ORDER
1. This order covers three company petitions filed under Section 111(4) of the Companies Act, 1956 (hereinafter called “the Act”), by Canara Bank, a public sector undertaking wholly owned by the Government of India having its head office at 112, JC Road, Bangalore, against three public sector companies, namely ;
(i) Mahanagar Telephone Nigam Ltd. (MTNL) having its registered office at Jeevan Bharti Tower-1, 12th Floor, Connaught Circus, New Delhi-110 001.
(ii) Power Grid Corporation Ltd. (PGCL) having its registered office at Hemkunt Chambers, 10th Floor, 89, Nehru Place, New Delhi-110 019.
(iii) National Thermal Power Corporation Ltd. (NTPC) having its registered office at NTC Bhawan, Scope Complex 7, Institutional Area, Lodhi Road, New Delhi-110 003.
2. In all these three cases there are also other respondents who are the transferors of the bonds in question. The above petitions were filed on October 17, 1996, November 6, 1996, and January 27, 1997, respectively. Since the petitioner, the cause of action and the reliefs prayed for in these petitions are common, all the three are being disposed of by this common order. The petitions relate to bonds issued by the above three public sector companies to the other respondents who in turn have transferred them to the petitioner-bank. The petitioner has prayed for. directions to rectify the register of bond/debenture holders to enter the name of the petitioner. There is also a prayer to pay the accrued interest on the said bonds apart from the costs. The bonds involved in these three cases are as follows :
(i) MTNL 17 per cent. Bonds (Series VI)-Face value Rs. 160 crores for rectification.
(ii) PGCL 9 per cent. Tax Free Bonds-Face value Rs. 39.992 crores for rectification.
(iii) (a) 17 per cent. Bonds (NTPC) (VII and IX series)-Face value Rs. 108 crores for rectification.
(b) 17 per cent. Bonds (III, IV, V and VI series)-Face value Rs. 103.45 crores for delivery of the bond certificate.
3. MTNL in its reply has raised the following preliminary objections, namely :
(i) The petitioner is seeking rectification based on the letter of allotment issued by the company which is not a negotiable instrument but merely a contract to allot the bonds.
(ii) The letter of allotment is admittedly already cancelled and as such the petition is not maintainable as per law.
(iii) The petitioner has not approached the Bench with clean hands since “CANFINA” to whom the letters of allotment were issued was a subsidiary of the petitioner-company and has not paid the consideration which fact the petitioner is fully aware of, thus in the absence of consideration, rectification cannot be sought.
(iv) The dispute between the petitioner and the respondent both being Government undertakings is required to be resolved or clearance for filing petition given by the high powered committee of secretaries of the Government of India in terms of the order and directions of the Hon’ble Supreme Court in the case of Oil and Natural Gas Commission v. Collector of Central Excise [1994] 1 Scale 324, which clearance has been already refused.
4. Power Grid Corporation has raised the following preliminary objections :
(i) The dispute between the petitioner and the respondent is required to be resolved or clearance-given by the high powered committee of secretaries of the Government of India in terms of the order and directions of the Hon’ble Supreme Court in the case of Oil and Natural Gas Commission v. Collector of Central Excise, [1994] 1 Scale 324, which clearance has been already refused.
(ii) The petition is time barred inasmuch as it is in the nature of an appeal under Section 111(2) and (3) and the time limit allowed is four months from the date of lodgment of the documents.
(iii) The petition is infructuous as the letter of allotment in question has been forfeited much prior to the filing of the petition.
(iv) The petition is mala fide and the Bench has been approached with unclean hands inasmuch as no consideration has been paid by the original allottee of which the petitioner is fully aware.
(v) The letter of allotment is not negotiable like the bond certificate and as such the relevant provisions of law are not applicable.
(vi) The petition involves disputed facts for which the matter has to be relegated to a regular suit.
5. In addition, a further affidavit has been filed to emphasise the non-maintainability stating that the Company Law Board has no jurisdiction to pass orders in such matters with the enactment of the Depositories Act, 1996. Consequently the jurisdiction under Section 111(4), (5) and (7) of the Act is confined to only private companies and public companies which have become so by virtue of Section 43A of the Act. It is further stated that even under the new Section 111A rectification of the register of debenture holders is not within the jurisdiction of the Company Law Board. Moreover, Section 111A does not incorporate the provisions of Section 111(4) in order to rectify the register of debenture holders.
6. Similar preliminary objections were also raised by NTPC including, a further emphasis on the specific denial of clearance by the high powered committee meeting held on August 17, 1995, in support of which a copy of the minutes of the high powered committee meeting held on August 17, 1995, was enclosed.
7. Since two of the respondent companies have raised a preliminary issue with regard to our jurisdiction we took up this question at the first instance since we wanted to be ourselves convinced that the jurisdiction is still available with us. In this context, we have noted that the Depositories Ordinance promulgated on September 20, 1995, and subsequently after re-promulgation enacted as a statute in January, 1997, has introduced two important changes in our jurisdiction regarding transfer of shares and debentures, namely :
(a) the entire provisions as contained in Section 111 of the Act are now made applicable only to private companies with include also a private company which had become a public company by virtue of Section 43A of the Act. In other words, the jurisdiction is not available in respect of shares/debentures of any other company other than the above. This has been done by the introduction of Sub-section (14) in Section 111.
(b) A new Section 111A has been introduced in respect of companies other than those covered in Section 111(14). On a plain reading of this section titled “rectification of the register on transfer” it is found that though it provides for an appeal to the Company Law Board in case of refusal to register, such appeal is confined to refusals in respect of transfer of shares thereby meaning that the debentures/bonds are not covered. Even this appeal facility was not referred to in the Ordinance but came to be introduced only when the Amendment Act came into force. Further, under Sub-section (3) of Section 111A, the Company Law Board may direct rectification of the register only in case of transfer of shares or debentures
made in contravention of (i) any of the provisions of the Securities and Exchange Board of India Act, 1992, or regulations made thereunder or (ii) the Sick Industrial Companies (Special Provisions) Act, 1985, or (iii) any other law for the time being in force. Even this latter part regarding contravention of “any other law” was absent in the Ordinance.
8. On a plain reading of the above provisions which have come into force, substantially on September 20, 1995, and since these petitions were filed subsequent to the above amendments, we wanted to be convinced ourselves about the availability of jurisdiction with us. We, therefore, allowed arguments to be advanced on the question of jurisdiction.
9. Shri A.N. Haksar, senior advocate appearing on behalf of the petitioner-bank, drew our attention to the proceedings instituted by his clients before the Hon’ble Delhi High Court in early 1995 before the amendments and decided by the court in September, 1996. The bank had filed two civil writ petitions against the three public sector companies in which certain preliminary objections were raised by Shri J. C. Seth, appearing on behalf of PGCL in that matter. The objection was that Section 111 of the Companies Act provides for petitions being preferred to the Company Law Board against refusal to register as well as for rectification if default is made or unnecessary delay takes place in the registration. The Company Law Board is empowered to direct the transfer and to make interim, incidental or consequential orders. It may also decide any question relating to title. This remedy is an effective alternate remedy. Further, a writ petition will not be appropriate as an alternative efficacious remedy is available. Though the petitioner’s counsel resisted this preliminary objection, initially, he later apprehended that in case the petitioner was driven to the Company Law Board by filing a petition under Section 111 of the Companies Act, respondent No. 1 may dispute the jurisdiction and may refuse to submit to it. On this Mr. Seth made a statement at the Bar that respondent No. 1, namely, Power Grid Corporation, would not object before the Company Law Board regarding its maintainability though it did not waive its right to all other objections such as on the ground of limitation, etc. After recording the above, the Hon’ble High Court dismissed the writ petition as not maintainable as an alternative efficacious remedy is available to the petitioner.
10. Shri A.N. Haksar further stated that the applicability of the amendment can only be prospective and not retrospective. He further stated that the writ petitions were filed before the amendments were introduced and as such since the jurisdiction was available on that date, the petitions
could be heard and disposed of by the Company Law Board. According to Shri Haksar, the present proceedings are a continuation of the legal proceedings initiated before the coming into force of the amendment.
11. Shri Haksar also cited in this connection a decision of the High Court of Judicature at Bombay in Godrej and Boyce Manufacturing Co. (P.) Ltd. v. Union of India [1984] 18 ELT 172. In this case, the issue which was considered related to a show-cause notice issued by the Union of India on the basis of certain subsequent changes in the law relating to matters prior to the change of law. The High Court observed that “at the highest as a result of subsequent change in law the respondents may be entitled to reopen and/or review any orders previously passed if they are so entitled under any of the provisions of law. They could also have exercised such a right within the time prescribed by law. The present show-cause notices are not issued in the exercise of any powers of review and/or revision under Section 35A or 36 of the said Act as then in force and they are without jurisdiction”. Thus, according to Shri Haksar, we have to ignore the subsequent changes in law particularly when the court was already seized of the matter. He also referred to Brooms Legal Maxims, 10th edition, page 73, to state that “the Act of the court shall not prejudice any party”. He also emphasised that as per Article 226 of the Constitution a court has to exercise its jurisdiction in an equitable manner. He, therefore, pleaded that taking all the circumstances into account, the Company Law Board should exercise equitable jurisdiction in these matters.
12. Dr. A.M. Singhvi, senior advocate, appearing on behalf of MTNL submitted that the jurisdiction for this matter is not available with the Company Law Board any more which is undisputed. No court can enlarge its jurisdiction since the power to create or enlarge jurisdiction is legislative in character and cannot be exercised by the court. No direction vlolative of the limits of jurisdiction can be given by any court. In this connection, he cited the majority judgment of the Supreme Court in A.R. Antulay v. R.S. Nayak, AIR 1988 SC 1531 ; [1988] 2 SCC 602 (paras. 39 and 47). He further reinforced his argument by a subsequent decision of the Supreme Court, namely, Chiranjilal Goerika v. Jasjit Singh [1993] 2 SCC 507 (para. 17) in which case the earlier decision,of the Supreme Court as cited above was relied upon. Citing these decisions Dr. Singhvi stated that jurisdiction can be exercised only when provided for either in the Constitution or in laws made by the Legislature. He quoted the apex court to say “the Supreme Court also cannot confer jurisdiction if it does not exist in law”. Dr. Singhvi further argued referring to the decision of the Delhi High Court in the two
civil writ petitions that even if the court is presumed to have given a direction to the petitioner to go to the Company Law Board, since the jurisdiction did not exist with the Company Law Board on that date, such a direction has no validity. According to him directions given oblivious of the relevant provisions of law are per incuriam. To substantiate this, he cited A.R. Antulay v. R.S. Nayak [1988] 2 SCC 602 (para. 42) as well as Municipal Corporation of Delhi v. Gurnam Kaur [1989] 1 SCC 101 (para. 11). He further argued that a question relating to jurisdiction of a court on interpretation of provisions of a statute cannot be deemed to have been finally determined by an erroneous decision of that court. He also stated that if a court lacks jurisdiction, by the parties consenting, jurisdiction cannot be conferred. In this connection, he cited S. K. Mehta v. Govind Ram Bohra [1990] 1 SCC 193 (para. 26), Dr. Singhvi further clarified that before the High Court when the writ petitions were taken up, no undertaking was given by him on behalf of his clients that he shall not raise any preliminary objection on maintainability before the Company Law Board.
13. Shri J. C. Seth, advocate, appearing for PGCL and NTPC submitted that the Company Law Board cannot entertain the petitions without clearance from the high-powered committee in view of the decision of the Supreme Court in Oil and Natural Gas Commission v. Collector of Central Excise [1994] 1 Scale 324. He further contended that since a specific refusal to grant permission has been made by the high-powered committee, the Company Law Board has no alternative except to dismiss the case in limine. He also stated that the amendments introduced by the Depositories Ordinance, 1995, have taken away the jurisdiction of the Company Law Board under Section 111 which provision is being invoked by the petitioner. He insisted on the decision being pronounced on maintainability of the petition before proceeding with the merits of the case.
14. During the hearing, Dr. Singhvi, senior advocate, suggested that in view of the fact that none of the parties brought to the notice of the Hon’ble Delhi High Court at the time of the hearing about the amendments introduced through the Depositories Ordinance, 1995, by which there is a substantial change in the jurisdiction of the Company Law Board, the petitioners may be directed to make a reference to the High Court for a clarification on this matter before taking up the petition for consideration. Though the petitioners’ advocate was willing to consider this proposal, Shri J. C. Seth, advocate, for the other two respondent companies, namely, PGCL and NTPC insisted on our deciding the maintainability question as the High Court has already dismissed the writ petitions.
15. We have carefully considered the submission of Shri Haksar, Dr. Singhvi and Shri Seth. Shri Haksar’s proposition that we should take the relevant date for exercise of jurisdiction as the date of filing of the writ petitions before the Delhi High Court does not convince us inasmuch as the two proceedings are totally independent and there is no nexus between the two. The present proceedings could be taken as a continuation in case the High Court had remanded the matter to us or had given suitable directions to that effect. From a reading of the judgment of the High Court especially the concluding paras. 14.5 and 14.6 it is clear that the court has dismissed the case finally. The verdict of the court is “the present petitions are, therefore, liable to be dismissed as non-maintainable. CWP No. 1968 of 1995, CWP No. 560 of 1995, are both dismissed in limine on the ground of availability of alternate efficacious remedy to the petitioner”. Thus, it is absolutely clear that the High Court has finally disposed of those writ petitions. The present company petitions before us are de novo proceedings initiated by the petitioners after promulgation of the Depositories Ordinance. It is, however, another matter that the High Court came to the conclusion that alternate efficacious remedy is available whereas on that date actually such a remedy is not available but we cannot go into that question. It is in this background that Shri Haksar’s plea of exercise of equitable jurisdiction in view of Article 226 is relevant. However, it would be inappropriate for us to go into this question which perhaps could have been done by the petitioners going back to the High Court as suggested by Dr. Singhvi which, was not acceptable to all the parties concerned.
16. Having come to the conclusion that the present proceedings are in the nature of fresh proceedings under Section 111 of the Act, we have to consider whether we should proceed with the matter further. In this connection, it is relevant to note that it is nobody’s case that the petitions are maintainable even under the amended provisions of the Companies Act. It is, therefore, understood by all concerned, that these petitions as of today cannot be entertained due to lack of jurisdiction as per the amended law. However, Shri Haksar insisted that we have to exercise equitable jurisdiction and we have to apply the law as it stood on the relevant dates. In this context, Shri Haksar’s reference to the judgment of the Bombay High Court in Godrej and Boyce Manufacturing Co, (P.) Ltd. v. Union of India [1984] 18 ELT 172 . However, from the facts of that case, in our view, a parallel situation is not there before us today. In that case, the court was dealing with a complaint of an authority issuing a show-cause notice to a party by applying a subsequent legal provision to a situation when such law was absent. A Tribunal’s jurisdiction is based on the provisions of the
relevant law. Such jurisdiction can also be taken away by means of legal provisions. The date of vesting or withdrawal of jurisdiction is purely based on the provisions of the relevant law. In case a forum continues to exist, subject to the provisions of the relevant law a Tribunal may exercise such jurisdiction if it is already in seisin of the matter. However, it cannot entertain a matter brought before it even if it continues to exist, after it has lost the jurisdiction. Thus, the exercise of the jurisdiction is totally dependent upon the relevant legal provisions.
17. The Supreme Court in A.R. Antulay v. R. S. Nayak [1988] 2 SCC 602 has by a majority judgment of a seven-member Bench declared as void certain directions given earlier by a five-member Bench of the same court, inter alia, on the ground that such directions are contrary to the express provisions of law. In other words, when a specific provision of law exists any direction given by a court contrary to the provisions of law will be void. We have also noted that the Supreme Court has further reiterated the same view in the subsequent decision in Chiranjilal Goenka v. Jasjit Singh [1993] 2 SCC 507, 517, wherein a specific observation has been made to the effect that even “the Supreme Court cannot confer jurisdiction if it does not exist in law”. We have further noted in the same decision another relevant passage :
“The characteristic attribute of a judicial act is that it binds whether it be right or it be wrong. Thus, this court laid down as an authoritative proposition of law that the jurisdiction could be conferred by statute and this court cannot confer jurisdiction on an authority or a Tribunal.”
18. From these two judgments of the Supreme Court, the legal proposition becomes abundantly clear that when a jurisdiction is no longer available with us in respect of rectification of register, we cannot appropriate the jurisdiction to ourselves. In the light of this proposition, Shri Haksar’s argument that we should apply equitable jurisdiction does not arise when basically we lack the jurisdiction to entertain the matter. By applying the equitable principle, no court can confer jurisdiction upon itself when there is no specific legal provision conferring jurisdiction. We are in agreement with Dr. Singhvi that even if the parties agree to confer jurisdiction on a court even then a jurisdiction cannot be assumed. In this connection, the decision of the Supreme Court in Municipal Corporation of Delhi v. Gurnam Kaur [1989] 1 SCC 101, cited by Dr. Singhvi is also relevant. We are convinced that whatever orders we may pass on the merits will be a nullity and non est as observed hereunder by the apex court in Chiranjilal Goenka v. Jasjit Singh [1993] 2 SCC 507.
19. It is settled law that a decree passed by a court without jurisdiction on the subject matter or on the grounds on which the decree made which goes to the root of its jurisdiction or lacks inherent jurisdiction is a coram non judice. A decree passed by such a court is a nullity and is non est.
20. On a consideration of all the rulings of the Supreme Court as referred to above, we are convinced that the present petitions are not maintainable in view of the amended provisions of law on the date of filing of the petitions by which admittedly we have no jurisdiction. Accordingly, we dismiss these petitions as not maintainable.