9911796707
TMI Blog1995 (2) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... akhs to the public for subscription on terms and conditions contained in the prospectus which is contained in annexure "A" to the writ application. In terms of the said prospectus the public issue was to open on March 30, 1993, and the first date of closing thereof was April 3, 1993, whereas the last date of closing was April 10, 1993. The petitioner applied for allotment of 100 shares on April 7, 1993. On June 5, 1993, a publication was issued in the daily newspaper Business Standard wherein the following particulars were stated : (i)The total number of shares that have been applied for pursuant to the said public issue was only 1,24,800 as against 21,70,000 shares offered to the public for subscription. (ii)The total number of applications received were 1,036. (iii)The total amount of money which had been deposited pursuant to the said offer was Rs. 28,08,000. (iv)Only 5.75 per cent, of the issue had been subscribed. The contention of the petitioner is that 120 days having expired from February 24, 1993, i.e., the date of first issue of the shares, and as no permission has been granted by the concerned stock exchanges permitting shares of the company being offered to the pub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner in this application has raised several contentions. It is, firstly, contended that there has been a flagrant violation of the provisions as contained in sections 69 and 73 of the Companies Act. My attention was drawn to the fact that on April 15, 1993, the company issued a certificate to the following effect : "This is to certify that based on the collections reported by the various collecting bank-branches to the public issue of Coventry Spring and Engineering Company Ltd. the tentative collection figures as on April 10, 1993, are as follows : Total applications : 1,036 ; Total shares applied for : 1,21,800 ; Total amount received : Rs. 28,08,000." However, on June 14, 1993, a letter was issued to respondent No. 2 wherein the company disclosed that- "Firstly, the company had obtained 1,420 numbers of applications assumed from the public as on April 10, 1993. The figure 1,163 quoted in the letter is based on 1,036 numbers applications from the public and 127 numbers of application from the underwriters. The figure 127 numbers of application from the underwriters is based on the contention that the underwriters will send in one application to honour his obligation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich allegedly was recorded in the notes of argument submitted to respondent No. 2 with a copy to the advocate for the company at Calcutta. My attention has further been drawn to the fact that no express order was passed by the Calcutta Stock Exchange refusing the prayer of the petitioner to list the shares. It has been pointed out that a prayer was made by the company before respondent No. 3 for relaxation of the provisions of rule 19(2)(b) of the Securities Contracts (Regulation) Rules for listing of shares. By another letter dated April 20, 1993, the company requested the secretary of respondent No. 3 to the following effect : "The company expects to receive minimum subscription amount of 90 per cent, of the issue within 120 days from the date of opening of the issue from public including development of underwriters. The company will be able to submit formal application for listing only after getting minimum subscription of 90 per cent, of the issue. The underwriters to the above public issue have asked the company to obtain necessary letters from the stock exchanges where listing is proposed that prima facie there is no objection to the listing and that listing permission shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany merely stated that except the petition of appeal he does not intend to rely upon any documents or make any other submission. Mr. Pratap Chatterjee, learned counsel appearing on behalf of the petitioner, submitted that keeping in view the fact that there has been a gross violation of the principles of natural justice, this court should set aside the impugned order. Learned counsel in support of the aforementioned contention has relied upon a decision in National Textile Workers' Union v. Ramakrishnan ( P.R.) [1983] 53 Comp. Cas. 184 ; AIR 1983 SC 75, and D.K. Yadav v. J.M.A. Industries Ltd. [1993] 3 SCC 259 ; [1993] 2 LLJ 696 ; [1993] 83 FJR 271. Learned counsel submitted that, in the circumstances of this case, this court should issue a writ of certiorari. Reliance in this connection has been placed on Syed Yahoob v. K.S. Radhakrishnan, AIR 1964 SC 477, and Calcutta Shipping Bureau v. Calcutta Port Trust, AIR 1986 Cal 288. Learned counsel submitted that compliance with the provisions of section 73 of the Companies Act was mandatory and failure to do so would invalidate the listing. Reliance in this connection has been placed on Mannalal Khetan v. Kedar Nath Khetan [1977 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt should not exercise its jurisdiction under article 226 of the Constitution as the petitioner has already filed a suit covering the same subject-matter which is still pending. It has been submitted that the petitioner had made prayers for grant of interlocutory orders in the said suit having failed to obtain the same this writ application has been filed. Mr. Mitra further submitted that the writ petitioner has no locus standi to question the order of the Central Government as before the Central Government, only the company and the stock exchange were necessary parties. It has been submitted that in terms of the provisions of section 22 of the Securities Contracts (Regulation) Act, the appeal was to be heard only in the presence of the stock exchange and the company but the hearing was given to the petitioner only pursuant to the order of this court and in this view of the matter, the petitioner cannot contend that there has been a violation of the principles of natural justice. It was submitted that as the petitioner was not the affected party, she did not have any legal right to question the appellate order passed by the Central Government. Reliance in this connection has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ublic issue involving Rs. 976.5 lakhs particularly when in terms of provisions of section 71 of the Companies Act, 1956, the person concerned can avoid their allotment and obtain refund. (c)She filed Suit No. 259 of 1993 on July 20, 1993, moved for an interim order and obtained an ex parte order and again orally applied for further interim order in the court of S.K. Hazari J. which was supported by the underwriters. It was further stated that even before notice under Order 1, rule 8 of the Civil Procedure Code was advertised in the Economic Times on July 31, 1994, two underwriters appeared in the case on July 28, 1994, and July 29, 1994, and obtained further interim orders. The matter appeared on various days either before the trial judge or before the appeal court and ultimately on November 9, 1994, all interim orders were vacated and the application was dismissed by A.N. Ray J. On November 15, 1994, the petitioner again preferred an appeal from the said order and obtained an ex parte interim order, which is said to have been dismissed during the pendency of this petition. The contention of respondent No. 5, therefore, is that the petitioner appears to have spent a huge amount w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as it would appear from the said letter that only provisional confirmation had been asked for. It is now well known that the court does not countenance trial in two proceedings simultaneously. Keeping in view the fact that a suit is pending in this court relating to the self-same subject-matter, I do not intend to consider the respective submissions made by learned counsel with regard to the issues involved in the suit. In Jai Singh v. Union of India [1977] 1 SCC 1 ; AIR 1977 SC 898, 899, it was held : "In our opinion, the appellant cannot pursue two parallel remedies in respect of the same matter at the same time." The only question, therefore, which can be considered in this writ application is as to whether the impugned judgment and order passed by the Central Government as an appellate authority in terms of the provisions of the Securities Contracts (Regulation) Act, as contained in annexure "W" to the writ application is invalid or not. It is not in dispute that the petitioner, but for the order of this court was not entitled to an opportunity of being heard inasmuch as in terms of section 22 of the said Act the stock exchange and the company who had made the application fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pears from the impugned order that on the said date submissions had been made by the Calcutta Stock Exchange as also the representative of the company. From the minutes of the proceedings held on January 12, 1994, which is contained in paragraphs 3 to 5 of the impugned judgment, it does not appear that any contention had been raised therein on behalf of respondent No. 5 regarding the factual aspect which had not been within the knowledge of the petitioner. It is, however, evident, that on that date a judgment of the Supreme Court and a judgment of the Punjab and Haryana High Court had been cited. Again, in the second hearing the representative of the stock exchange and the company were heard. The petitioner was given an opportunity of being heard on January 27, 1994. The petitioner also filed detailed notes of submission covering both factual as also the legal aspects of the matter which is at page 236 of the writ petition. In the said written submission also it was clearly stated that the entire matter including the issue and allotment of shares is sub judice before this court in the aforementioned Suit No. 259 of 1993. Paragraphs 6 and 7 of the said written notes of submission d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner, cannot be accepted as there is nothing on record to show that the said letter was not already on records of the Central Government. It appears from the letter dated January 24, 1994, addressed by Sri Tarun Kumar Gupta to Messrs. Khaitan and Co., that therein it was specifically stated that "all necessary and relevant documents have duly been filed with all statutory authorities as required and if your client so requires and/or if you are permitted ; you can have inspection of the same therein". The petitioner also in the grounds in the writ application had referred to the said letter dated June 29, 1993, stating that the figures contained therein were contrary to the figures submitted by the company in its earlier letters. The other letter dated July 3, 1993, wherein the figures relating to the number of application, etc., appear at page 188 of the writ application. Evidently, the aforementioned letter dated July 3, 1994, contains similar information and on that ground too it cannot be said that any real prejudice has been caused to the petitioner. There cannot be any doubt that the principles of natural justice are required to be complied with by any authority exerci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... citizen in his civil life inflicts a civil consequence. "Civil" is defined by Black Law Dictionary, 4th edition, at page 311: "Ordinally, pertaining or appropriate to a member of a civitas of free political community ; natural or proper to a citizen. Also, relating to the community, or to the policy and government of the citizens and subjects of a State. The word is derived from the Latin civilis, a citizen .... In law, it has various significations." "Civil rights" are such as belong to every citizen of the State or country, or, in a wider sense, to all its inhabitants, and are not connected with the organisation or administration of the Government. They include the rights of property, marriage protection by the laws, freedom of contract, trial by jury, etc........Or, as otherwise defined, civil rights are rights appertaining to a person in virtue of his citizenship in a State or community. Rights capable of being enforced or redressed in a civil action. Also a term applied to certain rights secured to citizens of the United States by the Thirteenth and Fourteenth Amendments to the Constitution, and by various Acts of congress made in pursuance thereof, (page 1487 Black's Lega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion contends that a hearing has been given although the appellant retorts that a vacuous meeting where nothing was disclosed and he was summarily told off would be strange electoral justice. We express no opinion on the factum or adequacy of the hearing but hold that where a candidate has reached the end of the battle and the whole poll is upset, he has a right to notice and to be heard, the quantum and quality being conditioned by the concatenation of circumstances.' In Bihar School Examination Board v. Subhas Chandra Sinha, AIR 1970 SC 1269, the apex court held that in a case of mass copying, the Board was not obliged to comply with the principles of natural justice. Mr. Chatterjee has relied upon the decision in National Textile Workers' Union v. P.R. Ramakrishnan [1983] 53 Comp. Cas. 184 ; AIR 1983 SC 75. In that case, the question which arose for consideration before the Supreme Court was as to whether in a winding up proceeding of a company under section 433 of the Companies Act, the workmen are necessary parties or not. The Supreme Court observed in paragraph 11 of the said decision at page 88 (page 207 of Comp. Cas.) : "We are, therefore, of the view that the workers are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justice are established in article 14 of the Constitution. It is also well known that the rule of natural justice must not be stretched too far as only too often, the people who have done wrong seek to invoke the rules of natural justice so as to avoid the consequence (see 1976 AIR 696). In Union of India v. Tulsi Ram Patel, AIR 1985 SC 1416, the Supreme Court of India held : "Principles of natural justice are not the creation of article 14 of the Constitution of India but merely they are constitutional guardian. The principles of natural justice can trace their ancestry to ancient civilizations and long past history." The Supreme Court in that case traced the history of the principles of natural justice in paragraphs 72 to 80 of the judgment and, thereafter, discussed various principles involved therein in paragraphs 81 to 83 thereof. The Supreme Court held : "The principles of natural justice have thus come to be recognised as being a part of the guarantee contained in article 14 because of the new and dynamic interpretation given by this court to the concept of equality which is the subject-matter of that article." Shortly put the syllogism runs thus : violation of a rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion in flagrant infraction of fair play. But the applicability of the principles of natural justice is not a rule of thumb or a straitjacket formula as an abstract proposition of law. It depends on the facts of the case, nature of the inquiry and the effect of the order/decision on the rights of the person and attendant circumstances." In National Institute of Mental Health and Neuro Sciences v. K.K. Raman, AIR 1992 SC 1806, it has been held that for selection or non-selection of a person in the absence of a statutory requirement, the authority is under no legal obligation to record reasons in support of his decision and even the principles of natural justice have no application in such a case. The Supreme Court in the case of Dr. Suresh Chandra Verma v. Chancellor, Nagpur University [1990] 4 SCC 55, 64 held as follows : "When, therefore, the services of the appellants are to be terminated in view of the change in the position of law and not on account of the demerits or misdemeanour of individual candidates, it is not necessary to hear the individuals before their services are terminated." Recently, the Supreme Court in Baikuntha Nath Das v. Chief District Medical Officer [19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jective. It is also well known that natural justice has to be viewed in circumstantial flexibility. It is also well settled that observance of the principle of natural justice is not necessary when it does not entail civil consequences. As noticed hereinbefore, the petitioner had no right to intervene in the appeal preferred by the company. She was, thus, not a party interested in the subject-matter of the appeal. The provisions of the Act by necessary implication exclude hearing of any party other than the company and/or the concerned stock exchange. The order of the writ court dated December 23, 1993, stated that all the parties interested in the matter shall be heard by the stock exchanges. This court by its order could not have expanded the scope of section 22 of the Act. It does not appear from the records that the provision of section 22 of the said Acts was brought to the notice of the learned judges. However, there is no doubt that all concerned interpreted the said order to mean that the petitioner as also others shall also be heard in the matter. In General Medical Council v. Spackman [1943] AC 627, upon which Mr. Chatterjee, has relied it has been stated that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parameters of jurisdiction of this court to issue a writ of certiorari stating that the decision of a statutory tribunal cannot be set aside by the High Court on purely assumptions and conjectures and there being no evidence whatsoever. In Syed Yakoob v. K.S. Radhakrishnan, AIR 1964 SC 477, 480, upon which our challenge relied the Supreme Court held : "It is, of course, not easy to define or adequately describe what an error of law apparent on the face of the record means. What can be corrected by a writ has to be an error of law ; but it must be such an error of law as can be regarded as one which is apparent on the face of the record. Where it is manifest or clear that the conclusion of law recorded by an inferior court or tribunal is based on an obvious misinterpretation of the relevant statutory provision or sometimes in ignorance of it, or may be, even in disregard of it, or is expressly founded on reasons which are wrong in law, the said conclusion can be corrected by a writ of certiorari." In Calcutta Shipping Bureau v. Calcutta Port Trust, AIR 1986 Cal 288, which has again been referred to by Mr. Chatterjee a learned single judge of this court taking into consideration t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 58, 663, the Supreme Court held : "The function of the court/tribunal is one of judicial review, the parameters of which are repeatedly laid down by this court. It would be sufficient to quote the decision in H.B. Gandhi, Excise and Taxation Officer-cum-Assessing Authority v. Gopi Nath and Sons [1992] Supp. 2 SCC 312. The Bench comprising M.N. Venkatachaliah J. (as he then was) and A. M. Ahmadi J. affirmed the principle thus : 'Judicial review, it is trite, is not directed against the decision but is confined to the decision-making process. Judicial review cannot extend to the examination of the correctness or reasonableness of a decision as a matter of fact. The purpose of judicial review is to ensure that the individual receives fair treatment and not to ensure that the authority after according fair treatment reaches, on a matter which it is authorised by law to decide, a conclusion which is correct in the eyes of the court. Judicial review is not an appeal from a decision but a review of the manner in which the decision is made. It will be erroneous to think that the court sits in judgment not only on the correctness of the decision-making process but also on the correctness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the petitioner should be an aggrieved person. The apex court observed in para. 12 of the judgment as follows (page 581) : "According to most English decisions, in order to have the locus standi to invoke certiorari jurisdiction, the petitioner should be an 'aggrieved person' and in a case of defect of jurisdiction, such a petitioner will be entitled to a writ of certiorari as a matter of course, but if he does not fulfil that character, and is a 'stranger', the court will, in its discretion, deny him this extraordinary remedy, save in very special circumstances. This takes us to the further question : Who is an 'aggrieved person' ? And what are the qualifications requisite for such a status ? The expression 'aggrieved person' denotes an elastic, and, to an extent, an elusive concept. It cannot be confined within the bounds of a rigid, exact and comprehensive definition. At best, its features can be described in a broad tentative manner. Its scope and meaning depends on diverse, variable factors such as the content and intent of the statute of which contravention is alleged, the specific circumstances of the case, the nature and extent of the petitioner's interest, and the nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal was filed within the period of limitation or not. There cannot, however, be any doubt whatsoever that a Tribunal of limited jurisdiction cannot condone the delay in filing an appeal in exercise of its inherent powers or under section 5 of the Limitation Act, 1963, unless such power is expressly conferred under the statute. Reference, in this connection, may be made to Sakuru v. Tanaji, AIR 1985 SC 1279. However, in terms of the provisions of the said Act, the Central Government could condone the delay in filing the appeal up to a period of one month. In any view of the matter, it is now well known that this court does not exercise its jurisdiction under article 226 of the Constitution of India merely because it is lawful to do so. In this case, as noticed hereinbefore, the petitioner has already filed a suit on the self-same cause of action. She also filed an application for interim order which, as noticed hereinbefore, has been considered not only by the learned judge trying the suit but also by the appeal court. Recently, by an order dated November 9, 1994, a learned single judge of this court in the aforementioned Suit No. 259 of 1993 dismissed the application for injunc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also known that the right of an individual sometimes has got to give way to the right of the public at large. Under article 226 of the Constitution of India, a High Court may refuse to exercise its jurisdiction in favour of a party who has not approached the court with clean hands." In that case reliance was placed upon the decision of the Supreme Court in Municipal Board, Pratapgarh v. Mahendra Singh Chawla [1982] 2 SCC 331 ; AIR 1982 SC 1493, 1495, wherein it has been held as follows : "What are the options before us, obviously as a logical corollary to our finding we have to interfere with the judgment of the High Court because the view taken by it is not in conformity with the law. It is at this stage that Mr. Sanghi, learned counsel for the respondent, invited us to consider the humanitarian aspect of the matter. The submission is that the jurisdiction of this court under article 136 of the Constitution is discretionary and, therefore, this court is not bound to tilt at every approach found not in consonance or conformity with law but the interference may have a deleterious effect on the parties involved in the dispute. Laws cannot be interpreted and enforced divorced fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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