Case: Canara Bank Vs. Nuclear Power Corporation of India Limited and Others

48 of the Bihar and Orissa Co-operative Societies Act. It was held that the jurisdiction of the ordinary civil and revenue courts of the land was ousted in the case of disputes that fell under Section 48. A registrar exercising powers under Section 48, therefore, discharged the duties which would otherwise have fallen on the ordinary civil and revenue courts. He had not merely the trappings of a court but in many respects he was given the same powers as were given to the ordinary civil courts of the land by the Code of Civil Procedure, including the power to summon and examine witnesses on oath, the power to order inspection of documents, to hear the parties after framing issues, to review his own order and to exercise the inherent jurisdiction of courts mentioned in Section 151. In adjudicating a dispute under Section 48 of the Bihar Act, the Registrar was held to be, "to all intents and purposes a Court discharging the same functions and duties in the same manner as a Court of law is expected to do."31.Now, under Section 111 of the Companies Act as amended with effect from 31st May, 1991, the CLB performs the functions that were therefore performed by courts of civil judicature under Section 15 5. It is empowered to make orders directing rectification of the company register, as to damages, costs and incidental and consequential orders. It may decide any question relating to the title of any person who is a party before it to have his name entered upon the companys register; and any question which it is necessary or expedient to decide. It may make interim orders. Failure to comply with any order visits the company with a fine. In regard to all the se matters it has exclusive jurisdiction (except under the provisions of the Special Court Act, which is the issue before us). In exercising its function under Section 111 the CLR must, and does, act judicially. Its orders are appealable. The CLR, further, is a permanent body constituted under a statute. It is difficult to see how it can be said to be anything other than a court, particularly for the purposes of Section 9A of the Special Act.32.We shall assume that a shareholder who se name the company has refused to enter in its register would be put to some difficulty in deciding whether he should approach the Special Court or the CLB, but that is no reason to interpret the provisions of Section 9A in a manner that would defeat its intendment and adversely affect the public interest. In any event, the time taken in approaching the CLB in a matter that should have been filed before the Special Court would not be of any consequence for there is no time limit within which the Special Court has to be approached; and it is most unlikely that the Special Court would be approached unless the shareholder were sure that his claim fell within Section 9A(1).33.It will be remembered that Mr. Nariman had drawn attention to the provisions of Section 4 of the Special Court Act and argued that even if the CIB, under the provisions of Section III of the Companies Act, made any order with regard to any securities, that order would stand at naught if an order relating to the same securities was made under Section 4 of the Special Court Act by reason of the fact that, under Section 13 of the Special Court Act, order of the Special Court had effect notwithstanding anything inconsistent therewith contained in any decree or order of any court, tribunal or other authority. Section 3(2) of the Special Court Act empowers the Custodian, on being satisfied on information received that any person has been involved in any offence relating to transactions in securities entered into between the stated dates to notify the name of such person in the Official Gazette. On such notification, by reason of Section 3(3), the property of the person notified stands attached. That property, by reason of Section 3(4), is to be dealt with by the Custodian in such manner is the Special Court may direct, Section 4 states that if the Custodian is satisfied after such inquiry as he may think fit that any contract or agreement entered into fraudulently or to defeat the provisions of the Special Court Act, he may cancel such contract or agreement whereupon such property stands attached. The scope, there-fore, of Section 4 is limited. It applied only in regard to property that belongs to a person notified. Section 9A(1) is much wider and it invests the Special Court with. jurisdiction to entertain matters or claims arising out of transactions in securities entered into between the stated dates in which a person notified is involved not only as a party but also as a broker, intermediary or in any other manner. The argument based on Section 4 must, therefore, fail.34. As has been pointed out, sub-sections(2) and (3) of Section 111 of the Companies Act term the pleading that the person aggrieved has to file before the CLE an appeal, sub-section (4) requires the person aggrieved to apply, sub-section (5) speaks of it as an appeal or an application, subsection (7) as an application and sub-section (10) as an appeal or application which shall be made by a "petition in writing". The words "appeal" and "application" in the context of the provisions of Section 111 have, therefore the same meaning and it is, plainly, an original application that is made. The shareholder does not resort to a superior court to review the decision of an inferior court or tribunal. The fact, therefore, that Section 9A(2) of the Special Court Act speaks of the transfer of every suit, claim or other legal proceeding (other than an appeal)" does not exclude the "application or "appeal" made under the provisions of Section 111 of the Companies Act from the purview of Section 9A(1) of the Special Court Act. Conclusion.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]16.It will be seen that the CLB now exercises the powers that were exercisable by the court under Section 155. It is entitled to direct rectification of the register and the payment of damages by the company. It is entitled to decide any question relating to the title of any person who is a party to the application to have his name entered in or omitted from the register and to decide any question which it is necessary or expedient to decide in this connection. An appeal to the High Court against any decision or order of the CLB on a question of law is available to any person aggrieved, thereby under the provisions of Section 105.While on Section 9A. it must also be noted that(2) thereof mandates transfer to the Special Court of "every suit, claim or other legal proceedings (other than an appeal)" which is pending before any court on the commencement of the Amendment Ordinance in which the cause of action, inter alia, arises out of a transaction in securities entered into between the stated dates in which a notified person is involved. It is, therefore, the proceeding in the court of first instance that stands transferred. If the court of first instance has finally disposed of the proceeding and its order thereon is the subject of an appeal, the appeal does not stand transferred.A "court" other than the Special Court is debarred, by reason ofsubsection (3) ofSection 9A, from exercising any jurisdiction, powers or authority, after the commencement of the Amendment Ordinance, in relation to any matter or claim arising out of transactions in securities entered into between the stated dates in which a notified person is involved.(2) of Section 9A also speaks of a court; a proceeding before a court, the cause of action of which arises out of a transaction in securities entered into between the stated dates in which a notified person is involved, stands transferred to the Special Court.The question, in these circumstances, is whether t he use of the words civil court in subsection (1) excludes the application of Section 9 A to theour view, the word ", court" must be read in the context in which it is used in a statute. It is permissible, given the context, to read it as comprehending the courts of civil judicature and courts or some tribunals exercising curial, or judicial, powers. In the context in which the word "court" is used in Section 9A of the Special Court Act, it is intended to encompass all curial or judicial bodies which have the jurisdiction to decide matters or claims, inter alia, arising out of transactions in securities entered into between the stated dates in which a person notified isis to be noted t hat the CLB performs functions which are administrative, as under Sections 224 and 269, and curial, as under Section 111.31.Now, under Section 111 of the Companies Act as amended with effect from 31st May, 1991, the CLB performs the functions that were therefore performed by courts of civil judicature under Section 15 5. It is empowered to make orders directing rectification of the company register, as to damages, costs and incidental and consequential orders. It may decide any question relating to the title of any person who is a party before it to have his name entered upon the companys register; and any question which it is necessary or expedient to decide. It may make interim orders. Failure to comply with any order visits the company with a fine. In regard to all the se matters it has exclusive jurisdiction (except under the provisions of the Special Court Act, which is the issue before us). In exercising its function under Section 111 the CLR must, and does, act judicially. Its orders are appealable. The CLR, further, is a permanent body constituted under a statute. It is difficult to see how it can be said to be anything other than a court, particularly for the purposes of Section 9A of the Special Act.32.We shall assume that a shareholder who se name the company has refused to enter in its register would be put to some difficulty in deciding whether he should approach the Special Court or the CLB, but that is no reason to interpret the provisions of Section 9A in a manner that would defeat its intendment and adversely affect the public interest. In any event, the time taken in approaching the CLB in a matter that should have been filed before the Special Court would not be of any consequence for there is no time limit within which the Special Court has to be approached; and it is most unlikely that the Special Court would be approached unless the shareholder were sure that his claim fell within Section 9A(1).33.It will be remembered that Mr. Nariman had drawn attention to the provisions of Section 4 of the Special Court Act and argued that even if the CIB, under the provisions of Section III of the Companies Act, made any order with regard to any securities, that order would stand at naught if an order relating to the same securities was made under Section 4 of the Special Court Act by reason of the fact that, under Section 13 of the Special Court Act, order of the Special Court had effect notwithstanding anything inconsistent therewith contained in any decree or order of any court, tribunal or other authority. Section 3(2) of the Special Court Act empowers the Custodian, on being satisfied on information received that any person has been involved in any offence relating to transactions in securities entered into between the stated dates to notify the name of such person in the Official Gazette. On such notification, by reason of Section 3(3), the property of the person notified stands attached. That property, by reason of Section 3(4), is to be dealt with by the Custodian in such manner is the Special Court may direct, Section 4 states that if the Custodian is satisfied after such inquiry as he may think fit that any contract or agreement entered into fraudulently or to defeat the provisions of the Special Court Act, he may cancel such contract or agreement whereupon such property stands attached. The scope, there-fore, of Section 4 is limited. It applied only in regard to property that belongs to a person notified. Section 9A(1) is much wider and it invests the Special Court with. jurisdiction to entertain matters or claims arising out of transactions in securities entered into between the stated dates in which a person notified is involved not only as a party but also as a broker, intermediary or in any other manner. The argument based on Section 4 must, therefore, fail.34. As has been pointed out, sub-sections(2) and (3) of Section 111 of the Companies Act term the pleading that the person aggrieved has to file before the CLE an appeal, sub-section (4) requires the person aggrieved to apply, sub-section (5) speaks of it as an appeal or an application, subsection (7) as an application and sub-section (10) as an appeal or application which shall be made by a "petition in writing". The words "appeal" and "application" in the context of the provisions of Section 111 have, therefore the same meaning and it is, plainly, an original application that is made. The shareholder does not resort to a superior court to review the decision of an inferior court or tribunal. The fact, therefore, that Section 9A(2) of the Special Court Act speaks of the transfer of every suit, claim or other legal proceeding (other than an appeal)" does not exclude the "application or "appeal" made under the provisions of Section 111 of the Companies Act from the purview of Section 9A(1) of the Special Court Act. Conclusion.