Anand Shrivastav And Anr. vs Union Of India (Uoi) And Ors.
2005 Latest Caselaw 1272 Del

JUDGMENT

Vikramajit Sen, J.

Page 1620

C.Ms. 11110/2005 & 11117/2005 (Exemption)

1. Allowed, subject to all just exceptions.

W.P. (C) No.17416-17/2004

2. This Writ Petition prays inter alia for the setting aside of the impugned Order dated 30.11.2004 passed by the Chairman, Company Law Board, Principal Bench, New Delhi. It cannot be disputed that that Order has already been assailed unsuccessfully before the Company Judge, High Court of Delhi. Thereafter a Special Leave Petition was preferred against the Order of the learned Company Judge and that was also dismissed. This is, therefore, the second salvo of litigation in respect of the same Order. The contention is that in the previous round of litigation the Petitioner had not put forward the argument that the impugned Order ought to have been passed by a Bench comprising of more than one person. This ground was certainly available to the Petitioner even in the previous round of litigation. The principles and prescriptions of constructive res judicata would, therefore, apply. The following observations of the Hon'ble Supreme Court in Shankar Ramchandra Abhyankar v. Krishnaji Battatraya Bapat, , have been relied upon by the learned ASG:

Now when the aid of the High Court is invoked on the revisional side it is done because it is a superior Court and it can interfere for the purpose of rectifying the error of the Court below. Section 115 of the Code of Civil Procedure circumscribes the limits of that jurisdiction but the jurisdiction which is being exercised is a part of the general appellate jurisdiction of the High Court as a superior Court. It is only one of the modes of exercising power conferred by the Statute; basically and fundamentally it is the appellate jurisdiction of the High Court which is being invoked and exercised in a wider and larger sense. We do not therefore, consider that the principle of merger of orders of inferior Courts in those of superior Courts would be affected or would become inapplicable by making a distinction between a petition for revision and an appeal.

It may be useful to refer to certain other decisions which by analogy can be of some assistance in deciding the point before us. In U.J.S. Chopra v. State of Bombay, the principle of merger was considered with reference to Section 439 of the Criminal Procedure Code which confers revisional jurisdiction on the High Court. In the majority judgment it was held, inter alia, that a judgment pronounced by the High Court in the exercise of its appellate or revisional jurisdiction after Page 1621 issue of a notice and a full hearing, in the presence of both the parties would replace the judgment of the lower Court thus constituting the judgment of the High Court the only final judgment to be executed in accordance with law by the Court below. In Chandi Prasad Chokhani v. The State of Bihar, it was said that save in exceptional and special circumstances this Court would not exercise its power under Article 136 in such a way as to by-pass the High Court and ignore the latter's decision which had become final and binding by entertaining an appeal directly from orders of a Tribunal. Such exercise of power would be particularly inadvisable in a case where the result might lead to a conflict of decisions of two Courts of competent jurisdiction. In our opinion the course which was followed by the High Court, in the present case, is certainly one which leads to a conflict of decisions of the same Court.

Even on the assumption that the order of the appellate Court had not merged in the order of the single judge who had disposed of the revision petition we are of the view that a writ petition ought not to have been entertained by the High Court when the respondent had already chosen the remedy under Section 115 of the Code of Civil Procedure. If there are two modes of invoking the jurisdiction of the High Court and one of those modes has been chosen and exhausted it would not be a proper and sound exercise of discretion to grant relief in the other set of proceedings in respect of the same order of the Subordinate Court. The refusal to grant relief in such circumstances would be in consonance with the anxiety of the Court to prevent abuse of process as also to respect and accord finality to its own decisions.

In this context it would be productive to refer to the string of judgments of several Benches presided over by Chief Justice R.C. Lahoti including Madhukar D. Shende vs. Tarabai Aba Shedage, , K. Sivaramaiah vs. Rukmani Ammal, , V. Rajeshwari (Smt.) vs. T.C. Saravanabava, , T.P. Moideen Koya vs. Govt. of Kerala and Others, and U.P. State Road Transport Corporation vs. State of U.P. and Another, .

3. On the previous date of hearing copies of the Company Law Board Regulations, 1991 had been handed over to the Court by learned Counsel for the Petitioner, Regulation 4 of which read as follows:

Page 1622

4. Power of the Chairman to specify matters which may be dealt with by a Bench- (1) It shall be lawful for the Chairman to provide that matters falling under sections 235, 237, 247, 248, 250, 388B, 408 and 409 and matters falling under Chapter VI of Part VI of the Act and under section 2A of the Monopolies Act shall be dealt with by a Bench consisting of not less than two members including the Chairman or the Vice-Chairman (which shall be known as the Principal Bench)

(1A) It shall also be lawful for the Chairman to provide that matters falling under section 235 and 237 of the Act and matters falling under Chapter VI of Part VI of the Act in so far as they relate to Southern Region shall be dealt with by a Bench consisting of not less than two Members (which shall be known as Additional Principal Bench).

(2) The Principal Bench shall be at New Delhi but the Principal Bench may sit at such places in India and at such time as may be most convenient in exercise of its powers and functions in India.

(2A) The Additional Principal Bench shall be at Chennai but it may sit at such places in the Southern Region as may be more convenient in exercise of its powers and functions.

(3) It shall be lawful for the Chairman to provide for matters falling under Section 111, 111A and 269 of the Act and under section 22A of the Securities Act shall be dealt with by a Bench consisting of not less than two members.

(4) All other matters including interlocutory and miscellaneous applications connected with the matters falling under sub-regulations (1), (1A) and (3) of this regulation may be heard and decided by a Bench consisting of a single member:

Provided that notwithstanding anything contained in regulation 7, it shall be lawful for the Chairman to transfer any matter pending before any Regional Bench or the Additional Principal Bench to the Principal Bench, for reasons to be recorded in writing.

It was this reproduction of the Rules which had prompted me to look further into the matter even though the principles of constructive res judicata if not res judicata confront me squarely in the face.

4. It transpires that the above extracted Regulations are not those presently in force. By Notification published in the Gazette of India, New Delhi, Thursday, September 5, 2002, a significant amendment to the Rules has been effected. In Regulation 4(1), for the words 'not less than two members including the Chairman or Vice-Chairman' the words 'one or more members' shall be substituted. In other words, with effect from September, 2002 it was lawful for the Chairman to provide that the subject matter of the present Writ Petition could be dealt with by a Bench consisting of one or more members. The amendment shift in the expectation from two persons to one person constituting the Principal Bench. By Order dated 9.9.2002, in exercise of the powers conferred by sub-Section 4(B) of Section 10E of the Companies Act, 1956 (1 of 1956) read with Regulation 4 of the Company Law Page 1623 Board Regulations, 1991, it had been established that the present matter shall be dealt with by Principal Bench consisting of any one of three persons. By a subsequent Order dated 12.5.2003 the only change that was brought about was that Shri K.C.Ganjwal had been appointed vice Shri C.R.Das. A similar Change in the persons has been notified by Order dated 19.7.2005, but the Regulation that the matters could be heard by a single member has not been altered.

5. The contention of learned counsel for the Petitioner is that the amendment to the Regulations in 1991 were to the effect that matters such as the present one would be heard and disposed of by a Bench comprising at least two persons. It is argued that this is the proper system that should be adopted since wide discretion is vested in the Benches in matters which are of the present nature. On the same logic if a subsequent amendment to the Regulations incorporates a return to the status quo ante 1991, that must alone be found to possess wisdom.

6. The unfortunate and unpleasant aspect of this Writ Petition is that the wrong Regulations have been handed over to the Court. It is contended the learned Additional Solicitor General that the amended Regulations are readily available in Ramaiya's Company Law, 2003 edition. Learned counsel for the Petitioner, however, submits that the Regulations which are handed over to the Court were drawn from the Company Law Board's website. Obviously the Company Law Board has not taken the pains of updating its website. The Company Law Board has indeed been remiss in not updating its website and necessary action must be taken by the Chairman in fixing responsibility in this regard. Since the extant Regulations are easily obtained from text-books etc. this will not have any impact on the merits of the Petition.

7. Keeping in view of the fact that this is the second round of litigation assailing the same Order, and the fact that the Regulations which have been relied upon have already been amended and the regime is not what the Petitioner has presented, this Writ Petition is dismissed with costs of Rs.5,000/- to be paid to the Legal Aid for Women, Children, SC & ST and Poor.

C.M.11109/2005 (For Stay)

8. This application is also dismissed accordingly.