SHASHI PRAKASH KHEMKA Vs. NEPC MICON LTD

JUDGEMENT

(1.) IN this order we are considering an interesting question of law as to the jurisdiction of the Company Law Board to adjudicate petitions under Section 111 of the Companies Act, 1956, against public limited companies, filed after the promulgation of the Depositories Ordinance, 1995, on September 20, 1995. There are three petitions before us in which this issue has been raised and even though arguments were advanced by counsel representing the parties in these petitions on different dates, since the issue is common we are considering the arguments of all counsel in this common order.

(2.) The Depositories Ordinance was promulgated on September 20, 1995, and was repromulgated twice on January 7, 1996, and on March 27, 1996. It later became the Depositories Act on August 10, 1996. Through this Ordinance/Act, certain provisions of the Companies Act were amended, one such provision being Section 111. Before the amendment, grievances relating to delay in as well as refusal to register/transfer of shares as also rectification of the register of members of any company-whether private or public (both listed and unlisted)--could be sought through a petition to the Company Law Board under Section 111. The Depositories Ordinance inserted a new Sub-section (14) in Section 111 of the Companies Act which reads :

(3.) THE stand taken by counsel for the respondents in all these petitions, is that, by virtue of the newly inserted Sub-section 111(14), the right to petition the Company Law Board under Section 111 is limited to matters relating to private companies only and the rectification of register of members of public limited companies can be sought only on the grounds specified in Section 111A. THEy also contended that this sub-section has taken out the jurisdiction of the Company Law Board to deal with public limited companies in matters specified in Section 111. Counsel for the petitioners counter this stand on various grounds as elaborated hereinafter.