2006 (10) TMI 230 - HC - Companies Law

Summary

Issues Involved:
1. Jurisdiction of the Company Law Board under section 111A(3) of the Companies Act.
2. Retrospective application of the amendment to section 111A(3).
3. Limitation period for filing rectification petitions under section 111A(3).
4. Availability of civil remedies alongside statutory remedies.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Company Law Board under section 111A(3) of the Companies Act:
The appeals questioned the jurisdiction of the Company Law Board (CLB) under the amended section 111A(3) of the Companies Act, particularly for transactions occurring before the amendment's effective date (15-1-1997). The amendment allowed the CLB to rectify the register of members for violations of the Companies Act or any other law. The court held that the statutory remedy for rectification was recognized only from 15-1-1997, and prior to this, the remedy was purely a common law right to be pursued in civil courts.

2. Retrospective application of the amendment to section 111A(3):
The court addressed whether the amendment to section 111A(3) should be applied retrospectively. It was argued that the amendment, which included the words "any other law for the time being in force," was clarificatory and thus retrospective. However, the court held that the amendment could not be read retrospectively as it did not explicitly state so. The court emphasized that retrospective construction is not applicable unless expressly or by necessary implication intended by the legislature.

3. Limitation period for filing rectification petitions under section 111A(3):
The court examined the limitation period for filing rectification petitions under the amended section 111A(3). It was argued that the two-month limitation period prescribed should apply prospectively and not affect vested rights. The court held that the limitation period could not be relaxed on the notion of retrospectivity or fairness. The statutory remedy introduced by the amendment was subject to the prescribed limitation, and the common law remedy remained available for violations occurring prior to the amendment.

4. Availability of civil remedies alongside statutory remedies:
The court discussed the availability of civil remedies alongside the statutory remedy provided under section 111A(3). It was noted that the amendment did not abrogate the common law right to seek rectification through civil courts. The court emphasized that both common law and statutory remedies were concurrent, allowing the aggrieved party to choose the forum. The amendment merely provided an additional statutory remedy without taking away the existing common law right.

Conclusion:
The court concluded that the amendment to section 111A(3) of the Companies Act, effective from 15-1-1997, could not be applied retrospectively. The statutory remedy for rectification introduced by the amendment was subject to the prescribed limitation period, and the common law remedy remained available for violations occurring before the amendment. The appeals were allowed, and the order of the Company Law Board was reversed.