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Shri Amba Motors Agencies (Pvt.) Ltd. Vs. the Registrar of Companies - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtDelhi High Court
Decided On
Case NumberCompany Appeal No. 480 of 1976
Judge
Reported in[1978]48CompCas89(Delhi); ILR1977Delhi383
ActsCompanies Act, 1956 - Sections 17; Companies (Amendment) Act, 1974 - Sections 5(2); Limitation Act, 1963 - Sections 5
AppellantShri Amba Motors Agencies (Pvt.) Ltd.
RespondentThe Registrar of Companies
Advocates: M.G. Ramachandran and H.S. Bhatia, Advs
Excerpt:
.....association of the petitioner-company. under section 18 of the companies act, the order had to be filed with the registrar of companies within three months from its date; but this was not done. the order consequently lapsed and the present application was under section 19 for reviving it. but meanwhile the companies (amendment) act, 1974 had come into force, whereby the company law board was substituted for the court as the authority to act in relation to sections 17, 18 & 19 of the original act. the question was whether the court would nevertheless entertain the instant application :; as follows :--; (1) the consequence of the saving clause provided by section 5(2) of the amendment act is to protect proceedings which are already pending before the court or which have been already..........on 21st april, 1976. this would mean that an additional 22 days have to be allowed for filing the copy with the registrar. re-computing the period in this manner, it means that the order dated 5th march, 1976, could be filed with the registrar by 26th june, 1976, which is the statement made in the application itself. the certified copy of the order and other documents having not been filed with the registrar by 26th june, 1976, the order lapsed by reason of section 19(2). now the application is for revival of the same and the application has been moved within one month calculated from) 26th june, 1976, having been filed on 22nd july, 1976. (8) the proviso to section 19(2) states that the court may revive the order on sufficient cause shown. the only cause shown in the application is.....
Judgment:

D.K. Kapur, J.

(1) This application under Section 19 of the Companies A6t, 1956, has been moved in July, 1976, in relation to an order passed by this court on 5th March, 1976, in Company Petition No. 21 of 1975. The order was passed by myself on 5th March, 1976, confirming an alteration in the Memorandum of Association. The provisions of section 18 of the Companies Act, 1956, required the order to be filed within three months from the date of the order together with a printed copy of the Memorandum as altered. The petitioner failed to file the documents within the requisite time. The effect of failure to file the documents within time is specifically provided for in section 19 of the Act which states that if the documents are not filed, then the proceedings connected with the same shall become void and inoperative. Consequently, the order ceased to have effect on 26th June, 1976, as stated in the application. There is a proviso to section 19, which enables the Court to revive the order within a further period of one month. Assuming that the facts stated in the application are correct, this meant that the Court could revive the order even though it had become void within one month from 26th June, 1976. I shall presently refer to this section again on account of the question of jurisdiction that has arisen as a result of the passing of the Companies (Amendment) Act, 1974 (Act No. 41 of 1974).

(2) The Amendment Act of 1974 substituted the Company Law Board as the authority competent to act in relation to sections 17, 18 and 19 of the Companies Act, 1956, in place of the Court. Consequently, after that Act came into force, the jurisdiction to pass the order confirming an alteration in the Memorandum of a company vested in the Company Law Board in place of the Court. The Act came into force on lr,t February, 1975, After that date, this Court would have no jurisdiction to act under sections 17, 18 or 19 of the Companies Act, 1956. The question for consideration is: whether, in the circumstances of this case, the Court still retains jurisdiction to revive its own order which lapsed on 26th June, 1976

(3) The particular conitigency which has arisen is provided for by section 5(2) of the Amendment Act, 1974. That provision reads:-

'NOTHINGcontained in sub-section (1) shall apply to any proceedings under Section 17 or under sub-scetion (4) of section 18, which is pending at the commencement of the Companies (Amendment) Act, 1974, before any Court or to any alteration of the memorandum of a company which has been confirmed, before such commencement, by any Court.'

The consequence of this saving clause is to protect proceedings which are already pending before the Court or which have been already decided by the Court. As it happens, the order passed in Company Petition No. 21 of 1975, by me on 5th March, 1976, was passed after 1st February, 1975. As there is no dispute that the said order was passed with jurisdiction, I presume that the proceedings in Company Petition No. 21 of 1975 were pending in this Court before the Amendment Act came into force. This means that nothing in the Amendment Act is to apply to those proceedings. If nothing in the Amendment Act is to apply to those proceedings, naturally, it would follow that Sections 18 and 19 as standing prior to the Amendment Act would also be applicable to the case. This is one way in which this matter may be dealt with.

(4) Assuming, I am not right in coming to the conclusion that Sections 18 and 19 have to be read as unamended in the present proceecdings, there would be a lacuna in the Act as a result of its amendment. To illustrate this it is necessary to read Section 19(2) as it stood and as it stands now. The previous provisions of Scetion 19(2) were as follows:

'If the documents required to be filed with the Registrar under Section 18 are not filed within the time allowed under that section, such alteration and the order of the Court made under sub-section (5) of Section 17 and all proceedings connected therewith, shall, at the expiry of such period, become void and inoperative. Provided that the Court may, on sufficient cause shown, revive the order on application made within a further period of one month.'

The amended provision reads as follows:

'If the documents required to be filed will the Registrar under Section 18 are not Sled within the time allowed under that section, such alteration and the order of the Company Law Board made under sub-section (5) of Section 17 and all proceedings connected therewith, shall, at the expiry of such period, become void and inoperative. Provided that the Company Law Board may, on sufficient cause shown, revive the order on application made within a further period of one month.'

(5) Now, if the amended Section 19 applies to the present case, the consequence would be that there would be no default and the order would not become void, as the amended Section only states that the order of the Company Law Board will become void. this would mean that inspire of the intention of the law, the order of the Court would remain as it is. I do not think, that this was the intention of the Legislature. The consequence, in my view, would still be the same as if the Act had not been amended. This means that the unamended Section 19 would have to apply to the order passed on 5th March, 1976, and it would become void after passage of the requisite period of three months. After that, the only way in wilich the proceedings could be revived would be either by making an application under Section 18(4) which is a provision by which the Court could extend the time for filing the documents, or by making an application under Section 19, which is the provision enabling the Court to revive the order on sufficient cause shown. I do not for a moment think that the Company Law Board has been given the power to revive the Court's order. Conversely, the Court has no jurisdiction in relation to the Company Law Board's order.

(6) On this analysis, I come to the conclusion that the application for revival does lie to this Court and does not lie to the Company Law Board. In fact, I read Section 5(2) of the Companies (Amendment) Act, 1974, to mean that the jurisdiction of the Court is to continue in respect of proceedings pending at the time of the coming into force of the Amendment Act not only for the purpose of con firming the Memorandum, but also, for extending the' time for filing documents as well as for passing an order under Section 19. The same argument would apply to a case in which the confirmation has already been made prior to 1st February, 1975. The provisions of Section 5(2) are wide enough to apply to all cases in which either the confirmation has already been made or to cases in which the proceedings are pending in relation to the confirmation.

(7) Now, it remains to be seen whether the present application has been moved within the time specified by Section 19. It may be seen that the application for revival is to be made within a period of one month after the expiry of three months. The date of the passing of the order was 5th March, 1976. thereforee, the period of three months expired on 4th June, 1976. The application should have been made by 4th July, 1976. In fact, it has been filed on 22nd July, 1976, which would make the application 18 days late. Learned counsel for the applicant/petitioner states that the period of three months provided for in Section 18 and also mentioned in Section 19(2) does not only mean the expiry of three months from the date of the order, but also, the copying days have to be allowed, i.e., the time required in obtaining a copy of the order for filing before the Registrar of Companies has also to be allowed. There is a specific section in the Act of 1956, viz.. Section 640A, providing that where orders of the Court have to be filed with the Registrar, the time taken in obtaining a copy thereof is to be excluded. This means that in computing the period of three months in which the order had to be filed with the Registrar, the time taken in obtaining the copy has to be excluded. The learned counsel for the applicant has shown me the certified copy of the order proposed to be filed. This was applied for on 1st April, 1976, and the copy was ready on 21st April, 1976. This would mean that an additional 22 days have to be allowed for filing the copy with the Registrar. Re-computing the period in this manner, it means that the order dated 5th March, 1976, could be filed with the Registrar by 26th June, 1976, which is the statement made in the application itself. The certified copy of the order and other documents having not been filed with the Registrar by 26th June, 1976, the order lapsed by reason of Section 19(2). Now the application is for revival of the same and the application has been moved within one month calculated from) 26th June, 1976, having been filed on 22nd July, 1976.

(8) The proviso to Section 19(2) states that the Court may revive the order on sufficient cause shown. The only cause shown in the application is that the certified copy of the order was lost and, thereforee, it could not be filed with the Registrar. I do not think that the Section should be too strictly _ construed. The order was applied for well within time as appears from the dates mentioned on the certified copy. The construction of the term 'sufficient cause' under the Limitation Act is that everyday's delay must be explained. I do not think that it is desirable that such a construction should be placed on Section 19(2) because an order of the Court has already been passed after due enquiry and the company should not be penalised for the default of the Advocate, who had misplaced the copy of the order as stated in the affidavit. I accordingly think that in the particular circumstances of this case, the cause shown is sufficient for this purpose.

(9) I accordingly revive the order, but the applicant/petitioner must pay the Registrar's costs. The costs are computed as Rs. 100 which should be paid within one month from to-day. The effect of the present order is that it revives the previous order. As a consequence of reviving the same, I have to pass an order under Section 18(4) extending the time 90 that it can be filed with the Registrar. This is necessary as the original time allowed by law expired on 26th June, 1976. I extend the time for filing the requisite documents under Section 18(4) to 20th November, 1976.


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