JUDGMENT : R. Balia, J. The company has preferred cross objection against finding recorded by the learned single Judge that allotment of shares to NOCII. and Shushrupad Investment Ltd. out of rights issue of 1987 was contrary to and in breach of the prohibitory order of injunction issued by the City Civil Court, Ahmedabad, in Suit Nos. 3181/87 and 3182/87 and NOCII, and Shushrupad could not have legitimately participated in respect of those shares in the meeting of the shareholders in pursuance of the directions issued by this court on an application having been made under section 391(1) of the Companies Act though the court ultimately found that even after excluding participation in respect of such unauthorisedly issued shares, the proposed scheme of amalgamation had got approval of requisite majority under section 391(2). 2. Controversy had arisen in the wake of objection raised by the objector appellant that the company had proposed to increase its subscribed capital in the year 1987. The proposed increase was governed under section 81(1) of the Act, that is to say, it was the rights issue which was required to he offered to persons who on the date of offer were shareholders of the company and offer was made in proportion as nearly as circumstances admit to the capital built up of those shares on that date. Two civil suit were filed in the City Civil Court at Ahmedabad, which were numbered as 3181 of 1987 and 3182 of 1987, by two different shareholders. Before allotment had taken place, the City Civil Court had issued injunction on 4.9.1987 in the following terms : "The defendants are permitted to allot shares to the applicants in the rights issue subject to clear stipulation operating that allotment of shares would be subject to result of this litigation. They are also directed not to allot shares from the un-subscribed portion thereof to anyone except banks and/or public financial institutions without previous permission from this court." 3. In view of the operation of the aforesaid order and keeping in view the provision of section 81 of the Act, it had been contended by the objector that the NOCIL was not a shareholder of the W. on the relevant date and, therefore, was not entitled to make any offer of rights issue. Another company Shushrupad was holder of only 563 shares of M11. Another company Shushrupad was holder of only 563 shares of M11. and was entitled to allotment of only 563 additional shares pursuant to the rights issue and not anything more than that. In the wake of this position, it was contended that allotment of any share to N(X1L and allotment of shares exceeding 563 shares to Shushrupad were contrary to the injunction order operating against the company and, therefore, illegal and, on the strength of such allotment or to the extent of such illegal allotment, the two companies could not have participated in the meeting. 4. It was the case of the company that NOCIL had applied for allotment of 1,50,000 shares on 2.7.1987 for participating in MIL.'s equity shares and Shushrupad had already been shareholder, was eligible to apply for additional shares than to which it was entitled. Both were subscribers to the equity issue of 1987 and there was no violation of order of the court. It was also contended that even if the allotment has been made in violation of the injunction order of the court by the company, it does not affect the validity of allotment and therefore such allottee's cannot be excluded from participation in meeting of the shareholders, though punishment for disobedience of injunction order may be imposed on the company or its officers responsible for breach. Lastly, it was contended that even if such shares are held to be illegally allotted to the above-referred two companies to the extent stated, and they are excluded from the shareholding, the scheme had been approved by the requisite majority. 5. The learned single Judge did not accept the first two contentions. It was held that the defence of the company that the shares allotted to NOCIL and Shushrupad are from the subscribed portion of the share capital or at any rate (within the) power which the Board of directors had under section 81(1)(d) to dispose off additional shares would cover shares other than un-subscribed shares is not acceptable. It was also found that the petitioner company which was injuncted by the prohibitory order of the City Civil Court is estopped from contending that even if it has committed breach of order of the court the only remedy is to initiate action of civil contempt and allottee's of shares can legitimately participate in the meeting of shareholders. It was also found that the petitioner company which was injuncted by the prohibitory order of the City Civil Court is estopped from contending that even if it has committed breach of order of the court the only remedy is to initiate action of civil contempt and allottee's of shares can legitimately participate in the meeting of shareholders. The party which is injuncted by the order of injunction cannot be permitted to contend that it having violated injunction, nothing further could be done or no relief can be granted by the court. Such stand from the corporate body shall have to be deprecated with a view to acknowledge reverence and regards for order of the court and for discouraging attitude of no respect for the orders of the court. These findings are challenged lest they may bind the company in pending application for contempt before the City Civil Court for violation of breach of the order. 6. In the first instance, it was contended that the learned Company Judge, even by assuming allotment of concerned shares to be in breach of the injunction order and (allottee's) could not have legitimately participated in the meeting, could have reached the conclusion that the result is not affected. In these circumstances, the court ought not to have decided the contentious issue. Reliance was placed on number of decisions. 7. We are not impressed with this objection. It is common ground between the parties (that) when the proceedings under sections 391 and 394 of the Companies Act, 1956, are governed by the provisions of Civil Procedure Code in terms of rule 6 of the Companies (Court) Rules, 1959. Rule 6 is clear in that regard that except as otherwise provided by the Act, or rules of 1959, procedure of the court and provisions of the Civil Procedure Code so far as applicable shall apply to all the proceedings under the Act and under the Companies (Court) Rules. Order 14, rule 2, of the Code of Civil Procedure requires the court to pronounce the judgment on all issues. Order 20 rule 4 requires that judgments of all courts except Small Causes Court to contain a concise statement of the case, the points for determination, the decision thereon, and the reasons for such decision. Order 14, rule 2, of the Code of Civil Procedure requires the court to pronounce the judgment on all issues. Order 20 rule 4 requires that judgments of all courts except Small Causes Court to contain a concise statement of the case, the points for determination, the decision thereon, and the reasons for such decision. Principle on which these provisions have been formed is that in appealable cases, the court should, as far as possible, decide all the issues jointly because piecemeal trial or leaving of decision on certain issues on such assumed premises will lead to protracted litigation and multiple appeals in the same proceedings, if ultimate conclusion on assumed fact situation on which the parties are at issue which (?) is not found acceptable to the appellate court. 8. This principle is more applicable when end result is not dependent merely on assumed state of affairs of particular facts but conjointly on decision of facts that may be assumed as well as other ancillary issues which have direct bearing on the conclusions reached as we will see in the case in hand. It is founded on sound policy for avoiding remand if the appellate court reverses the decision of the lower court on preliminary issue founded on assumed facts. 9. In the present case, it was objection of the objector that proper classification of the shareholders from holding separate meeting to the class of shareholders as required under section 391(1) has not been made, which has affected validity of approval of the scheme by requisite majority. The case of the petitioner has been that apart from the holding proper class meeting, certain shareholders have been allowed to participate in respect of shares which could not have been legitimately issued. Both the issues have direct bearing on the ultimate question whether the scheme has been approved by the statutorily required majority. It has also been the case of the petitioner that, while conceding the end conclusion reached by the learned Company Judge about the present controversy that after finding on the first issue, namely, about proper classification and proper class meeting did not find favour with the court, the approval by requisite majority would he vitally affected by exclusion of shares allotted to Nocil and Shushrupad in 1987 in breach of court's injunction order. Therefore, ultimate decision about effect of issue of shares in contravention of court's order is not dependent merely on the assumed state of affairs about issuance of such shares but also on the finding about proper class meetings. If finding about proper classification is reversed, finding on first two issues inherent in the present objection with which we are concerned in this cross objection becomes very much relevant. Therefore, it cannot be said that the finding on first two issues was wholly unnecessary. 10. In this connection, we may notice the judgment of the Supreme Court in the case of S.S. Klzannna v. F.I. Dillon, reported in AIR 1964 SC 497 . The court observed that normally, all the issues in a suit should be tried by the court. Not to do so, especially when the decision on issue even of law depends upon issues of fact, would result in a lop-sided trial of the suit. 11. In the case of Basheshar Natlz v. Commissioner of Income Tax, reported in AIR 1959 SC 149 , question raised before the Supreme Court was whether breach of the fundamental right guaranteed under Article 14 can be waived. The court as court of final resort did not deem it proper to go into the question whether breach of every fundamental right under Part III can be waived which was a question of general nature. The Court said : "12. The fundamental right, the breach whereof is complained of by the assessee, is founded on Article 14 of the Constitution. The problem, therefore, before us is whether a breach of the fundamental right flowing from Article 14 can be waived. For disposing of this appeal, it is not necessary for us to consider whether any of the other fundamental rights enshrined in Part III to the Constitution can or cannot be waived. We take the view that this court should not make any pronouncement on any question which is not strictly necessary for the disposal of the particular case before it. We, therefore, confine out attention to Article 14 and proceed to discuss the question on that footing." 12. It is obvious (that) this was a case in which the court declined to decide an issue of general nature, when only question before it was of limited nature. The court merely declined to pronounce upon the issue not before it. We, therefore, confine out attention to Article 14 and proceed to discuss the question on that footing." 12. It is obvious (that) this was a case in which the court declined to decide an issue of general nature, when only question before it was of limited nature. The court merely declined to pronounce upon the issue not before it. It was not a case in which the specific issue was before the court and it declined to decide it. 13. In K.L. Sheplzard v. Union of India reported in (1989) 1 Comp LJ 167 (SC) : AIR 1988 SC 686 , vires of section 45 of the Banking Regulation Act were challenged in one of the petitions. The court observed that "Since the grounds of attack on this score did not impress us at all, we do not propose to refer to that aspect of the submissions involving interpretation of Article 31A, Article 16 and Article 21." Thus, after rejecting plea on merit, which was not even found worth consideration, the court said that the court should not enter into constitutional issue and attempt interpretation of its provisions unless it is really necessary for disposal of the dispute. 14. This case, in our opinion, cannot be read as laying down abstract proposition of amplitude contended by Mr. Vakil. 15. In the case of Dibya Singh Malaria v. State of Orissa reported in AIR 1989 SC 1737 , the court was considering meaning to be assigned to the term 'family' in Orissa Land Reform Act, 1960. It has been contended before the court that, according to the definition of term 'family', land of a married daughter is liable to be attached twice, firstly, with that of her father and, secondly, with that of her husband. The court declined to go into that question, because none of the appellants before the court in appeal was a married daughter who would be said to be affected party on that count. Here we are not concerned with the question which does not affect the parties before the court. 16. Likewise, in the case of Dhartipakar Madanlal Agaruwal v. Rajiv Gandhi reported in AIR 1987 SC 1577 , the court was dealing with an appeal arising from an election petition wider the Representation of the Peoples Act. Here we are not concerned with the question which does not affect the parties before the court. 16. Likewise, in the case of Dhartipakar Madanlal Agaruwal v. Rajiv Gandhi reported in AIR 1987 SC 1577 , the court was dealing with an appeal arising from an election petition wider the Representation of the Peoples Act. The question about the validity of election concerned had become redundant because since the filing of it, fresh Lok Sabha elections had taken place. Yet petition had to be decided because of allegation of corrupt practice if found would result in disqualification of candidate to contest election in future. The court said a few words of advice to Parliament to look into the need to make suitable amendments so that the court may be absolved from allotting valuable time in inquiring into stale claim. This case also did not provide any parallel to the present one. In this case, issue has been raised which directly arose from pleading of the parties and is very much relevant for controversy to be decided. In fact, the company invited decision on the question by joining issues. It at no point of time required the learned single Judge not to go into question and proceed on the assumption of correctness of facts on the basis of which objection was raised before the learned single Judge. Having invited a decision by raising issues which are germane for the controversy, the party cannot claim as a matter of right that such issues may not be decided if the same are going to be decided against it so as to bind it. The fact that the court ultimately found that in spite of decision on the question of fact against the company it did, not affect the result of meeting because of combined effect of decision on other issues, namely, proper classification of members for separate meeting, which went in favour of the company. Therefore, merely because ultimate result went in favour of the company holding that the Company Judge ought not to have decided the issues in question at all, and in doing so, he has erred. It cannot result in setting aside the findings on issues which otherwise arose out of the pleadings and on which decision was invited by both the parties before the learned single Judge by now treating them to be of academic importance only. 17. It cannot result in setting aside the findings on issues which otherwise arose out of the pleadings and on which decision was invited by both the parties before the learned single Judge by now treating them to be of academic importance only. 17. Further, we may observe that in this regard, no strait-jacket rule can be laid down that in which case the court will decide or will not decide on a particular issue. It depends upon the totality of the circumstances bearing on entire controversy and also the fact whether jurisdiction exercised is discretionary one or obligatory one and whether orders are appealable. It is for the court to proceed in a manner as it deems fit in deciding issues raised before it. It may proceed to examine issues raised before it in seriatim and record its decision one after another. It may decide to reach its conclusion in advance and, if circumstances may warrant, leave deciding those issues which it may consider to have become academic due to its decision on other issues. It may proceed to decide all issue irrespective of its decision on other issues. In doing so, it commits no irregularity or illegality so as to warrant interference on that ground alone in appeal. Ultimately, it rests within discretion of the court. Be that as it may, in the facts and circumstance of the case, we are satisfied that the learned single Judge was fully justified and not in error in deciding two questions on which decision was invited by the parties. 18. Another contention raised before us was that in the facts and circumstances of the case and keeping in view the provisions of the Companies Act, the court had no jurisdiction to decide the questions in these proceedings whether NOCIL and Shushrupad could participate in meeting. It was contended that under section 87 of the Companies Act, every member of the company limited by shares and holding share capital shall have right to vote in respect of such capital on every resolution placed before the company. Reference was made to section 41 of the Companies Act which says that every person who agrees in writing to become member of the company and whose name is entered into the register of members shall be a member of the company. Reference was made to section 41 of the Companies Act which says that every person who agrees in writing to become member of the company and whose name is entered into the register of members shall be a member of the company. Section 111(4) of the Act provides a mode for challenging the entries in the register of members by way of appeal before the Company Law Board. One may apply before the Company Law Board for necessary rectification in the register of members. Thus, according to the learned counsel, the only remedy for restraining a person whose name has been entered in register of members for participating in meeting is by way of application before the Company Law Board. The objector having not resorted to that remedy against illegal allotment of shares to NOCIL and Shushrupad seeking rectification of register of members is not precluded from raising this objection before this court and this court in view of section 111(4) had no jurisdiction to go into that question. 19. This argument is fallacious. Obviously, section 41 refers to persons who can be treated as members under the Companies Act. Sub-section (1) refers to subscribers of memorandum of the company deemed to have agreed to become member of the company. Sub-section (2) refers to persons other than subscribers to the memorandum of the company who have agreed in writing to become member of the company and whose name's are in the register of members. Obviously, this provision means who can become members under the provisions of the Companies Act. Section 111 deals with appeals against the order of company refusing to register transfer of shares and also entry made in the register of members without sufficient cause. We are here not concerned with that nor objection that NOCIL and Shushrupad are entered in the register of members contrary to any provision of the Companies Act. The fundamental question raised before the learned single Judge was that when the company was under restraint order of not to allot shares to anyone except applicants to rights issue without permission of the court except to banks and public financial institutions, whether company acted contrary to (the) restraint order ? The fundamental question raised before the learned single Judge was that when the company was under restraint order of not to allot shares to anyone except applicants to rights issue without permission of the court except to banks and public financial institutions, whether company acted contrary to (the) restraint order ? If so, what is its effect on the issue before us, that too in the context of finding out whether holder of such shares could by their approval of the scheme, fulfil the requisite statutory majority ? In the context of court's jurisdiction to find out whether the proposed scheme of compromise or arrangement proceeds in compliance with statutory requirement and whether it offers fair deal to all concerned on the thinking platitude of ordinary men of business, the court has jurisdiction to try all ancillary questions necessary for reaching conclusion on main issue. In the context of application under sections 391/394 of the Act, the question whether any shares that have been issued contrary to the court's order can be taken into account for constituting statutory majority squarely arise as ancillary issue to be decided by Company Court. If the court were to hold that shares were allotted contrary to restraint order and cannot bring into the desired legal effect of such allotment made in breach of court's order, then rectification in the register of members would be consequence of court's order. It would not be a result of finding about sufficiency of reasons for entering name of such person in the register of members. The company who had issued shares is under obligation to enter name and it cannot by itself raise issue about sufficiency of reasons for entering their names in the register of members. In fact, allotment of shares itself requires the name of allottee's to be entered as members. Question about illegality of allotment of shares cannot be equated with sufficiency of reason for entering any persons' name in the register of members of such allottee in its register of members. In fact, allotment of shares itself requires the name of allottee's to be entered as members. Question about illegality of allotment of shares cannot be equated with sufficiency of reason for entering any persons' name in the register of members of such allottee in its register of members. In no case, in our opinion, issue about allotment of shares in breach of court's order by interpreting order of the court, relevant statute and effect of such disobedience can fall in the exclusive jurisdiction of Company Law Board so as to oust the jurisdiction of the civil court or the Company Law Board to decide upon question whether allotment of shares in breach of its restraint order which is operating against company should bear result. It cannot be said that civil court has no jurisdiction to pronounce upon question of breach of restraint order and consequence thereof. When civil court pronounces against the company, the rectification in the members register is consequential effect of the order of civil court and cannot depend upon order by Company Law Board. To accept the contention of Mr. Vakil will be to accept that Company Law Board will have jurisdiction to sit over the judgment of civil court to decide whether register of members be amended or not. This will be against all established canon(s) of supremacy of judicial decisions. We, therefore, overrule this objection as well. 20. As an ancillary of this plea, it was also argued that objector having not resorted to remedy wider section 111(4) of the Act, any time prior to raising this objection before this court in the proceedings under sections 391 and 394 is now estopped from raising question about legality of allotment made to NOCII. and Shushrupad in 1987. We do not find any merit in this objection either. It is the admitted case that the suit was filed by the objector in which injunction was made against the company. The party who had obtained order of temporary injunction against the company had already moved an application for disobedience which we are informed has not vet been decided. The petitioner while raising objection against sanctioning of the scheme by this court has raised objection that the scheme has not been approved by required majority. The party who had obtained order of temporary injunction against the company had already moved an application for disobedience which we are informed has not vet been decided. The petitioner while raising objection against sanctioning of the scheme by this court has raised objection that the scheme has not been approved by required majority. In support of this plea, he raised number of grounds which include that equity shares in question having been issued contrary to the orders of the court cannot have legal effect for the purpose of participating in the proceedings and for counting requisite majority because of illegality attached to it. We are not able to appreciate how the petitioner is estopped from raising this issue if the shares have been allotted in defiance of the order and if such allotment cannot have legal consequence. It is a matter of law, orders of court not of company in defiance and legal effect ensuing ; no part of conduct of the appellant is involved to give rise to plea of estoppel. A person may be estopped from raising any plea or for claiming right if by his conduct he can be said to be a person who has acquiesced in or allowed certain state of affairs to come in existence and later on takes a plea to avoid legal con-sequences thereof. 21. So also plea that only a person who is party to the proceedings can challenge the action taken in defiance of temporary injunction and a third party had no right to press such plea does not commend us. If question is about his obligation for initiating prosecution for contempt for disobedience of court's order or it is question about execution or enforcement of order of a court, it can very well be said that only person who is party to proceedings can resort to such remedy. Here, we are not concerned with question of enforcement or compliance of injunction order. 22. The fact that the appellant had not raised the question about legality of allotment of NOCIL and Shushrupad out of 1987 rights issue, cannot be held against him. He was not a party to suit in which injunction was issued. He is not seeking to enforce the order. His basic objection is that (the) scheme proposed under section 391 and 394 of the Act does not have requisite approval. He was not a party to suit in which injunction was issued. He is not seeking to enforce the order. His basic objection is that (the) scheme proposed under section 391 and 394 of the Act does not have requisite approval. In support of his contention, he points out that allotment of shares in question having been made in breach of restraint order did not have any legal effect and, therefore, for finding out whether the scheme has approval of statutory majority, such illegally issued shares ought to be kept out of consideration. Occasion to raise and examine this issue had arisen only now and examination of issues which are relevant to determine whether proposed compromise or arrangement fulfils statutory requirement it is necessary to find out what is the voting strength in value to find out the required percentage majority. Right to raise such objection must be distinguished from merit of the contention. 23. For contending that in petition under section 391, the court has no general power to interfere with past and concluded transactions, reliance was also placed on certain observations made by this court in Slieth Mohanlal Ganpatrant and another v. Shri Sayaji Jubilee Cotton and Jute Mills Co. Ltd and others (1964) 1 Comp LJ 326 (Guj) : (1964) 5 GLR 804. That was a case of a petition under sections 397 and 398 of Companies Act, for seeking relief against oppression and mismanagement. Relief was claimed that sale of movable and immovable properties, which were alleged to he acts of oppression, be set aside and directors of companies be removed and new Board may be appointed. 24. The court came to conclusion that sections 397 and 398 deal with powers of court for prevention of oppression and mismanagement in the affairs of company and remedy given by these sections is, therefore, of preventive nature intended to prevent occurrence or continuance of oppression or mismanagement in the affairs of the company and is not intended to set at naught what has already been done by controlling shareholders in the course of such oppression or mismanagement which is past and concluded and no longer a continuing wrong. 25. Obviously, the decision was rendered with reference to scope and ambit of enquiry in an application under sections 397 and 398 which is quite different from scope of enquiry under sections 391 and 394. 25. Obviously, the decision was rendered with reference to scope and ambit of enquiry in an application under sections 397 and 398 which is quite different from scope of enquiry under sections 391 and 394. The case, therefore, offers little assistance in the present controversy as to whether court can enquire into question which are incidental to find out whether the majority in meeting, approving the scheme, answers to requirement of requisite statutory majority. 26. We shall, therefore, examine contentions on merit. 27. In respect of the contention that there is no allotment of shares to NOCii. and Shushrupad contrary to restraint order, same arguments were advanced as were raised before the learned single Judge. Injunction, as reproduced herein above, so far as it related to restraint part, was not to allot shares from the unsubscrihed portion of rights issue to anyone except banks and/or public financial institutions without previous permission from the court. Permissible sphere of allotment was applicants in the rights issue could be allotted shares subject to clear stipulation that allotment of such share would be subject to result of litigation. Question that calls for consideration is what is meant by the term 'under-subscribed portion of rights issue'. 28. It had been contended that rights issue had been under-subscribed. Subscription thereto is to the extent of 70'%r of size thereof. As temporary injunction was granted keeping in view aforesaid fact under-subscription of rights issue to which restrain order was operating should be confined to 30% of the total rights issue. On behalf of the company, it was argued that allotment to NOCII. and Shushrupad is within 70` of the total issue. Therefore, allotment to Nocil. and Shushrupad out of subscribed issue. Threfore, there is no contravention of the order. Alternatively, it was urged that the subscription is stage after application for allotment is invited but before allotment is made. Therefore, any application made for allotment of shares out of an issue must constitute as subscribed and to the extent, no application has been made for allotment of shares, only that part of issue should be considered as un-subscribed issue. It was urged that there is no time limit within which or before which application can be made. Subscription is an act of prospective buyer of shares and not an act of the company. It was urged that there is no time limit within which or before which application can be made. Subscription is an act of prospective buyer of shares and not an act of the company. There is no restriction on any person to make application for allotment of shares even of rights issue though he may not be a member. Application for allotment of additional shares beyond offer of right shares can be made by any member or renounce. Such application can be made at any time, though allotment against such application can take place only after applicants of rights issues, namely, those applications of the members who had opted to apply for rights shares either themselves or have opted to renounce the same in favour of somebody else, who may or may not be member, are satisfied. Application for allotment of additional shares by a member other than in respect of renouncement made in his favour by another member or application of any person than a member can only be considered after applications for rights issue are satisfied. Nonetheless, as soon as application has been made for allotment of shares by any one member or renounces, or otherwise, has to be considered as subscription to issue by applicant. It is only to the extent no application has been received by the company for allotment from any quarters can be considered as un-subscribed portion of the issue. Reference was made to section 69 which provides that no allotment shall be made of any share capital of a company either to the public for subscription unless the amount as stated in the prospectus as minimum amount which, in the opinion of the Board, must be raised by such issue in order to provide for matters specified in clause (5) of Schedule 11 has been subscribed, the amount stated in the prospectus for the aforesaid purposes is termed minimum subscription. From the aforesaid, it is urged that the subscription means application for allotment of shares. 29. We may at the outset state that the term 'subscription' or 'subscribed capital' or un-subscribed capital' has different meaning(s) depending upon the context in which (the) term has been used. While referring to capital structure of the company to be stated in the prospectus inviting application for share allotment, terms used are authorised, issued, subscribed and paid up capital. 29. We may at the outset state that the term 'subscription' or 'subscribed capital' or un-subscribed capital' has different meaning(s) depending upon the context in which (the) term has been used. While referring to capital structure of the company to be stated in the prospectus inviting application for share allotment, terms used are authorised, issued, subscribed and paid up capital. Here, authorised share capital means number and par value of each class of shares that the company may issue in accordance with its instrument of incorporation. This is also described as nominal 'share capital'. 'Issued share capital' means that portion of issued share capital which had actually been offered for subscription. 'Subscribed share capital' means that portion of issued share capital which has actually been subscribed and allotted. This also includes fixed shares allotted to corporate enterprises and paid up share capital means that part of subscribed/ issued capital for which consideration in cash or otherwise has been received. This also includes bonus shares allotted to corporate enterprises. Therefore, term 'subscription' used in the financial statement of the company is not relatable merely (to) shares for which application has been made but refers to shares for which applications have been made and actually allotted. It is to be seen that (in) section 81 of the Act the term(s) used are . . . 'Where ..... it is proposed to increase subscribed capital the company by allotment of further shares, . (emphasis supplied by the court)'. Here also, subscribed capital refers to allotted shares and not to the applied shares. It provides that capital shall he increased by further allotment of shares in the manner prescribed under section 81. Term subscription' in section 41 has reference to subscription of name to the memorandum of the company. This has reference to agreement of person to give one's name in the memorandum of the company manifesting his agreement to associate with others to incorporate the company. Here also the word 'subscription' is not referred to applicants for share capital in the company. The dictionary meaning which can he aptly described to such statements use of word subscription in the financial statement (sic) as given in the Oxford English Dictionary, means 'Contribution to Fund'. Here also the word 'subscription' is not referred to applicants for share capital in the company. The dictionary meaning which can he aptly described to such statements use of word subscription in the financial statement (sic) as given in the Oxford English Dictionary, means 'Contribution to Fund'. Term 'subscription' to memorandum can be relatable to dictionary meaning 'to read one's name on a document either as a witness or to sign one's name to signify assent or adhesion to by signing one's name'. Another meaning which has been given to 'subscribe' is to give one's assent to a proposal (emphasis supplied by the court)2 or to express one's agreement, concurrence or acquiescence. In the present context of right issue, the dictionary meaning which can be attributed is 'to give assent to a proposal', viz., acceptance of offer of right issue and not to offer to pay sum of money for shares if allotted. In the context of public issue it may mean to promise over one's signature to pay a sum of money for shares in that undertaking. 30. Therefore, one has to look to the context in which meaning of subscribed or un-subscribed portion of an issue is to be ascertained. Here we are concerned with the case where the company, whose Board of directors have decided to increase subscribed capital by allotting new shares. The company had not decided to act under section 81(IA) of the Act for allotment of shares by inviting public to offer, but had decided to act in terms of sub-section (1) of section 81. Section 81(1) reads as under : "81. The company had not decided to act under section 81(IA) of the Act for allotment of shares by inviting public to offer, but had decided to act in terms of sub-section (1) of section 81. Section 81(1) reads as under : "81. Further issue of capital.-(1) Where at any time after the expiry of two years from the formation of a company or at any time after the expiry of one year from the allotment of shares in that company made for the first time after its formation, whichever is earlier, it is proposed to increase the subscribed capital of the company by allotment of further shares, then (a) such further shares shall be offered to the persons who at the date of the offer are holders of the equity shares of the company, in proportion, as nearly as circumstances admit, to the capital paid up on those shares at that date ; (b) the offer aforesaid shall be made by notice specifying the number of shares offered and limiting a time not being less than fifteen days from the date of offer, within which the offer, if not accepted, will he deemed to have been declined ; (c) unless the articles of the company otherwise provide, the offer aforesaid shall be deemed to include a right exercisable by the person concerned to renounce the shares offered to him or any of them in favour of any other person ; and the notice referred to in clause (b) shall contain a statement of this right ; (d) after the expiry of the time specified in the notice aforesaid, or on receipt of earlier intimation from the person to whom such notice is given that he declines to accept the shares offered, the Board of directors may dispose of them in such manner as they think most beneficial to the company." 31. The scheme of the provisions is very clear that such new shares can be offered only to the persons who on the date of such offer are holders of equity shares of the company. Offer is to be made in proportion to capital paid up on those shares as on the date of offer. This clearly goes to show that in the first instance, the entire issue is to be offered by the company to the existing shareholders in proportion to which they held shares. Offer is to be made in proportion to capital paid up on those shares as on the date of offer. This clearly goes to show that in the first instance, the entire issue is to be offered by the company to the existing shareholders in proportion to which they held shares. No one is entitled to claim anything more than what has been offered as proportionate share of capital issued to such shareholders. Sub-clause (c) further provides that in absence of anything contrary in articles of the company, offer to member includes a right exercisable by such shareholder to renounce shares offered to him or any part of it in favour of any other person. Provision also emphasised that offer is to be made by notice specifying number of shares offered disclosing limit of time within which such offer is to be accepted ; failure to exercise that option to accept that offer within that limit amounts to declining of offer made to the shareholders. It is only after expiry of time specified in the notice aforesaid or on receipt of earlier intimation from such shareholder to whom notice is given that it declines to accept share offered, that the Board of directors may dispose off such shares by which subscribed capital was proposed to be increased in such a manner as it thinks most beneficial to the company. From the aforesaid, it is clear that in case of rights issue, no public offer is made inviting application. Therefore, stage for expressing agreement to subscribe to share capital by persons other than existing shareholders does not reach before expiry of time for exercise of option to accept offer for allotment of share or to renounce such offer of allotment either in full or in part in favour of a third party or refusal to accept offer of allotment. One important difference between rights issue and public issue is that rights issue is definite offer by the company to allot shares on acceptance of it conveyed to the company by the existing shareholders or renounces, whereas a public issue is an invitation to subscribe to the issue whether initial or additional. A public issue is not offer for allotment to anyone whereas rights issue is primarily offer for allotment by the company of additional shares to existing members. A public issue is not offer for allotment to anyone whereas rights issue is primarily offer for allotment by the company of additional shares to existing members. Therefore, offering of such shares for subscription can arise only after a stage is reached when it can be said that shares are available for making subscription for allotment by third party. In case of rights issue, on offer of allotment being given to shareholder by way of notice, acceptance on the part of shareholders results in concluded contract creating right in favour of the shareholder claiming allotment. In case of others, issue is only to make offer for seeking allotment and no right vests in anyone to claim any allotment, in the context of section 81(1). Subscription to shares can only be made in pursuance of an invitation to intending subscriber when shares are available for such subscription. Any application made prior to that stage cannot be considered as subscription to the rights issue. Reference to section 69 in this connection in our opinion was inept inasmuch as it deals with offer to public for subscription. Meaning while learned advocate for company want to assign to words 'subscribed and non-subscribed' generally would be applicable to application received in response to offer to public for subscription. When there is no offer to the public for subscription, question of subscribed and non-subscribed portion of issue cannot have reference to application in general. Expression 'applicants to right issue' can have reference only to existing members or their renounces, who alone could be applicants to rights issue offered by company for allotment. Share falling outside that will amount to un-subscribed portion of rights issue, which could be dealt with by the Board under clause (d) of sub-section (1) of section 81. This is further apparent that with reference to powers of the Board, the court left it free to allot shares to banks and other public financial institutions, but restrained it to allot such shares to any one else except with the permission of the court. In the context of section 81(1), non-subscribed portion of rights issue can have no meaning other than the portion of additional issue for allotment meant for increase in the subscribed capital except the one which has been refused or deemed to have been refused by the existing shareholders. In the context of section 81(1), non-subscribed portion of rights issue can have no meaning other than the portion of additional issue for allotment meant for increase in the subscribed capital except the one which has been refused or deemed to have been refused by the existing shareholders. Therefore, subscribed portion of right issue in the context of rights issue cannot have reference to application for additional allotment by existing shareholders. We, therefore, are in agreement with the learned Company Judge on the question of interpretation of section 81. 32. We are mindful of the fact that here we are concerned with ambit and scope of restraint order passed against the company referred to above and the question is not solely of the interpretation of section 81. Words 'non-subscribed portion of rights issue' are not expression used in section 81. The meaning of the 'restraint order' will have to be gathered in the context in which the court has made the order and the attending circumstances to which our attention was invited qua statement of about under-subscribed of rights issue (statement of under-script-ion of rights issue ?) and subscription upto 701h of rights issue. It was also urged that because of this statement, restraint order was made confining allotment to the applicants and restraining allotment in respect of reminder (remainder?). In the first blush, argument appears to be attractive. But a close scrutiny of the order does not sustain it. The order speaks about permission to allot shares to the applicants to the right issue and not merely to the applicants or subscribers in general sense and restraint order was in respect of allotment of shares to the un-subscribed portion of rights issue. Restraint was also not an absolute one. But the Board was free to allot non-subscribed portion to banks and public financial institutions absolutely. Restraint order related to exercise of power by the Board in the matter of allotment of shares while the court protected rights of those who acquired right to allotment of shares by accepting offer of allotment but restrained the discretion of Board to allot shares which it could allot to any person other than banks and public financial institutions. Therefore, in the scheme of interim order, there is no room for reading that the court permitted allotment to those who were not entitled to allotment as matter of right in right issue. Therefore, in the scheme of interim order, there is no room for reading that the court permitted allotment to those who were not entitled to allotment as matter of right in right issue. Applications to rights issue can only be made by existing shareholders and that too only to the extent of shares offered to them. Those applicants can be existing shareholders or persons in whose favour existing shareholders renounced offers made to them or to make application for additional allotment of shares which can be available for allotment by the Board if other persons to whom such offer has been made have declined to accept offer cannot be considered as subscription to rights issue. It can only be subscription to remainder of rights issue which has not been accepted. Reference to 'un-subscribed' was apparently only for the purpose of finding out whether any part of rights issue available to be allotted at the discretion of the Board and it was that discretion which was restricted by issue of injunction. As has been noticed above, restraint was not to allot shares of non-subscribed portion of rights issue except to banks and public financial institutions without permission of the court. NOCIL was not an existing shareholder. It could not have been applicant to the un-subscribed portion of the rights issue. Therefore, it could not have been considered to be a person to the un-subscribed portion of the rights issue. Therefore, it could not have been considered to be a person to whom the court permitted allotment. So also Shushrupad to the extent it made offer for additional shares it was in no better position than that of NOCII. May be that for the purpose of facilitating the Board in exercising its discretion for making allotment out of expected unaccepted offers of rights issue the shareholders have been given opportunity to make simultaneous application for allotment of additional shares, it cannot be considered as part of subscription to right issue. We are, therefore, also in agreement with the learned single judge that allotment of shares made to Nocil who was not holder of equity share of the company and to Shushrupad of additional shares applied for, without seeking permission of the court, was in contravention of the temporary injunction operating against the company. 33. We are, therefore, also in agreement with the learned single judge that allotment of shares made to Nocil who was not holder of equity share of the company and to Shushrupad of additional shares applied for, without seeking permission of the court, was in contravention of the temporary injunction operating against the company. 33. It was strenuously urged that notwithstanding that shares were allotted to NOCIL and Shushrupad in breach of restrain order, validity of transaction remains unaffected in all circumstances and the only consequence of breach of temporary injunction is that the offender can be punished for contempt of court and that penalty can be visited only at the instance of the party to the suit or proceedings in which injunction has been issued. It was urged that it has been the consistent view of the courts in India that breach of temporary injunction does not render transaction void and that being the settled position, the court should not deviate from that view. For the proposition that transaction in breach of restraint order is not void and its legality cannot be affected. 34. Having carefully considered rival contentions and question at hand, we are of the opinion that it is not possible to accept in absolute that in no case validity of a transaction carried in breach of temporary injunction is affected. It must depend upon the tenor of the interim order, the subject matter affected by such interim order, the actual action taken or done, time at which action is alleged to have taken in breach of injunction order, and may be in some case, the ultimate decision about rights of the party. What is urged before us is that temporary injunction which is relief in equity is a remedy in personam and only person is affected by restraint order but rights of the parties, in the subject matter of injunction, are not affected and, therefore, any transaction carried on by them, which can be related to their right in the subject matter also cannot be affected. Since the restraint order acts against person, remedy also is only against person by way of proceedings in contempt and not against subject, then subject of injunction order may be property. Since the restraint order acts against person, remedy also is only against person by way of proceedings in contempt and not against subject, then subject of injunction order may be property. It was also urged that by a catena of decisions, courts in India have taken one view ; this court ought not to unsettle the settled position of law in respect of breach of injunction. 35. We may first examine the various cases referred to by learned counsel for the petitioner company to find out ratio of such cases. 36. In the case of Bali Rant and Bros. v. Randal reported in AIR 1925 Lah 644, temporary injunction was granted against Muhammad Hussain and Moti Begam restraining them from alienating property in question. During the operation of the interim order, sale was effected by Mst. Talia Begum who was not subject to restraint order. The court declined to affect validity of sale made by Mst. Talia Begum on the ground that the sale was effected by person who was not under restraint order and, secondly, the property was not attached. Hence, consequence of section 64 of the Civil Procedure Code (CPC) would not follow. Obviously, this case is of little assistance as far as the present controversy is concerned. The person who carried on transaction was not at all subject to injunction order. 37. In the case of Hakim Singh v. Wasan Singh reported in AIR 1928 Lah 639, initially property was sold before the restraint order was communicated to the person injuncted. The court proceeded on assumption that the prohibitory injunction becomes effective only when communicated and when any act is done in ignorance of such restraint order, before the prohibitory order is communicated, such act is not nullity. 38. Case of Darbari Ram v. Gin-lan-Farid reported in AIR 1930 Lah 858, was also of like nature, as was of 1928 Lahore [Hakmn Singh v. Wasan Singh AIR 1928 Lah 639]. In this case, injunction was issued against the defendants which was served on the defendant 'X' and not defendant 'K'. Defendant 'K' mortgaged property with 'D'. On a decree being passed on favour of plaintiffs in execution proceedings, property was sought to be sold. 'D' claimed that the property could be sold subject to his rights as mortgagee. In this case, injunction was issued against the defendants which was served on the defendant 'X' and not defendant 'K'. Defendant 'K' mortgaged property with 'D'. On a decree being passed on favour of plaintiffs in execution proceedings, property was sought to be sold. 'D' claimed that the property could be sold subject to his rights as mortgagee. The trial court rejected the objection holding that it was contrary to injunction as well as against section 64 of CPC. The High Court in revision reversed the order relying on AIR 1925 Lah 644 (Bali Rain and Bros. v. Randal AIR 1925 Lah 644]. Obviously, in this case also property has been transferred by 'Kagainst whom injunction has not become effective and there being no attachment, there was no illegality in sale on that ground. 39. In the case of Lal Chand v. Sohan Lal reported in AIR 1938 Lah 220, and in the case of Dharanrclrand v. Mitsui Bussan & Co. AIR 1920 Nag 12, sales were concluded under execution proceedings while injunction order was operating against the parties. Under the circumstances, the courts held that the injunction order operates against party unlike stay order which operates against court. Therefore, anything done by court in execution proceedings is not affected by a operative injunction order against the party unless there is stay of proceeding before the court. Lahore High Court clearly made distinction between orders issued under order 31), rules 1 and 2, or section 151 injuncting party on the one hand and order of stay issued by the court of competent jurisdiction to stay execution proceedings either under order 21, rule 29, and section 83 of Civil Procedure Code or by the appellate court under Order 41, rule 5, of CPC. 40. Manolrar Das v. Rain Autar Pande reported in (1903) ILR 25 All 431 was a case under the old CPC. Injunction was issued against judgment debtor against alienation during pendency of suit filed by M on 20 May, 1898. Suit was decreed in favour of the plaintiff on 12 June, 1898. Property was sold by judgment debtor on 20 June, 1898, by private negotiation, which was under attachment in execution of another decree and that decree was satisfied. Thereafter, M applied for attachment of the property which was objected to by the purchaser. In the earlier attachment, the decree holder M had applied for rateable distribution. Property was sold by judgment debtor on 20 June, 1898, by private negotiation, which was under attachment in execution of another decree and that decree was satisfied. Thereafter, M applied for attachment of the property which was objected to by the purchaser. In the earlier attachment, the decree holder M had applied for rateable distribution. Obviously, this case has no bearing on issue of effect of injunction order on the sale inasmuch as the injunction order came to an end as soon as suit was decreed. Sale of property was after decree had been passed, decree holder was claiming rateable distribution of proceeds of property in attachment in execution of another decree. Sale was made by the judgment debtor by private negotiation and claim of that decree holder in whose execution proceedings property was attached was satisfied. Plea of first decree holder to hold such sale to be invalid was not accepted in view of the existing provisions then in force under section 276 of the Code of 1874. There was no provision like Explanation appended to section 64 in the Code of Civil Procedure, 1909, which protected the claims for rateable distribution of assets of judgment debtor. 41. Balbliaddar v. Balla reported in AIR 1930 All 387 was also a case of like nature where temporary injunction in the money suit restraining defendants from alienating property in question was made on the same day on which the suit was decreed. Property was sold on the next day. Decree holder filed a suit for declaring sale made by judgment debtor to be void in breach of injunction. Court held that temporary injunction came to an end with passing of decree, Le., no injunction was in force when transaction took place. Transaction was otherwise held to he genuine and bona fide and not hit by section 53 of the Transfer of Properties(y) Act. In the fact situation, observation that existence of injunction does not render an alienation made in contravention of injunction void can at best be treated as obiter and not ratio of decision. The issue really did not arise for decision. 42. Another case of the same High Court relied upon by the learned counsel [Rain L akhan v. Mahbub Hasan reported in AIR 1954 All 422 ] has no bearing on the issue at hand. The issue really did not arise for decision. 42. Another case of the same High Court relied upon by the learned counsel [Rain L akhan v. Mahbub Hasan reported in AIR 1954 All 422 ] has no bearing on the issue at hand. It was a case where order of temporary injunction passed in favour of decree holder was sought to be treated as an order of attachment invoking operation of section 64. Court negatived contention by holding that an order of temporary injunction in favour of decree-holder restraining alienation of property would not amount to an order of attachment. 43. Likewise, in the case of Mohd. Abdul Rahman v. Mohd. Shanrsuddin reported in AIR 1951 Hyd 167 plea raised was that property in question was under attachment when mortgage was effected. The court found against existence of attachment. No direct issue about effect of an operative order of injunction on transaction made by a person under restraint order was raised. 44. In the case of Pushakkal Edonr v. Mahdeva Pat tar AIR 1919 Mad 772, injunction was obtained by plaintiff restraining defendant from managing the property of Karnavan. In view of the wide wording of the injunction, court firstly assumed in favour of plaintiff that it included restraining defendant from contracting loan. Defendant thereafter obtained permission of the court to raise Rs. 3,000 by leasing the jungle tree. Defendant was unable to find a lessee. He, therefore, obtained that loan from M. When recovery of loan was sought to be enforced against the property of Tarwad the plea was raised that property of Tarwad was not liable for the debt because it was contracted contrary to injunction. The court found as a fact that borrowed money was for the necessary purposes of Tarwad. In those circumstances, the court held that 'it will be going much too far to say that a person in position of Andi Achan being so restrained is not liable to repay the money which he in fact borrowed and if the money was borrowed [borrowed was ?] utilised for the benefit of Tarzoad that the Tarwad is not liable'. 45. The case obviously offers no parallel to case in hand laying down any principle of universal application. It was a case in which the court has permitted to borrow money in relaxation of injunction order against management. Money had been borrowed in different mode. 45. The case obviously offers no parallel to case in hand laying down any principle of universal application. It was a case in which the court has permitted to borrow money in relaxation of injunction order against management. Money had been borrowed in different mode. Then money was borrowed for necessity of joint family, for which the property of Tarwad would have otherwise been liable, irrespective of competence of contracted person. Then Tarwad having accepted the benefit of borrowing was estopped from disowning its liability to repay. Hence, this case does not offer any assistance to the case of company in defending breach of injunction by it. 46. Another case referred to by learned counsel was Kusunra Dei v. Malati reported in AIR 1969 Ori 195 . The High Court said that the principle applicable to attachment order affecting alienation is not applicable to alienation in defiance of injunction order. For stating this position of law, it relied upon the ratio in the case of Lal Chanel v. Sohan Lai reported in AIR 1938 Lah 220. As we have noticed that the decision in the case of AIR 1938 Lah 220 is founded on distinction between injunction operating against party and stay order operating against court the former not affecting the proceedings in the court. It, therefore, does not further the contention advanced by the learned counsel. 47. Facts in the case of Pranakrushna v. Unrakantha Panda reported in AIR 1989 Ori 148 were that the purchasers of property pendente lite had applied to he impleaded as party in a suit in respect of which relief in the nature of permanent injunction was sought. Application was allowed by the trial court, which was challenged in revision before the High Court. Learned single Judge was also of the opinion that the order of injunction prohibiting a person from alienating property suspends his right to transfer. Therefore, the defendant could not convey any marketable title. As his opinion was in conflict with the view expressed by learned single Judge in AIR 1969 Ori 1489 referred to above [Kusunra Dei v. Malati AIR 1969 Ori 195 ], he referred the matter to a larger Bench. Therefore, the defendant could not convey any marketable title. As his opinion was in conflict with the view expressed by learned single Judge in AIR 1969 Ori 1489 referred to above [Kusunra Dei v. Malati AIR 1969 Ori 195 ], he referred the matter to a larger Bench. The Division Bench was of the view that a transferee pendente lite was neither necessary nor proper party inasmuch as he would be bound by decree in the suit in view of the principle contained in section 52 of Transfer or Property Act. So far as dispute in revision was concerned, it came to an end and the question whether transfer by a person restrained to alienate can validly alienate the property did not fall for consideration. However, for observing that transfer by a person injuncted is only voidable and not void, the court relied upon decisions in [Pushakkal Edom v. Mahdeva Pat far] AIR 1919 Mad 772, [Dharamchand v. Mitsui Bussan & Co.] AIR 1920 Nag 12, [Rain Lakhan v. Mahhuh Hasan] AIR 1954 All 422 , [Mohd. Abdul Rahman v. Molid. Shamsuddin] AIR 1951 Hyd 167. 48. As already discussed, none of these cases had bearing on the controversy before us and are distinguishable on facts. In this connection, we would like to note that while the court reached the conclusion that restraint order does not in any way deprive or suspend rights of a person, it did accept that it only aims at a prohibition to act in a particular manner. With utmost respect, we may notice that there is distinction between right of person in property and right of person to deal with property by entering in the valid contract. While the former remains unaffected, the latter, namely, to deal with property in any manner, is affected to the extent the restraint order provides and if that right to deal in property is right in person, then, in our view the person is incapacitated to deal with property in the manner prohibited and cannot bring about legal consequences by acting with incapacity. 49. Another case falling in this genre, is Udairam v. State reported in 1963 Rajasthan Law Weekly 66. It was a case in which 'S' obtained decree for possession of fields and in execution warrant of delivery of possession was issued. 49. Another case falling in this genre, is Udairam v. State reported in 1963 Rajasthan Law Weekly 66. It was a case in which 'S' obtained decree for possession of fields and in execution warrant of delivery of possession was issued. Before Tehsildar could execute warrant of delivery, 'B' instituted a suit against 'S' restraining him from interfering with the possession of fields. Tehsildar who was assigned the task to execute warrant for delivery of possession in execution proceedings executed warrant after he was appraised of injunction order. The court held that delivery of possession to 'S' was not affected on the ground that he was restrained by a temporary injunction not to take possession. Possession was delivered by Tehsildar who was acting under the direction of executing court. There was no stay of proceeding of executing decree but the order was operative against party to civil suit, namely, 'S'. As there was no prohibitory order against the executing court, the question of declaring the delivery of possession in execution proceedings by the executing court would not arise. The court clearly said that 'order of Tehsildar dated 15.9.1959 on which reliance has been placed by the learned counsel is of no avail to him because the sub-divisional officer directed his officer to stay delivery of possession'. Tehsildar obviously read something more than what the order of injunction issued by the sub-divisional officer contained. He has only carried out execution. (emphasis supplied by the court); 50. We would presently see that the case is squarely in consonance with the principle enunciated by the Supreme Court in the case of Mulrnj v. Murti Raghunathji reported in AIR 1967 SC 1386 where the court drew distinction between injunction and stay order itself. Injunction order not being addressed to the court if the court proceeds in contravention of injunction order the proceedings are not nullity. 51. From the aforesaid, we notice that the chain of decisions relied upon by the learned counsel are either distinguishable on facts or do not bear on the controversy before us, apart from the fact that there cannot be any absolute restriction on the court to examine itself the effect of an injunction order on the action complained against in view of the existing decisions of other courts. In fact, none of the decisions referred to by the learned counsel invites application of that principle inasmuch as the cases are either distinguishable on fact or have no application to the facts of the present case. 52. About binding nature of precedents, in Goodyear India Ltd. v. State of Haryana (1990) 1 Comp LJ 23 (SC) : AIR 1990 SC 781 the court said that a precedent is an authority only for what it actually decides and not for what may remotely or even logically follow from it. 53. In Vijay Kiunar Sharina v. State of Karnataka (1990) 2 SCC 562 , the apex court said : "Question on which there is no discussion or on which no arguments have been advanced, reproduced in the law report or dealt with, then the observation, if any, not necessary for the decision in the case and not discussed in judgment on appeal cannot be regarded any more than a general observation and not obiter dicta much less the ratio decidendi of the case. Such observations have no binding effect." 54. One case, which directly concerns with this issue and has been referred to in some of the cases relied on by the learned counsel is reported in ILR (9) All 497. It was a case in which the defendant hypothecated property to bank in defiance of the injunction order restraining him from alienating property. When the property was attached in execution of money decree, the bank put forward its claim that the property can be sold only subject to the right of the bank under hypothecation. The plea about invalidity of alienation for want of authority in the defendant to alienate was negatived primarily on the ground that no precedent was cited. But, with utmost respect, any precedent to the contrary was also not cited or noticed by the court to negative the plea of decree holder. 55. From those decisions, it cannot be inferred that in all cases where earlier decision is sought to be relied on affecting the arrangement of affairs in defiance of a binding court order, and earlier view is not commending to court, the courts must stay their hands to examine the issue afresh. 55. From those decisions, it cannot be inferred that in all cases where earlier decision is sought to be relied on affecting the arrangement of affairs in defiance of a binding court order, and earlier view is not commending to court, the courts must stay their hands to examine the issue afresh. On the other hand, it was stated in no uncertain terms in the case of Nirshi v. Sudhir Kumar reported in AIR 1969 SC 864 , while endorsing the views that long settled position by earlier decisions ought not ordinarily to be disturbed held : "Different consideration would arise if the disputed transactions relate to a penal provision or the same is detrimental to public interest or causes public inconvenience." The court clearly made the distinction between the two positions when it said : "The rule that where the terms of a statute or ordinance are clear, then even a long and uniform course of judicial interpretation of it may be overruled if it is contrary to the clear meaning of the enactment is inapplicable to decision on the basis of which titles and transactions must have been founded." 56. It cannot be said that decision relied on by the petitioner company which is alleged to have acted in breach of injunction order, operating against it, lay down any such law on the basis of which title or rights can be founded. To read otherwise will be inducing the persons under restraint order to act in defiance of it with impunity or at any rate lead persons to act and arrange their affairs in a manner which may defeat the effect and purpose of binding court orders. That will be grossly against the public interest resulting in undermining the authority of law making severe dent in people's faith in the efficacy and enforceability of court's orders and its instrumentality as protector of people's right. 57. In the case of Bishanuber Dass Kohli v. Satya Bhalln reported in (1993) 1 SCC 566 , 568, the issue raised was that since deletion of section 18 of the Kerala Land Sales Tax Act, sub-rules (7) and (14) of rule 21, must be declared to have become otiose, Kerala High Court had repelled the contention in Ashoka Oil Mills v. STO in (1985) 58 STC 282 . The Supreme Court approved the conclusion of High Court in Ashoka Oil Mills case (Ashoka Oil Mills v. STO (1985) 58 STC 282 ) and also observed that since interpretation of procedural laws is prevailing in the State for sometime, it need not be disturbed. Thus, apart from upholding the case on merit, it was a case where statutory functionaries acted in furtherance of such interpretation to bring about certain legal effects. The case squarely fell within the ratio that such decisions on the basis of which title and transaction must have been founded ought not to be easily departed. Present cannot be said to be a case of that genre. Title and transaction are not founded on decisions relied on. On the basis of those decisions, consequences of a wrongful act is being sought to be avoided. 58. Likewise, in B. Lakshtnipathi Naidn v. District Educational Officer reported in AIR 1992 SC 2003 , interpretation affecting eligibility for appointment to the post of Headmaster was in force in State of Tamil Nadu for quite some time. The court directed the State authority to consider the case of appellant in accordance with prevalent status of interpretation of law relating to eligibility. This was also a case where the decision was affecting the foundation of a particular transaction of like nature by various authorities within the State. 59. Similarly, in Bishaniber Dass Koltli v. Satya Bhalla reported in (1993) 1 SCC 566 the court was concerned with interpretation of section 13(2)(ii)(b) of East Punjab Urban Rent Restriction Act, 1949. This was also a case where the decision was affecting the foundation of a particular transaction of like nature by various authorities within the State. 59. Similarly, in Bishaniber Dass Koltli v. Satya Bhalla reported in (1993) 1 SCC 566 the court was concerned with interpretation of section 13(2)(ii)(b) of East Punjab Urban Rent Restriction Act, 1949. The court noted that a Division Bench.of Punjab and Haryana High Court in Tel Rant v. Om Prakash Garg (1971) RCJ 1, took the view that : "A Division Bench of the Punjab and Haryana High Court in Tel,, Rant v. Om Prakash Garg while dealing with section 13(2)(ii)(b) of the Act mentioned one of its conclusion in para 21 as under : (b) that if the result of the use of even a small portion of a building is such that the category of the premise is changed from residential, non-residential and scheduled, and it becomes a category different from the one for which the same had been let, the clause would be attracted." In view of the interpretation prevailing in State of Punjab since 1971, the court observed : "This is how this provision appears to have been understood at least ever since then and the people in the State have arranged their affairs on that basis. Apart from the fact that this view commends to us as the correct view, the desirability of continuing the settled view is also a reason in its favour." 60. All these cases reveal that where an interpretation of substantive provision of law or rule has been accepted, in accordance with which a person is expected to act as law abiding citizen of a civilised society bound with discipline of law, deviation from such interpretation be not ordinarily made so as to render a lawful transaction to be unlawful. No court has said so far that it is lawful to act in breach of an injunction order, giving out that people may so arrange their affairs in accordance with law. 61. The apex court accepted in principle the justifiability of reconsideration of an earlier view of its own in view of later development and new experiences to reach right conclusion in Synthetic and Chemicals Ltd. v. State of U.P. reported in (1990) 1 SCC 109 . 62. 61. The apex court accepted in principle the justifiability of reconsideration of an earlier view of its own in view of later development and new experiences to reach right conclusion in Synthetic and Chemicals Ltd. v. State of U.P. reported in (1990) 1 SCC 109 . 62. We are of the opinion that in these state of affairs, we will not be justified in not examining the effect of injunction order operating against the petitioner company on the transaction of allotment of shares made in breach of it. 63. Purpose of temporary injunction to restrain doing certain acts or directing to do certain acts under Order 39, rule 1, of Code of Civil Procedure is stated to be for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal or disposition of the property or staying and preventing dispossession of property or otherwise causing injury to the plaintiff in relation to any property in dispute. These are the objects to be achieved through injunction order as per the statutory provisions contained in Order 39, rule 1, of the Code of Civil Procedure. Rule 2A provides for detention in civil prison of a person who is found to be guilty of disobedience. Property of defier is also liable to be attached. It also provided that in case disobedience continues in spite of attachment, the property may be sold and proceeds may be allotted as compensation to the injured party as the court may deem fit. However, rule 2A only provides for punishment for committing breach of order of the court. It does not spell out as to what shall be the effect on the act done in breach of injunction order. So also where the decree for perpetual injunction has been granted, Order 21, rule 32, visits defaulter with same penalties. Therefore, for this reason alone that no consequential effect has been provided by the statute on the act committed in breach of injunction, no distinction can be made in considering the effect of breach on transaction between temporary or permanent injunction. Yet it has been argued that while no legal effect will be attached to the acts committed in defiance of breach of temporary injunction, it would be held that transaction in defiance of permanent injunction would be unenforceable. That would be cutting at the roots of efficacy of administration of justice and rule of law. Yet it has been argued that while no legal effect will be attached to the acts committed in defiance of breach of temporary injunction, it would be held that transaction in defiance of permanent injunction would be unenforceable. That would be cutting at the roots of efficacy of administration of justice and rule of law. Provision of rule (2A) of Order 39, or rule 32 of Order 21, are aimed at punishing the person responsible for disobedience of the orders of the court ; civil imprisonment or attachment of property of defaulter by itself cannot be equated with satisfaction of the decree of the court or giving effect to the order of the court for achieving the object of statutory provision, viz., preventing a person from damaging, wasting, selling or alienating the property for which purpose orders are required to be made. Efficacy of rule of law lies in the satisfaction of the orders passed by courts. To say that non-compliance of the order of the court is unlawful and renders a person open to civil imprisonment, but the act complained of in the breach of such order bears the stamps of validity beyond the pale of scrutiny is contradiction in terms and results in defeating the object for which power to issue injunction has been conferred on courts. As noticed above, injunction orders can be issued with object to prevent alienation of property in dispute pending the dispute. Yet if a person injuncted can bring into effect a valid alienation in breach of it, (it) will be to accept that fulfilment of object for which restraint order can be made, is dependent on volition of person injuncted and not as a part of discipline of law and law is powerless to fulfil that object, where it is possible to achieve it, and be rest content with punishing the person guilty of defiance. In our view, the fact that the Code provides for imprisonment of a person committing disobedience of the orders of the court and also provides for payment of compensation to the injured party out of proceeds of sale of the property in attachment does not prevent the court from taking such course of action to enforce its orders or to order to being into existence fact situation even in case orders have been vacated, if still capable of enforcement in any manner. The cases are not wanting where the person under restraint order for maintaining status quo alters status quo in breach of restraint order can be directed to restore status quo by mandatory direction. If legal effect and efficacy of a transaction carried out in breach of restraint order is not affected and the only remedy is to commit defaulter for imprisonment under contempt, such course would not be open. 64. In this connection, reference may be made to judgment in the case of Magna v. Rustam reported in AIR 1963 Raj 3 . In that case, defendants made certain injunction order. The trial court ordered for demolition of such construction. Defendant approached the High Court on plea that penalty in defiance has been provided under Order 39, rules 2 and 3, and no other penalty can be imposed, hence no order of demolition can be made. The court held in paragraph 5 as under: "But the imposing of penalty on the party guilty of the disobedience does not provide any relief to the party in whose favour the order of temporary injunction is passed. The object of-such an order is to safeguard the rights of a party against a threatened invasion by the other party. If in disobedience of the order of injunction such rights are invaded during the pendency of the suit relief can only be granted to the aggrieved party by invoking the inherent power of the court under section 151 of the Code of Civil Procedure ." Thus, the court came to the conclusion that the order of the court can be made effective and the desired objective of compliance can be achieved by invoking inherent powers. In other words, it was accepted as court's duty to nullify the effect of things done or transaction carried out in defiance of court's order. Obviously, if no legal effect would be attached to the thing done in violation of injunction order, courts would not be in a position to enforce such orders. 65. In this connection, we may refer to the judgment in the case of Mulraj v. Murti Raghunathji, reported in AIR 1967 SC 1386 . It was a case in which a suit was filed under the U.P. (Temporary) Control of Rent and Eviction Act after obtaining permission from the Registrar. 65. In this connection, we may refer to the judgment in the case of Mulraj v. Murti Raghunathji, reported in AIR 1967 SC 1386 . It was a case in which a suit was filed under the U.P. (Temporary) Control of Rent and Eviction Act after obtaining permission from the Registrar. Issue raised was whether permission granted by the magistrate for filing suit could be said to be a nullity. Contention was that when the authority granted such permission, a stay order was operating ; therefore, the magistrate granting permission had no jurisdiction to do so. The facts were that stay order was passed on September 29, 1951, but the magistrate when granted permission on 4 October, 1961, had no knowledge of it. The trial court and the district could upheld the contention that order in breach of stay order was nullity. The High Court held that stay order could not take away the jurisdiction of magistrate from the moment it was passed and as the magistrate had no knowledge or information about the stay order when he granted permission, he acted within jurisdiction and the suit was maintainable. Under these circumstances, the matter went to the Supreme Court. The court drew parallels between the stay order and injunction order pointing out difference between the two. "As soon as therefore as the executing court has come to know of the order either by communication from the court passing the stay order or by an affidavit from one party or the other or in any other way, the executing court cannot proceed further and if it does so, it acts illegally. There can be no doubt that no action for contempt can be taken against an executing court, if it carries on execution in ignorance of the order of stay and this shows the necessity of the knowledge of the executing court before its jurisdiction can be affected by the order. In effect, therefore, a stay order is more or less in the same position as an order of injunction with one difference. An order of injunction is generally issued to a party and it is forbidden from doing certain acts. It is well settled that in such a case the party must have knowledge of the injunction order before it could be penalised for disobeying it. An order of injunction is generally issued to a party and it is forbidden from doing certain acts. It is well settled that in such a case the party must have knowledge of the injunction order before it could be penalised for disobeying it. Further, it is equally well settled that the injunction order not being addressed to the court, if the court proceeds in contravention of the injunction to a party and an order of stay to a court. In both cases, knowledge of the party concerned or of the court is necessary before the prohibition takes effect." This clearly goes to show that the act done by court or person under a stay order (former by way of stay order, latter by way of injunction order) if he acts contrary to it after knowledge, the act is held to be illegal and nullity. On this point, the court did not find any distinction between stay order and injunction order. 66. We are reminded of observations made by the Supreme Court in the case of B. Mohanhhai v. M.S.U. Mandir AIR 1975 SC 2128 , where the court cautioned that the court ought not to construe a statute in a manner that will encourage the breach of any of its provisions. 67. It is of the essence of the rule of law that every one within the society is governed by the rule of law and should consider himself bound by and obey the rule of law. It is fundamental to the system of polity that India has adopted and which is embodied in the Constitution that the courts of the land are vested with the powers of interpreting the law and of applying it to the facts of the cases which are properly brought before them. When once an order has been passed which the court has jurisdiction to pass, it is the duty of all persons bound by it to obey the order so long as it stands, and it would tend to the subversion of orderly administration and civil government, if parties could disobey orders with impunity. If disobedience could go unchecked, it would result in orders of courts ceasing to have any meaning and judicial power itself becoming a mockery. If disobedience could go unchecked, it would result in orders of courts ceasing to have any meaning and judicial power itself becoming a mockery. Right (It ?) cannot be doubted that the court is empowered by the statute to issue injunction against the defendant in appropriate cases in such terms as the court thinks proper. Machinery has been provided to penalise the person who disobeys the order, which is binding on the person injuncted as a part of fundamental rule of law which governs equity. Further question that is required to be considered is whether the act itself committed in breach of order remains unscathed. In our opinion, taking the view that such transaction in all circumstances irrespective of binding circumstances or nature of the order does not affect the transaction would be encouraging breach of injunction order by any person venturing to suffer penalty and would result in cutting at the very roots of the effective nature of the orders and attainment of object for which the courts exist and exercise judicial power. 68. In Satyahrata Biswas v. Kal yan Kumar Kisku, reported in AIR 1994 SC 1837 , in a civil suit, the trial court had passed an injunction for maintaining status quo about a fixed property. During pendency of the suit, a sub-tenancy was created in respect of the property. Sub-tenancy was sought to be effected on the ground that creation of sub-tenancy in violation of injunction order was illegal. Creation of sub-tenancy was sought to be justified on the ground that injunction for status quo did not suspend right of the parties and merely concerned the physical possession of the property. It was also pleaded that in contempt proceedings taken in pursuance of disobedience of the injunction order sub-tenant was not a party. The court rejecting plea said "Such an order cannot be circumvented by parties with impunity and expect the court to confer its blessings. It does not matter that to the contempt proceedings, Somani Builders was not a party. It cannot gain an advantage in derogation of the rights of the parties, who were litigating originally. If the right of sub-tenancy is recognised, how is status quo as of 15.9.1988 maintained ? Hence, the grant of sublease is contrary to the order of status quo. Any act done on the teeth of the order of status quo is clearly illegal. If the right of sub-tenancy is recognised, how is status quo as of 15.9.1988 maintained ? Hence, the grant of sublease is contrary to the order of status quo. Any act done on the teeth of the order of status quo is clearly illegal. All actions including the grant of sub-lease are clearly illegal." From the above, it is clear that apart from countenancing the proceeding for contempt for breach of injunction, the apex court permitted the action to be taken for eviction of sub-tenant inducted in possession contrary to injunction order by declaring consequence of creation of sub-tenancy in breach of injunction order itself to be illegal conferring no right on sub-tenant to remain in possession. This clear pronouncement of apex court fortifies conclusion to which we have reached and plea of the company that, in no circumstances, transaction carried on in breach of injunction order can be held to be void, cannot be sustained. 69. It may be noticed that in Mulraj's case [Mulraj v. Murti Raghunathjil] AIR 1967 SC 1387 while the court held that a stay order staying execution proceedings becomes effective only when the court proceeding before whom are so stayed, gets knowledge and until then it is not deprived of jurisdiction to proceed with execution, yet did not leave the position at that, leaving the proceedings taken between the date of order and knowledge beyond remedy. Even where the stay order has not become effective, though passed its efficacy could be achieved. The court said "Though the court which is carrying on execution is not deprived of the jurisdiction the moment a stay order is passed, even though it has no knowledge of it, this does not mean that when the court gets knowledge of it, it is powerless to undo any possible injustice that might have been caused to the party in whose favour the stay order was passed during the period till the court has knowledge of the stay order. We are of the opinion that section 151 of the Code of Civil Procedure would always be available to the court executing the decree, for, in such a case, when the stay order is brought to its notice, it can always act under section 151, and set aside steps taken between the time, it was brought to its notice, if that is necessary in the ends of justice and the party concerned asks it to do so." 70. As in such cases during the interim period proceedings are not nullity, the remedy was made available to party concerned only. But where court gets the knowledge, the court held the proceedings thereafter to be nullity passing into realm of void from voidable. 71. There is yet another aspect of the matter which needs consideration. Temporary injunction, undoubtedly, does not suspend rights of the respective parties in the property but prohibits doing of such acts in respect of property in question. As noticed above, it was on this principle that argument was canvassed drawing support from the decisions referred to above by the learned counsel that to alienate a property remains with the person injuncted and, therefore, exercise of that right is not invalidated by any provision of law. 72. Right to alienate is one thing but to enter into a contract in exercise of that right is another. For bringing about an alienation, a valid contract has to come into existence, for which the parties must he competent to contract in terms of section 10 of the Contract Act. Section 11 of the Contract Act provides that every person is competent to contract who is of the age of majority according to the law to which he is subject, and who is of sound mind, and is not disqualified from contracting by any law to which he is subject. Competence to contract is attached to a person. If a person is restrained to alienate property or is restricted to do a particular act while his right to alienate as part of bundle of rights in the property may not be impaired, but certainly his freedom to contract in respect of that property which is very much personal is impaired by the prohibitory order which as per law of the land hinds him. If a person is not disqualified from contracting by any law to which he is subjected, in our opinion, in the context of competency of a person to contract cannot he confined to statutory law but must be taken to be in its generic sense of meaning. Though it is not easy to define law, the main features and characteristics of law are recognised. The Supreme Court in the case of Narsing Pratap Deo v. State of Orissa, reported in AIR 1964 SC 1793 said - "Stated broadly, a law generally is a body of rules which have been laid down for determining legal rights and legal obligations, which are recognised by courts." 73. Yet another apt expression about meaning of law can be said to be the law includes rules and legal principles which are enforced by the State and applied by its court for administration of justice. It embodies distinct provisions enjoining persons to do or forebear from doing such act accompanied by sanction of the State that they will have to be obeyed. The court is empowered by a statute to issue injunction issued by the court in exercise of its powers under Order 39, rules 1 and 2, or section 151 of the Code of Civil Procedure or under various other provisions of law is inherent in the authority of the courts to issue such directions. If by a restraint order a person is to forebear from doing certain acts and such forbearance emanates from authority of law, namely, exercise of statutory power by the court under the statute which governs its proceedings and is further accompanied by sanction for its disobedience exposing the delinquent to penal action, direction to forebear from alienating the property affects directly the competency to enter into any contract to the extent prohibitory order directs in respect of that property is attached with that person. Competency to enter into the contract is affected which is a right in person. By acting in breach of that order, in our opinion, the person acting under the injunction order cannot bring about legal effect thereon. He would clearly be a person disqualified by law for the time being to enter into any contract relating to that property in respect of which he is to forebear from dealing under the restraint order of the court which under the law he is bound to obey. He would clearly be a person disqualified by law for the time being to enter into any contract relating to that property in respect of which he is to forebear from dealing under the restraint order of the court which under the law he is bound to obey. Law recognises temporary incompetency to enter into any contract by a person in certain circumstances. One such circumstance has been stated in the Act itself. In section 12, it is provided that a person who is usually of sound mind, but occasionally of unsound mind, may not make a contract when he is of unsound mind. Similarly, whether a person having right to transfer his property and is competent to make contract in respect of that property to alienate it, while acting under the restraint order, though not denuded of his rights in property, but acts under temporary disqualification under law from entering in any contract in respect thereof. 74. As we have seen that allotment of share under section 81 is a specie of contract, it requires making of offer of allotment by the company to the existing shareholders in the first instance and acceptance of offer by the shareholders either by themselves or by renounces. Shares, allotment of which have not been accepted by the existing shareholders and/or renouncees, then it can be dealt with by the company in such manner as the Board of directors thinks in the best interest of the company. That also requires of bringing into a valid enforceable contract between the company and persons to whom allotment is to be made. This necessarily requires that both the company and purchaser/allottee must be competent to enter into a contract in respect of allotment of such shares. Temporary injunction which was in force permitted the company to complete the contract in respect of offer made by the company to the existing shareholders. The order prohibited it to allot shares from un-subscribed portion to any one except the bank and public financial institutions without permission of the court. Therefore, obviously, until permission of the court was obtained, the company was not competent to make offer for allotment to third party or to accept the offer made by third party to bring into existence valid and binding contract of allotment of shares in favour of third party. 75. Therefore, obviously, until permission of the court was obtained, the company was not competent to make offer for allotment to third party or to accept the offer made by third party to bring into existence valid and binding contract of allotment of shares in favour of third party. 75. There is yet another reason which prompts us to reach this conclusion. As we have noticed above, it is fundamental to the system of polity that India had adopted that the courts of land are vested with powers of interpreting law and of applying it to the facts of the case which are properly brought to them, and as part of that fundamental system, it has to be accepted that, when once an order has been passed, which the court has jurisdiction to pass, it is the duty of all persons bound by it to obey the order so long as it stands. If effective state of affairs can be brought into existence wilfully exposing oneself to penalty of imprisonment without affecting the act itself, it would result in orders of the court ceasing to have effective operation and judicial power itself would be undermined. That would obviously be contrary to the public policy. Not only such construction of statute is contrary to law, but if the contract results into a situation nullifying the effectiveness of the operative orders of the court which are binding on the parties and which the parties are under obligation to obey and under which the parties are to act or forebear from doing such acts, then, any contract which comes into existence stultifying the object for which court is empowered to issue order, would be contrary to public policy also and would be void under section 23 of the Contract Act. 76. Thus, viewed from all angles, we are unable to accept the contentions raised by learned counsel for the company that any transaction brought into existence in defiance of the operative injunction order, its validity is not affected and the same must be given full effect. For the reasons aforesaid, we confirm the finding of the learned company judge on this question also. 77. Accordingly, cross objection fails and is hereby dismissed.