Case: R.D. Goyal  Vs. Reliance Inds.Ltd

2. The appellants herein pursuant to or in furtherance of an invitation to offer debentures linked with equity shares for public issue applied therefor. The respondents are public limited companies. They had offered capital for subscription but had linked the equity shares with the accrued redeemable non-convertible debentures.3. A complaint was made to the effect (which is the subject-matter of Civil Appeal Nos. 2071-2100 of 1987) that the issue of equity shares tied up with debentures is a restrictive trade practice within the meaning of Sections 2(o)(ii), 33(1)(b) and 33(1)(g) of the M.R.T.P. Act. In Civil Appeal No. 2490 of 1995, the subject-matter of complaint was that the public issue of debentures offered by the respondent therein upon certain terms and conditions amounted to unfair trade practice as the respondent-company in their prospectus for raising capital through the issue of debentures made false and misleading claims.4. The said complaints were inquired into by the Director General, who upon finding a prima facie case, recommended for issuance of notice; whereafter a proceeding was initiated by the Commission.

Court's reasoning:
13. Debentures, as ordinarily understood, in our considered view, would not come within the purview of definition of goods as it is simply an instrument of acknowledgement of debt by the company whereby undertakes to pay the amount covered by it and till then it undertakes further to pay interest thereon to the debenture-holders.It is true that when there exists a statutory definition in respect of an expression, the dictionary meaning thereof cannot be applied. It is also true that when a statutory definition uses the word "includes", it provides an extended meaning thereto but it is equally well-settled that the words are required to be construed in terms of the legislative intent.18. It is furthermore a well-settled principle of law that if the words are general and not precise, their interpretations are to be restricted to the fitness of matter.In the instant case, the action on the part of the company, in our opinion, does not involve any sale of goods or rendition of any service.It is, therefore, evident that the said amendment is not explanatory or clarificatory in nature. By reason thereof, the definition of goods was sought to be enlarged which will have prospective operation. The very fact that the Parliament in its wisdom sought to enlarge the definition of goods by including the issue of shares by allotment as also the service is a clear point to the fact that thereby the mischief which was existing in the said provision was sought to be remedied.31. It is, therefore, axiomatic that before the said definition of "goods" was amended, the matter relating to issue of shares before allotment was not included therein.In view of the aforementioned authoritative pronouncement of this Court it must be held that shares pending allotment in view of the provisions of law as thence existed could not be said to be goods.35. For the aforementioned reasons, it is not necessary to go into the other questions raised at the Bar.36. For the views, we have taken, the judgment of the Commission cannot be found fault with.