Carbon Corporation Ltd. Vs. Abhudaya Properties Pvt. Ltd. - Court Judgment

Excerpt:
1. this matter arises out of 59 references filed under section 22a of the securities contracts (regulation) act, 1956 (hereinafter referred to as "the act"), by carbon corporation ltd. (hereinafter referred to as "the applicant-company) for confirming the opinion formed by its board of directors to refuse the registration of 1,49,950 shares in favour of the parties shown as transferees hereinabove.2. the relevant particulars of these references such as petition number, date of filing with the company law board, names of the transferees, number of shares, date of lodgement and date of board meeting at which the opinion was formed to refuse the registration of transfer of the shares, are all contained in the statement annexed to this order (annexure 'a'). also against each reference in the last but two columns of the statement, information is given about the date on which reference was filed with the bench and whether separate application for condonation of delay, if any, is made by the applicant-company.3. at the beginning of the hearing on september 7, 1990, it was agreed by the advocates and parties present that all the 59 references involving 1,49,950 shares may be heard together, as the issues to be considered in all these references are common and may be disposed of by one common order.4. hearings were held on september 7, 1990, october 26, 1990, november 28, 1990, and january 9, 1991. during the hearings, the applicant-company sought permission to withdraw references made in respect of 21 cases by an application dated october 1, 1990, ten cases by an application dated november 23, 1990, one case by an application dated november 27, 1990, and one case by an application dated january 4, 1991, and also filed consent letters from the transferees for such withdrawal. during the hearing in two cases, the advocates for the applicant-company as well as for the transferees agreed mutually for withdrawal of the references, the advocate for the transferee reserving the right of his client to claim compensation. none of the advocates present objected to withdrawal of these references in respect of 35 cases involving shares ; as the company had agreed to transfer the shares in the name of the transferee in these 35 cases, we have allowed the applicant-company's request for withdrawal and, therefore, dismissed the 35 references. details of these dismissed references are indicated in the "remarks" column of annexure 'a'. thus, the present order covers only the remaining 24 references.5. in all these 24 references involving 97,200 shares, the transfer of shares is proposed to be rejected by the applicant-company on the ground stated in clause (c) of sub-section (3) of section 22a of the act. the power of the board of directors of the applicant-company to refuse the registration of the transfer of shares is contained in article 61 of the articles of association of the applicant-company.6. all the remaining 24 references were filed beyond the period of two months from the date of lodgment of share transfer applications, as provided in section 22a(4) of the act. the applicant-company has filed separate applications for condonation of delay in only nine cases out of these 24 references, but a generar statement for condonation of delay is made in all the petitions under section 22a. in addition, in some of the cases, the applicant-company has filed applications on december 21, 1990, giving elaborate reasons for condonation of delay.in respect of the cases 1/sc/clb/wr/90 and 3/sc/clb/ wr/90, the applicant-company has also filed applications for amending the petition by inserting para 11a pointing out that some of the transferees are residing outside india and necessary fera clearances have not been obtained and, therefore, the transfers cannot be registered, being illegal and contrary to law. these applications for condonation of delay and for amending the petitions were strongly objected to by the transferees and it was argued by shri r.a. kapadia, advocate appearing on behalf of abhudaya properties ltd., and shri g.e. vahanwati, advocate appearing on behalf of "bangurs", that it is necessary to consider the point of limitation and maintainability of these references before the application for amendment and condonation of delay could be taken up for consideration. in view of this, it was decided to first hear legal arguments on the point of limitation and maintainability of reference.7. shri. b. chinai, advocate appearing on behalf of the applicant-company, stated that a large number of applications for registration of transfer of shares were submitted to the company prior to the closure of books from july 18, 1989, to august 10, 1989. in or around july, 1989, more than three lakhs shares constituting 9% of the paid-up equity capital of the applicant-company were lodged for transfer and the number of share transfer deeds involved in these applications was more than 3,000. on scrutiny of these applications, the company observed various discrepancies in a number of transfers and the company called particulars and clarifications from the concerned transferees. as the applicant-company could not get a satisfactory explanation from the transferor and/or transferees at its board meetings held on november 21, 1980, march 23, 1990, and april 23, 1990, the board of directors of the applicant company in good faith formed the opinion that the shares lodged for registration of transfer, if allowed, would be prejudicial to the interest of the company, its employees, creditors, government, present investors and the public at large. shri chinai argued that since the volume of transfers lodged was substantially large, it was physically impossible for the staff of the company to complete the scrutiny and for the board to reach a decision on the subject within the stipulated time period and since the decision could be reached only in the board meeting held in november, 1989, there was no delay in making a reference under section 22a of the act to the company law board. he also submitted that if there is any delay in filing the references, the same could be condoned and enlargement of time be granted in accordance with rule 40 of the company law board (bench) rules, 1975, and the reference could be taken on record. he further submitted that, considering the large volume of reference, it was not possible for the applicant-company to file three copies of the memorandum and articles of association and the latest annual return along with each reference and exemption may be granted to the applicant-company for not annexing the same. it was further submitted that the applicant-company has filed copies of the share transfer deeds along with the references instead of the original share transfer deeds and exemption may be granted to be applicant-company for not filing the share transfer deeds. he also stated that the applicant-company would be ready to produce at any time the original share transfer deeds as and when they are required by the bench. shri chinai also referred to rule 41 of the (bench) rules under which, according to him, the company law board has inherent powers as may be necessary for the ends of justice and argued that, considering the large volume of lodgement of transfer shares within a short spell of time, circumstances do exist for use of the inherent powers to condone the delay to meet the ends of justice. shri atul setalvad also, appearing on behalf of the applicant-company, at the time of hearing held on january 9, 1991, stated though rules 40 and 41 of the company law board (bench) rules are not applicable to the present case and the lime for filing the references cannot be enlarged under the rules, he contended that the provisions of the limitation act are applicable. he also referred to the provisions of the limitation act, 1963, section 29(2) of which reads as follows : "29(2). where any special or local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed by the schedule, the provisions of section 3 shall apply as if such period were the period prescribed by the schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in sections 4 to 24 inclusive shall apply only in so far as, and to the extent to which, they are not expressly excluded by such special or local law." 8. he pointed out that the securities contracts (regulation) act is a special law enacted by parliament which provides the period of limitation of two months within which the company has not only to form, in good faith, its opinion about refusal to register transfer of shares but the company must also, within the same period, make a reference to the company law board and forward copies of such references to the transferor and the transferee. he also further pointed out that there are no provisions in the act which specifically exclude application of the provisions contained in sections 4 to 24 of the limitation act.after this, he drew our attention to section 5 of the limitation act which permits condonation of delay. section 5 of the limitation act, 1963, reads as follows : "5. extension of prescribed period in certain cases.--any appeal or any application, other than an application under any of the provisions of order xxi of the code of civil procedure, 1908 (5 of 1908), may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or make the application within such period. explanation.--the fact that the appellant or the applicant was misled by any order, practice or judgment of the high court in ascertaining or computing the prescribed period may be sufficient cause within the meaning of this section."mangu ram v. municipal corporation of delhi [1976] 2 scr 260 ; air 1976 sc 105 in which it was observed as under (page 108 of air 1976 sc) : "there is an important departure made by the limitation act, 1963, in so far as the provision contained in section 29, sub-section (2), is concerned. whereas under the indian limitation act, 1908, section 29, sub-section (2), clause (b), provided that for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law the provisions of the indian limitation act, 1908, other than those contained in sections 4, 9 to 18 and 22, shall not apply and, therefore, the applicability of section 5 was in clear and specific terms excluded. section 29, sub-section (2), of the limitation act, 1963, enacts in so many terms that for the purpose of determining the period of limitation prescribed for any suit, appeal or application by any special or local law the provisions contained in sections 4 to 24 which would include section 5, shall apply in so far as and to the extent to which they are not expressly excluded by such special or local law. section 29, sub-section (2), clause (b), of the indian limitation act, 1908, specifically excluded the applicability of section 5, while section 29, sub-section (2), of the limitation act, 1963, in clear and unambiguous terms provides for the applicability of section 5 and the ratio of the decision in kaushalya rani's case, air 1964 sc 1260, can, therefore, have no application in cases governed by the limitation act, 1963, since that decision proceeded on the hypothesis that the applicability of section 5 was excluded by reason of section 29(2)(b) of the indian limitation act, 1908. since under the limitation act, 1963, 'section 5 is specifically made applicable by section 29, sub-section (2), it can be availed of for the purpose of extending the period of limitation prescribed by a special or local law if the applicant can show that he had sufficient cause for not presenting the application within the period of limitation. it is only if the special or local law expressly excludes the applicability of section 5, that it would stand displaced." 10. he also referred to the delhi high court decision in rohtas industries ltd. v. union of india, air 1985 delhi 390, in which it was held that the central government was not correct in disallowing the prayer of the petitioner for condonation of delay in filing an appeal against the order of the director on the ground that there was no provision for condonation in the act as section 5 of the limitation act is applicable as it has not specifically excluded the applicability of the same. it was, therefore, contended by shri setalvad that not only the provisions of the limitation act are applicable to court proceedings but they are applicable even to proceedings before the authorities like the central government. he then referred to the decision of the company law board (eastern region bench) in sinclair hotels and transportations ltd, v. pressman advisory services (p.) ltd. [1989] 2 comp l] 49 (clb) m which it was held that the provisions of the limitation act, 1963, would be attracted by virtue of the provisions of section 29 thereof and the period prescribed under sub-section (4) of section 22a of the securities contracts (regulation) act would be deemed to have been incorporated in the schedule thereto and the provisions contained in sections 4 to 24 shall apply in so far as, and to the extent to which, they are not expressly excluded by this special law. in view of this, shri setalvad further argued that the bench has power to condone delay if the delay of each day is adequately explained. this decision of the company law board (eastern region bench) was given in october, 1988. he also referred to the decision of the company law board (eastern region bench) in sinclair hotels and transportations ltd. given in 1989 in which it was held that section 22a(4) of the securities contracts (regulation) act does not provide any relaxation of the period of two months nor does it vest this bench with power to enlarge the period of two months for filing the reference. shri setalvad, however, hastened to add that the bench had come to this decision probably because the company did not put forward any legal reasoning warranting condonation of delay. he also pointed out that the bench has considered only the question of applicability of rule 40 of the company law board (bench) rules and section 637b of the companies act, 1956, and they did not consider the applicability of the provisions of the limitation act, 1963. shri setalvad then referred to the decision of the company law board (southern region bench) given in the case of kcp ltd, v. eid parry (india) ltd. (published in company law digest in october, 1990 (pages 22 to 26)) in which it was observed "although an oral prayer was made before us by shri rajiv sawhney, advocate, that we should condone the delay in making the reference, under the inherent powers of the bench contained in rule 41 of the company law board (bench) rules, 1975, we find no merit in this prayer, firstly, because the time-limit for making the reference before the company law board is laid down in a separate statute, namely, section 22a of the securities contracts (regulation) act, 1956, which has overriding effect on a subordinate legislation like the company law board (bench) rules and, secondly, because the inherent powers of the bench cannot be invoked for purposes of overcoming statutory limitations." shri setalvad argued that, in this case also, the company law board had not considered the applicability of the provisions of the limitation act, 1963. shri setalvad further contended that, as per the delhi high court decision in rohtas industries ltd. v. union of india, air 1985 delhi 390, as the limitation act has been held applicable to proceedings before the central government, it will be equally applicable to the proceedings before the company law board. he further argued that even if it is held that the provisions of section 5 of the limitation act would come into play only in cases where the proceedings are before a court, in his view the company law board is, for all practical purposes, a court. in this connection, shri setalvad referred to the decision in employees' state insurance corporation v. shashikant arikhindi [1983] 2 bom cr 260, in which the high court of bombay observed, "the employees' insurance court has not merely the trappings of a court but, in many respects, it is given the same powers as are given to ordinary civil courts by the code of civil procedure. it performs judicial functions and has been empowered to render definitive decisions, which have a finality and authoritativeness so as to bind the parties appearing before it qua their rights. thus, it satisfies all the criteria that have been accepted by the supreme court and bench of this court and, therefore, it is a court for all practical purposes, including for the purposes of section 5 of the limitation act". on the same analogy, shri setalvad argued that so far as section 5 of the limitation act is concerned, the company law board should be treated as a court and, therefore, the company law board has got all the powers of condonation of delay and extending the time-limits for filing the reference. therefore, he pleaded that the references made by the applicant-company are maintainable and should be heard on the merits.11. shri r.a. kapadia, appearing on behalf of abhudaya properties pvt.ltd., argued that it is quite clear that the provisions of the limitation act are applicable to the proceedings before the court and since the company law board is not a court, the provisions of the limitation act are not applicable. he also referred to the various cases quoted by the learned advocate for the applicant-company and pointed out that in pravinkant keshavlal parikh v. bombay municipal corporation, air 1981 bom 37, it was held that the chief judge of the small causes court acts as a court and not as a persona designata and, therefore, the provisions of section 5 of the limitation act would apply to the proceedings instituted under section 504 of the bombay municipal corporation act. even in the case of employees' state insurance corporation v. shashihant arikhindi [1983] 2 bom cr 260, it has been clearly pointed out in para 5 that the employees' insurance court is constituted as a court and any person who is or has been a judicial officer or is a legal practitioner, of five years' standing is qualified to be a judge of the employees' insurance court. only when it was held that the employees' insurance court is a court, then only the provisions of section 5 of the limitation act were applicable.referring to the delhi high court judgment in rohtas industries ltd. v.union of india, air 1985 delhi 390, in which it was held that, even for the proceedings before the central government, the provisions of section 5 of the limitation act would be applicable, shri r.a. kapadia pointed out that, in that case, the question whether it was a court or not was not at all argued and, therefore, it is not a relevant decision in this case. shri. r.a. kapadia also pointed out that the wording of sub-section (2) of section 29 makes it clear that the provision is applicable only when the special law prescribes a period of limitation different from the period prescribed by the schedule. he pointed out that for such an application, since there is no limitation prescribed at all in the schedule to the limitation act, 1963, there is no question of applicability of the provisions of the limitation act, 1963, to the proceedings under section 22a of the act. he further pointed out that even if the company law board can condone the delay in filing the reference, it cannot condone default for not forming the opinion by the board of directors about approval or rejection of transfer within the stipulated period of two months.12. shri g. e. vahanwati, advocate, appearing on behalf of bangurs, stated that the decision of the eastern bench of the company law board in sinclair hotels v. pressman advisory services is not binding on this bench as the doctrine of precedence is not applicable to the proceedings before the tribunal. in this respect, he referred to wade's administrative law, fifth edition, page 927, in which it is observed : "in the use of its own precedents, a tribunal is, as explained earlier, in a radically different position from a court of law. its duty is to reach the right decision in the circumstances of the moment, any discretion must be genuinely exercised, and there must be no blind following of its previous decisions", 13. and argued that while precedents are applicable and binding in the proceedings before a court, it is not binding in the proceedings before the tribunal. he also stated that, in all the three cases (cases nos.15, 17 and 28), his clients have lodged transfer forms along with the share transfer certificates on july 12, 1989, and the board of directors held a meeting on november 21, 1989, in which it was decided to reject the transfer request and the reference was made to the company law board on january 15, 1990. he argued that these dates clearly indicate that there was not only a delay in making a reference to the company law board but the statutory period of two months for forming an opinion by the board of directors on the application for registration of transfer was also not adhered to shri vahanwati argued that there is no provision for condonation of default as the period of two months for forming an opinion by the board of directors for reference to the company law board has been fixed by a special statute and is mandatory. he further argued that even if it is considered that the previous decisions of the company law board are binding, as decided in v.t. harguda v. d.m. pujari, air 1980 bom 341, if each bench consists of an equal number of judges, the later decision would prevail and, therefore, the later judgment in the case of sinclair hotels v.pressman advisory services, given in 1989, and in the case of kcp ltd.., given in 1990 in which it was held that there is no provision for enlarging the period of two months prescribed in section 22a of the act should be taken as binding and was to be followed, shri vahanwati further pointed out that, even on merits, there is no case for condonation as the delay of each day is not explained by the applicant-company nor has the applicant-company filed an application for condonation while making a reference. it was also pointed out that a perusal of the board resolution passed on november 21, 1989, shows that the board of directors had taken an ad hoc decision without applying its mind and rejected all the applications where the shares involved were more than 500. he, therefore, argued that the reason stated in the reference that because of the large volume of transfers, it was not possible for the board to take a decision, is not borne out by the facts of this case.14. we have carefully considered the arguments advanced by learned advocates appearing on behalf of the applicant-company and the transferees on the point of maintainability of the references and also on the application of the provisions of the limitation act, 1963. both the sides have referred to a number of decisions in court cases in support of their contention. we have also considered the observations of the supreme court in sakuru v. tanaji, air 1985 sc 1279, in which it was observed (at page 1280) :town municipal council, athani v. presiding officer, labour court, hubli [1970] 1 scr 51 ; air 1969 sc 1335 ; nityananda m. joshi v. life insurance corporation of india [1970] 1 scr 396 ; air 1970 sc 209 and sushila devi v. ramanandan prasad [1976] 2 scr 845 ; air 1976 sc 177, that the provisions of the limitation act, 1963, apply only to proceedings in "courts" and not to appeals or applications before bodies other than courts such as quasi-judicial tribunals or executive authorities, notwithstanding the fact that such bodies or authorities may be vested with certain specified powers conferred on courts under the code of civil or criminal procedure. the collector before whom the appeal was preferred by the appellant herein under section 90 of the act not being a court, the limitation act, as such, had no applicability to the proceedings before him." 15. it is, thus, clear that the provisions of the limitation act, 1963, are applicable only to the proceedings before the court. the provisions of sub-sections (4c) and (4d) of section 10e of the companies act, 1956, state that every bench shall have powers which are vested in a court under the code of civil procedure, 1908, while trying a suit, in respect of certain matters. the nature of functions of the company law board acting under sub-section (4a) of section 10e are executive or administrative as distinguished from quasi-judicial functions performed under sub-section (4b). in view of this, the company law board is not a court even though it has certain specified powers of courts in respect of certain matters. the special statute under which the present proceedings are being held, i.e., the securities contracts (regulation) act, also does not contain express provisions empowering the company law board to extend the prescribed period of limitation and condone the delay in filing a reference. in view of the supreme court decision and the provisions of the securities contracts (regulation) act, relating to the proceedings under section 22a before this bench, we have no doubt in our mind that the provisions of the limitation act are not applicable to the proceedings under section 22a of the act which is a special statute and, consequently, this bench has no powers to extend the time limit for filing the reference and condone the delay. in view of this, we hold that the 24 references made by the applicant-company to us for confirmation or otherwise of the opinion arrived at by the board of directors of the company are not maintainable as the board has not arrived at a decision within a period of two months and have not made this reference within the prescribed period of two months and, therefore, are not maintainable and are dismissed.

Judgment:
1. This matter arises out of 59 references filed under section 22A of the Securities Contracts (Regulation) Act, 1956 (hereinafter referred to as "the Act"), by Carbon Corporation Ltd. (hereinafter referred to as "the applicant-company) for confirming the opinion formed by its board of directors to refuse the registration of 1,49,950 shares in favour of the parties shown as transferees hereinabove.

2. The relevant particulars of these references such as petition number, date of filing with the Company Law Board, names of the transferees, number of shares, date of lodgement and date of board meeting at which the opinion was formed to refuse the registration of transfer of the shares, are all contained in the statement annexed to this order (annexure 'A'). Also against each reference in the last but two columns of the statement, information is given about the date on which reference was filed with the Bench and whether separate application for condonation of delay, if any, is made by the applicant-company.

3. At the beginning of the hearing on September 7, 1990, it was agreed by the advocates and parties present that all the 59 references involving 1,49,950 shares may be heard together, as the issues to be considered in all these references are common and may be disposed of by one common order.

4. Hearings were held on September 7, 1990, October 26, 1990, November 28, 1990, and January 9, 1991. During the hearings, the applicant-company sought permission to withdraw references made in respect of 21 cases by an application dated October 1, 1990, ten cases by an application dated November 23, 1990, one case by an application dated November 27, 1990, and one case by an application dated January 4, 1991, and also filed consent letters from the transferees for such withdrawal. During the hearing in two cases, the advocates for the applicant-company as well as for the transferees agreed mutually for withdrawal of the references, the advocate for the transferee reserving the right of his client to claim compensation. None of the advocates present objected to withdrawal of these references in respect of 35 cases involving shares ; as the company had agreed to transfer the shares in the name of the transferee in these 35 cases, we have allowed the applicant-company's request for withdrawal and, therefore, dismissed the 35 references. Details of these dismissed references are indicated in the "remarks" column of annexure 'A'. Thus, the present order covers only the remaining 24 references.

5. In all these 24 references involving 97,200 shares, the transfer of shares is proposed to be rejected by the applicant-company on the ground stated in Clause (c) of Sub-section (3) of Section 22A of the Act. The power of the board of directors of the applicant-company to refuse the registration of the transfer of shares is contained in Article 61 of the articles of association of the applicant-company.

6. All the remaining 24 references were filed beyond the period of two months from the date of lodgment of share transfer applications, as provided in Section 22A(4) of the Act. The applicant-company has filed separate applications for condonation of delay In only nine cases out of these 24 references, but a generar statement for condonation of delay is made in all the petitions under Section 22A. In addition, in some of the cases, the applicant-company has filed applications on December 21, 1990, giving elaborate reasons for condonation of delay.

In respect of the cases 1/SC/CLB/WR/90 and 3/SC/CLB/ WR/90, the applicant-company has also filed applications for amending the petition by inserting para 11A pointing out that some of the transferees are residing outside India and necessary FERA clearances have not been obtained and, therefore, the transfers cannot be registered, being illegal and contrary to law. These applications for condonation of delay and for amending the petitions were strongly objected to by the transferees and it was argued by Shri R.A. Kapadia, advocate appearing on behalf of Abhudaya Properties Ltd., and Shri G.E. Vahanwati, advocate appearing on behalf of "Bangurs", that it is necessary to consider the point of limitation and maintainability of these references before the application for amendment and condonation of delay could be taken up for consideration. In view of this, it was decided to first hear legal arguments on the point of limitation and maintainability of reference.

7. Shri. B. Chinai, advocate appearing on behalf of the applicant-company, stated that a large number of applications for registration of transfer of shares were submitted to the company prior to the closure of books from July 18, 1989, to August 10, 1989. In or around July, 1989, more than three lakhs shares constituting 9% of the paid-up equity capital of the applicant-company were lodged for transfer and the number of share transfer deeds involved in these applications was more than 3,000. On scrutiny of these applications, the company observed various discrepancies in a number of transfers and the company called particulars and clarifications from the concerned transferees. As the applicant-company could not get a satisfactory explanation from the transferor and/or transferees at its board meetings held on November 21, 1980, March 23, 1990, and April 23, 1990, the board of directors of the applicant company in good faith formed the opinion that the shares lodged for registration of transfer, if allowed, would be prejudicial to the interest of the company, its employees, creditors, Government, present investors and the public at large. Shri Chinai argued that since the volume of transfers lodged was substantially large, it was physically impossible for the staff of the company to complete the scrutiny and for the board to reach a decision on the subject within the stipulated time period and since the decision could be reached only in the board meeting held in November, 1989, there was no delay in making a reference under Section 22A of the Act to the Company Law Board. He also submitted that if there is any delay in filing the references, the same could be condoned and enlargement of time be granted in accordance with Rule 40 of the Company Law Board (Bench) Rules, 1975, and the reference could be taken on record. He further submitted that, considering the large volume of reference, it was not possible for the applicant-company to file three copies of the memorandum and articles of association and the latest annual return along with each reference and exemption may be granted to the applicant-company for not annexing the same. It was further submitted that the applicant-company has filed copies of the share transfer deeds along with the references instead of the original share transfer deeds and exemption may be granted to be applicant-company for not filing the share transfer deeds. He also stated that the applicant-company would be ready to produce at any time the original share transfer deeds as and when they are required by the Bench. Shri Chinai also referred to Rule 41 of the (Bench) Rules under which, according to him, the Company Law Board has inherent powers as may be necessary for the ends of justice and argued that, considering the large volume of lodgement of transfer shares within a short spell of time, circumstances do exist for use of the inherent powers to condone the delay to meet the ends of justice. Shri Atul Setalvad also, appearing on behalf of the applicant-company, at the time of hearing held on January 9, 1991, stated though rules 40 and 41 of the Company Law Board (Bench) Rules are not applicable to the present case and the lime for filing the references cannot be enlarged under the rules, he contended that the provisions of the Limitation Act are applicable. He also referred to the provisions of the Limitation Act, 1963, Section 29(2) of which reads as follows : "29(2). Where any special or local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed by the Schedule, the provisions of Section 3 shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in sections 4 to 24 inclusive shall apply only in so far as, and to the extent to which, they are not expressly excluded by such special or local law." 8. He pointed out that the Securities Contracts (Regulation) Act is a special law enacted by Parliament which provides the period of limitation of two months within which the company has not only to form, in good faith, its opinion about refusal to register transfer of shares but the company must also, within the same period, make a reference to the Company Law Board and forward copies of such references to the transferor and the transferee. He also further pointed out that there are no provisions in the Act which specifically exclude application of the provisions contained in sections 4 to 24 of the Limitation Act.

After this, he drew our attention to Section 5 of the Limitation Act which permits condonation of delay. Section 5 of the Limitation Act, 1963, reads as follows : "5. Extension of prescribed period in certain cases.--Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908 (5 of 1908), may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or make the application within such period.

Explanation.--The fact that the appellant or the applicant was misled by any order, practice or judgment of the High Court in ascertaining or computing the prescribed period may be sufficient cause within the meaning of this section."Mangu Ram v. Municipal Corporation of Delhi [1976] 2 SCR 260 ; AIR 1976 SC 105 in which it was observed as under (page 108 of AIR 1976 SC) : "There is an important departure made by the Limitation Act, 1963, in so far as the provision contained in Section 29, Sub-section (2), is concerned. Whereas under the Indian Limitation Act, 1908, Section 29, Sub-section (2), Clause (b), provided that for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law the provisions of the Indian Limitation Act, 1908, other than those contained in sections 4, 9 to 18 and 22, shall not apply and, therefore, the applicability of Section 5 was in clear and specific terms excluded. Section 29, Sub-section (2), of the Limitation Act, 1963, enacts in so many terms that for the purpose of determining the period of limitation prescribed for any suit, appeal or application by any special or local law the provisions contained in sections 4 to 24 which would include Section 5, shall apply in so far as and to the extent to which they are not expressly excluded by such special or local law.

Section 29, Sub-section (2), Clause (b), of the Indian Limitation Act, 1908, specifically excluded the applicability of Section 5, while Section 29, Sub-section (2), of the Limitation Act, 1963, in clear and unambiguous terms provides for the applicability of Section 5 and the ratio of the decision in Kaushalya Rani's case, AIR 1964 SC 1260, can, therefore, have no application in cases governed by the Limitation Act, 1963, since that decision proceeded on the hypothesis that the applicability of Section 5 was excluded by reason of Section 29(2)(b) of the Indian Limitation Act, 1908.

Since under the Limitation Act, 1963, 'section 5 is specifically made applicable by Section 29, Sub-section (2), it can be availed of for the purpose of extending the period of limitation prescribed by a special or local law if the applicant can show that he had sufficient cause for not presenting the application within the period of limitation. It is only if the special or local law expressly excludes the applicability of Section 5, that it would stand displaced." 10. He also referred to the Delhi High Court decision in Rohtas Industries Ltd. v. Union of India, AIR 1985 Delhi 390, in which it was held that the Central Government was not correct in disallowing the prayer of the petitioner for condonation of delay in filing an appeal against the order of the director on the ground that there was no provision for condonation in the Act as Section 5 of the Limitation Act is applicable as it has not specifically excluded the applicability of the same. It was, therefore, contended by Shri Setalvad that not only the provisions of the Limitation Act are applicable to court proceedings but they are applicable even to proceedings before the authorities like the Central Government. He then referred to the decision of the Company Law Board (Eastern Region Bench) in Sinclair Hotels and Transportations Ltd, v. Pressman Advisory Services (P.) Ltd. [1989] 2 Comp L] 49 (CLB) m which it was held that the provisions of the Limitation Act, 1963, would be attracted by virtue of the provisions of Section 29 thereof and the period prescribed under Sub-section (4) of Section 22A of the Securities Contracts (Regulation) Act would be deemed to have been incorporated in the Schedule thereto and the provisions contained in sections 4 to 24 shall apply in so far as, and to the extent to which, they are not expressly excluded by this special law. In view of this, Shri Setalvad further argued that the Bench has power to condone delay if the delay of each day is adequately explained. This decision of the Company Law Board (Eastern Region Bench) was given in October, 1988. He also referred to the decision of the Company Law Board (Eastern Region Bench) in Sinclair Hotels and Transportations Ltd. given in 1989 in which it was held that Section 22A(4) of the Securities Contracts (Regulation) Act does not provide any relaxation of the period of two months nor does it vest this Bench with power to enlarge the period of two months for filing the reference. Shri Setalvad, however, hastened to add that the Bench had come to this decision probably because the company did not put forward any legal reasoning warranting condonation of delay. He also pointed out that the Bench has considered only the question of applicability of Rule 40 of the Company Law Board (Bench) Rules and Section 637B of the Companies Act, 1956, and they did not consider the applicability of the provisions of the Limitation Act, 1963. Shri Setalvad then referred to the decision of the Company Law Board (Southern Region Bench) given in the case of KCP Ltd, v. EID Parry (India) Ltd. (published in Company Law Digest in October, 1990 (pages 22 to 26)) in which it was observed "although an oral prayer was made before us by Shri Rajiv Sawhney, advocate, that we should condone the delay in making the reference, under the inherent powers of the Bench contained in Rule 41 of the Company Law Board (Bench) Rules, 1975, we find no merit in this prayer, firstly, because the time-limit for making the reference before the Company Law Board is laid down in a separate statute, namely, Section 22A of the Securities Contracts (Regulation) Act, 1956, which has overriding effect on a subordinate legislation like the Company Law Board (Bench) Rules and, secondly, because the inherent powers of the Bench cannot be invoked for purposes of overcoming statutory limitations." Shri Setalvad argued that, in this case also, the Company Law Board had not considered the applicability of the provisions of the Limitation Act, 1963. Shri Setalvad further contended that, as per the Delhi High Court decision in Rohtas Industries Ltd. v. Union of India, AIR 1985 Delhi 390, as the Limitation Act has been held applicable to proceedings before the Central Government, it will be equally applicable to the proceedings before the Company Law Board. He further argued that even if it is held that the provisions of Section 5 of the Limitation Act would come into play only in cases where the proceedings are before a court, in his view the Company Law Board is, for all practical purposes, a court. In this connection, Shri Setalvad referred to the decision in Employees' State Insurance Corporation v. Shashikant Arikhindi [1983] 2 Bom CR 260, in which the High Court of Bombay observed, "the Employees' Insurance Court has not merely the trappings of a court but, in many respects, it is given the same powers as are given to ordinary civil courts by the Code of Civil Procedure. It performs judicial functions and has been empowered to render definitive decisions, which have a finality and authoritativeness so as to bind the parties appearing before it qua their rights. Thus, it satisfies all the criteria that have been accepted by the Supreme Court and Bench of this court and, therefore, it is a court for all practical purposes, including for the purposes of Section 5 of the Limitation Act". On the same analogy, Shri Setalvad argued that so far as Section 5 of the Limitation Act is concerned, the Company Law Board should be treated as a court and, therefore, the Company Law Board has got all the powers of condonation of delay and extending the time-limits for filing the reference. Therefore, he pleaded that the references made by the applicant-company are maintainable and should be heard on the merits.

11. Shri R.A. Kapadia, appearing on behalf of Abhudaya Properties Pvt.

Ltd., argued that it is quite clear that the provisions of the Limitation Act are applicable to the proceedings before the court and since the Company Law Board is not a court, the provisions of the Limitation Act are not applicable. He also referred to the various cases quoted by the learned advocate for the applicant-company and pointed out that in Pravinkant Keshavlal Parikh v. Bombay Municipal Corporation, AIR 1981 Bom 37, it was held that the Chief Judge of the Small Causes Court acts as a court and not as a persona designata and, therefore, the provisions of Section 5 of the Limitation Act would apply to the proceedings instituted under Section 504 of the Bombay Municipal Corporation Act. Even in the case of Employees' State Insurance Corporation v. Shashihant Arikhindi [1983] 2 Bom CR 260, it has been clearly pointed out in para 5 that the Employees' Insurance Court is constituted as a court and any person who is or has been a judicial officer or is a legal practitioner, of five years' standing is qualified to be a judge of the Employees' Insurance Court. Only when it was held that the Employees' Insurance Court is a court, then only the provisions of Section 5 of the Limitation Act were applicable.

Referring to the Delhi High Court judgment in Rohtas Industries Ltd. v.Union of India, AIR 1985 Delhi 390, in which it was held that, even for the proceedings before the Central Government, the provisions of Section 5 of the Limitation Act would be applicable, Shri R.A. Kapadia pointed out that, in that case, the question whether it was a court or not was not at all argued and, therefore, it is not a relevant decision in this case. Shri. R.A. Kapadia also pointed out that the wording of Sub-section (2) of Section 29 makes it clear that the provision is applicable only when the special law prescribes a period of limitation different from the period prescribed by the Schedule. He pointed out that for such an application, since there is no limitation prescribed at all in the Schedule to the Limitation Act, 1963, there is no question of applicability of the provisions of the Limitation Act, 1963, to the proceedings under Section 22A of the Act. He further pointed out that even if the Company Law Board can condone the delay in filing the reference, it cannot condone default for not forming the opinion by the board of directors about approval or rejection of transfer within the stipulated period of two months.

12. Shri G. E. Vahanwati, advocate, appearing on behalf of Bangurs, stated that the decision of the Eastern Bench of the Company Law Board in Sinclair Hotels v. Pressman Advisory Services is not binding on this Bench as the doctrine of precedence is not applicable to the proceedings before the Tribunal. In this respect, he referred to Wade's Administrative Law, fifth edition, page 927, in which it is observed : "In the use of its own precedents, a tribunal is, as explained earlier, in a radically different position from a court of law. Its duty is to reach the right decision in the circumstances of the moment, any discretion must be genuinely exercised, and there must be no blind following of its previous decisions", 13. and argued that while precedents are applicable and binding in the proceedings before a court, it is not binding in the proceedings before the Tribunal. He also stated that, in all the three cases (Cases Nos.

15, 17 and 28), his clients have lodged transfer forms along with the share transfer certificates on July 12, 1989, and the board of directors held a meeting on November 21, 1989, in which it was decided to reject the transfer request and the reference was made to the Company Law Board on January 15, 1990. He argued that these dates clearly indicate that there was not only a delay in making a reference to the Company Law Board but the statutory period of two months for forming an opinion by the board of directors on the application for registration of transfer was also not adhered to Shri Vahanwati argued that there is no provision for condonation of default as the period of two months for forming an opinion by the board of directors for reference to the Company Law Board has been fixed by a special statute and is mandatory. He further argued that even if it is considered that the previous decisions of the Company Law Board are binding, as decided in V.T. Harguda v. D.M. Pujari, AIR 1980 Bom 341, if each Bench consists of an equal number of judges, the later decision would prevail and, therefore, the later judgment in the case of Sinclair Hotels v.Pressman Advisory Services, given in 1989, and in the case of KCP Ltd.., given in 1990 in which it was held that there is no provision for enlarging the period of two months prescribed in Section 22A of the Act should be taken as binding and was to be followed, Shri Vahanwati further pointed out that, even on merits, there is no case for condonation as the delay of each day is not explained by the applicant-company nor has the applicant-company filed an application for condonation while making a reference. It was also pointed out that a perusal of the board resolution passed on November 21, 1989, shows that the board of directors had taken an ad hoc decision without applying its mind and rejected all the applications where the shares involved were more than 500. He, therefore, argued that the reason stated in the reference that because of the large volume of transfers, it was not possible for the board to take a decision, is not borne out by the facts of this case.

14. We have carefully considered the arguments advanced by learned advocates appearing on behalf of the applicant-company and the transferees on the point of maintainability of the references and also on the application of the provisions of the Limitation Act, 1963. Both the sides have referred to a number of decisions in court cases in support of their contention. We have also considered the observations of the Supreme Court in Sakuru v. Tanaji, AIR 1985 SC 1279, in which it was observed (at page 1280) :Town Municipal Council, Athani v. Presiding Officer, Labour Court, Hubli [1970] 1 SCR 51 ; AIR 1969 SC 1335 ; Nityananda M. Joshi v. Life Insurance Corporation of India [1970] 1 SCR 396 ; AIR 1970 SC 209 and Sushila Devi v. Ramanandan Prasad [1976] 2 SCR 845 ; AIR 1976 SC 177, that the provisions of the Limitation Act, 1963, apply only to proceedings in "courts" and not to appeals or applications before bodies other than courts such as quasi-judicial tribunals or executive authorities, notwithstanding the fact that such bodies or authorities may be vested with certain specified powers conferred on courts under the Code of Civil or Criminal Procedure. The Collector before whom the appeal was preferred by the appellant herein under Section 90 of the Act not being a court, the Limitation Act, as such, had no applicability to the proceedings before him." 15. It is, thus, clear that the provisions of the Limitation Act, 1963, are applicable only to the proceedings before the court. The provisions of Sub-sections (4C) and (4D) of Section 10E of the Companies Act, 1956, state that every Bench shall have powers which are vested in a court under the Code of Civil Procedure, 1908, while trying a suit, in respect of certain matters. The nature of functions of the Company Law Board acting under Sub-section (4A) of Section 10E are executive or administrative as distinguished from quasi-judicial functions performed under Sub-section (4B). In view of this, the Company Law Board is not a court even though it has certain specified powers of courts in respect of certain matters. The special statute under which the present proceedings are being held, i.e., the Securities Contracts (Regulation) Act, also does not contain express provisions empowering the Company Law Board to extend the prescribed period of limitation and condone the delay in filing a reference. In view of the Supreme Court decision and the provisions of the Securities Contracts (Regulation) Act, relating to the proceedings under Section 22A before this Bench, we have no doubt in our mind that the provisions of the Limitation Act are not applicable to the proceedings under Section 22A of the Act which is a special statute and, consequently, this Bench has no powers to extend the time limit for filing the reference and condone the delay. In view of this, we hold that the 24 references made by the applicant-company to us for confirmation or otherwise of the opinion arrived at by the board of directors of the company are not maintainable as the board has not arrived at a decision within a period of two months and have not made this reference within the prescribed period of two months and, therefore, are not maintainable and are dismissed.