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2015 DIGILAW 365 (RAJ)

UNION OF INDIA v. RAYBAN SUN OPTICS INDIA LIMITED

2015-02-09

PRAKASH GUPTA, SUNIL AMBWANI

body2015
JUDGMENT : 1. This D.B. Special Appeal(Civil) No.4/2014, has been preferred by the Union of India through Ministry of Corporate Affairs, New Delhi, through Registrar of Companies, against the order dated 05.08.2013, passed by learned Company Judge in Company Petition No.9/2011, in the matter of Rayban Sun Optics India Ltd., whereby the Company Petition under Section 100 to 104 of the Indian Companies Act, 1956 (for short, 'the Act of 1956'), for reduction of share capital, was allowed. 2. The appeal has been filed with a delay of 176 days, which is sought to be explained on the grounds that on receipt of the order by the Counsel for the appellant, he supplied a certified copy of the order to the Registrar of Companies, who, in turn, sent a copy of the same to the Ministry of Corporate Affairs, New Delhi. In September, 2013, the Ministry of Corporate Affairs, directed the Registrar of Companies to obtain an opinion from the Counsel regarding further recourse, to be taken. On 21.09.2013, the Counsel for the appellant gave his opinion and recommended for filing an appeal. In October, 2013, the Ministry directed the Registrar of Companies, in response to the letter accompanying the opinion, to get the appeal prepared by the Counsel, who had appeared in the Company Petition. When the Registrar of Companies approached the Counsel, he was informed that the Counsel was no more on the panel of the Union of India, and therefore, before drafting the appeal, it will be prudent to obtain the approval of the Ministry of Corporate Affairs, to engage him. 3. It is stated that the Registrar of Companies wrote a letter to the Ministry of Corporate Affairs to engage the same Counsel Mr. Amol Vyas, for filing the present appeal. The permission was granted in the month of February, 2014, and after vetting the grounds, the appeal was filed. 4. Learned counsel appearing for the respondent submits that the delay has not been sufficiently explained. The intimation sent by the Registrar of Companies to the Ministry of Corporate Affairs, and thereafter the efforts made to seek opinion of the Counsel, and further the delay made by the Counsel in getting fresh instructions to be engaged in the matter, has not satisfied the requirement of day-to-days delay in filing the Special Appeal. The intimation sent by the Registrar of Companies to the Ministry of Corporate Affairs, and thereafter the efforts made to seek opinion of the Counsel, and further the delay made by the Counsel in getting fresh instructions to be engaged in the matter, has not satisfied the requirement of day-to-days delay in filing the Special Appeal. The appeal was filed on 04.04.2014 with more than 180 days after the expiry of the period of limitation. He has relied on the judgment of the Supreme Court in Postmaster General And Others Vs. Living Media India Limited And Another, (2012) 3 SCC 563 , in which the delay caused by the Government Departments in filing the appeal has been explained, with reference to all earlier decisions of the Apex Court beginning from Collector(LA) Vs. Katiji, (1987) 2 SCC 107 , to Pundlik Jalam Patil Vs. Jalgaon Medium Project, (2008) 17 SCC 448 , and in which it was held in paragraphs 24, 27, 28 and 29, as follows:- “24. After referring various earlier decisions, taking very lenience view in condoning the delay, particularly, on the part of the Government and the government undertaking, this Court observed as under: (Pundlik Jalam case, SCC pp.457-458, paras 29-30) “29. It needs no restatement at our hands that the object for fixing time-limit for litigation is based on public policy fixing a life span for legal remedy for the purpose of general welfare. They are meant to see that the parties do not resort to dilatory tactics but avail their legal remedies promptly. Salmond in his Jurisproduce states that the laws come to the assistance of the vigilant and not of the sleepy. 30. Public interest undoubtedly is a paramount consideration in exercising the court's discretion wherever conferred upon it by the relevant statutes. Pursuing stale claims and multiplicity of proceedings in no manner subserves public interest. Prompt and timely payment of compensation to the landlosers facilitating their rehabilitation/ resettlement is equally an integral part of public policy. Public interest demands that the State or the beneficiary of acquisition, as the case may be, should not b e allowed to indulge in any act to unsettle the settled legal rights accrued in law b y resorting to avoidable litigation unless the claimants are guilty of deriving benefit to which they are otherwise not entitled, in any fraudulent manner. Public interest demands that the State or the beneficiary of acquisition, as the case may be, should not b e allowed to indulge in any act to unsettle the settled legal rights accrued in law b y resorting to avoidable litigation unless the claimants are guilty of deriving benefit to which they are otherwise not entitled, in any fraudulent manner. One should not forget the basic fact that what is acquired is not the land but the livelihood of the landlosers. These public interest parameters ought to be kept in mind by the courts while exercising the discretion dealing with the application filed under Section 5 of the Limitation Act. Dragging the landlosers to courts of law years after the termination of legal proceedings would not serve any public interest. Settled rights cannot be lightly interfered with by condoning inordinate delay without there being any proper explanation of such delay on the ground of involvement of public revenue. It serves no public interest. 27. It is not in dispute that the person(s) concerned were well aware or conversant with the issues involved including the prescribed period of limitation for taking up the matter by way of filing a special leave petition in this Court. They cannot claim that they have a separate period of limitation when the Department was possessed with competent persons familiar with court proceedings. In the absence of plausible and acceptable explanation, we are posing a question why the delay is to be condoned mechanically merely because the Government or a wing of the Government is a party before us. 28. Though we are conscious of the fact that in a mtter of condonation of delay when there was no gross negligence or deliberate inaction or lack of bona fides, a liberal concession has to be adopted to advance substantial justice, we are of the view that in the facts and circumstances, the Department cannot take advantage of various earlier decisions. The claim on account of impersonal machinery and inherited bureaucratic methodology of making several notes cannot be accepted in view of the modern technologies being used and available. The law of limitation undoubtedly binds everybody, including the Government. 29. The claim on account of impersonal machinery and inherited bureaucratic methodology of making several notes cannot be accepted in view of the modern technologies being used and available. The law of limitation undoubtedly binds everybody, including the Government. 29. In our view, it is the right time to inform all the government bodies, their agencies and instrumentalities that unless they have reasonable and acceptable explanation for the delay and there was bona fide effort, there is no need to accept the usual explanation that the file was kept pending for several months/years due to considerable degree of procedural red tape in the process. The government departments are under a special obligation to ensure that they perform their duties with deligence and commitment. Condonation of delay is an exception and should not be used as an anticipated benefit for the government departments. The law shelters everyone under the same light and should not be swirled for the benefit of a few.” 5. In the present case, the minority shareholders have not filed an appeal against the order under Section 100 to 104 of the Act of 1956, by which the value of their shares was reduced. We are informed by the Counsel appearing for the Company that they have accepted the share value for which their shares were consequently reduced. The order of this Court has also been given effect to, by the Registrar of the Companies, Rajasthan, by carrying out reduction in share capital, in pursuance to the impugned order dated 05.08.2013, confirming Special Resolution of the Company, dated 26.04.2011. 6. The obligation of the Registrar of the Companies, to protect the interest of the minority shareholders, as a regulator, as well as in the interest of the minority shareholders at 7% of the shares, is appreciable. We however find that in this case most of the minority shareholders have taken option of receiving their share value as a consequence of reduction of the share capital, and have accepted same. 7. We have examined the reasons for condonation of delay, in the light of the subsequent development, and find that the delay has not been sufficiently explained, inasmuch as that after the advise of the Counsel for filing the appeal was accepted, the Counsel sought fresh instructions to be engaged, of which dates of request and the decision have not been given. In paragraphs 5 and 6 of the affidavit, delay in accepting engagement of the services of the Counsel by the Ministry of Corporate Affairs in the month of February, 2014, after having accepted the opinion in September, 2013, is too long, to be accepted for condonation. The explanation of delay is thus not found to be satisfactory. 8. In view of above and on the facts and circumstances of the case, in which learned Company Judge has considered the objections of both, the Registrar of Companies as well as minority shareholders, and that no minority shareholder, who is affected by the order, has come forward to file an appeal, the application for condonation of delay is rejected. 9. The Special Appeal is accordingly dismissed.