Judgment M.L. PENDSE, J.:---Petitioner No. 1 is a Company registered under provisions of the Companies Act, 1956, while petitioner No. 2 is Managing Director and petitioner No. 3 is General Manager (Finance) and Secretary of the Company. The Company had obtained and industrial licence dated April 18, 1990 under the Industries (Development and Regulation) Act, 1951 for manufacture of Polyester Filament Yarn with an annual capacity of 25,000 tonnes. The Controller of Capital Issues, Government of India by letter dated May 31,1990 consented to the Company issuing 7,20,00,000 equity shares of Rs. 10/- each at par and 33,90,000 14 per cent Secured Redeemable Non-Convertible Debentures of Rs. 100/- each at par. The consent was for an aggregate public issue of securities valued at Rs. 105.90 crores. The consent letter recites that the consent is qualified by the conditions mentioned in the annexure and the Company shall comply with the terms of the conditions so imposed. One of the condition was that the Company was to scrupulously adhere to the time limit of ten weeks from the date of closure of subscription list for allotment of all securities and despatch of allotment letters/certificates of refund orders. On July 1990 the Company issued prospectus for issue of 7,20,00,000 Equity Shares and 33,90,000 14 per cent Secured Debentures. The prospectus inter alia stated that the applications had been made to the Stock Exchanges at Indore, Ahmedabad, Bombay, Calcutta and Delhi for permission to list the equity shares and debentures offered in terms of the prospectus. This averment was necessary in view of the provisions of sub-section (1) of section 73 of the Companies Act which demands that every company intending to offer shares or debentures to the public for subscription by the issue of a prospectus shall before such issue make an application to one or more recognised Stock Exchanges for permission for the share or debentures intended to be so offered to be dealt with in the Stock Exchange or each such Stock Exchange. The prospectus sets out that allotment letters, debenture certificates in respect of debentures or share certificates in case of shares allotted, if any, letters of regret together with refund cheques or pay orders will be despatched by post at the application's sole risk or by such other method as may be approved by the relevant authorities within ten weeks from the closure of the subscription list or in the event of unforeseen circumstances, within such period as may be extended by the Stock Exchange at Indore, Madhya Pradesh. The prospectus further provided that payment of interest at the rate of 15% per annum on the excess application money will be made to the applicant as per the guidelines issued by the Ministry of Finance by letter dated July 21, 1983 and modified by letter dated September 27, 1985 addressed to the Stock Exchange. The prospectus sets out that the issue would open on August 20, 1990 and would closed on August 23, 1990, and the closure will not be extended beyond August 31, 1990. The public issue opened in accordance with the prospectus on August 20, 1990 received overwhelming response and 26,32,894 applications for Equity Shares and application money of Rs. 225,52,51,247/- was received. The share issue was over subscribed more than 40 times. In view of the tremendous response from the investing public, the issue was closed on August 23, 1990 which was the earliest date for closing under the terms of the prospectus. 2. The period of ten weeks from the date of closure of the issue as contemplated by the Ministry of Finance's letter dated July 21, 1983 as modified by letter dated September 27, 1985 as well as in accordance with the guidelines published by the Stock Exchange for the purposes of listing of shares expired on November 1, 1990. Prior to this date on October 15, 1990 the Board of Directors of the Company had approved the allotment of shares in consultation with the Stock Exchange. The Company thereafter received permission from the Stock Exchange at Indore, Ahmedabad, Bombay. Calcutta and Delhi to deal in the shares offered in the prospectus. The Company began despatching refund orders on or about October 22, 1990 and the number of refund orders required to be despatched were about 25,50,604. The Company thereafter received permission from the Stock Exchange at Indore, Ahmedabad, Bombay. Calcutta and Delhi to deal in the shares offered in the prospectus. The Company began despatching refund orders on or about October 22, 1990 and the number of refund orders required to be despatched were about 25,50,604. On October 23, 1990 the Company addressed letter to Madhya Pradesh Stock Exchange seeking extension upto November 30, 1990 for posting refund orders, share certificates etc. The letter recties that since the number of applications are large, the Company is required to do thorough checking at the computer level and about 25 lakhs refund orders, 3 lakhs share certificate envelopes and equal number of envelopes for other kinds of stationery like allotment letters for debentures are required to be posted and as the posting will be done only from Delhi where the Registrar's of the Issue are situate, the despatch will take considerable time. The letter claims that the post officers at Delhi are not equipped to handle that large influx form a single party and consequently despatches will have to be staggered over 25 to 30 days. 3. On October 26, 1990 the Company despatched a consignment of about 6,69,999 refund orders with pre-printed fascimile signatures from Bombay to Delhi in the brake van of 2925 Down Paschim Express. The fire broke out in the brake van between Bhestan and Surat Railway Station and the fire fighting authorities threw out the packages from the brake van. Consequently many of the refund orders were destroyed or scattered on the ground in a severely mutilated and damaged condition. On October 28, 1990 the Company sent representatives to the site of the accident and thereafter a message was sent to the bankers-American Express Bank-to stop payment in respect of refund orders which were despatched by the train. The bankers advised the Company that it would be impossible to ensure that the refund payments only in respect of those which were despatched by the train could be stopped by various branches all over the country and to prevent the misuse of large number of refund orders it is desirable that stop payment instructions should be given by the Company in respect of all refund orders, including those which were despatched by the train. Accordingly, the Company gave instructions to the bankers to countermand payment of all the refund orders. Accordingly, the Company gave instructions to the bankers to countermand payment of all the refund orders. On November 7, 1990 the Company addressed letter to the President of Madhya Pradesh Stock Exchange giving intimation of the fire which broke out in the brake van and the fact of instructions issued to the bankers. The letter also recites that the Company had take steps to print and despatched fresh refund orders. On November 8, 1990 the President of the Madhya Pradesh Stock Exchange informed the Company that in pursuance of the request for extension made by letter dated October 23, 1990 an extension for issuing refund orders is granted upto November 30, 1990. On December 13, 1990 the Company made second application to Madhya Pradesh Stock Exchange for further extension upto December 22, 1990 by expressing infra structural difficulty in posting a large volume of articles by registered post. The Madhya Pradesh Stock Exchange granted extension by letter dated December 29, 1990 but only till December 19, 1990, making it clear that no further extension will be granted. 4. On January 5, 1991 the Stock Exchange, Bombay called upon the Company to confirm that interest at the rate of 15% per annum on excess application money had been paid for the delayed period as mentioned in the prospectus. The Company informed Bombay Stock Exchange that the despatch of refund orders commenced within ten weeks from the date of the closure of the subscription list, but the delay was caused due to the fire in the train and therefore the requirement of payment of interest on delayed period is not applicable. The Bombay Stock Exchange again informed the Company on January 10, 1991 to confirm that interest at the rate of 15% per annum had been paid for the delayed period. On February 6, 1991 the Company addressed letter to Controller of Capital Issue requesting to waive the interest payment due to delay in the issue of refund orders. The Bombay Stock Exchange on February 7, 1991 again informed the Company that it is necessary to pay interest on excess application money for the delayed period. On February 6, 1991 the Company addressed letter to Controller of Capital Issue requesting to waive the interest payment due to delay in the issue of refund orders. The Bombay Stock Exchange on February 7, 1991 again informed the Company that it is necessary to pay interest on excess application money for the delayed period. On February 19, 1991 the Company addressed letter to the Securities and Exchange Board of India and claimed that delay in despatch of the refund orders was for reasons that were totally beyond the control of the Company, and inspite of the Company having taken all necessary steps to ensure the earliest possible despatch and therefore, the payment of interest should be waived. The Bombay Stock Exchange again informed the Company that if the Government had not taken any decision for waiver of interest on excess application money for the delayed period, the Company was bound to pay interest. Securities and Exchange Board of India by letter dated March 13, 1991 called upon the Company to pay interest to the investors at varying rates for the period commencing from 1st November to 1st December, 1990, and thereafter till the date of posting of the refund orders. The Union Ministry of Finance. Government of India informed the Company by telex message dated March 20, 1991 in answer to the request made for waiver of interest, that the Ministry was not agreeable to the waiver for payment of interest. The telex was followed by letter dated May 2, 1991, where the Under Secretary to the Government of India, Ministry of Industries, Department of Company Affairs, pointed out the attention of the Company to the department's notification dated June 10, 1988 inserting Rule 4-D in Companies (Central Government's) General Rules and Forms, 1956 under section 73 of the Companies Act, and called upon the Company to pay interest on delayed payment at the rates prescribed under the said notification. The Company was called upon to give intimation to the Department about the receipt of the communication. The Company was called upon to give intimation to the Department about the receipt of the communication. On receipt of this letter and on the insistence of the Bombay Stock Exchange that interest should be paid on the delayed payment, the Company apprehending that the Government of India and the Securities and Exchange Board of India may direct and authorise Stock Exchange to delist the shares of the Company for failure to pay interest on the delayed payment of the amounts, filed the present petition under Article 226 of the Constitution of India on June 20, 1991. 5. The gravamen of the complaint of the petitioners is that the Company is not liable to pay interest under section 73 (2-A) of the Companies Act in view of the express extension granted by Stock Exchange of Madhya Pradesh. The Company claims that the liability to pay interest arises only in case excess amount is not repaid within eight days from the date the Company became liable to pay. The Company claims that the period of ten weeks set out in the prospectus is not sacrosanct and the period can be extended by Stock Exchange in the event of any unforeseen circumstances. The Company claims that liability to pay interest can arised only after expiry of eight grace days from December 19, 1990 which is the extended date for refund of excess money as permitted by the Madhya Pradesh Stock Exchange. The Company claims that the liability created under section 73 (2-A) of the Companies Act is not an absolute liability but subject to exceptions, such as delay caused by an act of God or delay due to reasons beyond the control of the Company. On behalf of Government of India, Salek Chand Mittal, working as Joint Director in the Department of Company Affairs, New Delhi has filed return sworn on July 15, 1991. The return claims that provisions of section 73 (2-A) of the Companies Act are absolute in nature and are to be complied with without any excuse. The Government claim that the extension of time cannot be granted in face of the mandatory provisions of section 73 of the Companies Act and the Stock Exchange was not authorised to issue such extension and even if such extension is given, that would not take away the liability of the Company to pay interest with regard to the excess application money. The Government of India further claims that merely because the prospectus sets out that the period for refund of excess application money beyond ten weeks can be granted for unforeseen circumstances by the Stock Exchange, such provision cannot confer any right upon the Company to seek extension or the Stock Exchange to grant the same in view of provisions of sub-section (4) of section 73. Sub -section (4) of section 73 prescribed that any condition purporting to require or bind any applicant for shares or debentures to waive compliance with any of the requirements of section 73 shall be void. The Government of India claims that even assuming that the delay is due to circumstances beyond the control of the Company, still effect must be given to provisions of section 73 (2-A) of the Companies Act which was enacted with a view to protect the interest of the investor and to prevent the companies from retaining amounts to which it has right whatsoever. The return further claims that the Controller of Capital Issues, Ministry of Finance had issued order permitting issue of fresh capital with a specific stipulation that the Company scrupulously adhere to the limit of ten weeks from the date of closure of the subscription list for allotment of all securities and despatch of refund orders. The Government of India, therefore, claims that the petitioners are not entitled to any equitable relief in exercise of writ jurisdiction as the relief would clearly deprive the investing public of the right which was conferred by Legislature under section 73(2-A) of the Companies Act. The Securities and Exchange Board of India and the Bombay Stock Exchange supported the claim of Government of India, while Madhya Pradesh Stock Exchange submitted that the Exchange had authority to grant extension and on such extension the liability to pay interest stands waived. On behalf of the investors, it was urged that the Company should not be permitted to deprive the investors of right to receive interest as prescribed by the statue and also by the prospectus. 6. Before examining the submissions advanced by Shri Nariman, learned Counsel appearing on behalf of the Company, it is necessary to set out the relevant provisions of section 73 of the Companies Act to appreciate the claim made in the petition. 6. Before examining the submissions advanced by Shri Nariman, learned Counsel appearing on behalf of the Company, it is necessary to set out the relevant provisions of section 73 of the Companies Act to appreciate the claim made in the petition. "73.(1) Every Company, intending to offer shares or debentures to the public for subscription by the issue of a prospectus shall, before such issue, make an application to one or more recognised Stock Exchanges for permission for the shares or debentures intending to be so offered to be dealt with in the stock exchange or each such Stock Exchange. (1-A) Where a prospectus, whether issued generally or not, states that an application under sub-section (1) has been made for permission for the shares or debentures offered thereby to be dealt in one of more recognised Stock Exchanges, such prospectus shall state the name of the Stock Exchange or as the case may be, each such Stock Exchange, and any allotment made on application in pursuance of such prospectus shall, whenever made, be void if the permission has not been granted by the Stock Exchange or each such Stock Exchange, as the case may be, before the expiry of ten weeks from the date of the closing of the subscription lists: Provided that where an appeal against the decision of any recognised Stock Exchange refusing permission for the shares or debentures to be dealt in on that Stock Exchange has been preferred under section 22 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), such allotment shall not be void until the dismissal of the appeal. (2) Where the permission has not been applied under sub-section (1) or, such permission having been applied for, has not been granted as aforesaid, the Company shall forthwith repay without interest all moneys received from applicants in pursuance of the prospectus, and, if any such money is not repaid within eight days after the Company becomes liable to repay it, the Company and every director of the Company who is an officer in default shall, on and from the expiry of the eight day, be jointly and severally liable to repay that money with interest at such rate, not less than four per cent and not more than fifteen percent, as may be prescribed, having regard to the length of the period of delay in making the repayment of such money. (2-A) Where permission has been granted by the recognised Stock Exchange or Stock Exchange for dealing in any shares or debentures in such Stock Exchange or each such Stock Exchange and the moneys received from applicants for shares or debentures are in excess of the aggregate of the application moneys relating to the shares or debentures in respect of which allotments have been made, the Company shall repay the moneys to the extent of such excess forthwith without interest, and if such money is not repaid within eight days, from the day the Company becomes liable to pay it, the Company and every director of the Company who is an officer in default shall, on and from the expiry of the eighth day, be jointly and severally liable to repay that money with interest at such rate, not less than four per cent and not more than fifteen per cent, as may be prescribed, having regard to the length of the period of delay in making the repayment of such money. (2-B) If default is made in complying with the provisions of sub-section (2-A), the Company and every officer to the Company who is default shall be punishable with fine which may extend to five thousand rupees, and where repayment is not made within six months from the expiry of the eighth day, also with imprisonment for a term which may extend to one year. (3) All moneys received as aforesaid shall be kept in a separate Bank account maintained with a Schedule Bank until the permission has been granted, or where an appeal has been preferred against the refusal to grant such permission, until the disposal of the appeal, and the money standing in such separate account shall, where the permission has not been applied for as aforesaid or has not been granted, be repaid within the time and in the manner specificed in sub-section (2); and if default is made in complying with this sub-section, the Company, and every officer of the Company who is in default, shall be punishable with fine which may extend to five thousand rupees. (3-A) Moneys standing to the credit of the separate Bank account referred to in sub-section (3) shall not be utilised for any purpose other than the following purposes, namely:--- (a) adjustment against allotment of shares, where the shares have been permitted to be dealt in on the Stock Exchange or each Stock Exchange specified in the prospectus, or. (b) repayment of moneys received from applicants in pursuance of the prospectus, where shares have not been permitted to be dealt in on the Stock Exchange or each Stock Exchange specified in the prospectus, as the case may be or, where the Company is for any other reason unable to make the allotment of share. (4) Any condition purporting to require or bind any applicant for shares or debentures to waive compliance with any of the requirements of this section shall be void." Sub-section (1) of section 73 requires every Company intending to offer shares or debentures to the public by issue of a prospectus to make an application to recognised Stock Exchange for permission for the shares or debentures to be dealt with at the Stock Exchange. Sub-section (1-A) provides that the prospectus shall set out that such application has been made and the permission should be granted before the expiry of ten weeks from the date of closing of the subscription list and if such permission is not granted, then any allotment made in pursuance of such prospectus shall be void. Sub-section (5) of section 73 provides that it shall be deemed that permission has not been grated if application for permission has not been disposed of within the period of ten weeks from the date of closure of the subscription list. The provision to sub-section (1-A) prescribes that where an appeal is preferred under section 22 of the Securities Contracts (Regulation) Act against the order of refusal of permission, then allotment shall be void until the disposal of the appeal. Sub-section (2) of section 73 then provides that where permission has not been applied or had been refused, then the Company shall forthwith repay without interest all moneys received from the applicants in pursuance of the prospectus. Sub-section (2) of section 73 then provides that where permission has not been applied or had been refused, then the Company shall forthwith repay without interest all moneys received from the applicants in pursuance of the prospectus. The sub-section further provides that if such money is not repaid within 8 days, then the Company and every director of the Company who is an officer in default, shall be liable to repay it with interest at rate not less than 4% and not more than 15%. The provisions of sub-section (2) come into play where the permission has not been applied or having been applied not granted, with the result that the Company is unable to make allotment of shares or debentures in accordance with the prospectus as the said allotment is void. Sub-section (2-A) contemplates a different and distinct situation. Sub-section (2-A) comes into play when permission is granted by the Stock Exchange and allotment has been made by the Company and excess amount is required to be refunded to the applicant. Sub-section (2-A) provides that the Company shall repay such excess moneys forthwith without interest and in case it is not repaid within eight days from the date the Company becomes liable to pay, then the Company and every director, who is an officer in default, shall repay the money with interest at rate not less than 4% and not more than 15%. Sub-section (3) provides that the moneys received by the Company in pursuance of the prospectus shall be kept in a separate Bank account and shall not be utilised for the purpose other than adjustment against allotment of shares or repayment of moneys received from the applicants in pursuance of the prospectus. The scheme of section 73 indicates that the Legislature was desirous that the Company should not retain the moneys received from the applicants in pursuance of the prospectus after the Company is liable to repay and the repayment should be made forthwith. In case the repayment is not made within the grace period prescribed under section 73, that is eight days from the date of accrual of liability, then the Company and the directors are liable to repay the amount with interest. It is obvious that the Legislature was anxious that the investing public should not be deprived of the use and enjoyment of the money which the Company cannot retain. 7. It is obvious that the Legislature was anxious that the investing public should not be deprived of the use and enjoyment of the money which the Company cannot retain. 7. Shri Nariman submitted that the crucial words to be noted in sub-section (2-A) of section 73 of the Companies Act are "forthwith" and "the Company becomes liable to pay". The learned Counsel urged that it is first necessary to ascertain when the Company becomes liable to pay, and that can be gathered only from the prospectus issued by the Company. The learned Counsel urged that the guidelines issued by Government of India by letter dated July 21, 1983 and modified by letter dated September 27, 1985 and which guidelines are referred to in the prospectus and also in the letter issued by the Controller of Capital Issues, provide that the Company is required to pay to the applicants interest for the delayed period beyond ten weeks from the date of closure of the subscription list and which is the period stipulated under section 73 of the Companies Act for the purpose of disposal of the listing application by the Stock Exchange in respect of excess application money. Shri Nariman submitted that in accordance with the prospectus the liability of the Company to pay interest accrues on expiry of ten weeks from the date of closure of the subscription list. In the case in hand the exercise of allotment of equity shares and debentures was over before the expiry of ten weeks and in fact the Company had started process of posting refund orders in respect of excess money. Shri Nariman submits that sub-section (2-A) demands that the Company shall repay the excess money forthwith without interest and the expression "forthwith" should not be construed as instantaneously or at once. It was urged that the expression "forthwith" means "within a reasonable period" and as the prospectus permits the Stock Exchange to extend the period for unforeseen circumstances the liability to pay interest cannot arise till the expiry of extended period fixed by Madhya Pradesh Stock Exchange. The learned Counsel referred to 12th Edition of Maxwell on The Interpretation of Statues, and urged that the expression "forthwith" or "immediately" does not refer to a precise time and means a reasonable time. The learned Counsel referred to 12th Edition of Maxwell on The Interpretation of Statues, and urged that the expression "forthwith" or "immediately" does not refer to a precise time and means a reasonable time. Reference was made to the decision reported in 1968(1) Queen''s Bench 124 (Hillingdon Landon Borough Council v. Cutler)1, where it was observed by Lord Justice Harman that 'forthwith' is not a precise time and provided that no harm is done, "forthwith" means any reasonable time thereafter. Reliance was also placed on the decision of the Supreme Court reported the A.I.R. 1957 S.C. 28 (Keshav Nilkanth Jogeaekar ors v. The Commissioner of Police, Greater Bombay and others)2, where Justice Venkatarama Ayyar referred to several decisions which held that expression "forthwith" means without unreasonable delay'. Attention was also invited to dictionary meaning of the word "forthwith" and also to some American decisions. The submission advanced is that the expression "forthwith" should not be construed as the requirement to pay the moment allotment of share is completed and excess moneys are available in the hands of the Company. The expression "forthwith" claims Shri Nariman, indicates that there is an area of discretion left to extend the period for payment for sound reasons. Shri Bhabha, Shri Cooper and Shri Andhyarujina, on the other hand urged that the requirement under sub-section (2-A) of section 73 of the Companies Act is absolute in nature and it is not permissible to defer or waive the liability to pay the amount with interest, in case the amount is not repaid forwith period of grace of eight days. In our judgment, the submission of Shri Nariman that the expression "forthwith" does not require payment at once of immediately but such payment is permissible within a reasonable time if circumstances so warrant, cannot be accepted in the facts and circumstances of the present case. The expression "forthwith" will have a different meaning according to the act which is to be performed. There are certain ministerial acts where the requirement of immediate performance can be construed as performance within the reasonable time, but there are other acts which demand performance forthwith without exception and in such cases it is not permissible to allow performance with the reasonable time. There are certain ministerial acts where the requirement of immediate performance can be construed as performance within the reasonable time, but there are other acts which demand performance forthwith without exception and in such cases it is not permissible to allow performance with the reasonable time. In the present case it is Legislature intended that the excess money shall be repaid forthwith and in case it is not repaid within eight grace days, then with interest. The Legislature had in contemplation that though the expression "forthwith" is used, it may require some reasonable time to make payment and therefore permitted grace period of eight days before liability to repay with interest arises. In other words the Legislature was fully conscious that the expression "forthwith", as claimed by Shri Nariman," may be construed as 'within a reasonable time' and not at once. The Legislature in its wisdom therefore permitted grace period of eight days before requiring the Company and the directors to repay the amount with interest. Once it is obvious that Legislature had in contemplation that there may be delay for unforeseen circumstances in making repayment forthwith and therefore some grance period is required, then it is not permissible for the courts to find out whether still further time can be granted for repayment by resort to the unforeseen circumstances. In our judgment, the provisions of sub-section (2-A) of section 73 of the Companies Act are absolute in nature and once the Company fails to repay the excess amount within the grace period of eight days as contemplated by the section, then there is no escape from payment of interest irrespective of the circumstances which the Company may suffer. 8. Shri Nariman also urged that both sub-section (2) and sub-section (2-A) refer to the day on which the Company becomes liable to pay and the issue as to when the liability of the Company to pay arises is not free from doubt. It was urged that section 73 no where lays down that the Company shall make allotment within period of ten weeks from the date of closure of subscription list and the Government of India and Securities and Exchange Board of India have taken conflicting stand as to when the liability to refund the excess application money arises. It was urged that section 73 no where lays down that the Company shall make allotment within period of ten weeks from the date of closure of subscription list and the Government of India and Securities and Exchange Board of India have taken conflicting stand as to when the liability to refund the excess application money arises. The Government of India claimed that the liability arises on expiry of ten weeks from the date of closure of the subscription list, while the Securities and Exchange Board claimed that the liability to repay excess application many arises only on the date of allotment. Shri Nariman submitted that as the section did not prescribe that allotment should be completed within ten weeks, the liability under sub-section (2-A) cannot arise till the exercise of allotment is over. The submission is not correct. Though it is undoubtedly true that provisions of section 73 do not specifically provide for completion of allotment within a period of ten weeks from the date of closing of the subscription list, there is intrinsic evidence in the section itself to establish that it is necessary that allotment must be completed within ten weeks. As mentioned hereinabove, sub-section (1-A) of section 73 demands that permission from stock exchange is to be secured before expiry of ten weeks from the date of closing of the subscription list, and if such permission is not granted, then the allotment made shall be void. The permission is to be secured by the Company before expiry of ten weeks from the date of closing of the subscription list and this permission from the Stock Exchange is referred, both in sub-section (2) and sub-section (2-A) of section 73 of the Companies Act. Sub-section (2-A) refers to the cases where permission has been granted and allotment has been made. It was pointed out on behalf of the Bombay Stock Exchange that it is an invariable practice of the exchange to insist that the exercise of allotment should be completed before expiry of ten weeks from the date of closure of the subscription list and indeed the Stock Exchange has almost made it a rule that permission as contemplated under sub-section (1-A) is granted only when the allotment is completed within ten weeks. On behalf of Bombay Stock Exchange the exchange listing requirements are produced for our perusal. On behalf of Bombay Stock Exchange the exchange listing requirements are produced for our perusal. It cannot be debated that Stock Exchange plays a crucial role in the offer of shares or debentures to the public for subscription by issue of a prospectus. Apart from the guidelines issued by the Government and to which reference is made hereinabove every Stock Exchange in the country has laid down principles in regard to the requirements to be satisfied by the Company entering the capital market. Paragraph 24.1 of the Stock Exchange Listing of Bombay Stock Exchange provides that Companies entering the capital market with public offers of capital will be required to pay to the applicants interest at the rate of 15% per annum in respect of excess application money for the delayed period beyond 10 weeks from the date of closure of the subscription list, which is the period stipulated in section 73 of the Companies Act. The Stock Exchange therefore understood that the requirement of section 73 is that interest should be paid for the delayed period beyond ten weeks from the date of closure of the subscription list. Clause 23.2 then provides that the Company should scrupulously adhere to the time limit of ten weeks from the date of closure of the subscription list for allotment of securities and despatch of allotment letters/certificates and refund orders. Clause 23.3 requires the Company to furnish an undertaking for compliance of this condition at the time of filing an application for listing. Clause 23.4 provides that the Company should file within five working days of the expiry of the stipulated period, a statement certifying that allotment letters/securities and the refund orders have been despatched within the prescribed time. Clause 23.5 authorises the Stock Exchange to take action against the Company for non-compliance of the conditions and such action is in addition to the action that may be taken by other competent authorities. These clauses of the Listing arrangement prepared by the Stock Exchange leave no manner of doubt that it is the consistent practice of the Stock Exchange that the exercise of allotment shall be completed within the period of ten weeks from the date of closure of the subscription list. These clauses of the Listing arrangement prepared by the Stock Exchange leave no manner of doubt that it is the consistent practice of the Stock Exchange that the exercise of allotment shall be completed within the period of ten weeks from the date of closure of the subscription list. Shri Nariman did not dispute that the Company very well understood that allotment has to be made within ten weeks and in fact the Stock Exchange granted permission contemplated under sub-section (1-A) of section 73 of the Companies Act only after the Board of Directors of the Company finalised and approved the allotment of shares on October 15, 1990. It is therefore obvious that in the present case it is not necessary to examine as to when the liability of the Company to repay that amount arises. Shri Andhyarujina very rightly pointed out that sub-section (2-A) of section 73 should be read harmoniously with the requirement provided under the guidelines and under the listing provisions of the Stock Exchange. In cases where allotment is completed before expiry of ten weeks, then the liability to repay would arise immediately on completion of allotment and in cases where the allotment is not even completed till the expiry of ten weeks, then from the date of expiry of ten weeks from the date of closure of the subscription list. In our judgment, there is no difficulty in fixing the date from which the liability of the Company to make repayment arises. In a case where the allotment is completed before expiry of ten weeks, then from the date of allotment and in case where that allotment is not completed till the expiry of ten weeks from the date of closure of the subscription list, then from the date of expiry of ten weeks. In cases where the allotment is completed before expiry of ten weeks, then the Company very well knows the excess amount, which is to be repaid and consequently the liability accrues forthwith to repay the side amount. In cases the Company fails to repay the amount within the grace period of eight days, then the Company would be liable to pay interest to the investor inspite of the fact that period of ten weeks from the date of closure of the subscirption list is not over. In cases the Company fails to repay the amount within the grace period of eight days, then the Company would be liable to pay interest to the investor inspite of the fact that period of ten weeks from the date of closure of the subscirption list is not over. On allotment the Company is not entitled to retain the amount of excess money and there is considerable merit in the submission of Shri Andhyarujina that the amount then held by the Company is in the nature of a trust. Reliance on the decision reported in 1955 (3) All England Law Reports 219 (Re Nanwa Gold Mines, Ltd. Ballantyne v. Nanwa Gold Mines, Ltd. and another)3, does support the contention of Shri Andhyarujina that there had been an attempt to create by statute a kind of trust for applicants. Shri Andhyarujina submitted that sub-section (3) of section 73 of the Companies Act requires the Company to keep money in a separate bank account and the money standing to the credit of the said account can be utilised only for repayment of moneys received from the applicants. It is not necessary to record a conclusion as to whether a trust is created in the present case and we leave that aspect for determination in a proper case. 9. Shri Nariman then submitted that as the Madhya Pradesh Stock Exchange has granted extension for repayment in accordance with the application made by the Company, the liability to make repayment within the stipulated period stands deferred. We are unable to find any merit in this submission for more than one reason. In the first instance Shri. Nariman was unable to point out any source of power in the Stock Exchange to grant such extension. Our repeated enquires with Shri Dwarkadas, who appeared on behalf of Madhya Pradesh Stock Exchange, did not elicit any material to indicate that the Stock Exchange has power to entertain application for extension of stipulated period. Apart from the fact that provisions of sub-section (2-A) of section 73 of the Companies Act are absolute in nature, the section does not refer to any authority, including the Government of India, who could extend the stipulated period for refund of the excess amount. Apart from the fact that provisions of sub-section (2-A) of section 73 of the Companies Act are absolute in nature, the section does not refer to any authority, including the Government of India, who could extend the stipulated period for refund of the excess amount. We are also unable to gather any material from the Company or the Madhya Pradesh Stock Exchange to conclude that the Stock Exchange can extend that period for unforeseen circumstances. As mentioned hereinabove, there is an inbuilt provision in sub-section (2-A) of section 73 to grant grace period of eight days for making repayment before the liability to pay interest accrues. The Legislature was extremely clear in providing that at the expiry of grace period the liability to pay interest is foisted on the Company and we are unable to appreciate how such liability can be deferred or postponed at the behest of the Stock Exchange. No rules or regulations of any Stock Exchange were brought to our attention to hold that the Stock Exchange possesses such power. Shri Nariman contended that the prospectus issued by all the companies contain a clause that the period of refund can be extend beyond the stipulated period by the Stock Exchange for unforeseen circumstances. Shri Nariman submitted that both the Stock Exchanges, the investors and the Company have accepted for over several years that such power exists and therefore, the prospectus contains such a clause. It was urged that the prospectus being a contract between the investor and the Company, it is not permissible to challenge that the Stock Exchange has no authority to entertain the application for extension and grant the same. It is not possible to accede to the submission of the learned Counsel for several reasons. In the first instance the provisions of sub-section (2-A) of section 73 of the Companies Act are absolute in nature and do not leave any scope for any authority to extend the period on accrual of liability to refund or to pay interest. The liability to refund the excess amount arises forthwith on allotment of shares and the liability to pay interest accrues on expiry of eight grace days. The liability to refund the excess amount arises forthwith on allotment of shares and the liability to pay interest accrues on expiry of eight grace days. Neither the Stock Exchange nor the Government have any authority to extend the stipulated period of ten weeks from the date of closure of the subscriptions list mentioned in the prospectus for refund of the amount and even though the Stock Exchange informs the Company that the time is extended for making refund, that would not wipe out the liability to pay interest at the expiry of the grace period. Secondly, the Stock Exchange Listing Rules no where authorises Stock Exchange to extend the period on accrual of liability, but on the other hand Clause 23.2 specifically provides that the Company should scrupulously adhere to the time limit of ten weeks from the date of closure of subscription list for despatch of refund orders. Our repeated queries did not elicit any response from the Company or the Madhya Pradesh Stock Exchange as to whether there is any rule or regulation framed by the Stock Exchange conferring power to extend the period. We also enquired as to whether there is any agreement between the Company and the Stock Exchange conferring authority on the Stock Exchange to extend the period for unforeseen circumstances, and the answer was in the negative. Thirdly, the contention that the authority flows from the prospectus is entirely unsustainable because the mere recital in the prospectus authorising stock exchange to permit Company to refund the excess amount beyond the period of ten weeks from the closure of the subscription list in the event of unforeseen circumstances does not confer such authority on the Stock Exchange, nor can take away the substantial right conferred by sub-section (2-A) of section 73 upon the investing public. The submission of Shri Nariman that as the prospectus amounts to contract between the investor and the Company, the investor cannot challenge the authority conferred on the Stock Exchange is required to be turned down in view of provisions of sub-section (4) of section 73 of the Companies Act. Sub-section (4) prescribes that any condition requiring or binding any applicant for shares or debentures to waive compliance with requirements of section 73 shall be void. Sub-section (4) prescribes that any condition requiring or binding any applicant for shares or debentures to waive compliance with requirements of section 73 shall be void. It is therefore obvious that even assuming that the investor had bound himself to waive compliance with sub-section (2-A) of section 73, such condition cannot bind the investor, the condition being void. In our judgment, it is not open for the Company to urge with reference to the contents of the prospectus that it is permissible for the Company to travel beyond the stipulated period for refund of excess amount on the Stock Exchange being satisfied that refund cannot be made within the stipulated period. It is also not possible to accede to the submission that the liability to pay interest contemplated under sub-section (2-A) of section 73 of the Companies Act is suspended or wiped out when Stock Exchange is satisfied that refund of excess amount cannot be completed within the stipulated period. In our judgment, the Legislature, with a view to protect the interest of the investor, provided that the refund of excess amount should be made forthwith and granted a grace period of eight days, but on expiry of that period the liability to pay interest is absolute and is not subject to satisfaction of the Stock Exchange about the unforeseen circumstances. It is also not possible to spell out power of extension in favour of the Stock Exchange merely because the Stock Exchange have exercised such power in some instances and have approved the prospectus containing averments to that effect. 10. Shri Nariman also submitted that while examining the ambit of sub-section (2-A) of section 73 of the Companies Act, the fact that proviso to sub-section (2-A) was deleted should be borne in mind. The proviso prior to its omission read as follows:--- "Provided that the director shall not be liable if he proves that the default in the repayment of the money was not due to any misconduct or negligence on his part." The proviso was deleted by Companies (Amendment) Act. 1988 and at the same time provision of sub-section (2-A) were amended. Prior to the amendment, sub-section (2-A) provided that if excess amount is not repaid within 8 days from the day the Company becomes liable to pay, then the directors of the Company shall be jointly and severally liable to repay the money with interest. 1988 and at the same time provision of sub-section (2-A) were amended. Prior to the amendment, sub-section (2-A) provided that if excess amount is not repaid within 8 days from the day the Company becomes liable to pay, then the directors of the Company shall be jointly and severally liable to repay the money with interest. After amendment, sub-section (2-A) prescribes that the Company and every director of the Company, who is an officer in default, shall be liable. The meaning of the expression "officer in default" is set out in section 5 of the Companies Act. Shri Nariman submitted that the proviso to sub-section (2-A) prior to its election clearly indicates that the Legislature did not wish to impose liability on the directors unless the liability has accrued due to any misconduct or negligence on the part of the directors. It was urged that this is a tale-tell circumstance to indicate that though the Legislature used the expression "forthwith" in sub-section (2-A) of section 73, the liability to pay is not absolute but is subject to any unforeseen circumstances, and in case the repayment is not done forthwith, still liability to pay interest by directors would not arise if it is established that the failure to repay was not due to any misconduct of the directors. The submission is controverted by Shri Cooper and Shri Andhyarujina by pointing out that the proviso to sub-section (2-A) was embodied by the Legislature with a view to making the requirement of sub-section (2-A) very rigorous. The Legislature felt that it is not desirable that the Company should retain the excess amount beyond the stipulated period and after expiry of the grace days earn advantage and deprive the investor of the use of the money. The submission is correct and deserves acceptance. The deletion of the proviso is indicative of the fact that the Legislature desired that the investor should earn interest on the excess amount after the stipulated period and that right to earn interest for deprival of the amount has nothing to do with any circumstance in which the Company is placed. It is possible that there may be unforeseen circumstances for inability of the Company to refund the amount within the stipulated period, but the end result is that the amount was retained by the Company and the investor was deprived of the enjoyment of this amount. It is possible that there may be unforeseen circumstances for inability of the Company to refund the amount within the stipulated period, but the end result is that the amount was retained by the Company and the investor was deprived of the enjoyment of this amount. It is therefore obvious that the omission of the proviso to sub-section (2-A) is one of the circumstance to hold that sub-section (2-A) of section 73 is absolute in nature and does not permit any relaxation in respect of payment of interest. 11. Shri Nariman then submitted that in case it is held that provisions of sub-section (2-A) of section 73 are absolute in nature, then the provision is required to be struck down on the ground that it is penal in character. The learned Counsel urged that in case the Company is required to pay interest inspite of existence of unforeseen circumstances for not effecting repayment of the excess amount within stipulated period, then the provision is clearly penal. We are not impressed by the submission. Payment of interest is not penal but is merely compensatory in the facts and circumstances of the case. The Company is required to pay interest because the excess amount was retained beyond the stipulated period and the investor is deprived of the use of the said amount. To compensate the investor for the loss of the amount beyond the stipulated period the Company is directed to pay interest and that in our judgement, is clearly compensatory in nature and not penal. The penal provision for default in compliance with the provisions of sub-section (2-A) is set out in sub-section (2-B) of section 73. The Company and every officer of the Company in default is liable to punishment of fine which may extend to Rs. 5000/- in case the repayment is not made within six months, and an imprisonment for a term which may extend to one year if repayment is not made after six months. In our judgment, the enactment of sub-section (2-A) clearly establishes that the Legislature never contemplated payment of interest as penal and made specific provision for prosecution only in sub-section (2-B). Reference was made to Notes to Companies Amendment Bill, 1987 and especially to Clause 10 which refers to deletion of provision to sub-section (2-A), which makes the directors liable to repay the excess application moneys along with interest. Reference was made to Notes to Companies Amendment Bill, 1987 and especially to Clause 10 which refers to deletion of provision to sub-section (2-A), which makes the directors liable to repay the excess application moneys along with interest. The Note then recites ; "With a view to ensuring that, ordinary directors like nominees of Government or Financial Institution do not attract the penal provisions, it is further proposed that only the director, who is an "officer in default" should be liable for prosecution." Relying upon use of the expression "penal provisions" Shir Nariman submitted that the Legislature accepted that the provision for payment of interest is penal in character. We are not prepared to accede to the submission. The use of the expression "penal provisions" in the Note to the Amendment Bill cannot determine the nature or character of the liability. In our judgment the liability to pay interest is purely compensatory in nature and the Company cannot avoid the liability on any count whatsoever. 12. Finally, Shri Nariman submitted that even assuming that the liability under sub-section (2-A) of section 73 is absolute in character, the liability does not partake the character of penalty, and that the Stock Exchange or the Government had no authority to extend the stipulated period fro repayment of excess amount even in unforeseen circumstances, still the Court should permit the Company to refund the excess amount without payment of interest after the stipulated period by invoking the doctrine of impossibility of performance. The learned Counsel urged that in the facts and circumstances of the present case it was impossible for the Company to complete the process of refund of excess amount within the stipulated period of ten weeks. Reliance is placed on the two circumstances (i) that the postal authorities were not accepting refund certificates of more than 1 lakh per day, and (ii) various refund certificates were destroyed in the which broke out in the brake van of Paschhim Express. Shri Cooper and Shri. Andhyarujina resisted the contention by urging that the two circumstances are entirely made in by the Company with a view to retain the large amount which is required to be repaid and these two circumstances can never be imagined to be unforeseen circumstances. Shri Cooper and Shri. Andhyarujina resisted the contention by urging that the two circumstances are entirely made in by the Company with a view to retain the large amount which is required to be repaid and these two circumstances can never be imagined to be unforeseen circumstances. We need not examine the claim as to whether the two circumstances were unforeseen circumstances which prevented the Company from completing the process of refund of money. We will assume that the Company was prevented from completing the process of refund within the stipulated period and then examine as to whether doctrine of impossibility of performance can be invoked in the facts and circumstances of the case. Shri Nariman referred to the passage in Brooms Maxims to the following effect : "The law itself and the administration of it, said Sir W. Scott, with reference to an alleged infraction of the revenue laws, must yield to that to which everything must bend, to necessity; the law, in its most positive and peremptory injunctions, is understood to disclaim, as it does in its general aphorisms, all intention of compelling to impossibilities, and the administration of laws must adopt that general exception in the consideration of all particular cases..... It is, then, a general rule which admits of ample practical illustration, that impotentia excusat legem; where the law creates a duty or charge, and the party is disabled to preform it, without any default in him, and has no remedy over, that the law will in general excuse him; and though impossibility of performance is in general no excuse for not performing an obligation which a party has expressly undertaken by contract, yet when the obligation is one implied by law, impossibility of performance is a good excuse." Shri Nariman submitted that the Company was impossible to perform the obligation to refund the excess amount within the stipulated period and therefore, should be relieved of the liability to pay interest as prescribed under sub-section (2-A) of section 73 of the Companies Act. We are unable to find any merit in the submission. We are unable to find any merit in the submission. We are not sure whether the Company was prevented from performing the obligation for two excuses set up by the Company, but even assuming that these two reasons are sufficient to lead to the conclusion that the Company was unable to perform the obligation to refund the excess amount for reason beyond their control, still the doctrine of impossibility of performance is not attracted to the facts of the present case. In our judgment, the Court should invoke the doctrine only in cases where the absolute nature of obligation leads to the harshness or adversely affects the party who has to carry out obligation and further leads to injustice. On the facts of the present case we have no hesitation in concluding that the obligation to pay interest costs no hardship whatsoever to the Company, but permitting the Company to retain the excess amount beyond the stipulated period without payment of interest would certainly cause serious prejudice to the interest of the investor. Shri Nariman submitted that sub-section (3) of section 73 requires the Company to keep all the moneys received in pursuance of prospectus in a separate bank account and sub-section (3-A) does not permit utilisation of that money for any purpose other than adjustment against allotment of shares or repayment of moneys. The learned Counsel urged that as the Company had not earned any interest on the excess amount which was required to be repaid within the stipulated period, the obligation to pay interest caused hardship. The submission is not correct. It is not necessary for the Company to keep the amount locked up in the account in pursuances of provisions of sub-section (3) of section 73. The Reserve Bank of India had issued circular dated July 13, 1990 to all scheduled commercial Banks in regard to the application moneys for issued of shares, debentures etc. and utilisation thereof. The circular recites that earlier the Banks were advised that Company should not be permitted to utilise the subscription moneys for any purpose other than those specifically mentioned in section 73(3-A) of the Companies Act. The circular then recites that it is permissible for the Banks to invest on request of the Company the application moneys received in interest bearing short term deposits. The circular then recites that it is permissible for the Banks to invest on request of the Company the application moneys received in interest bearing short term deposits. The short-term deposits are to be allowed interest at the rates prescribed in the directives of the Reserve Bank on interest rates for the relevant periods. This circular makes it extremely clear that it is open for the Company to request the bankers to invest the amount received from the investor in interest bearing short term deposits and the Company will certainly earn interest. It is therefore futile to suggest that the amount which is required to be refunded to the investor lies locked up in the account and would not confer any benefit upon the Company. The Company would certainly enjoy the benefit of earning interest by keeping the amount in the interest bearing short term deposits. Shri Bhabha submitted that the amount of interest which the Company is required to pay to the investor is about Rs. 4 crores. The Company after securing a large amount from the investor cannot be permitted to enjoy that amount by investing in interest bearing short term deposits and then plead that the investor should be deprived of the right to earn interest conferred by sub-section (2-A) of section 73 of the Companies Act. In these circumstances we decline in exercise of our writ jurisdiction under Article 226 of the Constitution of India to invoke the doctrine of impossibility of performance. In our judgment, the petitioners are not entitled to any relief and the petition is nothing but an attempt to deprive the investor of the advantage of payment of interest in respect of repayment of excess money beyond the stipulated period. The Company by filing the present petition desires to enjoy the interest on a large amount which is really due to the investing public. We wish to record that though the petition raises several issues and several reliefs were asked for, Shri Nariman did not agitate any contentions save and except those referred to in the judgment. 13. Accordingly, petition fails and rule is discharged with costs. Shri Nariman orally applies for certificate under Article 134-A of the Constitution of India for filling appeal before the Supreme Court. Certificate refused. 13. Accordingly, petition fails and rule is discharged with costs. Shri Nariman orally applies for certificate under Article 134-A of the Constitution of India for filling appeal before the Supreme Court. Certificate refused. Shri Nariman requests that the Bombay Stock Exchange, respondent No. 3 should be directed not to adopt proceedings for delisting for a duration of six weeks and respondent No. 1, Union of India should be directed not to lodge prosecution under sub-section (2-B) of section 73 of the Companies Act for a duration of six weeks to enable the Company to approach Supreme Court. The request is reasonable and we grant the said request, but on condition that in no circumstances further extension will be granted. Rule discharged. -----