Kalyan Jyoti Sengupta, J. - (1.) In this motion, the petitioner succeeded in obtaining an ad interim order of status quo, passed by this court in a declaratory action for holding that defendants Nos. 1 and 2 have become disqualified to be directors in defendant No. 3-company in view of the provision of Section 274, Sub-section (1)(g) of the Companies Act, 1956. Defendants Nos. 1 and 2 applied for vacating of the aforesaid order of status quo. However, this application has not been disposed of separately and the same has been treated to be an affidavit-in-opposition to the petition of this motion for convenience sake.
(2.) Short narration of the facts in this case would be relevant in order to find out, prima facie, as to whether the plaintiffs/petitioners are entitled to continuation of the interim order till the disposal of the suit or not. The plaintiffs/ petitioners are holders of equity shares in defendant No. 3, Yule Financing and Leasing (hereinafter referred to as "Yule"), being defendant No. 7 which was floated in the year 1981 by Andrue Yule and Company (the fourth defendant). Defendants Nos. 1 and 2 had been the directors of Yule who had accepted deposits from the public under various schemes but failed to repay on their respective dates on maturity.
(3.) They were appointed directors on June 28, 1999, and June 26, 1998, respectively, and had been till October 15, 2001, and September 26, 2001, respectively, when, the aforesaid two persons are said to have resigned from the office of the director of defendant No. 7. Now these two persons are sought to be appointed directors in defendant No. 3. It appears that during their tenure of directorship defendant No. 7 is alleged to have defaulted in repaying the amount of deposit together with interest to the public upon maturity. So, defendant No. 7 approached the Company Law Board for suitable order for reschedulement of repayment under the Companies Act, 1956. By an order in August, 2000, pursuant to the scheme submitted by defendant No. 7 reschedulement of repayment of the deposits to the respective depositors was allowed. During the tenure of the directorship of defendants Nos. 1 and 2 Section 274 of Sub-section (1) of the Corporate Laws was amended on December 13, 2000, by incorporating in Sub-section (1), Clause (g) (A and B). Therefore, the aforesaid section as amended are set out hereunder : "274. Disqualification of directors.--(1) A person shall not be capable of being appointed a director of a company, if ... (g) such person is already a director of a public company, which-- (A) has not filed the annual accounts and annual returns for any continuous three financial years the commencing on and after the first day of April, 1999, or- (B) has failed to repay its deposit or interest thereon on due date or redeem its debentures on due date or pay dividend and such failure continues for one year or more : Provided that such person shall not be eligible to be appointed as a director of any other public company for a period of five years from the date on which such public company, in which he is a director, failed to file annual accounts and annual returns, under Sub-clause (A) or has failed to repay its deposit or interest or redeem its debentures on due date or pay dividend referred to in Clause (B)." Learned counsel for both the parties have argued and agreed that any Act cannot have any retrospective operation and the law is very well settled that unless expressly it is intended by the Legislature, retrospective operation cannot be thought of and it is always prospective.;