Skip to content


Dalmia Cement (Bharat) Ltd. Vs. Registrar of Joint Stock Companies, Madras - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtChennai High Court
Decided On
Case NumberAppln. Nos. 792 and 793 of 1953
Judge
Reported inAIR1954Mad276; [1953]23CompCas139(Mad); (1953)2MLJ94
ActsCompanies Act, 1913 - Sections 76 and 131
AppellantDalmia Cement (Bharat) Ltd.
RespondentRegistrar of Joint Stock Companies, Madras
Appellant AdvocateV.C. Gopalaratnam and ;L.V. Krishnaswami Ayyar, Advs.
Respondent AdvocateGovt. Pleader
Cases ReferredBhagirath v. Emperor
Excerpt:
.....- extension of time - sections 76 and 131 of companies act, 1913 - whether registrar has power to extend period of eighteen months for placing final accounts before general meeting - in case legislature intended that period of eighteen months should be absolute being not liable for extension then same would be clear by language of statute itself - adequate reasons given as to delay in placing final accounts in general meeting - power of extension applies to both nine months as well as twelve months - registrar has power to extend period of eighteen months in special circumstances. - - but it will not be safe to base the conclusion on the mere fact that the same words 'the period' occur in the proviso as well as the body of the section. i fail to see why the words 'the period' in..........to the period of nine months mentioned in the latter part of the section and not to the period of eighteen months mentioned in the earlier part of the section. on the merits, the learned counsel did not dispute that if the power vested in him to extend the period of eighteen months as contended for the company, this would be eminently a fit case for the exercise of the power. the answer to this controversy lies in a proper assessment of the limits of the power of extension conferred on the registrar by the proviso to the said section. section 131, companies act, makes it obligatory on the directors of every company at some date not later than eighteen months after the incorporation of the company and subsequently once at least in every calendar year to lay before the company in general.....
Judgment:

Manaswami Goundar, J.

1. These are applications praying that the time for the placing of the Balance sheet and Profit and Loss account of the applicant company Dalmia Cement (Bharat) Limited before the general meeting under Section 131(1), Companies Act, be extended by three months or to direct under Section 45, Specific Relief Act, the Registrar of Joint Stock Companies, the respondent to both the applications, to exercise the powers conferred upon him and extend the time. The above company was incorporated on 1-11-1951 for the purpose of taking over of the entire assets in the Indian Union of Dalmia Cement Limited and accordingly took over all the shares of the said Dalmia Cement Limited and issued its own shares in lieu thereof, as a part of a scheme of amalgamation. It is alleged that though the share-holders of Dalmia Cement Limited were duly notified, they took their own time to surrender their share certificates in exchange for corresponding share certificates in the applicant company and the work of issuing fresh certificates to a very large number of share-holders has not been completed, that hundreds of accounts have to be opened and maintained in which thousands of entries have to be made, and that therefore it is impossible for the directors to place the Balance sheet arid profit and loss account before the General Meeting within 18 months since the date of incorporation, i.e., on or before 30-4-1953. The directors applied to the Registrar to extend by three months the period of 18 months prescribed by Section 131; but the Registrar declined to extend the time on the ground that he had no power to do so.

2. The applications are opposed by the Registrar on the ground that the power to extend the time conferred on him by the proviso to the section relates only to the period of nine months mentioned in the latter part of the section and not to the period of eighteen months mentioned in the earlier part of the section. On the merits, the learned counsel did not dispute that if the power vested in him to extend the period of eighteen months as contended for the company, this would be eminently a fit case for the exercise of the power. The answer to this controversy lies in a proper assessment of the limits of the power of extension conferred on the Registrar by the proviso to the said section. Section 131, Companies Act, makes it obligatory on the directors of every Company at some date not later than eighteen months after the incorporation of the company and subsequently once at least in every calendar year to lay before the company in general meeting a balance sheet and profit and loss account for the period, in the case of the first account since the incorporation of the company and in any other case since the preceding account, made upto a date not earlier than the date of the meeting by more than nine months. In this case, the company was incorporated on 1-11-1951; and as I said in the affidavit In support of these applications, adequate reasons are given why the directors are unable to place before the general meeting the balance sheet and profit and loss account 'at some date not later than 18 months after the incorporation of the company.' It is that period of 18 months that they wanted to be extended by the Registrar by three months. The learned counsel for the Registrar who is the respondent to these applications does not question the fact that on. the merits, this is a fit case in which extension of time should be granted. But his contention was that under the proviso to that section, the Registrar has no power to extend the period of eighteen months and that the Registrar is competent to extend only the period of nine months. The proviso to the section runs thus:

'Provided that the Registrar may for anyspecial reason extend 'the period' by a periodnot exceeding three months.'

It will be seen that Section 131 contemplates two perioi3s: (1) the period before the expiry of which the directors shall lay before the general meeting the balance sheet and the profit and loss account, namely, 'at some date not later than eighteen months after the Incorporation of the company'; (2) the period for which those accounts should be prepared, namely, for the present case, the period since the incorporation of the company to a date not earlier than the date of the meeting by more than nine months, The contention for the Registrar is that he has got power under the proviso only to extend the period for which the balance-sheet and the profit and loss account are to be prepared, that is, to extend the latter period of nine, months and not the earlier period of eighteen months after the incorporation of the company within which that should be done. The argument is that that period of eighteen months is immutable and that the word 'the period' in the proviso must be correlated to the words 'the period' occurring in the body of the section. The argument seems attractive and plausible. But it will not be safe to base the conclusion on the mere fact that the same words 'the period' occur in the proviso as well as the body of the section. I fail to see why the words 'the period' in the proviso should not be equally made applicable to the period of eighteen months after the incorporation, contemplated in the earlier part of the section. '18 months' under the earlier part of the section is a period in the same manner as the period for which the accounts are to be made up; and as both of them are periods, I consider that the words 'the period' in the proviso would apply to both the periods of 18 months as well as 9 months. One is the period 'during which' that particular account should be laid; and the other is the period 'for which' it should be prepared, under the English enactments, the matter Is placed beyond any doubt, for the proviso to the corresponding section states:

'Provided that the Board of Trade, if, for any special reason, they think fit so to do, may, in the case of any company, extend the period of 18 months aforesaid, and in the case of any company and with respect to any year extend the period of nine months aforesaid.'

There are no reasons to suppose that our legislature intended to make a deliberate departure from the English enactment in the content of the proviso, while copying the body of the section. The proviso is a proviso to the entire section, and there is no reason to treat it as a proviso only to the latter part of the section. If our legislature intended that the period of eighteen months should be absolute, and not liable for extension, they could have used clear words embodying such intention. They could well have copied the language of the English proviso itself, but only omitting the words relating to the extension of the period of eighteen months and need not have left the matter in doubt by simplifying the language of the English proviso and adopting instead the words 'the period'. It seems to me that the only departure made is that the Registrar's power Is limited to three months, whereas the power of the Board of Trade is unlimited. My attention was also drawn to Section 76 of the Act which is no doubt mandatory as to the holding of the general meeting within eighteen months of its Incorporation, and under which no power of extension is given to the Registrar or even to the court. It is therefore argued that if eighteen months Is unalterable under Section 76, that should equally be so under Section 131. But Section 76 does not say that such meeting shall be called for considering the balance sheet or profit and loss account and such a meeting might be called for other purpose. The calling for a meeting is one thing, and the subject to be considered at such a meeting is another. The matter is free of authority and the only decided case brought to my notice by the learned counsel for the company is the one reported in -- 'Bhagirath v. Emperor' : AIR1948Cal42 . But in that case, this point did not arise for decision and was not decided.

3. In my view therefore the Registrar has got the power to extend the period of eighteen months and that being so, as his learned counsel intimated, he will have no objection to exercise that power in the special circumstances of this case. This expression of opinion is enough and no specific orders on these applications are necessary. The costs of both the parties will come out of the assets of the company. Counsel's fee Rs. 300/- (Rupees three hundred).


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //