9911796707
TMI Blog1995 (10) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... hort but ticklish question which arises for decision in the present case is the meaning of the word 'each' in the expression "if the permission has not been granted by the stock exchange or each such stock exchange" used in sub-section (1A) of section 73 of the Companies Act, 1956 ('the Act'). This is the real question for decision in the present appeal. 3. Section 73 of the Act, insofar as it is material is as under : " Allotment of shares and debentures to be dealt in on stock exchange. (1) Every company intending to offer shares or debentures to the public for subscription by the issue of a prospectus shall, before such issue, make an application to one or more recognised stock exchanges for permission for the shares or debentures intending to be so offered to be dealt with in the stock exchange or each such stock exchange. (1A) Where a prospectus, whether issued generally or not, states that an application under sub-section (1) has been made for permission for the shares or debentures offered thereby to be dealt in one or more recognised stock exchanges, such prospectus shall state the name of the stock exchange or, as the case may be, each such stock exchange, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) because of the rejection of the application by the Bombay Stock Exchange to render ineffective even the grant of permission by the Coimbatore Stock Exchange within the specified period ? 6. In substance the contention of Shri F.S. Nariman is, that the cones-quence of rendering void the allotment made under section 73(1A) envisaged by the provision cannot render ineffective the permission granted by the Coimbatore Stock Exchange within the prescribed period. The reply of Shri Harish Salve is that the consequence of rendering the entire allotment void is clearly envisaged where rejection of the applica- tion for permission is by any such stock exchange to which application has been made. Shri Salve referred to the legislative history which led to the insertion of sub-section (1A) to overcome the consequence of the decision of this Court in Union of India v. Allied International Products Ltd. AIR 1971 SC 251, by the amendment of law in this manner. It is, therefore, necessary at this stage to refer to the decision of this Court in Allied International Products Ltd.'s case ( supra ) . 7. In Allied International Products Ltd.'s case ( supra ) , a similar question a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... list shares with all the stock exchanges mentioned in a prospectus. In legislating on this point, it is proposed to make an incidental amendment to Securities Contracts (Regulation) Act, 1956." 11. In the notes on clauses the portion relevant for this amendment is as under: "Clause 7.- Sub-clauses ( i ) and ( iii ), - Section 73 prescribes certain time-limit for enlistment with the stock exchanges. It also contemplates that enlistment has to be done in all the stock exchanges mentioned in the prospectus and in case of failure to do so, the money received in respect of allotment of shares on the basis of the prospectus should be refunded within a specified time. In the recent judgment in Union of India v. Allied International Products Limited, the Supreme Court has held that if the stock exchange had intimated that it would give further consideration to an application, the time-limit contemplated by the section will not operate. It has also held that if any one of the stock exchanges mentioned in the prospectus approved the application for enlistment, it would mean sufficient compliance with the provisions of section 73 and the allotment made in pursuance of that prospec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne of all". 14. The meaning of the word 'each' in the expression "if the permission has not been granted by the stock exchange or each such stock exchange" in sub-section (1A) of section 73 is now to be determined. Sub-section (1A) of section 73 requires that where a prospectus states that an application under sub-section (1) has been made for permission for the shares or debentures offered thereby to be dealt in one or more recognised stock exchanges, 'such prospectus shall state the name of the stock exchange or, as the case may be, each such stock exchange'. In other words, if the application is made only to one stock exchange then the name of that stock exchange is to be mentioned and where the prospectus states that application has been made to more than one recognised stock exchanges then it shall state the name of each such stock exchange, i.e., every such stock exchange or in other words, all the stock exchanges to which the application has been made. The second part of sub-section (1A) of section 73 then provides the consequence of refusal of the permission by saying that any allotment made on an application in pursuance of such prospec- tus shall be void "if the per ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
