TMI Blog1995 (2) TMI 461X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 80 crores by way of private placement in favour of Can Fina and issued allotment letters. On or about May 5, 1992, Can Fina sold to the petitioner, bonds of the face value of ₹ 30 crores and delivered three allotment letters of the face value of ₹ 10 crores each. On or about July 6, 1992, the petitioner lodged the allotment letters along with the transfer forms with Power Grid for registering the transfer of bonds in favour of the petitioners. But till the date of filing the petition, Power Grid had not registered the transfer. Power Grid had also not paid the interest due on the bonds that fell due to the petitioners. Power Grid was duty bound to register the transfer and send either the allotment letters or the bond certificates as required by Section 113 of the Act. Since City Bank had not received any communication from Power Grid in this regard, many meetings were held with the Power Grid authorities but no response was forthcoming from Power Grid. Even though as per the terms of issue of bonds, interest was to be paid on January 1, and July 1, every year, no interest had been paid by Power Grid. Even to the letters dated June 23, 1993, written to the ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us on the date of allotment for one year as portfolio management scheme . Therefore, there was a composite arrangement with Can Fina by which Can Fina was to be allotted bonds to the extent of ₹ 80 crores and in turn Power Grid would place with Can Fina ₹ 60 crores for a period 12 months as portfolio management scheme at 12 per cent, interest. However, after one year Can Fina did not pay the consideration amount towards the allotment despite repeated letters and registered notices. They also did not comply with the stipulation of the allotment, that 20 per cent, of the allotted bonds would be offered to the public over the sales counter. Therefore, Power Grid remained an unpaid seller and as such after giving notice to Can Fina, Power Grid forfeited the letters of allotment on February 11, 1994, and there is no valid allotment letter in existence to give rise to any cause of action. 6. Shri Soli Sorabjee, the senior advocate appearing on behalf of the petitioner, dealing with the preliminary objections raised by the respondents, submitted that the petition is maintainable under Section 111. According to him, as per Section 111{2), a petition under this section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erit and they cannot be treated as matters of preliminary objection, he submitted. 7. Shri Shanti Bhushan, senior advocate appearing on behalf of Power Grid, questioned the contention of Shri Sorabjee regarding the power of the Company Law Board to condone the delay under Section 637B of the Act. According to him, Section 637B confers powers of condonation only on the Central Government and not on the Company Law Board. He further submitted that when the Company Law Board was a delegate of the Central Government, before May 31, 1991, the Company Law Board was conferred with the powers of condonation of delays under Section 637B. But now the Company Law Board has become a quasi-judicial body, the powers conferred on the Central Government cannot be construed as available to the Company Law Board and as such the delay in filing the petition cannot be condoned by the Company Law Board under the provisions of Section 637B of the Act. 8. He reiterated the submissions made in the reply that the remedy under Section 111 is not available in respect of letters of allotment and no petition under Section 155 could have been entertained in this case or under similar circumstances. 9. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be strictly complied with and the intent of Parliament should be given full effect to as this time limit is binding on every one. After obtaining relief under Section 111(2) and (3), a petitioner may resort to Section 111(4) in case the transfer is still not registered by the company. If the petitioner has got any grievance, in view of the expiry of the limitation period, he may seek suitable remedy in a civil court and not under Section 111 or the petitioner should have filed another set of transfer forms. But even that it cannot do now as the bonds have been forfeited. Even if it is assumed that the petitioner has come under Section 111(2) on the plea of refusal by letter dated September 23, 1993, it is to be noted, Shri Shanti Bhushan stated that this petition is prior in period of time, to the letter dated September 23, 1993. As a matter of fact, he further stated, there is nothing in this letter to indicate that the transfers have been refused. It is nothing but a reply to the notice of the solicitor of the petitioner. Therefore, the upper limit of four months from the date of lodgment has to be strictly applied and since the petition is beyond a year from the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He also relied on Girdhari Lal and Sons v. Balbir Nath Mathur , AIR 1986 SC 1499, 1503, 1504 . So, we see that the primary and foremost task of a court in interpreting a statute is to ascertain the intention of the Legislature, actual or imputed. Having ascertained the intention, the court must then strive to so interpret the statute as to promote/advance the object and purpose of the enactment. For this purpose, where necessary, the court may even depart from the rule that plain words should be interpreted according to their plain meaning. There need be no meek and mute submission to the plainness of the language. To avoid injustice, anomaly or absurdity or to avoid invalidation of a law, the court would as well be justified in departing from the so called golden rule of construction so as to give effect to the object and purpose of the enactment by supplementing the written word, if necessary. . . . A judge cannot simply fold his hands and blame the draftsman. He also relied on the observation of the Supreme Court in J. K. Cotton Spinning and Weaving Mills Co. Ltd. v. State of U. P., AIR 1961 SC 1170, 1174; [1960-61] 19 FJR 436 . The rule that general ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of the applicability of Section 155, the same should apply to a petition under Section 111(4). He cited the following cases in support of the proposition that sections 111(2) and 155 are alternate remedies. (1) South Indian Bank Ltd. v. Joseph Michael [1978] 48 Comp Cas 368 , wherein the Kerala High Court observed (at page 371) : It is open to the aggrieved transferee to seek relief either under Section 111 by an appeal to the Central Government or under Section 155 by petitioning the court. (2) Hemendra Prasad Barooah v. Bahadur Tea Co. Pvt. Ltd. [1991] 70 Comp Cas 792, 796 (Gauhati ) : Section 155(l)(b) covers all cases of improper or illegal refusal to register the transfer of shares. (5) M. M. Mukherjee v. Jalpaiguri Cinema Co. Ltd [1975] Tax LR 1741 (Cal) : Petition under Section 155 for rectification of share register is not necessarily barred because of prior Section 111 proceedings as remedies under these two sections are different in nature. Shri Ganesh further submitted that since the provisions of Section 155 have been assimilated in Section 111(4), and in the absence of any contrary intention on the part of the Legisl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered under Section 111(3) inasmuch as the petition was filed within two months from the date of the letter of refusal, as in the case of refusal, the time will start running from the date of refusal and it has no relevance to the date of lodgment as the cause of action would accrue to the aggrieved only from the date of refusal of registration of transfer. On this proposition, he relied on Shailesh Prabhudas Mehta v. Calico Dyeing and Printing Mills Ltd. [1994] 80 Comp Gas 64 (SC). 15. As for the argument of Shri Bhushan that the letter dated September 23, was not a letter of refusal and that the petition was filed prior to that date, Shri Ganesh pointed out that a reading of the contents of the letter would show that the intention of the company to refuse, was clear and as a matter of fact it was a conditional refusal. This letter was filed along with the reply of the respondents and the petitioner has questioned this in his rejoinder. In such eventualities, as observed by the Supreme Court in Union of India v. Alok Exports, AIR 1965 SC 578 (sic) a document contained in the reply if contested in the rejoinder tantamounts to mention in the petition and should be consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue a speaking order on the maintainability of the petition and as we also feel so, we are considering in this order only the maintainability of the petition. Even though various preliminary objections have been raised, according to us, there are only two issues which touch upon the maintainability of the petition and, therefore, we propose to consider only these two issues, namely, whether a petition against refusal to register the transfer of a letter of allotment is maintainable and whether the petition is maintainable under Section 111(4). Other objections relating to forfeiture especially when the correctness of the same has been questioned and non-furnishing of full details, etc., would require us to go into the merits of the case and as such they are not being discussed in this order. 21. The first objection of the respondents is that a petition regarding refusal to register the transfer of a letter of allotment is not maintainable under Section 111 of the Act. In this connection, it is necessary to note the exact wording of Section 111(1) which reads as follows : If a company refuses, whether in pursuance of any power of the company under its articles or otherwi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e evidence to a share/debenture certificate by the specific provisions contained in Section 108 in the context of transfers of shares and debentures. However, the certificate letter of allotment is not the same as the share or debenture itself. As such the objection of the respondents regarding maintainability on the ground that the evidence of the debenture is in the form of a letter of allotment is not well founded. The respondents have misconstrued a share or debenture as the same as a share certificate or debenture certificate whereas the former denotes the interest of a member or debenture holder, the latter refers to the evidence of such interest. The evidence of shares/debentures is tangible and as such could be destroyed but a share/debenture being intangible cannot be destroyed. What is dealt with in Section 111 relates to the transfer of the share/ debenture which may be evidenced either by a certificate or letter of allotment. In the circumstances, this ground adduced by the respondents is not maintainable. 23. As regards the second objection, this petition has been filed under Section 111(4) which according to Shri Shanti Bhushan is not the applicable provision in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out first exhausting the remedy available under Section 111(2) and (3) he contended. 25. His argument is that if at all transfer matters could be considered under Section 111(4) it could be only after either the Company Law Board or the High Court or a civil court has given a verdict or direction to the company to effect the registration of transfers and the right to become a member has crystallised and the company still delays effecting the transfer. The main theme of the argument is that when certain time limits have been fixed within which an aggrieved transferor or transferee can agitate under Section 111(3) it would be inappropriate to switch the same under Section 111(4) wherein no time limit has been fixed. According to Shri Shanti Bhitshan this switching cannot be done if a harmonious construction of the entire section is taken. Since in the present case what had been sought in the petition is to direct the company to register the transfer, the petitioner should have come within the time limit prescribed under Section 111(3). In other words, admitting a petition under Section 111(4) in case of refusal of transfer renders the entire time limit in Section 111(2) and (3) nu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umption against implicit alteration of law--One of these presumptions is that the Legislature does not intend to make any substantial alteration in the law beyond what it explicitly declares, either in express terms or by clear implication, or, in other words, beyond the immediate scope and object of the statute. In all general matters outside those limits the law remains undisturbed. It is in the last degree improbable that the Legislature would overthrow fundamental principles, infringe rights, or depart from the general system of law without expressing its intention with irresistible clearness. Their Lordships agreed that the law was correctly stated in the above passage. 28. In Cricket Club of India v. Madhav L. Apte [1975] 45 Comp Cas 574 (Bom), the four principles of interpretation were set out as follows (at page 591) : (1) There is presumption against the alteration of well-settled law by implication and such a change should be either by explicit or express words or only if such inference of alteration is irresistible. (2) If the matter is evenly balanced or fairly arguable on either side, then that interpretation should be preferred which would involve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant circumstances, ought to prevail. The rules of interpretation are useful servants but quite often tend to become difficult masters. 31. Bearing the above principles in mind, our task is to find out whether the Legislature has intended to, by incorporating the provisions of Section 155(1) into Section 111(4), restrict the remedies which were earlier available to an aggrieved person. The intention of the Legislature regarding whether the remedies under Section 111(2) and (4) are alternate remedies would have been difficult to ascertain if the erstwhile Section 155(1) had been incorporated in Section 111(4) as such. The addition of the words including a refusal under Sub-section (1) in Section 111(4) makes it abundantly clear that the Legislature had intended that transfer cases also could be considered under this sub-section and it is an additional remedy to that provided in Section 111(2). Since refusal to transfer and delay in transfer are treated at par a view cannot also be taken that cases of delay are not contemplated by addition of these words. The contention of Shri Shanti Bhushan that the addition of these words would cover only those cases in which there is a j ..... X X X X Extracts X X X X X X X X Extracts X X X X
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