1. By this order we are disposing of an application No. 273 of 1996, filed by Shree Cement Limited in C. P. No. 3/111/94-CLB against Power Grid Corporation Limited and others. This application seeks to restore and revive the proceedings in C. P. No. 3/111 of 1994, which petition stood disposed of by us vide our order dated October 17, 1994. It is necessary for us to recapitulate the background of this application in order to understand and appreciate the prayers in this application for restoration and revival of the abovesaid company petition.
2. The petitioner-company, Shree Cement Limited purchased on or about June 13, 1992, from Fairgrowth Financial Services Limited, (Fairgrowth) 10,000--9 per cent. tax free bonds of Rs. 1,000 each issued by the respondent-company. These bonds were initially issued by the respondent-company and owned by Andhra Bank Financial Services Limited being the last record holder of the said bonds. The petitioner-company paid the consideration which is also evidenced by a certificate issued by the bankers of Fairgrowth. The petitioner-company took delivery of the bonds which are transferable by endorsement and delivery and lodged the same with the respondent-company to record and register the transfer through their letter dated June 26, 1992. Thereafter, the respondent-company, vide its letter dated July 15, 1992, called for a transfer deed or to provide information in accordance with the provisions as contained in the letter for necessary action. In reply the petitioner-company informed that as per the relevant notification issued by the Central Government, the requirement of a transfer deed is dispensed with and only an intimation was sufficient for registering the transfer. In this process more than two months had expired from the date of lodgement, thereafter the respondent-company informed the petitioner-company that Fairgrowth's assets have been attached by the Custodian in terms of the Special Court (Trial of Offences Relating to Transaction in Securities) Ordinance, 1992, (TORTS) and as such stated that the petitioner-company may take such action as may be advised.
According to the petitioner-company, they are the undisputed owners of these bonds for which full payment has been made and is so reflected in the books of the petitioner-company and is also treated as fully paid bonds in the books of the respondent-company.
3. On the refusal of the respondent-company to register the bonds and on their contention that a notified person under the TORTS is involved, the petitioner-company filed a petition before the Special Court at Bombay constituted under TORTS challenging the refusal to register the name of the petitioner-company with regard to the bonus in question.
The Special Court directed after hearing the parties that an appropriate application be moved before the Company Law Board and further stated that the limitation for the purpose of these proceedings would commence from the date of the order of that court, i.e., with effect from September 8, 1993. This was necessitated because an objection was raised on behalf of the respondent-company before the Special Court that the appropriate forum for such a petition was the Company Law Board and not the Special Court. Consequently the petitioner-company filed the petition, viz., C.P. No. 3/111/94-CLB before the Company Law Board under Section 111 of the Act. When the matter came up before the Company Law Board on March 28, 1994, it was contended on behalf of the respondent-company that by reason of another Ordinance being Ordinance No. 3 of 1994, the jurisdiction in respect of this transaction stood ousted from the Company Law Board and is now vested in the Special Court. Accordingly, the Company Law Board by an order dated, March 28, 1994, directed the respondent-company to file an application before the Special Court seeking clarification in the light of the latest Ordinance. Thereafter, the respondent-company filed an application before the Special Court claiming that by virtue of the Ordinance the Special Court had exclusive jurisdiction to entertain and try the petition. The petitioner-company who had filed the petition earlier in the Special Court and "who were compelled to file a fresh petition before the Company Law Board because of the stand taken by the respondent-company was only interested in having the claim decided by a competent forum and as such consented to the application of the respondent-company being made absolute". Accordingly, the Special Court recorded that it would have jurisdiction over the dispute and that the parties have agreed in that behalf.
4. Thereafter, the Special Court directed the certification committee appointed by that court, inter alia, to enquire into whether the petitioners were bona fide holders and whether they had paid the consideration. The bonds committee confirmed that the consideration has been paid by the petitioners. In view of these developments and since all the parties had agreed that the Special Court would have jurisdiction in the matter, after recording the statement of the petitioner and the respondent-company the petition namely C. P. No.3/111/94 was disposed of by the Company Law Board as withdrawn by an order dated October 17, 1994.
5. Another interesting turn to this case happened when the Special Court proceeded to hear the petition. When the petition came up for final disposal according to the petitioner the first respondent-company in a total reversal stand sought to contend on the self-same facts and totally contrary to the averments made in their own application stated that the petitioner-company had purchased the bonds on June 13, 1992, and payment was made on that day itself. Since the Special Court has jurisdiction only in matters relating to transactions between April 1, 1991, and June 6, 1992, and since these transactions have taken place outside the time frame provided in the TORTS, the Special Court has no jurisdiction in this matter. The Special Court after duly considering the matter by its judgment dated July 2, 1996, recorded the various submissions and, inter alia, held that the petitioners were purchasers for value without notice and the petitioner-company had a good title to the bonds. However, the Special Court came to the conclusion that since there was no attachment of properties as of July 2, 1992, under the TORTS, the Special Court has no jurisdiction to grant relief of rectification of register as prayed for by the petitioner-company.
Accordingly, the Special Court disposed of the petition after awarding costs in favour of the petitioner-company in the sum of Rs. 1 lakh. It is worthwhile to note at this juncture that in the meanwhile the relevant provisions in the Companies Act have undergone a change by which the jurisdiction of the Company Law Board with regard to appeals or rectification of register in respect of transfer of securities in the case of public companies was apparently taken away by an Ordinance promulgated on September 20, 1995.
6. Even though the petitioner-company has filed a fresh petition under Section 111 on August 26, 1996, on which an interim order has also been passed by us, it has around the same time filed this application namely C. A. No. 273 of 1996, praying for restoring and reviving the proceedings in C. P. No. 3/111/94-CLB and to adjudicate upon the issues and to pass orders directing the first respondent-company to rectify the register of bond holders as well as to issue consequential directions in respect of the impugned bonds. The application narrates the entire background of the case and has sought restoration/revival of the proceedings in the facts and circumstances narrated therein.
7. Since this case involves a challenge to our jurisdiction as well as the maintainability of the main petition we decided to hear the application for restoration/revival without taking for consideration the fresh petition filed under Section 111 on the same facts. Further, it was strongly contended by Shri J. C. Seth, advocate for the respondent-company, that the petitioners should opt for either the revival application or the fresh petition under Section 111 and cannot have both being heard at the same time. Ultimately, it was agreed between the parties that we will hear the restoration/revival application first. Accordingly, the application is being disposed of by this order.
8. Shri U. A. Rana, advocate appearing for the petitioner-company, laid substantial emphasis on the inherent powers of the Bench to restore/ revive the petition. For this purpose, he relied on Section 151 of the Civil Procedure Code, 1908, read with Order XXIII, Rule 1. He stated that even though the Civil Procedure Code, 1908, as such is not applicable to the Company Law Board since the Board is clothed with the powers of a civil court by virtue of Section 10E of the Act, the inherent powers can be invoked. Further, he relied on regulation 44 of the Company Law Board Regulations to substantiate his claim that the Bench has the powers to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Bench. In order to substantiate that a court has the power to allow a subsequent application to withdraw an earlier application for withdrawal of suit, he referred to the decision of the Division Bench of the Calcutta High Court in Rameshwar Sarkar v. State of West Bengal, AIR 1986 Cal 19, wherein it is observed that Order XXIII, rule 1, provides for withdrawal of a suit with or without liberty to file a fresh suit.
There is no provision for getting an order passed on a withdrawal application set aside or praying for withdrawal of an application for withdrawal of the suit. In such circumstances the court is not powerless to allow withdrawal of an application for withdrawal of a suit in exercise of its inherent powers in proper and suitable cases.
He insisted that in that case the court specifically observed that the Code is not exhaustive. There are cases which are not provided for in it and the High Court must not fold its hand and allow injustice to be done". In a similar view he also referred to Gulam Ali v. Viswanath Balwant Mahakal, AIR 1962 MP 308, wherein the court upheld the plea of the petitioners to review its own decision which was earlier dismissed for default but on sufficient ground being shown for the non-appearance of the petitioner at the hearing, the revision petition was restored to file. He pointed out that this power could be exercised unless it is either expressly or by necessary implication prohibited. Shri Rana also argued that a party to the dispute cannot take advantage of his own plea about the non-maintainability before one court and having obtained a dismissal order on that plea should not be allowed to turn round and take a stand that the same petition is maintainable, i.e., in other words a party is estopped from making conflicting pleas to his own advantage and shall not be allowed to approbate and reprobate. In this connection he pointed out that the respondent-company was a party to the withdrawal of the petition on account of lack of jurisdiction with the Company Law Board and hence pleading with the Special Court that it is only the Company Law Board which has jurisdiction should not be allowed to take advantage of the conflicting stands. In this connection, he cited a Full Bench judgment of the Delhi High Court in Ummrao Singh v. Man Singh, AIR 1972 Delhi 1.
9. Arguing on the question that the Act has not conferred any specific inherent powers on the Company Law Board, Shri Rana drew a parallel with reference to Section 151 of the Civil Procedure Code, 1908, and stated that inherent power is a power inherent in the court by virtue of its duty to do justice between the parties before it. This inherent power in a court to do justice has been recognised by the Supreme Court in Manohar Lal Chopra v. Rai Bahadur Rao Raja Seth Hira Lal, AIR 1962 SC 527, by a majority judgment. In this connection the court has only recognised one limitation, namely, that the inherent jurisdiction cannot be exercised to nullify the provisions of the Code. In other words, where the Code deals expressly with a particular matter the provisions should normally be regarded as exhaustive. As such, it was the submission of Shri Rana that so long as there is no provision to nullify the inherent jurisdiction, the court should exercise inherent jurisdiction looking into the circumstances of the case.A. A. Calton v. Director of Education. From this citation, Shri Rana insisted that a proceeding which has already commenced on the basis of certain provisions of law cannot be considered to be illegal because of certain subsequent amendments to the law so long as the amendment had no retrospective effect. He, therefore, stated that since the proceedings on his petition had already commenced before the Company Law Board, the same could be continued irrespective of the amendment under Section 111 subsequently.
11. Elaborate arguments were advanced by Shri J. C. Seth, advocate, on behalf of the respondent-company. The following five preliminary objections were raised : (a) A petition which was dismissed already cannot be restored or revived and this is the reason why the petitioner itself had filed a new petition now.
(b) There cannot be two petitions at the same time and as such the restoration application cannot be allowed.
(c) No liberty was sought nor was it provided in the order dated October 17, 1994, for restoration or revival of the petition.
(d) The Company Law Board has become functus officio after passing the order allowing withdrawal of the petition and does not have jurisdiction to restore or revive the petition.
Since the petitioner has filed a fresh petition and thus has chosen the mode and forum it cannot now insist on revival of the earlier petition.
12. Elaborating on these preliminary objections, Shri Seth insisted that the petitioner having withdrawn the petition by a specific prayer as early as on October 17, 1994, has now chosen after a period of 22 months to recall that order. The petitioner had purposely withdrawn the petition, after getting a favourable order from the special court and now seeks to restore the same petition. The petitioner has also filed another new petition and has obtained interim stay on the new petition.
As such, it would be against settled law, public policy and established practice to have two petitions on the same cause of action. In this connection, he cited Sarguja Transport Service v. State Transport Appellate Tribunal, AIR 1987 SC 88, wherein the petitioner after withdrawing a writ petition filed by him in the High Court under Article 226 without permission to institute a fresh petition was disallowed from filing a fresh writ petition in respect of the same cause of action in the High Court. According to the Supreme Court, it is against the rule of public policy to allow such situation. Thus the court was so strict in observing such public policy even in respect of writ matters. He also stated that strictly speaking even though the provisions of the Civil Procedure Code, 1908, do not in terms apply to any proceedings under Article 226 of the Constitution, still the apex court has refused to revive a writ petition already dismissed. He further stated that the Company Law Board has no power to restore/revive a petition already dismissed for which provisions should exist in law. On the contention of the petitioner that restoration can be done in exercise of the powers under Regulation 44 of the Company Law Board Regulations, he stated that under Section 10E(1) of the Act, the Company Law Board is to discharge its functions under the Act and the Act does not contemplate restoration of dismissed cases. Regulation 44 is not comparable with Section 151 of the Civil Procedure Code, 1908, which is the law passed by Parliament whereas the Company Law Board Regulations are made by the forum itself. Section 151 of the Civil Procedure Code, 1908, vests substantial powers under the Code and puts a limitation of 30 days to file an application for restoration which is a power given by the Legislature to the court. A quasi-judicial body cannot vest in itself such substantive power. In the present case, the petitioner has come after 22 months and after getting a favourable order from the Special Court. He further pointed out that as per the new Company Law Board Regulations, there is no review power which was available in the old Regulations.
13. Dealing with the provisions of Order 23, Rule 4 which is based on public policy and codified and passed by the Legislature as a statute, he stated that even then in case a suit is withdrawn without permission, the plaintiff is precluded from seeking a fresh suit or restoration. Even though the Civil Procedure Code as such is not applicable the Company Law Board is bound to follow the principles based on public policy, Shri Seth drew our pointed attention to the Supreme Court judgment in Nawabganj Sugar Mills Co. Ltd. v. Union of India, AIR 1976 SC 1152, to state that a judge cannot innovate the law at his pleasure.
14. It is also contended by Shri Seth that the Company Law Board is a court only for limited purposes and not for all purposes. It does not have the inherent powers as the Supreme Court has under the Constitution of India. Shri Seth also cited the following cases on Section 151 of the Civil Procedure Code, 1908, to show that the statutory power vested in courts is also used in exceptional cases hedged in by various conditions and restrictions :Cotton Corporation of India Ltd. v. United Industrial Bank Ltd., [1984] 55 Comp Cas 423 ; AIR 1983 SC 1272.Sarguja Transport Service v. State Transport Appellate Tribunal, AIR 1987 SC 88.Dudani (G. K.) v. S. D. Sharma, AIR Velayudhan Nair v. Kerala Kshemam Yunik Kuries Pvt Ltd., AIR 1988 Ker 223 (224).Shashi Prakash Khemka v. NEPC Micon Ltd. [1997] 90 Comp Cas 228 (CLB).
15. The learned advocate also distinguished some of the cases cited by Shri Rana on restoration of writ petitions in certain special circumstances, namely, that a writ petition in the Supreme Court was restored which was earlier withdrawn in the High Court on the undertaking given by the Government Pleader to make a reference but the reference was ultimately failed to be made. Dealing with Rameshwar Sarkar v. State of West Bengal, AIR 1986 Cal 19, cited by the petitioner's advocate, Shri Seth, stated that the restoration in that case arose out of a mistake which is not so in the present case.
Refuting the submission of the petitioner's advocate in Gulam Ali v.Viswanath Balwant Mahakal, AIR 1962 MP 308, he stated that a mistake on the part of the concerned advocate in noting the date of hearing was treated as sufficient reason for non-appearance. The facts of that case are not relevant to the present case. Referring to Ummrao Singh v. Man Singh, AIR 1972 Delhi 1, cited by the petitioner's advocate, he stated that this case does not deal with inherent powers. Shri Seth further stated that the petitioner's advocate has not referred to any judgment or law which shows that the Company Law Board is vested with inherent powers under the Companies Act. The submission of the petitioner that regulation 44 is equivalent to Section 151 of the Civil Procedure Code, 1908, is baseless and misleading since the latter is law laid down by Legislature whereas the former is procedure designed by the Tribunal itself.
16. Shri Seth also briefly narrated the facts relating to this case to state that it was the petitioner-company which wrongly chose its own forum namely the Special Court as early as in 1992, whereas it was the respondents who pointed out that the Special Court had no jurisdiction.
However, it was only thereafter, that the petitioner chose to file the present petition in 1994. Again it was the respondent who had to point out the amendment in the TORTS by which civil jurisdiction was also vested in the Special Court. It was the petitioner which gave its unqualified consent that the Special Court has got jurisdiction to decide the petition though subsequently the Special Court dismissed the case for lack of jurisdiction. Thus the entire fault is on the part of the petitioner and the respondents cannot be blamed. On the other hand, it was the respondent who had pointed out right at the beginning that the Special Court has no jurisdiction in the matter. Shri Seth, therefore, submitted that the restoration application should be dismissed.
17. This case involves intricate questions of law particularly with regard to the powers and jurisdiction of a quasi-judicial Tribunal in going over the same case which has been already dismissed as withdrawn.
We have gone through the pleadings and arguments from both the sides in considering the issues before us. The two basic issues which confront us are : (a) Whether we can review our own order dismissing a petition as withdrawn (b) Whether we can exercise any inherent jurisdiction and revive/ restore a petition by virtue of such inherent power 18. Shri J. C. Seth in his preliminary objection's has raised a question whether a new petition on the same cause of action on which a petition is already dismissed can be entertained as there cannot be two petitions as a matter of public policy for the same cause of action and seeking the same relief. We shall not be dealing with this question presently since we are not dealing with the new petition filed by the petitioners but shall do so as and when we take it up. However, we have to deal with the preliminary objection per se, namely, whether the revival of a petition which was already dismissed as withdrawn can be allowed when no liberty is sought or provided for in the order. Also, whether we have the jurisdiction to restore or revive the petition which has been already disposed of as withdrawn. The above two issues framed already covered the objections raised by Shri Seth. It is a matter of general principle that when a finality is reached with regard to a case the process cannot be rehearsed at the same forum once again.
However, if a party has any grievance the facility of appeal is provided. The general principle with regard to this aspect of covering the whole ground again is reflected in Order 47, rule 1 of the Civil Procedure Code, 1908, under the provision "Review" which is reproduced below ; (a) by a decree or order from which an appeal is allowed but from where no appeal has been preferred, (c) by a decision on a reference from a court of small causes, and who from the discovery of new and important matter or evidence which, after the exercise of due diligence, was not within his knowledge or could riot be produced by him at the time when the decree was passed or order made or on account of some mistake or error apparent on the face of the record, or for any other sufficient reason, desires to obtain a review of the decree passed or order made against him, may apply for a review of judgment to the court which passed the decree or made the order." 19. The substance of the submissions made by Shri Seth is that since no review power is specifically granted and when no liberty to revive the petition has been granted and the petition is clearly dismissed such an order cannot be reviewed since the Tribunal has become functus officio.
This principle is well accepted. We are ourselves conscious of this fact that once a finality is reached with regard to any matter, the only course open to the aggrieved party is to approach the appellate court for relief. Though Shri Seth has drawn our attention to Rule 31(3) of the old Company Law Board Bench Rules, 1975, for "restoration of dismissed petitions" which according to him is not available in the new Company Law Board Regulations, 1991, his reference is not to the correct rules. The old rule cited by Shri Seth is incorporated in the new Company Law Board Regulations under regulation 26 of the 1991 Regulations. However, restoration of a dismissed petition on account of default of a party in not appearing is not the real issue. The real issue is that by covering the same ground once again when there is no default of any party whether we will be really reviewing our own order of October 17, 1994. This power of review was in fact contained in the Company Law Board Rules, 1975, as rule 45 and was incorporated in the Company Law Board Regulations, 1991, as regulation 27. However, in 1992, this regulation was specifically omitted. We are conscious that even if this regulation was present in our Company Law Board Regulations, we cannot exercise a power of review and we have ruled accordingly in certain other causes. A power of review is not an inherent power and it must be conferred by law either specifically or by necessary implication. This has been ruled so by the Supreme Court in P.N. Thakershi v. P. Arjun Singh, AIR 1970 SC 1273. Similarly administrative bodies acting quasi-judicially under a statute cannot exercise a power of review unless conferred specifically by the statute. The power of review has been specifically conferred on civil courts under Order 47, Rule 1 as already referred to above. Since we cannot derive any powers from the Civil Procedure Code, the Company Law Board has no jurisdiction to review its own orders. In this context the objection of Shri Seth is validly taken that we have no jurisdiction to restore or revive the petition by exercising a power of review which is not specifically conferred on us. Thus the position is that there is no specific review power and also there is no specific prohibition and even then no review is possible.
20. However, a clear distinction should be made between a procedural review and a review on the merits when the error sought to be corrected is one of law and is apparent on the face of the record. The latter kind of review which is on the merits cannot be exercised unless specifically conferred by statute whereas the former type of review contemplates recall of orders passed under some misapprehension (Law Lexicon-cum-Digest by N. M. Mulchandani, 1990 edition, page 1324). The former strictly speaking is not a review on the merits and hence cannot be put on an equal footing.
21. This leads us to the next question whether there is any other power available by which we could consider the application of the petitioners to restore/revive the petition without really reviewing it on the merits. It is in this context that the argument of Shri U. A. Rana, the learned advocate for the petitioner, is relevant. He stated that we should exercise our inherent powers in order to do justice in the circumstances of the case. In this context he referred to the judgment of the Division Bench of the Calcutta High Court in Rameshwar Sarkar v.State of West Bengal, AIR 1986 Cal 19, in which the court restored a suit in exercise of the inherent powers to permit the withdrawal of an application to withdraw a suit since no remedy was available in such circumstances under any of the provisions of the Civil Procedure Code, 1908. In that case, the court also cited another Bench decision to state that the court has always jurisdiction to entertain and consider an application under Section 151 of the Civil Procedure Code, 1908, to recall an order passed earlier. Against this argument Shri Seth has submitted that the ratio of this case is not applicable to the facts of the present case. We find in the Calcutta case, the petitioner committed a mistake in filing an application for withdrawal of a suit without realising the seriousness of the prejudice that would be suffered by him by the withdrawal after the court passed an order dismissing the suit. The court set aside the order of dismissal and allowed the withdrawal of the application for withdrawal of the suit in exercise of the inherent power. The question, therefore, is not whether the facts are identical but whether an inherent power can be invoked to recall an order without rehearing on the merits in the interest of justice so long as the court is convinced that otherwise justice will not be done. In the circumstances of the case before us the principle laid down in the Calcutta case has great relevance. However, the provisions of the Civil Procedure Code are not applicable, as such to the Company Law Board but are applicable only to courts. Hence, per se we cannot exercise any power based on the provisions of the Civil Procedure Code. However, it is appropriate to examine whether as a quasi-judicial Tribunal we ourselves have the inherent power in order to do justice. It is in this context that Shri Rana has cited regulation 44 of the Company Law Board Regulations, 1991, to state that the inherent power has been specifically referred to in order to meet the ends of justice or to prevent abuse of the process of the Bench.
Against this contention, Shri Seth argued that the inherent power under Section 151 of the Civil Procedure Code is a substantive power conferred on the court which has to be conferred on the Company Law Board by means of specific provision of law by the Legislature.
According to him, Section 10E(1A) of the Act specifically states that the Company Law Board will discharge its powers under the Act which means that the inherent power unless it is provided in the Act cannot be exercised by the Company Law Board merely because it is provided in the regulation which is only its own creation.
22. We have very carefully examined the meaning and scope of the inherent powers of the court as well as the quasi-judicial bodies from the precedents available particularly from the rulings of the apex court as the rulings of that court have to be taken as the law of the land in interpreting legislations. On the basis of this study we are convinced that the inherent powers are not conferred on any court by any provisions of law, not even by Section 151 of the Civil Procedure Code. An inherent power is to be distinguished from an implied power.
Implied power is a conferred power but it is implicit and not explicit.
It has to be spelt out from the powers specifically conferred. However, inherent power is not a power conferred ; it is something inherent and attached to the office by virtue of the office. Shri Seth's argument is that the courts of law like the High Court and Supreme Court are vested with powers whereas the Company Law Board is a court for limited purposes and not a court for all purposes and is not conferred with the inherent power and, as such, according to him inherent powers are not available. Our examination of the decisions of the apex court and the High Courts, on the contrary, clearly establishes that the inherent powers are not vested by any provision of law but are inherent by virtue of the Tribunal being a court. The courts have clarified that Section 151 of the Civil Procedure Code does not control or limit the inherent powers though courts have referred to Section 151 of the Civil Procedure Code while exercising inherent power. In this connection, the following observations of the Supreme Court in Manohar Lal Chopra v.Rai Bahadur Rao Raja Seth Hira Lal, AIR 1962 SC 527, 533, cited by Shri U. A. Rana are relevant (at para. 23) : "The section itself says that nothing in the Code shall be deemed to limit or otherwise affect the inherent power of the court to make orders necessary for the ends of justice. In the face of such a clear statement, it is not possible to hold that the provisions of the Code control the inherent power by limiting it or otherwise affecting it. The inherent power has not been conferred upon the court; it is a power inherent in the court by virtue of its duty to do justice between the parties before it." Another judgment of a Special Bench of the Calcutta High Court has further elaborated and drawn more support from various decisions of the Supreme Court in this regard in Arun Bros. v. Sakti Prasanna Chatterjee, AIR 1983 Cal 129, 140 (at para. 50) "It is settled law that the inherent power has not been conferred on the court: it is a power inherent in the court by virtue of its duty to do justice between the parties before it (vide observations of the Supreme Court in Manohar Lal Chopra v. Rai Bahadur Rao Raja Seth Hira Lal, AIR 1962 SC 527 : see also Ram Chand and Sons Sugar Mills Pvt. Ltd. v. Kanhayalal Bhargava, AIR 23. The court further observed that "the view expressed by their Lordships Woodroffe and Mukherjee in the well-known case of Hukum Chand Baid v. Kamalanand Singh [1906] ILR 33 Cal 927, on the inherent power of the court has now become locus classicus. Their Lordships pointed out that the Civil Procedure Code was not exhaustive and it did not affect previously existing powers unless the Code had taken them away ; in matters with which it does not deal, a court will exercise an inherent jurisdiction to do justice between the parties which is warranted under the circumstances and which the necessities of the case require." 24. The above decisions fully convince us that inherent powers are not vested by any legislative provision but are inherent by virtue of the court charged with the duty to render justice. In other words, it is a functional necessity and not a conferred authority through statutory provision. Though we find that while exercising inherent powers courts have referred to Section 151 of the Civil Procedure Code, it should not be construed that such power is conferred/regulated by Section 151 as already evident from the decisions cited above. However, the Civil Procedure Code has contemplated and approved of the existence of inherent powers of the court.
25. It is now necessary for us to be convinced whether the Company Law Board can exercise inherent powers as a court does under the Civil Procedure Code. It is beyond doubt that the Company Law Board is not part of the judiciary and as such the provisions of the Civil Procedure Code are not applicable. However, as argued by Shri J. C. Seth in another context "even though the Civil Procedure Code is not applicable to the Company Law Board yet the general principles of law as established therein are applicable and the Company Law Board is bound to follow the principles based on public policy". In view of this logic, it follows that in dispensing justice, the Company Law Board should also invoke its inherent powers in appropriate circumstances as a court does. In other words, it is a functional necessity and not a conferred authority. To satisfy ourselves on this count, we looked into precedents so that we can reinforce our conviction. In The Law Lexicon Digest by N. M. Moolchandani, Volume II, page 1162, the author specifically states that "administrative authorities do not possess inherent powers like courts, tribunals, and quasi-judicial bodies". We have no doubt that we are not an administrative authority. It is no doubt true that the inherent powers to act ex debito justitiae is not an attribute of administrative authorities but of courts which enjoy such powers to do real and substantial justice for the administration of which they alone exist. In this context we also went through a decision of the Special Bench of the Calcutta High Court in Arun Bros.
v. Sakti Prasanna Chatterjee, AIR 1983 Cal 129. In that case after analysing the powers of the rent controller at the stage of accepting a deposit of rent from a tenant such act being a ministerial act and under such circumstances it was held that he cannot exercise any inherent power. At the same time the court also kept in view certain quasi judicial powers of the rent controller and distinguished his administrative powers from the quasi-judicial powers. After having observed that, the court also remarked about the absence of inherent powers with administrative authorities as opposed to such power being "available with the court, Tribunals and quasi-judicial bodies". In this context, the court observed "it is equal well settled that the administrative authorities do not possess inherent powers like court, Tribunals and quasi-judicial bodies. A person or authority exercising executive powers acts within the bounds of its authority conferred by statutes, rules, directions, etc., as the case might be". Thus the availability of inherent power for a quasi-judicial Tribunal is clearly acknowledged.
26. If we look at this issue from another angle, the Company Law Board is recognised as a court while dealing with matters under Section 111 of the Act as in the present case. We recall the specific observation of the Supreme Court in Canara Bank v. Nuclear Power Corporation of India Ltd. [1995] 84 Comp Cas 70 in a matter which went to the apex court from our decision in the matter under Section 111 of the Act that while dealing with matters under Section 111 of the Act, the Company Law Board is undoubtedly a court in view of the procedure adopted in disposing of the petitions under that section. The apex court observed as follows (page 95): "Now, under Section 111 of the Companies Act as amended with effect from May 51, 1991, the Company Law Board performs the functions that were theretofore performed by courts of civil judicature under Section 155. It is empowered to make orders directing rectification of the company's register, as to damages, costs and incidental and consequential orders. It may decide any question relating to the title of any person who is a party before it to have his name entered upon the company's register and any question which is necessary or expedient to decide. It may make interim orders. Failure to comply with any order visits the company with a fine. In regard to all these matters it has exclusive jurisdiction (except under the provisions of the Special Court Act which is the issue before us). In exercising its function under Section 111, the Company Law Board must, and does, act judicially. Its orders are appealable. The Company Law Board, further, is a permanent body constituted under a statute. It is difficult to see how it can be said to be anything other than a court particularly for the purpose of Section 9A of the Special Court Act." Thus the function of the Company Law Board is a judicial function is undoubtedly clear.
27. We are, therefore, convinced that in accordance with the principles of public policy as enunciated by the judiciary in discharging justice, the Company Law Board should also resort to inherent powers wherever required depending upon the circumstances of the case.
28. Having established that the inherent power is available with us or rather it is a functional necessity we should now examine the circumstances in which such power should be exercised. Once again adopting the principle enunciated by the judiciary we are fully convinced that this power should be exercised only in exceptional situations. In this context, we are in agreement with Shri J. C. Seth that courts have resorted to such powers and used the same in exceptional cases hedged in by various conditions and restrictions. We have also gone through various judgments cited by Shri Seth and are fully convinced that this power can be exercised in the rarest of rare situations. In this context, we have noted the following observations of the Karnataka High Court in Maruthi Enterprises v. Smt.
Muniyanjamma, AIR 1987 Kar 264, 266, para. 12 ; "The exercise of the inherent powers under Section 151 of the Civil Procedure Code, 1908, by the court can be resorted to only when there is no other remedy available to the party. When the law has provided for an appeal against the order rejecting the plaint, the court would not be justified in invoking its inherent jurisdiction under Section 151 of the CPC." A similar point has already been decided by the Supreme Court in Nainsingh v. Kanwarjee, AIR 1970 SC 997, 998, wherein it was observed "under the inherent powers of the court under Section 151 of the CPC, a court has no powers to do that which is prohibited by the Code ; inherent jurisdiction of the court must be exercised subject to the rule that if the Code does contain specific provisions which would meet the necessities of the case, such provisions should be followed and inherent jurisdiction should not be invoked. In other words, the court cannot make use of the special provisions of Section 151 of the Code,"where a party had his remedy provided elsewhere in the Code, and he neglected to avail himself of the same".
29. Shri U. A. Rana also brought to our notice, another exceptional case where the inherent powers were invoked vide the judgment of the Division Bench of the Calcutta High Court in Rameswar Sarkar v. State of West Bengal, AIR 1986 Cal 19. In this case, the Division Bench allowed withdrawal of an application for withdrawal of a suit and restored the suit proceedings even though the ground for withdrawal of the withdrawal application was only because the plaintiff could not realise the seriousness of the prejudice that would be suffered by him if the suit is withdrawn without liberty to file a fresh suit. In this case, the court had already passed an order dismissing the suit for non-prosecution on the application of the plaintiff but in the opinion of the Division Bench this would be no ground to refuse to render justice.
30. Even though we would not like to liberally exercise the inherent jurisdiction we should certainly look into real genuine hardships. We are however conscious that such hardship cases are to be considered not on equitable considerations but only on the legal principles as enunciated by precedents. In equitable matters some times an appeal to the heart may be justified, but in legal matters consideration should always come from the head and not from the heart (Velayudhan Nair v.Kerala Kshemam Yunik Kuries Pvt. Ltd., AIR 1988 Ker 223). Shri Seth has also reminded us of the judgment of Justice V. R. Krishna Aiyyar in Nawabganj Sugar Mills Co, Ltd. v. Union of India, AIR 1976 SC 1152, wherein it is observed that "the judge even though he is free he is not wholly free, he is not to innovate at pleasure". At the same time, we also noted the observation of the Supreme Court in the very same case that the above difficulty cannot force a court to abandon the inherent powers. The inherent powers have their roots in necessity and it is co-extensive with the necessity. But, while doing so a court cannot go against any statutory prescription.
31. We are also conscious of the fact that repeatedly courts have observed that exercise of inherent powers can have application only when no other remedy is available according to the existing provision of law. It is further observed in some of the decisions that inherent powers cannot be invoked as a substitute for an appeal. In other words, instead of resorting to an appeal, the petitioner cannot invoke inherent powers. Thus, we are conscious of the fact that the exercise of inherent powers is circumscribed by various restrictions and conditionalities as seen from the various case-laws already cited. We summarise these restrictions and conditionalities as follows : (i) The power cannot be invoked if there is an alternative remedy available ; (ii) if the order can be appealed against, the inherent power cannot be resorted to ; (iii) the power cannot be invoked, if it would conflict with any specific provision of law which prohibits such a remedy ; (iv) non-exercise of the inherent power may result in abuse of the process of the court ; Keeping the above conditionalities in view, it is necessary for us to consider the facts of the present case to be satisfied whether it warrants the exercise of our inherent powers. In the present case on October 17, 1994, we disposed of the company petition as withdrawn without liberty to approach us again, as both the parties were convinced that in the facts of the case the jurisdiction lies with the Special Court and not with the Company Law Board. However, it transpired later on, that both the parties were under a genuine mistake with regard to the date of the impugned transaction as a consequence of which the matter did not fall within the jurisdiction of the Special Court but is under the jurisdiction of the Company Law Board. In this context, we have noticed a specific case decided by the Punjab and Haryana High Court in Krishanlal v. Gulabram, AIR 1958 Punj 157, in which an identical case of a suit having been withdrawn by a party due to a fraud played by the opposite party resulting in reporting a compromise whereas no compromise actually did take place. In such a situation a dismissed petition was revived under the orders of the High Court. In the present case before us, the only difference is that it was not a case of fraud but a genuine mistake on the part of both the parties. We are further convinced that an alternative remedy in the form of a suit is not possible because it is a specific case of rectification. Since a party cannot resort to a suit for rectification of the register the first condition of nonavailability of alternate remedy is fully satisfied.
32. The next conditionality is whether the order can be appealed against also goes in favour of the petitioner. The company petition was dismissed on October 17, 1994, by a consent order in which the petitioner has already consented to withdraw the petition. Thus by doing so, the possibility of appealing against such order has to be ruled out.
33. As regards the next test the revival of the petition should not conflict with any specific provision of law which prohibits such a remedy. In this context the only provision which is to be kept in view is that the facility of Section 111 is no longer available after September 20, 1995, in view of the amendment introduced by the Depositories Act, 1996, which was preceded by an Ordinance in 1995. The Ordinance however had no retrospective effect and as such resorting to Section 111 of the Act before September 20, 1995, was not prohibited.
By seeking to revive the earlier petition the petitioners are not defeating the provision of any law nor is such a remedy prohibited by the Ordinance. It is true that there is no power of review with the Company Law Board. By recalling our order are we exercising a power of review which is not available As already stated a rehearing on the merits would really constitute a review. In the present case, the merits have not been gone into at all. It was only on a misconception of law that the petition came to be withdrawn. The exercise of inherent-power to recall an order which was based on a misapprehension on the part of all parties concerned is, strictly construed, not a review on the merits which however, is not specifically granted to the Company Law Board. As such nothing is sought to be exercised which is prohibited by law.
34. As regards the last two tests namely that in absence of exercise of inherent jurisdiction it may result in the abuse of the process of law and failure of justice, both the tests are satisfied. Shri Rana has tried to rely in this context on the decision of the Division Bench of the Delhi High Court in Ummrao Singh v. Man Singh, AIR 1972 Delhi 1. By citing this case, Shri Rana would like to establish that a person getting advantage of a plea in prior suit is not entitled to take a contrary plea on the same facts. In other words, a party cannot be permitted to approbate and reprobate. By this he means that the petitioner went to the Special Court he is being told that when the petitioner went to the Special Court it was resisted by the respondent stating that the Special Court has no jurisdiction but when the petitioner filed the petition before the Company Law Board, the respondent once again resisted by stating that the Company Law Board has no jurisdiction and it lies with the Special Court. Again when the petitioner went to the Special Court he is being told that the jurisdiction is with the Company Law Board. In our opinion, there cannot be a more appropriate case of abuse of the process of law resulting in failure of justice. Though the respondent cannot be fully blamed for this situation, certainly there is an error in apprising the courts concerned about the relevant dates of the impugned transactions which are crucial in determining the jurisdiction of the Company Law Board and the Special Court. The error on both the sides was compounded by changes in law entailing in the petitioner being denied justice. In view of the above circumstance we consider it appropriate that our inherent jurisdiction should be exercised to revive/restore C. P. No.3/111 of 1994. While doing so, we are conscious of the fact that as a matter of public policy we cannot allow the second petition on the same issue to be continued to be maintained while restoring the earlier petition. However, we may have to formally hear both the sides before deciding on the fate of the new petition.
35. In the above circumstances, we allow the application of the petitioner-company and restore C. P. No. 5/111 of 1994. We however, allow a period of 30 days from the date of receipt of a copy of this order to enable the respondent to resort to the remedy of appeal if so advised. Failing this the respondents shall file their reply to the original petition by June 30, 1998, and rejoinder if any shall be filed by July 31, 1998. The matter will be heard thereafter.