9911796707
TMI Blog2006 (2) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1 on or about 2-1-2001 lodged the sa id share certificate pledged by respondent Nos. 2 to 4 along with the share transfer forms with the appellant for transferring the said shares in its name on the ground that there had been delay in repayment of the said loan. A winding up petition also came to be filed by respondent No. 1 against the appellant in terms of sections 434(1)(a) and 439(1)(b) of the Companies Act, 1956 (for short, 'the Act') in the High Court of Judicature at Madras. Respondent Nos. 2 to 4 had also filed suits being O.S. Nos. 3742, 3740 and 3741 of 2003 respectively for permanent injunction restraining the respondent No. 1 and the appellant from effecting the transfer of the equity shares in favour of respondent No. 1. 5. It is not in dispute that upon compliance of the requisite formalities, as envisaged under section 108 of the Act, respondent No. 1 was to present the said shares with the appellant by 8-12-1999. However, it did so only on 2-1-2001. Respondent No. 1 raised a grievance that the appellant although had registered a transfer of 2,99,800 shares pledged by respondent Nos. 2 to 4, but failed to effect registration of transfer in respect of the remaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le of waiver which had been relied upon by the High Court was not available, inasmuch as if on an earlier occasion, the appellant registered 2,99,800 shares in ignorance of law, it cannot be expected to commit the same mistake over again. 9. Mr. Soli J. Sorabjee, learned senior counsel appearing on behalf of the respondents, on the other hand, would submit that the decision of this Court in Mannalal Khetan's case (supra) is distinguishable inasmuch as the said provisions were couched in negative language whereas sections 108(1A) and 108(1C) are structured differently and have a different scheme besides having not used such negative language. The provisions of sections 108(1A) and 108(1C) of the Act, Shri Sorabjee would contend, do not provide for any penalty or consequences in the event of failure to comply therewith and in that view of the matter, the said provisions must be held to be directory in nature. In any event the fact that the Company can move the Central Govern- ment for extension of time itself indicates that the provisions are directory and not mandatory. 10. In any event, the learned counsel argued that having regard to the fact that at no point of time, the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or transferee is not a bona fide investor or transfer is not permissible in terms of one or the other provisions of the Articles of Association or the same is otherwise prohibited in law e.g., sub-section (3) of section 22A of the Securities Contract (Regulation) Act, 1956. However, before the company can be asked to perform its duties in terms of the said provisions, the procedural requirements contained in section 108 are required to be complied with. Section 108 requires the applicant desiring to obtain the registration of transfer of shares in its favour to comply with the provisions contained therein. It is, therefore, ordinarily for the applicant to comply with all formalities. If it does not do so it cannot make the company bound to effect the transfer, unless sufficient and cogent reasons are assigned. The time is specified in the aforementioned provisions for filing of such an application in the prescribed form and upon complying with the requirements prescribed therein. 13. Whether a statute would be directory or mandatory will depend upon the scheme thereof. Ordinarily a procedural provision would not be mandatory even if the word 'shall' is employed therein unless a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creates a duty, the special remedy is prescribed for non-performance of the duty. In Crates on Statute Law (7th Edn.), it is stated that the Court will, as a general rule, presume that the appropriate remedy by common law or mandamus for action was intended to apply. General rule of law is that where a general obligation is created by statute and statutory remedy is provided for violation, statutory remedy is mandatory. The scope and language of the statute and consideration of policy at times may, however, create exception showing that the Legislature did not intend a remedy (generality) to be exclusive. Words are the skin of the language. The language is the medium of expressing the intention and the object that particular provision or the Act seeks to achieve. Therefore, it is necessary to ascertain the intention. The word 'shall' is not always decisive. Regard must be had to the context, subject-matter and object of the statutory provision in question in determining whether the same is mandatory or directory. No universal principle of law could be laid in that behalf as to whether a particular provision or enactment shall be considered mandatory or directory. It is the duty of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also not in dispute. Furthermore, we are of the opinion that by reason of the impugned judgment no injustice as such has been done to the appellants and in that view of the matter this Court in exercise of its jurisdiction under Article 136 of the Constitution of India may not interfere with the impugned order, even if it may be lawful to do so. 21. In Taherakhatoon v. Salambin Mohammad [1999] 2 SCC 635, this Court observed : "20. In view of the above decisions, even though we are now dealing with the appeal after grant of special leave, we are not bound to go into merits and even if we do so and declare the law or point out the error-still we may not interfere if the justice of the case on facts does not require interference or if we feel that the relief could be moulded in a different fashion. . ." (p. 643) 22. In Chandra Singh v. State of Rajasthan [2003] 6 SCC 545, it was held: ". . .Furthermore, this Court exercised its discretionary jurisdiction under Article 136 of the Constitution of India which need not be exercised in a case where the impugned judgment is found to be erroneous if by reason thereof substantial justice is being done. [See S.D.S. Shipping (P.) Ltd. v ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
