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Judgment
This is a petition under Article 226 of the Constitution of India, whereby the petitioner seeks issuance of a writ of certiorari or a writ, order or direction in the nature of certiorari or any other appropriate writ, direction or order quashing and setting aside the decision of the executive committee of the Institute of Company Secretaries of India, an erstwhile company which was registered under the Companies Act, 1956, whereby that Institute had rejected the petitioner''s application for enrolment as an Associate Member of that Institute. It may be mentioned at the outset that, that Institute which was a company registered under the Companies Act, has since been dissolved by virtue of Section 31 of the Company Secretaries Act, 1980, which came into force on January 1, 1981, and its place has been taken by Respondent No. 1, the Institute of Company Secretaries of India, which has been constituted under the Company Secretaries Act, 1980. For the sake of convenience, I will refer to hereinafter to the Institute of Company Secretaries of India which was registered under the Companies Act, as "the erstwhile company".
The petitioner who holds the degrees of B.Com. and LL.B., was serving as a Secretary with the Motilal Hirabhai Spinning Weaving and Manufacturing Co. Ltd., which was an existing public limited company under the Companies Act, 1956, with effect from December 3, 1960 upto April, 1978. On May 15, 1975, he applied to the erstwhile company for enrolment as an Associate Member of that erstwhile company. In April, 1976, the erstwhile company rejected the petitioner''s request and refused to enrol the petitioner as an associate member. It is that decision which the petitioner has called in question by filing this petition, and for that purpose, the petitioner knocked at the doors of this court on December 22, 1986. He has thus, come to this court more than 10 1/2 years after the impugned decision.
According to the petitioner, he holds degrees in Commerce and Law, and that he served as a Secretary of The Motilal Hirabhai Spg. Wvg. & Mfg. Co. Ltd. from December 3, 1960 upto April, 1978. He was serving in that capacity even on the date of his application to the erstwhile company, i.e. on May 15, 1975. The Central Government had framed the Companies (Secretary''s Qualifications) Rules, 1975 (for short "the said Rules") laying down the qualifications for appointment of a person as Secretary of public a limited company, having a paid up share capital of Rs. 25 lacs or more. According to Rule 2 of the said Rules, a person has to be a member of the Institute (erstwhile company) for appointment as Secretary. In view of this provision contained in the said Rules, the Institute (erstwhile Company) had issued Notification on May 15, 1975, providing therein the categories of persons who are eligible to be considered for enrolment as member of the Institute. That notification inter alia provided that any person who, on August 1, 1972 was working as Secretary of a Public Limited Company and continued to hold that position on the date of his application and possesses one or more of the qualifications enumerated in the notification, would be considered for enrolment as an Associate Member. According to the petitioner being a Law graduate, he falls within one of the categories mentioned In the notification and he answers the other qualifications and requirements as mentioned in the said notification in as much as he was a Secretary of a public limited company on August 1, 1972, and he continued to hold that position on the date he made his application, i.e. on May 15, 1975. Thus, according to the petitioner, his case squarely answers the requirement of the notification, and the erstwhile company was totally wrong in rejecting his request for enrolment as an associate member. This in short is the genesis of the petitioner''s claim in this petition.
It appears that the erstwhile company rejected the request of the petitioner on the ground that though he may have worked as Secretary of a public limited company, he had not worked as the Secretary of a public limited company of which the paid up capital was Rs. 25 lacs or more. In the submission of the petitioner, the erstwhile company was not at all justified in importing into its notification the words "of which the paid up capital was Rs. 25 lacs or more". The petitioner submits that in having read into its own notification, these additional words which never existed, the erstwhile company acted arbitrarily, illegally and unconstitutionally.
As said above, the erstwhile company came to be dissolved by the act of the Parliament, viz. The Company Secretaries Act, 1980. Under S. 32 of that Act, certain assets and liabilities of that erstwhile company devolved on Respondent No. I which has been brought into existence as a statutory authority. It is therefore, that the petitioner has filed the petition against that statutory authority -Respondent No. 1, and Union of India - Respondent No. 2.
Mr. Raval, the learned Advocate for Respondent No.1 opposed the petition. In justification of the impugned order, he submitted that the impugned order could not be faulted for, though under the notification of the erstwhile company the words "of which the the paid-up capital is Rs. 25 lacs or more", may not be there, essentially that notification was issued to take care of a new situation that was created by the incorporation of Section 383A in the Companies Act which state that every public limited company having a paid up share capital of Rs. 25 lacs or more must have a full time Secretary. In the submission of Mr. Raval, therefore, it was to take care of such companies of which the paid up capital was Rs. 25 lacs or more that the appointment of secretary was required to be made, and keeping in mind that factor, the erstwhile company addressed itself to the question whether the applicants who made applications for enrolment as Associate Members had experience in such big companies having the paid up capital of Rs. 25 lacs or more. The petitioner admittedly having no such experience, in such big company, submitted Mr. Raval, his case was rightly rejected.
Mr. Gandhi, the learned advocate for the petitioner argued to the contrary, and submitted that what the notification of the erstwhile company required was that the person who applied for enrolment as an associate member should, on August 1, 1972, have been working as Secretary of a public limited company irrespective of the extent of the paid up capital of that company.
In the view of the matter that I intend to take on other issues. I do not think it is necessary for me to decide this controversy.
Mr. Raval, the learned advocate for Respondent No. 1 very strongly contended that the petition is barred by laches, delay, waiver and acquiescence. Such a contention has been raised in the affidavit-in-reply as well. In order to appreciate this contention, once again, at the cost of repetition, certain dates may be noticed.
The petitioner applied to the erstwhile company for enrolment as an associate member on May 15, 1975. That request was rejected in April, 1976. The present petition has been filed on December 22, 1986, that is to say, it has been filed more than 10 1/2 years after the impugned decision was taken.
Mr. Raval therefore, submitted that the petition suffers from the fatal vices of delay, laches, acquiescence as also of waiver.
In paragraph 9 of the petition, after adverting to the erstwhile company having rejected to his request for enrolment, and having refunded to him his filing fees of Rs. 200/-, and after averring that before the rejection of his application, the erstwhile company had not afforded any opportunity of personal hearing to the petitioner, the petitioner stated that as a man of ordinary prudence, the petitioner waited and tried to collect data against the erroneous decision of the Institute (erstwhile company), and at last, a decision of the Hon''ble Delhi High Court was found supporting the petitioner''s case.
As I see the petition, it is based on the judgment of the Delhi High Court in the case of Suraj Prakash Oberoi v. Institute of Company Secretaries of India 1986 (60) Comp Case, 536: (1985 Tax LR 19 (Delhi). According to the petitioner, when he came to note this decision of Delhi High Court, he realised that the rejection of his application for enrolment by the erstwhile company was illegal, and therefore, he has approached this High Court. In paragraph 14 of the petition, he stated that the letter of rejection referred to by him in the earlier paragraph has inadvertently been mislaid owing to passage of time and he is therefore, not in a position to produce the same along with the petition.
The facts clearly reveal that the petitioner has approached this Court more than 10 1/2 years after the impugned order was passed. He is before this court in its writ jurisdiction under Article 226 of the Constitution. On the assumption that the impugned decision is grossly wrong and arbitrary, the question would be whether the petitioner should be granted the relief?
On behalf of the petitioner, Mr. Gandhi, submitted that in the interregnum of 10 1/2 years, no new right has been created and it was after having read the judgment of the Delhi High Court that the petitioner came to realise that the rejection of his request for enrolment was grossly arbitrary and therefore, notwithstanding this delay of 10 1/2 years, the relief should be granted to the petitioner as prayed.
On the other hand, Mr. Raval, strenuously contended that whatever be the merits of the contention about the impugned order being arbitrary, unreasonable, etc. on the ground of delay, laches, acquiescence and waiver itself, the petitioner should be refused relief. Mr. Raval also submitted that had the petitioner come to the court with promptitude, and had the court found that the impugned decision was arbitrary and wrong, the erstwhile company could have taken remedial measures to modify its notification so as to reflect the real spirit behind it, which was the concern for the proper management of big companies.
A number of judgments have been cited before me on the question of delay, laches, acquiescence and waiver. All said and done, the judgments ultimately boil down to this that each case has to depend upon its specific facts and no strait-jacket formula can be laid down as to delay of how much period would prove not fatal to the writ petition and beyond that it would prove fatal. Still however, illustrative cases may, with advantage, be referred to.
In State of Madhya Pradesh Vs. Bhailal Bhai and Others, , petitions were filed in the High Court of Madhya Pradesh for refund of tax paid under the provisions held to be unconstitutional. Some of the petitions were filed within the period of three years from the date of the decision holding the provisions ultra vires whereas others were filed after three yers. The Supreme Court allowed the former group, but dismissed the later. It was observed in paragraph 21 of the report as follows:
"This Court may consider the delay unreasonable even if it is less than the period of limitation prescribed for a civil action for the remedy, but where the delay is more than this period, it will almost always be proper for the Court to hold that it is unreasonable."
On behalf of the petitioner, reliance was placed on the decision in the case of Ratilal Balabhai Nazar Vs. Ranchhodbhai Shankerbhai Patel and Others, . In that case, the delay was of 3 1/2 years, and this is what this Court has observed in paragraph 2 of the report:
"the remedy under Article 227 is a discretionary remedy and the Court will not ordinarily exercise its discretion in favour of a petitioner who is guilty of laches or delay but there can be no hard and fast rule, no mathematical formula laying down the period within which the remedy must be invoked beyond which delay would be considered fatal petitioner. Delay or laches is a factor which bears on the discretion of the Court and what is essentially a matter of discretion cannot be cast in any rigid mould or encased in any strait-jacket formula. Whether or not delay in any particular case is sufficient to disentitle the petitioner to relief under Article 227 must depend on the facts and circumstances of the case. We cannot, therefore, accept the submission of the respondents that merely because the petition is filed more than 90 days after the date of the impugned decision, the petition must be thrown out on the ground of laches and delay. The period of 90 days provided for pursuing the analogous remedy of revision is certainly a relevant factor and would have to be taken into account, but it would not be proper to regard it as invested with such sanctity that any delay beyond it would necessarily be fatal. What is of the essence is and that constitutes the principle behind the rule that the petitioner must not be guilty of inaction in asserting his rights; he must not sleep over his rights his delay must not have resulted in prejudice to the other party."
After making the aforesaid observations, the Division Bench of this Court referred to the decision in the case of Moon Mills Ltd. v. M. R. Mehar, a judgment which has been reported in AIR 1967 SC 1450. In that case of Moon Mills Ltd., their Lordships of the Supreme Court, in turn referred to the judgment of Sir Barnes Peacock in the Lindsay Petroleum Company v. Prosper Armstrong Hurd, Abram Farewell and John Kemp (1874) LR 5 PC 22 where at p. 239, the following observations appear :
"Now the doctrine of laches in Courts of Equity is not an arbitrary or a technical doctrine. Where it would be practically, unjust to give a remedy, either because the party has, by his conduct, done which might fairly be regarded as equivalent to a waiver of it, or where by his conduct and neglect he has, though perhaps not waiving the remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases, lapse of time and delay are most material. But in every case, if an argument against relief, which otherwise would be just, is founded upon mere delay of course not amounting to a bar by any statute of limitations, the validity of that defence must be tried upon principles substantially equitable. Two circumstances, always important in such cases, are, the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking the one course or the other, so far as relates to the remedy.''''
In Tilokchand and Motichand and Others Vs. H.B. Munshi and Another, , this is what the Supreme Court at para 7 of the report held :
"It follows, therefore, that this Court puts itself in restraint in the matter of petitions under Article 32 and this practice has now become inveterate. The question is whether this Court will inquire into belated and stale claims or take note of evidence of neglect of one''s own rights for a long time? I am of opinion that not only it would (not?) but also that it should (not?). The party claiming fundamental rights must move the Court before other rights come into existence. The action of courts cannot harm innocent parties if their rights emerge by reason of delay on the part of the person moving the Court. This principle is well recognised and has been applied by Courts in England and America."
In paragraph 10 of that very case, it has been observed thus :
"I should say that utmost expedition is the sine qua non for such claims. The party aggrieved must move the Court at the earliest possible time and explain satisfactorily all semblance of delay. "
In Durga Prashad Vs. Chief Controller of Imports and Exports, , it has been posited that :
"There can be no doubt that if a citizen moves the High Court under Article 226 and contends that his fundamental rights have been contravened by any executive action, the High Court would naturally like to give relief to him; but even in such a case, if the petitioner has been guilty of laches, and there are other relevant circumstances which indicate that it would be inappropriate for the High Court to exercise its high prerogative jurisdiction in favour of the petitioner ends of justice may require that the High Court should refuse to issue a writ. There can be little doubt that if it is shown that a party moving the High Court under Article 226 for a writ is, in substance, claiming a relief which under the law of limitation was barred at the time when the writ petition was filed the High Court would refuse to grant any relief in its writ jurisdiction."
In State of Orissa and Others Vs. Shri Arun Kumar Patnaik and Others, as there was long and inexplicable delay and the grievance was too stale to merit redress, the relief was refused.
In Raja Jagdambika Pratap Narain Singh Vs. Central Board of Direct Taxes and Others, this is what the Supreme Court said in paragraph 13 of the report :
"Even so, the journey of the appellant is depend upon its own facts, when the question beset with insurmountable hurdles Art. 226 is not a blanket power, regardless of temporal and discretionary restrains. If a party is inexplicably insouciant and unduly belated due to laches the Court may ordinarily deny redress and if the High Court has exercised its discretion to refuse this Court declines to disturb such exercise unless the ground is too untenable. To awaken this Court''s special power gross injustice and grievous departure from well established criteria in this jurisdiction have to be made out. In the present case, long years have elapsed not only after the impugned orders but even after the High Court held the taxed income agricultural. The reason for the inaction is stated to be an illusory expectation of suo motu modification of assessment orders on representation by the party. The High Court has examined and dismissed the plea and consequently refused relief. We do not think that in so refusing relief on ground of laches the High Court exercised its direction arbitrarily or improperly. And the story must thus close. "
In Ramchandra Shankar Deodhar and Others Vs. The State of Maharashtra and Others, it has been enunciated as follows:
"In the first place, it must be remembered that the rule which says that the Court may not inquire into belated and stale claims is not a rule of law but a rule of practice based on sound and proper exercise of discretion and there is no inviolable rule that whenever there is delay, the Court must necessarily refuse to entertain the petition. Each case must depend upon its own facts."
After making the aforesaid pertinent observation, their Lordships of the Supreme Court referred to the earlier judgment in Trilok chand''s case, referred to by me here in above.
The resume of the judgment referred to by me here in above clearly shows that no straight-jacket formula can be evolved for saying that delay up to a particular time would not bar the petition, and delay beyond that time would bar it. Each case has to depend upon its own facts, when the question of delay, laches, etc. is raised to oppose a writ petition Art. 226 or for that matter, even a writ petition before the Supreme Court under Art. 32 of the Constitution. However, the general principles that seem to have been evolved by the judgments, clearly indicate that a petitioner who wants to invoke the writ jurisdiction of the High Court, and for that comes to the Court and if there is delay, he must explain that delay. The other principle that seems to have been well founded is that normally delay beyond the period of limitation prescribed for an analogous civil suit would be treated to be fatal to the claim for a relief in a writ jurisdiction though of course, no unviolable rule in that behalf has been laid down, and it has been held that delay of a period shorter than the period of limitation prescribed for the analogous suit could also be fatal and in a given case, delay of a period more than the period of limitation prescribed for the analogous suit may not come in the way of the petitioner seeking relief if other factors are in his favour. Thirdly it seems to have been well entrenched by a number of decisions that if the conduct of the petitioner tantamounts to waiver, then, whatever be the period of delay, he should be refused relief.
As a result of the consideration of the judgments referred to by me here in above, I think the above said principles seem to have been well established. It is from the stand: point of those principles that I have to examine the facts of the case before me.
In the case before me, the petitioner''s request for being enrolled as an associate member was rejected way back in April, 1976, and it appears quite clear that the decision was, soon after it was taken, communicated to the petitioner. The alibi of the petitioner is that as a man of ordinary prudence, he waited and tried to collect data against the erroneous decision of the erstwhile company, and at last he came by the Delhi judgment referred to here in above and after he came across that judgment, without wasting much time, he has approached this Court. I think the alibi cannot be accepted. It is not as if, the Delhi High Court judgment enacted a new law. It is also not as if the Delhi High Court judgment has enunciated the law. The facts in the Delhi High Court judgment were to an extent different. None-the-less, in that judgment, the contention that the erstwhile company could not have legally read into it notification, the words "having a share capital of Rs. 25 lacs or more" in relation to a company of which the petitioner was supposed to be the Secretary at the relevant time seems to have been accepted. To that extent, the Delhi High Court judgment does support the petitioner. But then, it is not as if, it is for the first time when the Delhi High Court rendered that judgment, the proposition of law came to be enunnciated: The law was as it was even when the erstwhile company rejected the petitioner''s request for enrolment as an associate member in April. 1976. Even the petitioner had, at least very time felt that the decision was erroneous and it was therefore that he tried to collect data against that erroneous decision as said by him in para 9 of the petition. To the petitioner''s belief, therefore, the decision was erroneous and that belief he formed no sooner that decision was communicated to him. If he felt that the decision was erroneous, nobody prevented him from seeking the remedy soon thereafter. He should have approached the proper forum for the appropriate relief within reasonable time after that decision was rendered in April, 1976. Had he gone to the regular Civil Court challenging that decision, the limitation for his suit would have been three years. That period of three years would have been over some time in April, 1979. As seen above, he has come to this Court in December, 1986, i.e. more than 7 1/2 years after the expiry of the period of limitation prescribed for the suit. Going by the propositions of law as they emerge from the Judgments referred to by me here in above, ordinarily, this Court, on that ground alone should refuse him relief.
Mr. Gandhi for the petitioner submitted that it was when the petitioner read Delhi High Court judgment in the law report that he realised that the decision of the erstwhile company refusing his request for enrolment as an associate member was arbitrary and wrong. I am just not impressed by that judgment. As can be seen from paragraph9 of the petition, right from the time he came to know about the decision, he believed that the decision was erroneous and that he was collecting data. What data he was collecting, he has not elucidated. But then, according to him, the decision was erroneous, is a fact pleaded by him in the petition itself. If he believed that the decision was erroneous, he should have approach the proper forum within a reasonable time, and if he approached the Civil Court, he should have approached that Court within the limitation prescribed for his action. He having not done that, he should not be granted relief in the writ jurisdiction when he has knocked the door of this Court 10 1/2 years after the passing of the impugned order I do not find any explanation for this delay. The argument that the starting point of limitation for his writ petition would be the reporting of the Delhi judgment, is required to be stated merely for being rejected. It may be noticed that the petitioner is not a layman. He holds the degree in Commerce and the degree in Law. He is serving as Company Secretary for a number of years. He could well have known whether the impugned decision was correct or not, and going by what he has stated in the petition, according to his assessment, the decision was erroneous. He, therefore, did not need the help of the Delhi decision to say that the decision was erroneous. If the decision was erroneous, it was erroneous, whether the Delhi High Court 1 took A similar view or not.
It is good that the Delhi High Court decision was rendered on July 19, 1984, and came to be reported in a law reporter in 1986. Supposing, that decision had not been rendered in 1984, and had not been reported in the law reporter in 1986, could the petitioner be heard to say that he could come to this Court at any length of time for the relief that he has prayed in the petition? Secondly supposing that the Delhi High Court decision had been rendered in the year 1996, and had been reported in a law reporter in the year 1998, could the petitioner have come to this Court in the year 1999, some 23 years after the rejection of his request for enrolment, and could have been granted the relief on the ground that the Delhi High Court came to be rendered only in the year 1996? Answers to these questions, in my opinion, are in the negative.
If the petitioner thought that the decision was wrong, he should have sought his remedy within a short time. He has not done that he has waived his right to get the relief. He has acquiesced in the decision, his petition suffers from delay and laches.
In view of the foregoing discussion, I think, without entering into the merits of the contention whether the impugned decision is or is not arbitrary, the petitioner should be refused the relief.
Mr. Raval, the learned advocate for respondent No. 1 also contended that by virtue of S. 32(2) of the Company Secretaries Act, 1980, no writ petition would lie against respondent No. 1, for there was no liability or obligation of the erstwhile company on the date the Company Secretaries Act came into force, which would have devolved upon respondent No.1. The argument was based on the wordings of sub-section (2) of S. 32 of the Company Secretaries Act. However, in view of the -decision that I have taken on the question of delay, laches, waiver, etc. I do not think, I should go into this question raised by Mr. Raval, based on sub-section (2 ) of S. 32 of the Company Secretaries Act.
In the result, the petition fails and it is dismissed. Rule is discharged, with no orders as to costs.
Petition dismissed.