1999 (4) TMI 573 - HC - Companies Law

Summary

Issues Involved:
1. Validity of the impugned order dated September 15, 1997.
2. Whether directions can be issued to the Regional Director after the period stipulated in section 22 of the Companies Act, 1956, has elapsed.
3. Whether the period of limitation prescribed in section 22 can be extended or enlarged.

Detailed Analysis:

1. Validity of the Impugned Order:
The writ petition challenges the order dated September 15, 1997, by the Regional Director, Department of Company Affairs, which stated that no action could be taken under section 22 of the Companies Act, 1956, as the stipulated period had elapsed. The petitioner-company, incorporated on December 4, 1984, filed a complaint on February 20, 1996, for rectification of the name of another company incorporated on January 4, 1996, which was allegedly identical or too similar to the petitioner's name. The Regional Director's decision was based on the expiration of the 12-month period specified in section 22(1)(b) of the Act.

2. Directions to the Regional Director Post Stipulated Period:
The court examined whether it could issue directions to the Regional Director after the expiration of the statutory period. The petitioners argued that the period covered by court injunctions should be excluded from the computation of the 12-month period. The court acknowledged that the principle of excluding periods covered by court orders is well-established in judicial procedure. However, it noted that even if the period covered by the injunction (May 17, 1996, to September 12, 1996) was excluded, the extended period would still have expired in April 1997. Since the impugned order was issued on September 15, 1997, the court concluded that no directions could be issued to the respondent authority to invoke the powers under section 22.

3. Extension or Enlargement of the Period of Limitation:
The petitioners contended that the statutory rights under section 22 should not be rendered ineffective due to the inaction of the respondent authorities. They argued for the exclusion of the period covered by court injunctions, citing the Supreme Court's judgment in Director of Inspection of Income-tax (Investigation) v. Pooran Mal & Sons, which held that periods covered by court orders should be excluded in computing statutory limitation periods. The court agreed with this principle but emphasized that it could not extend or enlarge the statutory period prescribed under section 22.

Conclusion:
The court held that the period covered by the injunction should be excluded when computing the 12-month period under section 22(1)(b). However, even with this exclusion, the extended period had expired before the impugned order was issued. Consequently, the court dismissed the writ petition, stating that it could not compel the respondent authority to act beyond the statutory period. The court clarified that this judgment did not address the merits of the main controversy.