company shall be freely transferable", yet, there was no provision to apply to the Company Law Board in case of refusal or delay in registration of transfer. This omission was corrected by an amendment to the Depositories Act effective from January 15, 1997, by which a proviso has been added to Section 111A(2), to the effect that in case a company, without sufficient cause, refuses to register the transfers, the transferee can move the Company Law Board for relief. If the legislative intent were to provide for approaching the Company Law Board, in case of rectification in non-transfer matters, then, either a provision to that effect could have been made that the right under Section 111(4) in respect of public companies has not been affected, or as contended by counsel, the same could have been specifically stated when the amendment was notified on January 15, 1997. A statute or a provision of a statute may need interpretation as propounded by the apex court in Reserve Bank of India v. Peerless General Finance and Investment Co. Ltd. [1987] 61 Comp Cas 663 ; AIR 1987 SC 1023, but when the words in the statute are unambiguous, textual application would be in order. With the coming into force of Sub-section (14) to Section 111, it is crystal clear to us that this section is not applicable to public companies. Therefore, we are unable to agree with Shri Raghavan, that the right to move the Company Law Board for rectification in respect of public companies, under Section 111(4), continues even after the coming into force of the Ordinance.
38. Second issue.--This issue relates to appeal to the Company Law Board under Section 111(2) in respect of public companies. This sub-section provides for appeal to the Company Law Board in case a company refuses registration of transfer within two months of lodgment or delay in registering transfers. The same reasoning that we have given for rectification under 111(4) holds good in respect of an appeal under 111(2) also in respect of public companies. However, as we have already pointed out, the legislature has, now, through the amendment notified on January 15, 1997, provided for appeal to the Company Law Board in case of refusal to register transfer in respect of public companies.
39. Third issue.--In view of our negative findings on the first two issues, the need for answering this issue does not arise.
40. Fourth issue.--This issue relates to the remedy available to an investor of a public company, in view of our finding that he cannot move the Company Law Board either through an application under 111(2) or an appeal under 111(4). Any right to move the Company Law Board in respect of a public company, could only be under the provisions of Section 111A. As far as transfer matters are concerned, now provision exists under the proviso to Section 111A(2) as well as Section 111A(3).
However, the prayer for rectification in respect of non-transfer matters cannot be made before the Company Law Board as no jurisdiction in these matters has been conferred on the Company Law Board under that section. Therefore, under the existing provisions, perhaps, the only remedy available, as seems to us, is that one has to move the civil court. In this connection, we may also beneficially refer to the decision of the Full Bench of the Delhi High Court in Ammonia Supplies Corporation Pvt Ltd. v. Modern Plastic Containers Pvt. Ltd. [1994] 79 Comp Cas 163, in which it was held that matters contained in Section 111 could be agitated in a civil court.
41. Now that we have given our findings on the issues involved, let us examine the maintainability of the three petitions. In respect of the first petition (C. P. No. 1 of 1996), the argument of counsel for the petitioners Shri Datar, is that, since the cause of action arose before the issue of the Ordinance, he could exercise the right vested in him to move the Company Law Board. He cited a number of cases in support of his claim. A perusal of these cases would show that most of the cases have been decided in terms of Section 6(c) of the General Clauses Act.
From the relevant portions of these judgments in these cases, which we have already extracted, it is apparently clear that repeal of an Act would not upset any pending proceedings initiated under the provisions of the repealed Act, save any contradictory provision in the repealing Act. In other words, if proceedings had already been initiated under the provisions of an Act, such proceedings would continue even after the repeal of that Act, As far as this proposition is concerned, counsel for the respondents, Shri Seshadri, has no different opinion.
In the same way, in regard to the right of enforcement of a right or privilege accrued, as found in some of the judgments cited by Shri Datar, we do concur with him that such right survives the repeal. But the question is the forum through which such right is to be enforced.
In the present case, the forum through which one could have enforced his right was the Company Law Board, when the cause of action arose.
However, when the petitioners decided to enforce the right through the Company Law Board, the Company Law Board has been divested of its jurisdiction, by the amendment brought through the Ordinance on matters provided in Section 111. Under these circumstances, can the Company Law Board assume powers and jurisdiction to deal with the matter on the ground that it had jurisdiction when the cause of action arose We are afraid that the Company Law Board cannot assume such powers.
Jurisdiction is always conferred by a statute and cannot be assumed. We have already extracted from the cases cited before us, judgments stating that any order passed without jurisdiction is a nullity, and we do endorse the same. When the Central Administrative Tribunal Act was enacted, there was a specific provision to the effect that all cases pending in various courts would be transferred to the Tribunal.
However, when the Company Law Board was constituted, even though some of the powers of the High Court were transferred to the Company Law Board, the pending cases were being continued with the High Courts. As a matter of fact, we continue to hear matters under Section 111 in respect of public companies, which were filed before the Ordinance came into effect. If, as suggested by Shri Datar, [the contention] that he has the right to move the forum which had jurisdiction when the cause of action arose, is accepted, then, what would happen if such forum is abolished Would it mean that the aggrieved person has no forum to approach According to us, one has to move a forum, which has the jurisdiction to entertain the matter on the day of filing a petition, and not a forum which had the jurisdiction when the cause of action arose but does not have the jurisdiction when a petition is filed. In view of this, we hold that we have no jurisdiction to entertain this petition and as such dismiss the same.
42. As far as the second petition (C. P. No. 16 of 1996) is concerned, it is for rectification under Section 111(4). We have already held that no application lies to the Company Law Board under that section in respect of a public company. In view of this, this petition is also not maintainable. However, during the hearing, we had made some suggestions to the bank, to provide some relief to the petitioners and the bank has now filed a memo indicating its acceptance of our suggestion. In view of this, we do not propose to pass any order on this application.
43. The third petition (C. P. No. 18 of 1996) relates to transfer matters, that the company is not registering transfer of shares impugned in the petition. This is actually an appeal under Section 111(2) and we have already held that we have no jurisdiction under this section in respect of public companies. When this appeal was filed, there was no proviso to Section 111A(2) empowering the Company Law Board to consider matters relating to refusal to register transfer of shares in respect of public companies. Now that provision exists in this regard, while we dismiss this petition as not maintainable under Section 111, we grant liberty to the petitioner to file a fresh petition under Section 111A if he so desires.