KARNATAKA THEATRES LTD Vs. S VENKATESAN

JUDGEMENT

(1.) These petitions are directed against an order made by the Company Law Board (hereinafter referred to as "the CLB") in appeals filed before it under section 111 of the Companies Act, 1956 (for short "the Act"), against the decision of the board of directors of the petitioner-company (hereinafter referred to as "BODs company") declining to register certain shares of the company said to have been acquired by the first respondent in each of these cases.

(2.) Before the CLB, the petitioner contended that the appeals filed by the first respondent in each of these cases before it were barred by limitation, as the same were not filed within a period of two months from the date of receipt of the petitioner's letter regarding refusal to transfer shares. On this aspect of the matter, the Board classified the appeals into three categories : (i) that there are certain appeals in which there was no delay at all; (ii) certain appeals in which there was delay; and (iii) certain other appeals have been forwarded to the Board within the prescribed time, but reached the Board a little late. On an overall consideration of the matter it held that in order to avoid undue hardship to the appellants before it, the CLB was inclined to condone the "short delay".

(3.) Attacking this finding, learned counsel for the petitioner urged that there is no specific provision for condonation of delay in the matter of an appeal filed under section 111 of the Act on any ground including one of hardship. Elaborating his submission, learned counsel for the petitioner stated that section 111 provides for power to refuse registration and also the appeal that could be filed against such refusal. The decision as to refusal of registration of transfer of any share should be communicated within two months from the date of delivery of intimation of such refusal and if there is any default in complying with the aforesaid provision, the company and every officer of the company would be punishable with fine, which may extend to Rs. 50 per day during the period the default continues. He invited my attention to section 111(4) thereof. It provides that in case an appeal is filed against such refusal to transfer the shares, the same should be made within a period of two months from the date of receipt of the notice of refusal. In the present case, it is submitted that at the relevant time there was no provision made in the rules framed by the Central Government for the conduct of the business of the CLB empowering them to condone the delay. It is also submitted that under section 637 of the Act, there should be a specific delegation of powers to the CLB by the Central Government to exercise such powers. Neither section 111 nor section 637B is the subject matter of delegation. Rules framed under section 642 do not provide for condonation of such delay. It is, therefore, submitted that there is no scope for condoning the delay at all in the case of the appeals which are filed beyond the time fixed in section 111(4) of the Act. He further contended relying upon a decision of this court in Lingamma v. State of Karnataka, AIR1982 Kant 18 , AIR1982 KAR 18 , ILR1981 KAR 161 , 1981 (2 )KarLJ177 , that when there is no specific power conferred upon an authority functioning under a special statute no inherent power is available for condonation of delay, however hard the circumstances in a given case may be.