Case: Union Of India Vs. Allied International Products Ltd. &amp; Anr

1. On May 29, 1965, the Allied International Products Ltd. hereinafter called the Company issued a prospectus offering to the public for subscription 5,00,000 equity shares of Rs. 10/- each and 10,000 cumulative preference shares of Rs. 100/- each, and intimating that "applications are being made to Bombay, Calcutta and Delhi Stock Exchanges for permission to deal in for official quotations of the shares of the Company".2. On June 3, 1965, the Company submitted applications to the Stock Exchanges at Bombay, Calcutta and Delhi (which are recognised Stock Exchanges within the meaning of Section 2 (39) of the Companies Act 1956), for "enlisting" its shares. The subscription list of the Company was closed on June 21. 1965. On June 22, 1965, the Bombay Stock Exchange extended the time for consideration of the application till the expiry of seven weeks from the date of closing of the subscription list and requested the Company to furnish certain particulars to facilitate compliance with S. 73 of the Indian Companies Act, 1956. August 6, 1965, the Exchange informed the Company that the application was receiving further consideration and requested that certain formalities be complied with. On September 13, 1965, the Exchange informed the Company that it had considered and approved the application for "enlisting" its shares.3. On June 9, l965, the Calcutta Stock Exchange called upon the Company to modify certain Articles of Association and by letter dated July 12, 1965, asked for particulars in respect of specified matters. On July 27, 1965, the Calcutta Stock Exchange granted time for compliance till the end of the seventh week from the date of the closing of the subscription list. On November 5, 1965, the Calcutta Stock Exchange rejected the application of the Company for "enlisting the shares".4. The Delhi Stock Exchange informed the Company on July 10, 1965, that in order to facilitate compliance with the provisions of Sec. 73 of the Companies Act. 1956, "the allotment of shares should be finalised as soon as possible in consultation with the Stock Exchange". By another letter dated August 9, 1965, the Exchange informed the Company that the matter of "enlistment" of shares was under consideration, and the Company will be intimated of the decision of the Exchange as soon as it is taken. The Delhi Stock Exchange by letter dated December 4, 1965, rejected the application of the Company for "enlistment" of its shares.5. The Company challenged the orders passed by the Calcutta and Delhi Stock Exchanges rejecting the applications for "enlistment" in separate appeals under Section 22 of the Securities Contracts (Regulation) Act 42 of 1956. The Central Government dismissed the appeals. In the orders recording the dismissal it was recited that the Exchange did not grant the permission for the shares to be "enlisted" before the expiry of four weeks from the date of closing of the subscription list as required by S. 73 (1) ofthe Companies Act, 1956, and that the Exchange did not notify any extension of time for the grant of the permission within four weeks.6. The Company then moved petitions in the High Court of Delhi for the issue of writs quashing the order passed by the Central Government in appeals under S. 22 of the Securities Contracts (Regulation) Act, and the orders of the Stock Exchanges rejecting the applications of the Company as void, illegal and of no effect", and for orders directing the Stock Exchanges to "grant enlistment" of the shares of the Company, and further declaring Section 22 of the Securities Contracts (Regulation) Act 42 of 1956, and S. 73 ofthe Companies Act, 1956, ultra vires the Constitution of India.7. Rangarajan, J. was of the opinion that grant of permission by the Bombay Stock Exchange was valid, and that allotment of shares did not become void, merely because one out of the three Exchanges alone gave the permission to enlist the Companys shares. The learned Judge quashed the order of the Central Government and directed that writs of mandamus do issue against the Calcutta and Delhi Stock Exchanges requiring them to "enlist the shares of the Company.8. Against the decision of Rangarajan, J., the Union of India appealed to a Division Bench of the High Court of Delhi. The two Exchanges acquiesced in the orders passed against them. The High Court confirmed the order of Rangarajan, J. With certificate granted by the High Court, the Union of India has appealed to this Court.

Court's reasoning:
19. We are in the view we have taken not called upon to decide whether the provisions of S. 73 ofthe Companies Act, 1956, are ultra vires, nor do we consider it necessary to decide whether S. 22 ofthe Securities Contracts (Regulation) Act, 1956, is ultra vires.It was urged on behalf of the Delhi and Calcutta Stock Exchanges that the High Court ought, in exercise of the power under O. 41 R. 33 of theCode of Civil Procedure, to have vacated the writ of mandamus issued requiring them to grant permission for quotation of the Companys shares.An Appellate Court may in appropriate case pass any decree and make any order appropriate to the ends of justice, even if a party has not appealed against an adverse decision. That power may be exercised by the Court notwithstanding that the appeal is as to part only of the decree and may be exercised in favour of all or any of the parties, even though they may not have filed any appeal or objection. But the jurisdiction is discretionary and the High Court has not exercised it apparently for good reasons. The orders passed against the Union and the two Exchanges were in substance distinct. Against the Union the order was made quashing its order in appeal against the orders of the Exchanges; and against the Exchanges the order was made directing inclusion of the shares in the list of quoted shares. The Exchanges acquiesced in the direction.21. We need, however, not express any final opinion on this question. We are informed at the Bar that the Calcutta Stock Exchange has applied for certificate to the High Court of Delhi and that application is pending. We need not pre-judge the result of that application or the appeal, if any, which may be filed in this Court.