TaxTMI 
TaxTMI 
1991 (1) TMI 447
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....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 ....
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....ehalf 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, a....
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....d 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 ....
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....ub-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 agains....
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....s 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 ....
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....surance 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 ....
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....ber 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 ....