Janardhana Mills Ltd. vs The Registrar of Companies

Veeraswami, J.—This is an application u/s 18(4) of the Indian Companies Act, 1956, as amended in I960, For condoning the delay and

extending the time for filing the required documents with the Registrar for purposes of registration of the alteration confirmed by this Court by its

order dated 25-7-1959, in O. P. 40 of 1958. Sub-section (1) of Section 18 gives the petitioner a period of 3 months from the date of the order

within which to file the documents with the Registrar. Actually, the petitioner is stated to have filed the documents only on 30-4-1959, while the

time prescribed had expired earlier on 25-10-1958. This petition was taken out as late as 15th January 1962:

Learned Government Pleader for the Registrar of Companies raises a preliminary objection to the maintainability of the application on the

ground that there is no Dower under Sec. 18(4) to condone the delay and extend the time. To decide this question, it is necessary to notice in

better detail Sections 18 and 19 of the Act as amended in 1960. Section 17 relates to special resolution and confirmation by court of proposed

alteration of a Memorandum. Section 18 provides for registration of the alteration within a prescribed period. For this purpose, Sub-section (1) of

that section states that a certified copy of the order of the Court made under Sub-section (5) of Section 17 confirming the alteration, together with

a printed copy of the memorandum as altered, shall, within 3 months from the date of the order, be filed by the company with the Registrar. The

same sub-section proceeds to say that the Registrar shall register the alteration and certify the registration under his hand within one month from the

date of the filing of such documents.

Sub-sections (2) and (3), which deal with the affect of registration, are not relevant for present purposes. Sub-section (4) confers power upon the

court to extend the time for filing of documents or for registration of the alteration to such period as it thinks proper. If this sub-section stood alone,

something could have; been said in favour of the petitioner, for, by its own terms, it does not appear that the power of the Court to condone delay

and extend time is restricted. But, such a restriction, says the Registrar of Companies, should be read into Sub-section (4) because of Section 19,

which deals with the effect of failure to register. Sub-section (1) of this section states that no such alteration as is referred to in Section 17 shall

have any effect until it has been duly registered in accordance with the provisions of Section 18. Sub-section (2) with its proviso, which is material,

reads:

If the documents required to be filed with the Registrar u/s 18 are not filed within the time allowed under that section, such alteration and the order

of the court made under Sub-section (5) of Section 17 and all proceedings connected therewith, shall, at the expiry of such period, become void

and inoperative.

Provided that the court may, on sufficient cause shown, revive the order on application made within a further period of one month.

This sub-section is as allowed in 1960. Before the amendment, Sub-section (2) read thus:

If the registration is not effected within three months next after the date of the order of the court confirming the alteration, or within such further

time, as may be allowed by the court under Sub-section (4) of Section 18, such alteration and order and all proceedings connected therewith shall,

at the expiry of such period of three months or of such further time, as the case may be, become void;

Provided that the court may, on sufficient cause shown revive the order on application made within a further period of one month.

The amendment in 1960 does not, as it seems to me, effect material change so far as the effect of a failure to file the documents with the Registrar

within the prescribed time is concerned.

The argument on behalf of the petitioner is that Sub-section (4) of Section 18, as it stands, confers unrestricted power upon the court to

condone delay and extend time as it thinks proper and that nothing in Sub-section (2) or the proviso thereto limits or cuts down the wide ambit of

Sub-section (4) of Section 18. I am unable to accept this construction. As I said, Sub-section (4) of Section 18 does not stand alone. For a

proper understanding of the real scope of Sections 18 and 19, they must be read together, and so read it is clear that the power conferred by Sub-

section (4) of Section 18 is controlled by Sub-section (2) of Section 19, particularly by the proviso thereto. Sub-section (2) of Section 19 makes it

explicit that the order of the Court will become void and inoperative in the event of failure to file the required documents with the Registrar within

the prescribed time. This itself would indicate that an application to extend time should be made before the order becomes void and inoperative.

Normally, when an order becomes void and inoperative, there is no question of reviving it, unless the statute provides an enabling power. That is

what the proviso does. The proviso states that notwithstanding the effect provided an application for extension of time is made within a period of

one month from the expiry of the period of three months contemplated by Sub-section (1) of Section 18, the court may, for sufficient cause shown,

extend the time after reviving the order. This, proviso resolves any possible doubt and makes it crystal clear that normally there is no power to

extend time unless an application therefore is made before the order becomes void and inoperative, and that the proviso is an exception to that rule

enabling the court to nevertheless extend the time only if and when the application'' is made within a period of one month from the expiry of the

period of three months.

On this view of the scope of Section 18(1) and 19(2) with the proviso, I uphold the objection of the Registrar of Companies and rule that there

is no power to condone the delay and extend the time since the application has been made beyond the time provided by the proviso to Sub-

section (2) of Section 19.

Sri Raghavan contends that this court, in appeal. No. 2514 of 1958, made an order condoning the delay and extending the time, although an.

application was made beyond the time contemplated by the proviso to Sub-section (2) of Section 19. It is further pointed out by the learned

counsel that the Registrar himself, on that occasion, had no objection. But the order of this court does not show that the precise scope of Section

18(4) read in the light of Sub-section (2) of Section 19 with its proviso had been considered. It was not considered obviously for the reason, as Sri

Raghavan himself says, the Registrar did not raise the objection.

The petition is dismissed, but in the circumstances, with no order as to costs.