Chitra Venkataraman, J.
1. The above Civil Miscellaneous Appeals arise out of the orders of the Company Law Board on the preliminary objection taken by the appellants herein as regards the maintainability of the petition filed by the respondents herein under Section 111A(3) of the Companies Act. Important question of law arises in these appeals as to the availability of the jurisdiction of the Company Law Board under the amended Section 111A(3) of the Act with effect from 15.1.1997 on the question of rectification of register of shares transfer on the violation of the provisions of the Companies Act taking place prior to the amendment to Section 111A(3) in 1997.
2. The Depositories Act, 1996, brought about comprehensive changes in the matter relating to transfer of securities by introducing amendments to various related statutes like Companies Act, Indian Stamp Act, IT Act, Securities Contract (Regulatory) Act. Prior to the enactment of the Depositories Act, 1996, two remedies were available to the aggrieved investors as regards the transfer of shares or debentures of a public or a private company to appeal to the Central Government under Section 111 of the Companies Act or to appeal before the High Court for rectification under Section 155 of the Companies Act. The provision of Section 155 of the Companies Act relating to the power of the Court to rectify was omitted by the Company Amendment Act, 1998 with effect from 31.5.1991. The same was incorporated in Section 111 of the Companies Act that the avenue of relief through rectification was directed to the Company Law Board. Sub-section 14 was added to Section 111 of the Act consequent on the amendment introduced by the Depositories Act, 1996, as per which for the purpose of Section 111, a company shall mean a private company including a private company declared a public company under Section 43A of the Act.
3. Section 111A of the Companies Act was inserted by the Depositories Act,1996 with effect from 20-9-95 to exclusively deal with Public Companies. The Depositories Act, 1996 made substantial amendment, wherein Section 111A was inserted to provide for the free transferability of shares and debentures of a public company other than the private company or a deemed public company under Section 43A of the Companies Act. Thus all public companies came to be covered underSection 111A on and from 20.9.95. Sub-section 2 provided for free transfer of shares or debentures and any interest in a company. The proviso to Sub-Section 2 was inserted by the Depositories Related Laws (Amendment) Act, 1997 with effect from 15.1.97 to provide a remedy of appeal to the aggrieved party to approach the Company Law Board, in cases, where, without sufficient cause a company refused to register the shares within two months from the date on which the instrument of the transfer is delivered to the company. The Company Law Board was empowered to direct such company to register the transfer of shares.
4. Under Sub-section 3 of Section 111A of the Act, introduced by the Depositories Act, 1995, the Company Law Board was empowered to direct rectification of register of members or records of a depository in the case of transfers made in violation of the provisions of the Securities and Exchange Board of India Act, 1992 or Sick Industrial Companies (Special Provisions) Act, 1985. Sub-section 3 provides for filing a petition for rectification in case of transfer of shares in contravention of the provisions of the SEBI or BIFR Act within two months from the date on which the instrument of transfer was intimated to the company.
5. Sub-section 3 of Section 111A of the Companies Act was substituted by the Depositories Amendment Act, 1997 with effect from 15.1.97. The words 'or any other law for the time being in force' was added with effect from 15-Jan,1997, so as to include contravention of any other Acts also, apart from the SEBI Act, 1992, and Sick Industrial Companies (Special Provisions) Act, 1985 as subject matter for preferring a rectification petition. The subsection provides for the appealing to Company Law Board for rectification within two months from the date of transfers of any shares or debentures held by a depository etc., or from the date on which the instrument of transfers or the intimation of transmission was delivered to the company as the case may be.
6. It may be noted herein itself that the introduction of provision of rectification however does not do away with a civil remedy. The law laid down by the Apex Court in the decision reported in 94 CC 310 (Ammonia Supplies Corporation Limited) with reference to Section 155 of the Act as it stood there, still has its relevance on the interpretation of Section 111A(3) of the Act.
7. The question that arises herein relates to the availability of the jurisdiction under Section 111A(3) of the Companies Act with reference to the time limit prescribed therein in respect of transfers that had taken place prior to the introduction of the provision. An aggrieved party has the right to elect the forum to exercise his common law right to move the civil court to vindicate the grievances or invoke the statutory right to move the Company Law Board for relief. The Apex Court held in the decision 94 CC 310 that the jurisdiction under Section 155 of the Act was summary in nature. However, when the claim is based on the disputed rights or title and the materials placed are not sufficient enough to give a decision on the claim, the Court feels that such claim could not be constituting a ground for rectification to be decided in a summary manner, the Court could direct the parties to get their disputes adjudicated by a civil court. It may be seen that the position after the deletion of Section 155, and the insertion of Section 111 or 111A is no different from what prevailed earlier. Applying the Article 137 of the Limitation Act where there is no time limit fixed elsewhere, the period of limitation to invoke common law right will be 3 years. Hence, it is a matter of election for the party aggrieved to invoke the forum and it is the discretion for the Company Law Board to exercise the jurisdiction depending on its view on the complexity of the issue before it.
8. The respondents herein, who are the petitioners before the Company Law Board filed company petitions seeking rectification of the Register of members, Share Transfer Register and Index of Members of the Companies in respect of the impugned shares including the rights, issue and fully convertible debentures said to have been renounced by the petitioners.
9. The objection of Mr. Mylsamy, learned Counsel representing the present appellants is as regards the jurisdiction of the Company Law Board to entertain the petitions under Section 111A of the Companies Act in respect of the transactions which had taken place in the year 1992, 1993 and 1994. The petitioners before the Company Law Board sought rectification to the register of the company by deleting the names therein and to enter their names. The said petition was given on 17.9.1997. The insertion of the crucial words 'any other law for the time being in force' was inserted with effect from 15.1.1997. The Company Law Board dismissed the first petition filed on the premise of want of jurisdiction and that the petitioners had to avail civil remedy alone. However, in view of the amendment made with effect from 15.1.1997 and having regard to the fact that as on the date of dismissal of the petition, the amendment had already come into effect, the petitioners sought intervention once again before the Company Law Board. It is stated by the learned Counsel for the respondents that changes effected in Sub-section 3 of Section 111A of the Companies Act under the amendment Act of 1997 by addition of words 'any other law for the time being in force', is retrospective and hence the petition was maintainable.
10. According to the respondents herein as on the date of the amendment, the respondents had a subsisting civil right, as such, Section 111A of the Companies Act has application and relevancy to the already existing or subsisting right meaning thereby the legislative changes are not be read as prospective to cover cases arising on or after 15.1.1997 calling for rectification, thereby make the respondents remediless.
11. The Company Law Board considered the rival submissions and held that when the respondents applied to the Company Law Board in December 1995 under Section 111A of the Companies Act, the Company Law Board dismissed the petition on the ground that their remedy would not be under Section 111A of the Companies Act before the Company Law Board. By reason of insertion of 'violation of any other provisions of law' in 111A of the Companies Act with effect from 15.1.1997, the rights of the petitioners to move the Company Law Board has been recognised. The amendment being clarificatory, the period of limitations of two months could not be held against the interest of the respondents. The Company Law Board also accepted that there was no undue delay in moving the petitions. Consequently, the Company Law Board admitted the petition for consideration on merits. Aggrieved of this, the respondents before the Company Law Board/the appellants have preferred the above appeals raising following question of law under Section 10F of the Companies Act.
As to whether the Company law Board was right in coming to the conclusion that the limitation prescribed under Section 111A(3) of the Companies Act is absolute and hence would not cover the cases where cause of action had arisen prior to the introduction of Section 111A(3) of the Companies Act.
12. Mr. Mylsamy, learned Counsel appearing for the appellants submitted that in terms of Section 111A(3) of the Act, the Company Law Board had no inherent powers to exercise the jurisdiction condoning the delay beyond the limitation prescribed. The amendment being prospective, any transfer effected much prior to the introduction of amendment, in contravention of 'any other law for the time being in force' under the amendment effected in 1997 and beyond two months limitation would not be covered under Section 111A(3) of the Act. In support of this, he placed reliance on the decision reported in : [1976]2SCR266 N.I. Insurance Co. v. Shanti Misra. The second submission made by Mr. Mylsamy, learned Counsel for the appellants is that change of forum is a matter of procedure. Yet, when substantive right is conferred in addition to the existing common law right, it is not a matter of mere procedure like a change of forum andhence, the provision could only be held as prospective. Hence, when the first petition was dismissed on the ground of jurisdiction, the second petition before the Company Law Board also suffers the same handicap, it being not within the prescribed time limit of two months from the date of transfer. He submitted that there could not be any inherent power to the Company Law Board to enlarge limitation under Section 111A(3) of the Companies Act. Consequently, the right to seek remedy for rectification before the Company Law Board is totally not available on the given set of facts. He placed reliance on the decision reported in : [1991]3SCR912 Vinod Gurudas Raikar v. National Insurnce Co. Ltd. that the Board cannot extend the time for considering the case of this nature. He also submitted that the Section 111A(3) of the Companies Act is prospective in character, it being substantive as well as a procedural provision. He submitted that the introduction of 'any other law for the time being in force' in Section 111A(3) of the Act is substantive in its character. That the statutory remedy for rectification for violation of other Act was constituted only on and from 15.1.1997. Consequently, the only remedy available to the respondents herein from 15.1.1997 is to go before the Civil Court. He also submitted that when there is only a common law right available, the respondents ought to have taken recourse to the same. In support of this proposition, he relied on the decision reported in 109 CC 913 (Shirish Fin. and Invt. v.M. Sreenivasulu Reddy). Apart from this substantive point, he also made submissions on the allegations of fraud.
13. Per contra, Mr. Aravind P. Datar, learned senior counsel appearing for the respondents herein submitted that the first order by the Company Law Board was passed on 6.6.1997. The second petition was preferred in the year November 1997. By the time the first order was passed, the amendment had already come conferring jurisdiction on the Company Law Board to entertain the petition on violation of laws in force. Consequently, coming to know of the amended provision to include 'any other law for exercise of jurisdiction' under Section 111A(3) of the Companies Act, the second petition was rightly presented in November 1997. The learned Counsel supported the order of the Company Law Board and submitted that if, on the date of presenting petition before the Company Law Board, and on the date of the amendment introduced, the respondents has a subsisting right to go for a remedial action, the amendment being declaratory, legislative changes fixing the shorter period of limitation could not put an end to a right which is already there and at best, the period of limitation will have relevance to the cases which arise post amendment. Consequently, he submitted that the Company Law Board had rightly taken the view that leaving aside the limitation prescribed, in respect of live, subsisting civil rights, under the present amendment, the aggrieved party is entitled to approach the Company Law Board within a reasonable time and offering satisfactory explanation on any delay. Consequently, he submitted that the Company Law Board had rightly taken the view that the petition filed in 1997, later on dismissed, and the petition filed in 1998 was within a period of three years from May 1995, and hence maintainable under Section 111A(3) of the Companies Act. In the light of this, he supported the order of the Company Law Board by inviting the attention of the decision of the Supreme Court reported in : [1976]2SCR266 (N.I. Insurance Co. v. Shanti Misra).
14. As far as the present appeals are concerned, the issue has to be approached on a very narrow campus as regards the availability of remedy before the Company Law Board in respect of rectification on violation of other law in force for which jurisdiction has been vested on the Company Law Board only on and from 1997. It is an admitted fact that, but for this amendment, the respondents company would only have a right to move before the Civil Court to vindicate his grievance.
15. Hence, the question raised in the appeal is a pure question of construction on the scope of Section 111A(3) of the Act as to whether retrospectivity could be read into the amendment brought forth by way of substitution of the existing provisions, when the section itself does not expressly state so.
16. Legislation in modern state is directed with some policy to effectuate some public benefit or cure, curb a menace. The normal rule of interpretation is every statute or amendment to the statute is prospective prima facie unless it is expressly or by necessary implication made to have retrospective operation. Hence, it is not necessary to give retrospectivity to the statute only through express provision. Equally the rule against retrospective construction is not applicable as a general proposition, merely because a part of the requisites for its action is drawn from facts antecedent in point of time to its passing of the enactment AIR 2000 SC 1976 - Dilip v. Mohd. Azizal Haq. It is an accepted canon of interpretation that in deciding the question of application of particular statutory provision to past events, the language used is studying factor to look at. It is held that a bare mechanical interpretation of the words and the application of legislative intent, devoid of purpose, will reduce most of the remedial beneficent legislation to futility. In the decision reported in : 1994CriLJ2269 in the case of Directorte of Enforcement v. Deepak Mahajan, Chinnappa Reddy J said 'interpretation must depend on the text and the context. They are the basis of interpretation. One may well say if the text is the texture, context is what gives the colour, neither can be ignored (AIR 1987 SC 1023 Reserve Bank of India v. Peerless General Finance and InvestmentCo. Ltd). Hence, the correct interpretation is one which harmonises with the object of the Act.
17. In all cases, primarily, the language employed is the determinative factor of the legislative intent. It is said that 'the first and the primary rule of construction is that the intention of the legislature must be found in words used by the legislative itself. (AIR 1950 SC 165 - New Piece Goods bazaar co. Ltd. v. CIT). Hence, when the words are precise and unambiguous and the 'Act speaks for itself'' to the use of expression of Justice Subba Rao in : [1962]45ITR414(SC) - State of Uttar Pradesh v.Dr. Vijay Anand Maharaj; it will not be open to the Court to adopt any other construction on the ground that such construction is more consistent with the alleged object or the policy of the Act. It is equally an established principle of construction that every statute is prima facie prospective unless expressly or implied made to have retrospective operation. Hence, in the absence of any specific provision or an intention discernible where the language is not clear, the retrospective construction rests no more than a principle of simple fairness which is made the basis of construction. Hence, ultimately, one has to again return to the principle of construction based on the intention of the legislature gathered from the language used, the objects indicated circumstances under which statute is passed. : AIR2004SC4010 - Ramji Purushottam v. Lakshman Bai D.Kurlawala). The enquiry hence is
(1) what was the object of the Act,
(2) What was the evil that was intended to be curbed by the Act and
(3) what is the machinery for achieving this object (AIR 1987 SC 1023 - Reserve Bank of India v. Peerless General Finance Industries Ltd.)
18. The issue on the retrospective character of the amendment assumes significance further by reason of the limitation provided for in the amendment. It has been held that law relating to forum and limitation is procedural in nature, yet, the law relating to the rights of action and right of appeal, even though remedial, is substantive in character.
19. In the background of these principle, one has to look at the amendment brought forth to Section 111A of the Act with effect from 15.1.1997 as to whether the inclusion of any other law for the time being in force with limitation of two months prescribed in Section 111A of the Act has to be read as a retrospective provision with limitation prescribed therein read down to cover cases of violations or breach under any other law for the time being in force happening prior to the introduction of the amendment falling beyond the period of limitation, but which are otherwise alive within the limitation period for common law remedy.
20. It is an admitted fact that right to file a petition for rectification was a statutory right as well as a common law remedy - one available under Section 155 of the Companies Act originally to come before the High Court or in a given case to move the Civil Court for that matter. The amendment in 1991 to Section 111 of the Act, however resulted in the provisions of Section 155 taken to Section 111 of the Act. Consequently, with the introduction of Section 111, apart from statutory remedy before the High Court, common law remedy is also a remedy available to be pursued as a matter of choice. Thus Section 111 of the Act as it stood from 31st May 1991 covered cases of public limited companies as well as private limited companies. The jurisdiction held by the Court under the provision of Section 111 of the Act is a summary jurisdiction. Serious disputes as regards questions raised within the peripheral field of rectification necessarily need to be adjudicated only before the Civil Court in a manner known to law. However where the Court feels that the question of civil rights or title, denial of transaction or certain basic facts that need enquiry touching on the rights to be a member, are not capable for decision to be considered and give in a summary manner and hence claim does not call for a rectification but exercise demand adjudication on basic facts. The Court can exercise its discretion to direct the party to seek relief before the civil forum. The settled position of law hence is that exercise of jurisdiction under Section 111 of the Act is confined only to those cases where the court can appropriately decide the question raised therein in exercise of summary jurisdiction. Where the application raised complicated question of law or disputed question of law or title, the Court has to consider the facts and issues raised therein to exercise its discretion to grant the relief or direct the parties to file a suit. As such, the jurisdiction of the Civil Court is not completely barred. The decision reported in 94 CC 310 (Ammonia Supplies Corporation Limited) guides us in this regard. Subsequent to the insertion of Section 111A with effect from 20th September 1995 by Depositories Act, 1996, the private limited companies, deemed public companies under Section 43A of the Act came under the exclusive consideration of Section 111 of the Act, as is evident from Sub-section 14. This means on and from 20.9.1995 remedies relating to the public companies came to be covered only under Section 111A of the Act. Sub-section 2 provided that the shares or debentures or any interest therein of a company shall be freely transferable. Sub-section 3 provided for rectification by Company Law Board on an application made by a depository, company, participant or investor in the case of contravention of any other provisions of SEBI Act or Sick Industrial Companies (Special Provisions)Act, 1985. The introduction of proviso with effect 15.1.1997 by Depositories Related Laws (Amendment) Act, 1997, cured the lacunae as regards the appeal remedy as well as to the scope of the rectification remedy.
21. The Amendment Act substituted with effect from 15.1.1997, the original Sub-section 3 by addition of words 'any other law for the time being in force' so as to include contravention of the provisions of the Companies Act, Securities Contract (Regulatory) Act, 1956 and other applicable law enabling the aggrieved party to seek rectification before the Company Law Board. The result of this amendment is that the right to seek the rectification remedy for violation of the provisions of the Company Act or any other law for the time being in force, hitherto a common law right came to be recognised as a statutory remedy with effect from 15.1.1997. It also shows that till the date of amendment and for the period between 20.9.95 to 15.1.97, the only remedy available to an aggrieved person as regards the violations of any other law for the time being in force is a civil remedy alone. Hence till 15.1.1997, as far as the rectification remedy for a violation of the Companies Act or for that matter any other law for the time being in force is concerned, the aggrieved party did have a remedy, the only remedy viz., under common law governed by general law of limitation. The Amendment Act of 1997 merely gave a statutory recognition of common law right to approach the Company Law Board even in respect of breach or violation of any other law for the time being in force. Referring to the scope of amendment, the Bombay High Court in the case reported in 109 CC 913 1028 (shirish fin. and invt. v. M. Sreenivasulu Reddy), considering the said amendment referred to an earlier decision of Bombay High Court reported in 102 CC 375 (Gopal Krishna Baliga v. Poona Industrial Hotel Ltd.), held that,
In this context, it is also worth noticing that till January 15, 1997, when Section 111A was amended, no one could, in a proceeding under Section 111A, challenge a transfer which was in violation of any law in force, other than the SEBI Act and Regulations, and the Sick Industrial Companies (Special Provisions) Act, 1985. It would, therefore, be difficult to contend that Section 111A took away the common law right of a member to seek rectification on account of the transfer being in violation of a law in force. The jurisdiction of courts was not expressly excluded, nor Section 111A as originally enacted or even after its amendment, provided an adequate alternative remedy, or a machinery for the enforcement of the pre-existing right of a member recognised at common law, a test to determine whether exclusion of jurisdiction of courts was intended.
22. In the context of gap existing in the interregnum period since 1995 to 1997, question arises whether the retrospective operation should be given to this provision by reason of substitution brought to the Depositories Related Amendment Act, 1997, which was given effect from 15.1.997. On the question of effectiveness of amendment brought forth by substitution, the Supreme court in : AIR2004SC5100 (Zile Singh v. State of Haryana), considered the provisions relating to Haryana Municipal Act, 1973. Referring to the principle of construction that every statute is prima facie prospective one, the Supreme Court held that the presumption against retrospective operation is not applicable to declaratory statutes. Consequently, the Apex Court held that in determining, therefore, the nature of the Act, regard must be had to the substance rather than to the form. The Court held that
In the absence of a retrospective operation having been expressly given, the courts may be called upon to construe the provisions and answer the question whether the legislature had sufficiently expressed that intention giving the statute retrospectivity. Four factors are suggested as relevant; (i) general scope and purview of the statute; (ii) the remedy sought to be applied; (iii) the former state of the law; and (iv) what was it the legislature contemplated. (p.388) The rule against retrospectivity does not extend to protect from the effect of a repeal, a privilege which did not amount to accrued right.
23. The Apex Court considered the Haryana Municipal Act, 1973. Chapter III of the said Act deals with the composition of municipalities. The Haryana Municipal (Second Amendment) Act, 1994 (Act 3 of 1994) inserted Section 13-A in Chapter III of the principal Act which provides for disqualification from being chosen as member of a municipality if he had more than two living children, provided that a person having more than two children on or after the expiry of one year of the commencement of this Act, shall not be deemed to be disqualified. The result of the amendment is that the legislative embargo imposed on persons from procreating and giving birth to a third child in the context of holding the office of a member of a municipality remained in operation for a period of one year only and thereafter it was lifted. Even for those who became disqualified on 5.4.1994, the disqualification ceased to operate and they became qualified once again to contest the election and hold the office of member of a municipality on the expiry of one year from 5.4.1994. Obviously, this is not what the legislature intended. Under the Haryana Municipal (Second Amendment) Act, 1994 (Act 15 of 1994), the amendment substituted the word 'upto' for the word 'after' in the proviso to Section 13 A of the Act. On the facts of this case reported, it was alleged that a child was born after 5.4.1995, i.e. one year after the commencement of the First Amendment Act, the appellant had incurred disqualification for holding the office as a member. The State Election Commission notified the disqualification suffered by the member. Challenging this, the aggrieved party, the appellant filed a writ petition, which was dismissed by the High Court, thereupon, the appellant went on Special Leave before the Apex Court. Considering the effect of the substitution of one text for the pre-existing text as one of the known and well-recognised practices employed in the legislative drafting, substitution has to be distinguished from supersession or a mere repeal of an existing provision. Referring to the case reported in : [2002]1SCR897 (West U.P. Sugar Mills Assn. v. State of U.P.) at para 25, the Supreme Court held that the process of substitution consists of two steps; first, the old rule is made to cease to exist and, next, the new rule is brought into existence in its place.
24. The Supreme Court viewed that the second amendment as declaratory, that it explains and removes the obvious error and clarifies what the law always was and shall remain to be. The second amendment would operate retrospectively from the date of the first amendment. The court held that evil sought to be curbed was existing for some period contrary to legislative intent. Thus keeping in mind, the general scope and purview of the statute, the remedy sought to be applied, the former state of law, the legislative intent and the employment of the expression, the Apex Court declared the petition is retrospective.
25. Similar view was taken in the case reported in : 2005(187)ELT162(SC) (Govt. of India v. Indian Tobacco Assn.). This case relates to the provisions of Customs Act and Exemption notification. Dealing with the amendment notification as regards substituting a larger list containing the name of some additional places for the list of the places specified in the original notification, the Supreme Court considered the effect of the substitution to the existing provisions. Referring to the amendment by substitution, the Supreme Court held that the amendment only corrected certain obvious mistake. This decision referred to the earlier decision reported in : AIR2004SC5100 (Zile Singh v. State of Haryana), extracting the paras 23 to 25 of this decision, the Apex Court held that,
We are not oblivious of the fact that in certain situations, the court having regard to the purport and object sought to be achieved by the legislature may construe the word 'substitution' as an 'amendment' having a prospective effect but such a question does not arise in the instance case
26. The Supreme Court applied the doctrine of fairness as a relevant factor for construing the statue, apart from language and object discernible from the statue read as a whole.
27. Keeping in mind this principle of construction, if we look at Section 111A(3) of the Act, particularly to the amendment by substitution with effect from 15.1.1997, the fact is clear that a statutory remedy of rectification to public limited companies in respect of violations under the laws for the time being in force was introduced with effect from 15.1.1997 only. By such introduction one more ground for rectification before the Company Law Board is added viz., violation under other laws. It does not do away with the already existing common law right, which means a statutory remedy, in addition to the common law remedy, thus is recognised as available to the aggrieved person as regards the violation under other laws in force. It must be noted that Section 111A was inserted in the Depositories Act, 1996 with effect from 20.9.95 under the same Act 22A of the Securities Control (Regulatory) Act was repealed thus making free transfer of shares of the public company possible. The jurisdiction for rectification as contemplated under Section 111A(3) was restricted to violations of SEBI Act and Sick Industrial Companies (Special Provisions) Act, alone. However, considering the fact that violations of other laws also may demand a rectification in a given set of facts. Section 111A(3) was amended to widen the scope to invoke rectification provisions, thus bringing within the fold of Section 111A(3) other laws violations also, apart from the already enumerated Acts. An addition of a right by a statutory recognition to an already existing right merely enables an aggrieved party a choice of forum, that the absence of which hitherto up to 15.1.1997 could not be said to leave a person remediless. It must be noted that the jurisdiction under Section 111A(3) of the Act for rectification was available only in cases of contravention as stated in the Sub-section. Viewed from this aspect including other Acts to come with Section 111A(3), a supplementary statutory right introduced under the amendment could at best be viewed as prospective and could not by any stretch be given a retrospective effect. It may be noted that the decision reported in : 2005(187)ELT162(SC) (Government of India v. Indian Tobacco Assn.) rests on the construction of the notification granting benefit of exemption, that on the facts of the case and having regard to the intent of the notification, even in the absence of express words, on retrospectivity, the Apex Court granted the benefit basing on the intent and object of the legislation culled out from the background of facts. In fact the Apex Court held that 'the court having regard to the purpose and object sought to be achieved by the legislation may construe the word substitution as an amendment having a prospective effect. In the light of the law declared by the Apex Court, and having regard to the object and the background as regards the availability of rights, the aggrieved person to invoke the common law remedy, I do not find any necessity to read retrospectivity to relax the limitation clause in the section.
28. There is yet another aspect to this. As already seen, Section 111A(3) of the Act prior to the amendment Act, 1997 covered cases of violation falling under the SEBI Act and Sick Industrial Companies (Special Provisions) Act, 1985, which need to be petitioned within the time limit of two months from the date of transfer of shares or debentures held by a depository or from the date on which the instrument of transfer or intimation of transfer was delivered to the company. If the limitation prescribed has to be given a liberal view in respect of action falling for consideration under the amended provision, covering cases of breach of any other law for the time being in force, falling well beyond the two months limitation taken right from the date of introduction of Section 111A and even thereafter, anomalous and discordant notes as regards the provision of limitation would result in that, while for violation of SEBI and Sick Industrial Companies Act, the time limit would be two months, for other enactments, it would mean a liberal limitation not confining to a prescribed limit - a result totally unintended by the legislature an exercise leading to absurdity in interpretation. What is true of the principle of interpretation of statue to be read as a whole and one provision of the Act construed with reference to other provisions of the Act to have a consistent enforcement of the whole statute is equally true of reading the various clauses or aspects in the provision to avoid any repugnancy or inconsistency. It is necessary that we must eschew 'head on clash' between the various parts of the same provisions. We must choose the construction which will be in accord with other parts of the section and avoid one which leads to absurdity, confusion, conflict and contradiction between the various provisions and parts of the section or which undermines or defeat or destroy the basis of the enactment. ( : [1979]1SCR26 Chief Justice of A.P. v.L.V.A. Dixitulu). Hence, even applying the principle of maintaining harmony among the several parts of the Section, one can only say that the statutory remedy under the amended provisions is available only to subject to the limitation provided. The limitation hence, cannot be relaxed on any notion of retrospectivity or a principle of fairness or treating the amendment as declaratory to have an implied retrospectivity.
29. It must be noted that there is nothing in the Companies Act expressly or by necessary implications barring the jurisdiction of the Civil Court or the abridging the common law right of a party. The jurisdiction of the Company Law Board under Section 111A(3) of the Act recognises a right under the provisions of the Companies Act to seek relief in summary manner for rectification. Yet, at the same time, the common law right to file a petition is always available on the date as well as post the date when the amendment was brought forth.
30. The learned Counsel for the appellants, referring to the Maxwell on Interpretation of Statutes, Craies on Statute Law and on Principles of Statutory Interpretation, in support of his contention, submitted that unless the statute intended retrospectivity to the provisions, the same cannot be read into, more so, where there is no ambiguity pointed out in the amended provision. He also submitted that when common law right had not been taken away from the respondents, the prayer for retrospectivity could not be granted to the provisions of statutory remedy of rectification. The learned Counsel in this connection placed reliance on the decision reported in : [1976]2SCR266 (N.I. Insurance Co. v. Shanti Misra), and submitted that the retrospectivity can be read only in cases of procedural law and not substantive law.
31.The decision cited by the learned Counsel for the appellants is also relied on by the learned Counsel for the respondents, which relates to the provisions of the Motor Vehicles Act. The case relates to an accident occurred on 11.9.1966. Under the provisions then existing under Article 82 of the Limitation Act, a suit could be filed within two years from the date of the accident. However, it is stated that in the meantime, the Uttar Pradesh Government constituted a Claims Tribunal under Section 110 of the Motor Vehicles Act by notification dated 18th March 1967. An application was preferred under Section 110A on 8th July 1967, which was objected to by the Insurance Company. Aggrieved of the orders passed against the insurance company, on the question of jurisdiction, the matter was taken on appeal to the Supreme Court. Referring to the difficulties arising in the provisions relating to the constitution of the Tribunal and limitation provided with reference to the claims which were live as on the date of the amendment, the Apex Court, referring to Sections110 A and 110F of the Motor Vehicles Act, held that the claim before the Tribunal normally should have been made within period of six months from the date of the accident. The court noted the provisions of Section 110A and 111 of the Motor Vehicles Act and held that,. It is a well established proposition that such 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. If by express words the new forum is made available only to causes of action arising after the creation of the forum, then the retrospective operation of the law is taken away.
32. The Apex Court further held that if an application could not be made within a period stipulated therein, by reason of the limitation provided therefor, it led to a situation that the claimant could not invoke the jurisdiction of the Tribunal. Noting the unambiguous language of Sections 110A and 110F, the Court held that the change of the procedural law as to a forum must be given retrospective effect. The underlying principle of the change of law brought about by the amendment was to enable the claimants to have a cheap remedy of approaching the Claims Tribunal on payment of a nominal court fee, whereas a large amount of ad valorem court fee was required to be paid in Civil Court. The Apex Court held that it was legitimate to think that the legislature did not think it necessary to affect the pending suits but wanted the cheap remedy to be available as soon as the Tribunal was constituted by the State Governments, in all cases irrespective of the date of the accident, provided the remedy of going to the Court was not barred on the date of the constitution of the Tribunal. The Court felt that the limitation in such cases have to be solved. The Apex Court further held that if a party was not able to file an application for no fault of his but because the Tribunal was not in existence, it would not be a case where it could be said that the applicant was prevented by sufficient cause from making the application in time. For considering the question of limitations, the Apex Court gave two reasons, which are:
(1) Time for the purpose of filing the application under Section 110A did not start running before the constitution of the Tribunal. Time had started running for the filing of the suit but before it had expired the forum was changed. And for the purpose of the changed forum, time could not be deemed to have started running before a remedy of going to the new forum is made available.
(2) Eventhough by and large the law of limitation has been held to be a procedural law, there are exceptions to this principle. Generally the law of limitation which is in vogue on the date of the commencement of the action governs it. But there are certain exceptions to this principle. The new law of limitation providing a longer period cannot revive a dead remedy. Nor can it suddenly extinguish vested right of action by providing for a shorter period of limitation.
33. The Court further held that since there was a change of forum, reasonable view has to be taken that such an application could be filed within a reasonable time of the constitution of the Tribunal, which ordinarily and generally, would be the time of limitation mentioned in Sub-section (3) therein. Hence, when the application was not made within the time stipulated from the date of constitution of the Tribunal, in a given case, further time taken in making of the application may be held to be reasonable time on the facts of the case. Since the jurisdiction of the Civil Court is taken away and the filing of the application before the Tribunal is the only remedy available to the claimant, the rights alive on the date of the constitution of the Tribunal, retrospectivity could not be denied at all.
34. Learned Counsel for the appellant further submitted that this case clearly brings out a case where due to the change of forum,the earlier remedial forum itself abolished, the effect of retrospectivity was given for relaxation on the front of limitation. However, in the case on hand, it is not as though, even on the date of the amendment, the respondent is remediless. As on today the common law remedy is always available to the aggrieved party along with the statutory remedy. Hence, conferring the jurisdiction for rectification in respect of violations of any law since 1997 is an additional remedy giving recognition to the principle of electing the forum for rectification and not a remedy in substitution of the one already in existence, I agree. As rightly pointed out by the learned Counsel for the appellants, the fact that Section 111A(3) of the Act prior to 1997 amendment had not contemplated violations under the other laws for Section 111A(3) does not mean that an affected party was left without any remedial forum. The learned Counsel for the appellants also relied on : [1979]1SCR26 (Chief Justice A.P. v.L.V.A. Dikshitulu) : AIR1988SC1875 (Ajay Pradhan v. State of M.P.) and : (1992)IILLJ744SC (Nelson Motis v. Union of India) in support of the contention that unless the statute intended retrospectivity, reading down of statute is not permissible to confer jurisdiction on the Company Law Board to entertain the applications for rectification in respect of the company law violations, or any other law for that matter alleged to be committed much prior to the introduction of the amendment to Section 111A(3) of the Act. He also referred to a decision reported in 109 CC 913 (Shrish Fin. and Invt. v.M. Sreenivasulu Reddy) that when common law right is already available, a person cannot have grievance on this. In the context of these decisions, the appellants prayed that the appeal be allowed.
35. Mr. Aravind P. Datar, learned senior counsel appearing for the respondents however submitted that the second petition was preferred in November 1997 and the first petition was dismissed on 6.6.1997. Going by the fact that the amendment itself was available on 15.1.1997, the application was there when the first order was made, the learned Counsel submitted that there was no delay in filing the application, considering the fact that the right already in existence could be exercised only on the amendment to the Act and hence the Tribunal was justified in its view on the aspect of applicability of the amended provision particularly on the question of limitation not to be invoked to the prejudice of the respondent.
36. A perusal of the order of the Tribunal shows that it had taken the view in support of the respondents that vested rights of action could not be taken away by subsequent legislation changes fixing a shorter period of limitation. It viewed that on the date the amendment, the rights of the parties was a live one. The vested right of action hence could not be taken away by subsequent legislative changes. Hence the limitation of two months would apply prospectively. For rights already vested, the limitation could not be applied. Hence, the Company Law Board held that the petition was maintainable and did not suffer from limitation. In this connection,Mr. Aravind P. Datar placed reliance on the decision reported in : [1976]2SCR266 (N.I. Insurance Co. v. Shanti Misra), the decision which was relied on by the appellant. In the circumstances, he submitted that even though the provisions contained limitation, it could not affect the right which live and hence the chance of electing the forum given under the amendment could not be whittled down by reading limitation into their rights. The petitions were filed in November 1997 and again on February 1998, within a period of three years from May 1995. Consequently, the application was maintainable.
37. I do not agree with the contention of the respondents herein. As rightly contended byMr. Mylsamy, learned Counsel appearing for the appellants, the respondents' right in seeking for rectification for violations of any other provisions of the Act till 1997 only a common law remedy was available. There was no statutory right. On and from January 1997, only a pure and simple civil remedy as against the violation of other enactments has been recognised as a statutory remedy too, apart from SEBI Act and Sick Industrial Companies (Special Provisions) Act, 1985. The restriction as regards the exercise of the right is subject to limitation, which was already there as regards the violation of SEBI Act and Sick Industrial Companies Act. As already considered in the earlier paras, there is nothing in the section to show that the amendment has put an end to the common law right to leave the affected party remediless. Consequently, to this extent the reliance placed by the respondents in the case of : [1976]2SCR266 (New India InsuranceCo. Ltd. v. Shanthi Misra) is not sustainable. The situation which prompted the Apex Court to read retrospectivity as in the reported decision is not same in the case on hand to read an implied retrospectivity. There is nothing in the objects to suggest that the legislature intended to rope in violations of other laws irrespective of the time limit to give a right under Section 111A(3) of the Act to base the cause of action drawn from past events. The common law right which was available for the period of 1995 to 1997 remain intact even after the amendment and the aggrieved party could assert that the right by filing a suit before the Court of competent jurisdiction - a right which continues even after the amendment. It must be noted that the amendment does not in any way whittle down or abrogate the common law remedy. Post the amendment, both the common law and statutory remedy are concurrent remedies available leaving open an element of election to the parties concerned. The decision of the Supreme court in (1968) 22 STC 416 (Dhulabai v. State of M.P.) ( : [1988]171ITR254(SC) (Raja Ram Kumar Bhargava v. Union of India) is an authority for the proposition that if the pre existing right in common law is recognied as a statutory right and a statutory remedy provided, there being no express exclusion of the Civil court jurisdiction, both the common law remedy as well as statutory remedy remain available hand in hand leaving the choice to the aggrieved party to elect.
38. Retrospectivity is a matter which needs to be considered taking into account the objects, the purpose and the intention of the amendment and prejudice, if any, caused to the subject. The situation herein is totally different from one prevailing in the reported decisions. The construction put on by the Company Law Board on Section 111A of the Act overlooks the fact that the present provisions merely provide a forum of choice and that common law remedy continued to exist even after 1997 and with that right still available, the question of relaxation does not arise.
39. Learned Counsel for the respondents submitted that even before the remedy for going to the new forum is made available, the law of limitation providing for a shorter period cannot ring a death knell to an already existing right, thus, the limitation provided therefor merited liberal construction given the object of the amendment. Supporting the view taken by the Company Law Board, the learned Counsel submitted that the amendment of 1997 could at best be read as clarificatory and hence retrospective in character. The apprehension stated supra on the effect of the shorter limitation on the right is only imaginary. I do not find any basis for the same. Consequently, for the reasons stated supra, I do not find any justification in accepting the plea of the respondents herein.
40. The order of the Company Law Board consequently deserves to be reversed. The Company Law Board fell into an error for its reasons that the limitation provided completely wipes out the vested rights of the parties, which are alive as on the date of the amendment. The view that the change of forum being procedural, as such, rights of the parties as regards the violations relating to other laws prior to 1997, would be vindicated only before the Company Law Board consequent on the amendment over looks the fact that 1997 amendment does not take away the civil rights under common law. What is true of 1995 position as regards SEBI Act and Sick Industrial Companies (Special Provisions) Act is equally true as regards the violations of provisions available under 1997 amendment. In the circumstances, I do not find any hesitation in allowing the appeals herein by accepting the contentions on the scope of Section 111A(3) of the Companies Act under the Amendment Act, 1997. Consequently, the appeal is allowed. The order of the Company Law Board is reversed. No order as to costs.