Judgment:
1. This Petition is filed under Section 111A read with Section 111 of the Companies Act, 1956 ("the Act") against M/s Wipro Limited ("the Company") for rectification of the register of members in respect of 6000 equity shares of Rs. 2/- each in favour of petitioners, being bonus shares allotted in respect of 100 equity shares of Rs. 10/- each with registered folio No. WPL000591 acquired and duly registered in the name of petitioners by ordering enhancement of the holding of the petitioners by the said 6000 equity shares to the petitioners and for the accumulated dividend together with interest as may be deemed fit and proper by the Company Law Board.
2. According to Shri. Arvind P Datar learned Senior Counsel, the petitioners had purchased 100 equity shares of the Company on cum bonus basis from a broker at Mysore, upon which forwarded the original share certificates together with duly signed and stamped transfer deed on 21.12.1989 to the Company for registering the transfer of the said 100 equity shares in the joint name of the petitioners which were received by Company on 27.12.1989. The Company had registered the transfer of shares only on. 20.03.1.990, after a period of three months of its lodgment contrary to the mandatory requirement of the provisions of Section 111 of the Act, and further delayed delivery of the original share certificates by more than 100 days on 04.05.1990, in violation of the provisions of Section 113, for no fault of the petitioners. In the meanwhile, the Company had allotted bonus shares in the ratio of 1:1 in favour of all those members whose name stood in the register of member as on the record date, viz., 27.12.1989, fixed by the Company, on which date the Company had actually received the instrument of transfer alongwith the original share certificates sent by the petitioners for registering the transfer in their favour.' Consequently, the Register of Members and Share Transfer Book were kept closed between 27.12.1989 and 03.01.1990 (both days inclusive) for issue of bonus shares by the Company. According to the learned Senior Counsel, the Company ought to have considered the transfer of 100 equity shares lodged by the petitioners not only for the transfer prior to the allotment of bonus shares but should have also allotted the bonus shares in favour of the petitioners, in view of the requirement of the listing agreement as well as the statutory provisions of Section 111 read with Section 206A of the Act. The Company should have kept the allotment of 100 bonus shares in abeyance pursuant to Section 206A, but arbitrarily allotted the bonus shares in favour of the transferor of the shares. In this connection, the learned Senior Counsel referred to the decision of the Company Law Board in S.V. Nagarajan v. Lakshmi Vilas Bank Ltd - 1997 CC 392, wherein the documents were lodged with me Company before the book closure. The Company refused to approve the transfer for defective documentation. The CLB did not interfere with the decision of the company, when allotted the bonus shares to the transferors, whose name appeared as on the record date in its register of members. The learned Senior Counsel pointed out that the petitioners, in the present case were denied the allotment of 100 bonus shares by the Company due to its non compliance with the mandatory requirement of Section 206A and on account of its default to register the transfer of shares in contravention of the listing agreement read with the provisions of the Section 111 and Section 113, which resulted in the Company not maintaining the register of members in accordance with law and required to be rectified in the interest of justice. The learned Senior Counsel further submitted that the said 100 bonus shares of 1990 have now resulted in 6000 equity shares of face value of Rs. 2/- each based on the subsequent bonus issues and sub division of shares by the Company, entitling the petitioners for rectification of the register of members for the enhanced holding together with any additional bonus entitlement, if any, till disposal of the petition. The petitioners are further entitled for the accumulated dividend and eligible dividend which may be declared in respect of these shares till disposal of this petition together with interest and other costs by virtue of the principles of restitution, in support of which reference has been made to the judgment of the Privy Council in Jai Berham v. Kedar - AIR 1922 PC 269 to show that "it is the duty of the court under Section 144 of the CPC to place the parties in the position, which they would have occupied but for such delay or such part thereof as has been varied or reversed. The power is inherent in the general jurisdiction of the court to act fairly and rightly and it is one of the first and highest duties of a court to repair the injury done to a party by its act". In spite of repeated demands and personal persuasion, the Company failed to settle the claim of the petitioners remedying the violation and misguided them to initiate action against the share broker which resulted in the petitioners pursuing their remedies in good faith before the Consumer Fora during the period between 05.06.1991 and 13.08.2002, as borne out by a series of correspondence on record (Annexures A3 to A12 in Petition). The revision preferred by the second petitioner before the National Consumer Disputes Redressal Commission was permitted to be withdrawn on 13.08.2002 for want of jurisdiction enabling the petitioners to move the CLB on 08.10.2002 for the appropriate reliefs. By virtue of Section 14 of the Limitation Act, the time consumed by the petitioners in prosecuting the matter with due diligence and in good faith before the Consumer Fora must be excluded, in which case the claim of the petitioners is neither delayed nor barred by limitation. The learned Senior Counsel in support of his arguments relied on the following decisions:V.K. Gupta v. Auto Lamps Limited (1999) - 2 CLJ 519, (CLB) - to show that the CLB on facts held that the petitioner had shown sufficient cause that there is no gross negligence or deliberate inaction or want of bonafides imputable to the petitioner and accordingly the delay was condoned.Shamsunder Kukreja v. Hindustan Lever Limited - (2001) 4 CLJ 305 (CLB) - to show that limitation cannot be strictly applied in case of fraudulent transactions and that delay could be condoned and further that on the facts of the case even on equitable considerations, petition cannot be held to be barred on the ground of limitation.Khurshid Alam v. P. Pagnon Company (P) Limited - (2002) 1 CLJ 175 (CLB) - to show that the provisions of the Limitation Act are applicable to the proceedings before the CLB and that if the proceedings before the CLB were being pursued bonafide, in the interests of justice, the petition should not be dismissed on the ground of delay or laches.Bombay Dyeing and Manufacturing Company Ltd v. Arun Kumar Bajoria - (2001) 4 CLJ 115 - to show that an application under Section 5 of the Limitation Act 1963, can be considered if the delay was not deliberate or due to gross negligence.Collector, Land Acquisition v. MST. Katiji - 167 ITR 471 - to show that the power to condone the delay for sufficient cause should be used if it is for doing substantial justice and that the Court should have pragmatic liberal approach.
The learned Senior Counsel pointed out that the transferor, viz., Mr.
Brijesh Bheti had already transferred the 100 bonus shares in question in favour of the third parties; which was approved by the Company as early as on 22.06.1990 and that the shares of the Company are now covered under DEMAT, preventing the petitioners from impleading either the immediate transferor or any of his transferees as parties to this petition. According to the learned Senior Counsel, the original broker, the immediate transferor and the subsequent transferees of the bonus shares are neither necessary nor proper parties to adjudicate the present dispute and for the relief of rectification, the presence of either the transferor or transferee of the bonus shares is not necessary. Moreover, there was no privity of contract among these parties. In this connection, reference has been made to the judgment of the apex court in Sarvinder Singh v. Dalip Singh - (1996) 5 SCC 539 - to show that "a necessary party is one whose presence is absolutely necessary and without whose presence the issue cannot effectually and completely be adjudicated upon and decided between the parties. A proper party is one whose presence would be necessary to effectually and completely adjudicate upon the disputes ".
Shri Datar, learned Senior Counsel, while concluding his submissions urged that the price went upto Rs. 10,000/- per share in Bombay Stock Exchange and that if the bonus shares were allotted in favour of the petitioners at the relevant point of time, they would have shares worth a huge sum of money, but lost such an opportunity on account of the inaction of the Company and in support of the proposition of the opportunity loss, the learned Senior Counsel referred to the decisions in the Hindustan Lever Ltd. (supra) and Vimal Chandra Graver v. State Bank of India - Vol.II (2000) CPJ 11 and therefore, sought for the reliefs claimed in the petition.
3. Shri Sriram Panchu, learned Senior Counsel appearing for the Company raised the following preliminary objections: The petitioners had already filed a petition against the Company and others for the very same cause of action before the District Consumer Disputes Redressal Forum at Mysore and a subsequent appeal before the State Commission at Karnataka. The order made by the District Consumer Disputes Redressal Forum was confirmed in the appeal, which became final, according to which the Company is no way responsible for the claim of bonus shares and subsequent benefits of such shareholding, but made the share broker engaged by the petitioners liable for the claim. Though the second petitioner challenged the order of State Commission before National Commission, he later withdrew the revision preferred by him, without leave to approach the CLB. The present petition against the Company on the very same cause of action is an abuse of the process of law.
The petition is not maintainable under Section 111 read with Section 111 A, as these sections deal with mutually exclusive spheres and therefore, it would not be possible to maintain a petition under these sections.
The cause of action for the present petition arose in the year 1989 - 1990, but the petitioners have filed the present petition after a lapse of 11 long years. Though there is no provision limiting any time for petitions under Section 111 of the Act, yet the principles of the Limitation Act would be applicable, as consistently decided by the CLB in a number of cases to the effect that a petition filed after a period of 3 years from the cause of action is barred by laches. Section 111A specifies a period of 2 months for filing a petition for rectification. The courts invoking the residuary clause of Section 113 of the Limitation Act have held that any application filed under Section 111 or 111A must be within 3 years in support of which the learned Senior Counsel referred to the decisions in Bipin Vadilal Mehta v. Ramesh B. Desai - 1998 Vol 92 Com cases 910 to show that a petition filed after six years for rectification is barred by limitation and S. Balwant Singh v. Krishna Bus Service Private Ltd. - 1967 Vol xxxvii Com Cases 471, where the CLB has held that a petition for rectification has to be filed within three years time.
The CLB has further held in Abani Bhusan Bhattacharya v. Ericsson India (P) Ltd.-1998 Vol 93 Com Cases 939 that pursuing of various alternate remedies resulting in delay of 17 years renders the petition for rectification not maintainable.
The petitioners have failed to implead the share broker, the original transferor and the subsequent transferees of bonus shares, who are necessary parties to adjudicate the disputed issue. The Company had issued the first set of bonus shares in the year 1990, followed by several bonus shares, which have now multiplied to 6000 shares. It is therefore, practically impossible for the Company to rectify its register and remove, who have become share holders in the course of last 11 years. Any order, which may be passed by the CLB is not capable of enforcement. Moreover, no order of rectification can be passed without hearing the subsequent transferees of bonus shareholders. Any failure to implead necessary parties will render the petition liable to be dismissed as held in Sha Mulchand and Co., v. Jawahar Mills Ltd. - AIR 1953 SC 98.
Therefore, this petition is bad for non joinder of necessary parties.
According to Shri Panchu, learned Senior Counsel a petition under Section 111A would lie only when shares are lodged with the Company for effecting the transfer and when refused by the Company. The petitioners have never lodged the bonus shares after complying with the relevant requirements in regard to stamps, endorsement and delivery nor transfer was refused by the Company. Any one applying for rectification has to comply with every procedure prescribed under the Act. The learned Senior Counsel pointed out that the present petition docs not meet these requirements. Therefore, the question of refusal of the Company to register the 100 bonus shares in favour of the petitioners does not arise. Thus the petition is not for rectification but for the bonus shares under the garb of a petition for rectification which must be agitated in a civil suit and not by means of a petition for rectification before the CLB, as held in the judgment of the Supreme Court in Ammonia Supplies Corporation (P) Ltd. v. Modern Plastic Containers Pvt. Ltd. - 1999 (I) CTC 273. Moreover, the petition does not disclose "any legal and adequate reason" for non-registration, as required and held in Benarsi Das Saraf v. Dalmia Dadri Cement Ltd. - AIR 1959 Punjab 232. The learned Senior Counsel further pointed out that any cause of action under Section 111A for rectification is limited to refusal of the transfer without sufficient cause. Whereas, the actual grievance of the petitioners is that bonus shares were not allotted to them but in favour of the transferor. Thus the dispute falls outside scope of Section 111 A. According to the learned Senior Counsel the share transfer documents in respect of 100 shares purchased by the petitioners were lodged with the Company only on 27.12.1989, after the book closure, which commenced on 27.12.1989 until 03.01.1990 (both days inclusive). The Company could not register the transfer of shares until conclusion of the book closure. Consequently it is only members whose names are found in the Company's register of members as on the day prior to the book closer date would be entitled for bonus shares and not the petitioners as claimed by them in support of which reference is made to Chunilal Khushaldas Patel v. H.K. Adhyaru - AIR 1956 SC 655 to show that the Company would not recognize anybody except the person whose name was shown in the register of companies and would certainly not be bound to pay dividends if any transaction has been completed between the parties and has not been recorded by the company and Pyariben M. Shah v. NIIT Limited - 2002 (2) Comp LJ 518(CLB) to show that the CLB has held that until the name of transferor exists in the company records bonus shares will be issued only to the transferor.
The CLB, in regard to the bonus shares gave liberty to proceed against the transferor at the appropriate forum. The petitioners have claimed dividends for the shares which are not in their name. Therefore, the claim for payment of dividend or interest must be disallowed. According to the Company it did not effect the transfer in respect of 100 shares during the book closure period in due compliance with law and its listing agreement with the Stock Exchange and consequently could not allot the bonus shares in favour of the petitioners. The bonus shares issued by the Company were dispatched to the transferor, viz., Shri.
Brijesh Baheti, whose name stood in the register of members of the Company in respect of 100 shares as on the day prior to the book closure, viz. 26.12.1989. The learned Senior Counsel pointed out that Section 111 and Section 206A do not mandate the acceptance of transfer documents after the date of book closure. The Company cannot, therefore, keep in abeyance any bonus shares or dividend as claimed by the petitioners. According to the learned Senior Counsel, Section 206A comes into operation only after lodgment of the transfer deeds and pending registration in case of disputes in the transfer. Section 108 (1-A) stipulates that a company can consider registration of shares only when shares are properly lodged in the manner prescribed under this section. Accordingly the shares must be delivered to the company for registration, at any time before the date on which the register of member is closed. Any pendency of registration as, contemplated under Section 206A is possible only when the lodgment is in strict compliance with Section 108 (1-A). In the present case the shares were lodged on the date of book closure and not before the closure. Thus the lodgement is not as required by Section 108(1-A). Consequently there is no question of violation of Section 206A by the Company. In this connection the learned Senior Counsel referred to S.V. Nagarajan v.Lakshmi Vilas Bank Ltd. - 1997 Vol 90 Com Cases 392 where the CLB has clearly held that the "protection afforded to the transferee under Section 206A is available until such time that the title to shares is decided and is not indefinite in time". The learned Senior Counsel further pointed out that by virtue of the non-obstante clause contained in Section 206A, Section 206A does not override the provisions Section 108 (1A) and any other provisions of the Act, save Sections 205(3) and 81(1) of the Act referred to in Section 206A, which make it mandatory for the Company to issue dividend/bonus shares to share holders, which are overridden by Section 206A providing for dividends/bonus shares to keep in abeyance. In regard to the manner of interpretation of non-obstante clause the learned Senior Counsel referred to the judgment of the Supreme Court in Aswini Kumar Ghose v. Ambinda Bose - AIR 1952 SC 369 to show that "it should first be ascertained what the enacting part of the section provides on a fair construction of the words used according to their natural and ordinary meaning, and the non obstante clause is to be understood, as operating to set aside as no longer valid anything contained in relevant existing laws which is inconsistent with the new enactment." Against the background of the judgment of Supreme Court, the learned Senior Counsel pointed out that Section 206A specifically overrides only 205(3) and 81(1), which are inconsistent with the requirements of Section 206A. Moreover Section 206A does not refer to lodgment, delivery, stamping, endorsement etc.
of transfer deeds which are covered by Section 108 (1A). As there is no inconsistency between these provisions, there is no scope for one section to overwrite the other. Hence the non-obstante clause in Section 206A does not override Section 108 (1A). The learned Senior Counsel further referred to decision of Supreme Court in Chandavarkar Sita Ratna Rao v. Ashalata S. Guram - (1986) 4 SCC 447 to show that a non obstante clause is appended to a section with a view to give the enacting part of the section in case of conflict an overriding effect over the provision of the Act or the contract mentioned in the non-obstante clause. According to the learned Senior Counsel the provisions Section 206A and 108(1A) have to be harmoniously considered, as each section has a different scope of operation in the Act and not inconsistent with each other. In spite of the specific advice of the Company to file a criminal- complaint as well as a civil suit against the share broker and the transferor, the petitioners chose to exhaust their remedies before Consumer Fora and after pursing one alternative remedy, the petitioners cannot vex the Company again by initiating action before the other forum for the very same relief, as held in Chait Ram Saini v. Ghasi Ram - AIR 1986 ALL 50. Though the share broker filed an application before the District Consumer Disputes Redressal Forum to implead the transferor in the said proceedings, the same was successfully opposed by the second petitioner at his risk. The District Consumer Disputes Redressal Forum by an order dated 17.02.1997, while absolving the Company held the share broker liable for deficiency in service and further directed him to pay the petitioners market value for 400 bonus shares together with compensation of Rs. 1000/- and cost of Rs. 1000/-. Aggrieved by the said order dated 17.02.1997 of the District Consumer Disputes Redressal Forum both the petitioners and the share broker preferred appeals before the State Consumer Disputes Redressal Commission, which ultimately upheld the order of District Consumer Disputes Redressal Forum stipulating the mode of calculating market value of 400 shares. The petitioners thereupon preferred revision before the National Consumer Disputes Redressal Commission and when the revision petition came up for hearing on 13.08.2002, on the representation of the petitioners in person, the revision petition was dismissed as withdrawn, without leave to pursue the claims before any forum, in which case the benefit of Section 14 cannot be claimed as held in Bhagavatula Pankala Rao v. Kadiyala Venkatasubbayya - 1947 (II) MLJR 337 and if it is a case of ignorance of law on the part of the petitioners in obtaining of leave of the National Consumer Disputes Redressal Commission they cannot claim the benefit of Section 14 of the Limitation Act as held in Sitaram Ramcharan v. M.N. Nagrashna - AIR 1954 Bombay 537. The learned Counsel, referring to a letter dated 13.08.2002 of the petitioners' lawyer (Annexure A-16) urged that it cannot explain the order of National Consumer Disputes Redressal Commission that it did not have jurisdiction and that commission had granted leave to initiate the proceeding before the CLB in support of which he made reference to Mohinder Singh Gill v. The Chief Election Commissioner - AIR 1978 SC 851 to show that "when a statutory functionary makes an order based on certain grounds its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise". According to the Company, the petitioners failed to act diligently by pursuing their cause before the Consumer Fora taking a calculated risk, instead of a civil suit disentitling them to claim benefit under Section 14 of the Limitation Act as held in Chait Ram Saini v. Ghast Ram (supra). The learned Counsel further made reference to the decision in Gajadhar Shaw v. Union of India - AIR 1959 Calcutta 21 to show that if the initial filing is attributed to carelessness for which there is no excuse, the subsequent prosecution of the suit cannot be said to be in good faith, thereby losing exemption under Section 14 of the Limitation Act. The Supreme Court in Rabindra Nath Samuel Dawson v. Sivakami - AIR 1972 SC 730 has clearly held that a person who has objected to the impleadment of necessary parties at the initial or later stage cannot be said to act in good faith. The petitioners cannot, therefore, seek exemption under Section 14 of the Limitation Act. The learned Senior Counsel further pointed out that the order of State Commission is binding between the parties. When the State Commission granted the relief the same does not amount to dismissal of case on the ground of defect in jurisdiction of the original forum. Hence the Limitation Act is not applicable in the present case in support of which reference is made to the following decisions: -Bakhtawar Singh v. Sada Kaur - AIR 1988 Punjab And Haryana 131 to show that "if the previous suit was allowed to be withdrawn on account of a formal defect in the jurisdiction of the Court or otherwise of a like nature only then the plaintiff is entitled to claim the benefit of the provision".....Upadhyay & Co. v. State of U.R - AIR 1999 SC 509 to show that permission of the court has to obtained for filing a fresh suit and that the ban on filing a fresh suit is based on public policy and the same has to be extended in the interest of the administration of justice to the withdrawal of Writ Petitions also, where CPC is not applicable.
Chait Ram Saini v. Ghasi Ram (supra) - to show that though the High Court already entertained a petition, but on hearing dismissed the same on merits on the ground that benefit of Section 14 cannot be availed by the plaintiff as the case was not dismissed because of lack of jurisdiction.
Willian Jacks & Co. (India) Ltd. v. Sm. Sumitra Sen - AIR 1984 Calcutta 12 - to show that if a case has failed on its merits the same cannot be excluded for computing the period of limitation.
S. Suppiah Chettiar v. Chinnathurai - AIR 1957 Madras 216 to show that if it is not a case of no jurisdiction in the first forum, the parties are not entitled to go before the new court.
Thus the petitioners are merely indulging in forum shopping in order to extract undue advantage in lieu of their bonus shares and the present claim amounts to abuse of process of law. The petitioners are raising the same dispute, which was agitated before the Consumer Fora and finally decided by the State Commission. The claim before the CLB is barred by the principles of res judicata, in support of which, the learned Senior Counsel referred to the decision in Union of India v.Nanak Singh - AIR 1968 SC 1370 to show that "the provisions of Section 11 of the Code of Civil Procedure are not exhaustive with respect to an earlier decision operating as res judicata between the same parties on the same matter in controversy in a subsequent regular suit, and on the general principle of res judicata, any previous decision on a matter in controversy, decided after full contest or after affording fair opportunity to the parties to prove their case by a court competent to decide it, will operate an res judicata in a subsequent regular suit.
It is not necessary that the Court deciding the matter formerly be competent to decide the subsequent suit or that the former proceeding and the subsequent suit should have the same subject-matter". This principle has been followed in Avtar Singh v. Jagjit Singh -AIR 1979 SC 1911; Gulabchand Chhotalal Parikh v. State of Gujarat For these reasons the learned Senior Counsel appearing for the Company sought for dismissal of the Company Petition.
4. Shri R.Venkatavaradan, the learned Counsel, while replying has submitted that a number of decisions cited by the learned Senior Counsel appearing on behalf of the Company do not apply to the facts of the present case. The interpretation of the provisions of Section 206A by the learned Senior Counsel is not only irrational but also against the interpretation laid down by the Courts. If petitioners were to approach the Civil Court for allotment of the bonus shares, they must necessarily seek rectification of register of member in respect of such bonus shares, of which the CLB alone has jurisdiction to determine the issue. In this connection the learned counsel referred to the decision of the Supreme Court in Ammonia Supplies Corporation (P) Ltd v. Modern Plastic Containers Pvt. Ltd - 1999 (I) CTC 273 to show that in the case of rectification, the Court under Section 155 must decide all matters raised in that connection and if it finds adjudication on any matter not falling under its jurisdiction, it may direct a party to get his right adjudicated by a Civil Court, unless jurisdiction is barred either expressly or implicitly under the statute. In regard to the principles of Res Judicata, the learned Counsel pointed out that in the present case the State Commission dismissed the appeal, for want of jurisdiction on the ground that the petitioners are not consumers vis-a-vis the Company. Secondly the CLB alone is competent to decide the statutory violation of Section 206A and not the Consumer Forum.
Moreover, the revision petition filed before National Consumer Disputes Redressal Commission was dismissed as withdrawn to pursue the reliefs before the CLB. Shri Venkatavaradan, learned Counsel further contended that the petitioners could approach the CLB even in the absence of permission of the National Commission, in view of non-applicability of the technical provisions of the Civil Procedure Code before the Consumer Forum as held in K.M. Singh v. Sir Ganga Ram Hospital 1992 (1) CPR 307. Thus, the dispute was not heard on merits and finally decided by the National Consumer Disputes Redressal Commission. In this connection, the learned Counsel referred to the judgment of Supreme Court in Rani Chowdhury v. Lt. Col. Suraj Jit Choudhury - AIR 1982 SC 1397 - to show that "an appeal may be disposed of on various grounds.
It may be disposed of after proper hearing on merits and this is usually the normal way of disposal of an appeal. An appeal may be disposed of also for non-prosecution thereof. Though the dismissal of an appeal on the ground of non-prosecution of the same is not disposal of the appeal on merits, yet the dismissal of the appeal for non-prosecution results in the disposal thereof." Shri Venkatavaradhan, the learned Counsel, therefore, prayed for the reliefs made in the petition.
5. I have considered the pleadings and extensive arguments both oral and written, advanced by the learned Senior Counsel.
The facts not under dispute are that the petitioners had purchased 100 equity shares of Rs. 10/- each of the Company bearing registered folio No. WPL000591 through a share broker on 03.11.1989 on cum-bonus basis and forwarded the original share certificates together with the instrument of transfer on 21.12.1989 to the Company for registering the transfer in the joint name of petitioners, which were received by the Company on 27.12.1989, being the record date for issue of bonus shares by the Company. With necessary prior approvals, the Register of Members and Share Transfer Books of the Company were kept closed during the period between 27.12.1989 and 03.01.1990 (both days inclusive) for issue of bonus shares. The Company had approved the transfer in respect of 100 shares on 20.03.1900 and delivered the original share certificates to the petitioners by a letter dated 04.05.1990. In the meanwhile, the Company had on 15.01.1990 allotted bonus shares to those members whose name appeared in its register of members as on the record date viz. 27.12.1989, fixed by the Company. Accordingly the Company had allotted bonus shares in the ratio of 1:1 in respect of the original 100 shares lodged by the petitioners in favour of their transferor viz.
Shri Brijesh Baheti, which according to the petitioners is violative of the provisions of Section 206A. Before going into the obligations of the Company as envisaged in Section 206A in the interval period between lodgement of the transfer document with the Company and its eventual registration, I shall proceed to consider whether the present petition filed after a lapse of 11 years is hit by the provisions of the Limitation Act, 1963, being one of the preliminary objections raised by the Company. At this point of time, it is absolutely relevant to observe that the Company by a letter dated 08.05.1990 (Annexure-12 of reply) specifically advised the second petitioner to contact the transferor for re-transfer of the bonus shares and further furnished his full address enabling the second petitioner to claim the bonus shares from the transferor. There is nothing to show that the petitioners have made any demand on the transferor calling upon him to retransfer the bonus shares. The plea of the second petitioner in his letter dated 26.03.1991 (Annexure-13 of reply) addressed to the Company that the transferor does not reply to any of his letters does not conclusively show that any such demand was made by the petitioners. The Company further by a letter dated 27.05.1991 (Annexure-18 of reply) on the request of the petitioners, advised them to file a civil suit against the share broker and the transferor of shares for recovery of money. Notwithstanding the protracted correspondence and personal discussion with the representatives of the Company, the petitioners have preferred to agitate their claim before the District Forum without either seeking relief against the Company or impleading the transferor.
It is clear from the complaint dated 05.06.1991 (Annexure-23 of reply) made by the petitioners before the District Forum, that prayer has been made only against the share broker and not the Company for delivery of 100 equity shares of the Company or payment of adequate amount to buy 100 equity shares from the open market, compensation towards the dividend paid by the Company in respect of the bonus shares, expenses incurred by the petitioner and also compensation towards the misery and mental torture suffered by the petitioner on account of the omissions and commissions of the share, broker, as evidenced from the order dated 17.02.1997 of the District Forum (Annexure-31 at page 119 of reply) the relevant portion of which runs as under: "Therefore the complainant has sought for a direction to opposite party-1 to pay the value of 100 WIPRO Equity shares and compensation of Rs. 10,000/- to cover the dividends of those shares and expenses for correspondence and telephone bills and compensation for mental agony." While the petitioners had raised the plea of statutory violation of the provisions of the Act by the Company before the State" Commission at the time of preferring an appeal against the order dated 17.02.1997 of the District Forum, no such plea was made before the District Forum. It is further interesting to observe that when the share broker made an application before the District Forum seeking to implead the transferor as necessary party to the proceedings, the second petitioner stoutly opposed the impleadment of the transferor as one of the opposite parties on the ground that the transferor "has nothing to do with the obligations created by the contract of sale of shares and their purchase", which ultimately resulted in the dismissal of the application made by the share broker. This plea of the petitioners before the District Forum is not in consonance with the confirmation Memo dated 03.11.1999 (Annexure-6 of reply) by which the shares were purchased on cum-bonus basis and the transferor was obliged to return the bonus shares. Nevertheless, the petitioners have not chosen to implead the transferor in the present proceedings and the explanation offered for his non-impleadment is neither found to be justifiable. It is on record that the District Forum by an order dated 17.02.1997 directed the share broker to pay the petitioners market value for 400 bonus shares together with compensation and cost, which was confirmed on appeal by an order dated 16.08.2000 of the State Forum save the mode of calculating market value of the shares and further held that the second petitioner is not a consumer vis-a-vis the Company and hence the second petitioner cannot maintain the complaint against the Company under the Consumer Protection Act, 1986. The revision petition preferred before the National Commission by the petitioners against the order of the State Commission was dismissed as withdrawn on 13.08.2002 on the representation of the petitioners that they would move the CLB or any other appropriate forum for appropriate reliefs, resulting in the disposal thereof as held in Rani Choudhury v. Col.Suraj Jit Choudhury (supra) and approached the CLB after a period of more than 11 years for the very same reliefs. Section 111A(3) provides a period of two months for filing a petition for rectification in case the transfer of shares is in contravention of the provisions of certain laws mentioned therein. The High Court of Gujarat in Bipin Vadilal Mehta v.Ramesh B.Desai (supra) prior to the amended Section 111A, held that petitions for rectification must be filed within three months as per the residuary clause Section 113 of Limitation Act and accordingly further held that the petition filed before the High Court after a period of six years for rectification is barred by the law of limitation. The CLB in S.Balwant Singh v. Krishna Bus Service Private Ltd. (supra) held that a claim by way of a suit for rectification of the register of members of a company is governed by Article 113 of the Limitation Act, 1963 and therefore a petition for rectification has to be filed within three years and further in Abani Bhusan Bhattacharya v.Ericsson India (P) Ltd. (supra) after considering the facts of the case, where the petitioner was pursuing various legal proceedings including before the District Forum under Consumer Protection Act, 1986 for a number of years concluded that the petitioner has already availed himself of various alternate remedies and therefore, cannot now make use of one more forum for the same remedy and that too after an inordinate delay of about 20 years without any explanation for such a delay. In the present case, the petitioners pursued their remedies under the Consumer Protection Act for over a decade, when ultimately withdrew the revision filed before the National Commission against the order dated 16.08.200.0 of the State Commission. The order dated 13.08.2002 of the National Commission (Annexure R-38 at page 255 of reply) reads as under: "After some hearing Mr. Bhasme, Counsel for the Petitioner, on instructions from the Petitioner in person, wants to withdraw this petition. He states that he will move the Company Law Board or any other appropriate forum for his reliefs. These Revision Petitions are dismissed as withdrawn." The above order does not throw any light as to whether the revision petition was dismissed due to defect of jurisdiction of the National Commission. Moreover, the letter dated 13.08.2002 of the petitioners' advocate (Annexure A-16) regarding the observation of the National Commission that it did not have jurisdiction has no force in the light of the decision of the Supreme Court in Mohinder Singh Gill v. The Chief Election Commissioner (supra) wherein it has been held that "when a statutory functionary makes an order passed on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise." and therefore this letter of the petitioners' advocate do not come to the aid of the petitioners. In these circumstances, the present claim of the petitioners made after a delay of 11 years, in my view, is barred by the provisions of the Limitation Act and cannot be agitated before the CLB. Now the question that arises for my consideration is whether the petitioners are entitled to exclude the period from 05.06.1991 to 13.08.2002 consumed before the Consumer for a pursuing their reliefs, by virtue of Section 14 of the Limitation Act, the relevant portion of which reads as under :- "(1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceedings, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.
(2) In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.
(3) Notwithstanding anything contained in Rule 2 of Order 23 of the Code of Civil Procedure, 1908 (5 of 1908), the provisions of Sub-section (1) shall apply in relation to a fresh suit instituted on permission granted by the court under Rule 1 of that Order, where such permission is granted on the ground that the first suit must fail by reason of a defect in the jurisdiction of the court or other cause of a like nature.
There is no doubt that the parties before the CLB were the parties before the Consumer Fora. The claim before the CLB as well as the Consumer Fora is the same. It is now required to be seen whether the petitioners were pursuing their reliefs bonafide with due diligence and good faith before the Consumer Fora. The provisions of Section 14 further contemplate leave of the Court on the ground that the proceedings first initiated must fail by reasons of a defect in the jurisdiction of the court or other cause of a like nature. It is on record as already observed that the Company had specifically indicated that the petitioners must take up their claim for bonus shares with the transferor and further categorically advised them to proceed against the transferor by means of filing a civil suit as well as criminal complaint. The petitioners deliberately chose to approach the Consumer Fora without impleading the transferor. When the share broker, one of the opposite parties contended that the transferor is a necessary party to the proceedings, it was stoutly opposed by the petitioners resulting in dismissal of the impleading application filed by the broker. The petitioners have taken a calculated risk in pursuing their claim before Consumer Forum for the past 11 years; obtained the relief and now approached the CLB for the bonus shares, in which case the benefit of Section 14 of the Limitation Act cannot be legally availed by the petitioners as held in Chait Ram Saini v. Ghasi Ram (supra). The chain of events show that the petitioners failed to act diligently in pursuing their remedy before the competent forum, disentitling them to claim remedy before the CLB as held in Gajadhar Shaw v. Union of India (supra). Accordingly, if the initial filing is attributed to carelessness for which there is little or no excuse, the subsequent prosecution of the suit cannot be said to be in good faith, thereby denying the exemption available under Section 14 of the Limitation Act.
The petitioners by objecting to impleadment of the transferor as party to the proceedings cannot be said to have acted in good faith as held in Rabindra Nath Samuel Dawson v. Sivakami (supra), thereby denying the benefits of Section 14 of the Limitation Act. The parties are not entitled to go before the new court unless it is a case of no jurisdiction in the first forum as held in Suppiah Chettiar v.Chinnathurai. As no liberty has been granted in favour of the petitioners by the National Commission the petitioners are barred from agitating their claim before the CLB as held in Bakhtawar Singh v. Sada Kaur (supra) where it has been held that if the previous suit was allowed to be withdrawn on account of a formal defect in the jurisdiction of the court or otherwise of a like nature only then the plaintiff is entitled to claim the benefit of Section 14 of the Limitation Act. In this connection, the decision of the apex court in M/s Upadhyay & Co. v. State of U.P. assumes importance, according to which, the ban on filing a fresh suit is based on the public policy and the same has been extended in the interest of administration of justice to the withdrawal of Writ Petitions also where CPC is not applicable.
The High Court of Madras in Bhagavatula Pankala Rao v. Kadiyala Venkatasubbayya (supra) has held that "Section 14 of the Limitation Act applies only where the Court itself decides that it cannot entertain the suit; and it is not concerned with suits which are voluntarily withdrawn or abandoned by the Plaintiff". Therefore, the plea of the learned Counsel for the petitioners that liberty of the National Commission is not required in view of the fact that the technicalities of the provisions of the Civil Procedure Code are not applicable before the Consumer Fora is devoid of merits. Moreover, the decisions in Bombay Dyeing and Manufacturing Company Ltd Fs. Arun Kumar Bajoria and Collector, Land Acquisition, v. MST. Katiji cited by the learned Senior Counsel for the petitioners do not go to their aid in view of the fact that the cause shown for the delay in filing the petition before the CLB was not sufficient and that the petitioners were not acting diligently and in good faith while pursuing their remedies before the Consumer Fora for the reasons recorded elsewhere. Consequently, the delay on the petitioners' part cannot be condoned on equitable considerations and therefore the decision in Shamsunder Kukreja v. Hindustan Lever Limited would neither be applicable to the facts of the present case. Taking into consideration the decisions of the various High Courts and the apex court (supra), I am of the considered view that the petitioners are not entitled to claim the benefit of Section 14 of the Limitation Act. Further, the matter directly and substantially in issue before the CLB was the same matter which was directly and substantially in issue in the proceedings before the Consumer Fora between the same parties and that the matter directly and substantially in issue in the Company Petition was heard finally and decided in the appeal before the State Commission. The revision filed against the order of State Commission before the National Commission was withdrawn thereby the order of the State Commission becoming final and binding between the parties in accordance with Section 11 of the Code of Civil Procedure, 1908.
Therefore, the claim of the petitioners before the CLB is barred by the principles of res judicata, as enunciated by the apex court in Union of India v. Nanak SinghAvtar Singh v. Jagjit Singh and Gulabchand Chhotalal Parikh v. State of Gujarat cited supra. It is not under dispute that the original 100 bonus shares allotted in favour of Shri Brijesh Baheti have been transferred from time to time in favour of third parties who are bonafide purchasers. The CLB being a court of equity is bound to afford an opportunity of being heard to the transferees, in the event of removal of their names from the register of members of the Company and it would not meet the ends of justice to adjudicate the dispute in the absence of the transferees of the bonus shares, irrespective of whether the dispute in question could be effectually adjudicated or not without their presence before the CLB.In view of these preliminary objections, I consider it inappropriate to go into and decide the merits of the case. Therefore, the petition is dismissed on the grounds as already referred to above. No order as to costs.