186 SEBI & Corporate Laws - Reports [Vol. 154
intention of the Legislature in making the provision, the general inconvenience or
injustice which may result to the person from reading the provision one way or the
other, the relation of the particular provision to other provisions dealing with the
same subject and the language of the provision are all to be considered. Prohibition
and negative words can rarely be directory. It has been aptly stated that there is
one way to obey the command and that is completely to refrain from doing the
forbidden act. Therefore, negative, prohibitory and exclusive words are indicative of
the legislative intent when the statute is mandatory. (See Maxwell on Interpretation
of Statutes^11 th Ed. p. 362 seq.; Crawford: Statutory Construction, Interpretation of
Laws p. 523 and Seth Bikhraj Jaipuria v. Union of India [^1962 ] 2 SCR 880.
18. The High Court said that the provisions contained in Section 108 of the Act
are directory because non-compliance with section 108 of the Act is not declared
an offence. The reason given by the High Court is that when the law does not pre-
scribe
the
consequences
or
does
not
lay
down
penalty
for
non-compliance
with
the^
provision
contained
in
Section
108
of
the
Act
the
provision
is
to
be
considered
as^
directory.
The
High
Court
failed
to
consider
the
provision
contained
in
Section
629 (A)^
of
the
Act.
Section
629 (A)
of
the
Act
prescribes
the
penalty
where
no
specific
penalty^
is
provided
elsewhere
in
the
Act.
It
is
a
question
of
construction
in
each
case^
whether
the
Legislature
intended
to
prohibit
the
doing
of
the
act
altogether,
or^
merely
to
make
the
person
who
did
it
liable
to
pay
the
penalty.”
Section
108
operates
independently
of
section
286
or
section
300.
The
in
validation -
of
meeting
is
dependent
under
the
provisions
of
section
108.
There
was^
violation
of
section
108
of
the
Companies
Act.
HQRL
did
not
file
share
certificate^
along
with
the
duly
executed
share
transfer
form
as
on
10. 5. 2005 ,
the^
date
of
Board
resolution.
The
plea
of
Mr.
R.P.
Mittal
has
been
disbelieved
that^
share
certificates
were
returned
on
23. 6. 2003.
The
High
Court
has
also
ordered^
the
proceedings
under
section
340
Cr.P.C.
against
Mr.
R.P.
Mittal
for
filing^
an
affidavit
to
the
contrary.
The
High
Court
has
relied
on
the
affidavit
of
Mr.^
Vivek
Dixit
and
Mr.
Deepak
Sudan,
the
concerned
officials
of
the
Indian
Overseas^
Bank.
The
High
Court
has
found
that
the
share
certificates
were
delivered^
to
Mr.
R.P.
Mittal
not
on
23. 6. 2003
but
on
23. 6. 2005.
No
doubt
about
it^
that
there
was
violation
of
the
provisions
of
section.With
respect
to
the
appropriate
order
to
be
passed
under
section
397
of
the^
Companies
Act
of
1956 ,
reliance
has
been
placed
upon
M.S.D.C. Radha
Ramanan
v. M.S.D. Chandrasekara Raja
[ 2008 ]
6
SCC
750
thus:
“ 23. Sections 397 and 398 of the Act empower the Company Law Board to remove
oppression and mismanagement. If the consequences of refusal to exercise juris-
diction would lead to a total chaos or mismanagement of the company, would still
the Company Law Board be powerless to pass appropriate orders is the question.
If a literal interpretation to the provisions of Section 397 or 398 is taken recourse
to, may be that would be the consequence. But jurisdiction of the Company Law
Board having been couched in wide terms and as diverse reliefs can be granted by
it to keep the company functioning; is it not desirable to pass an order which for
all
intent
and
purport
would
be
beneficial
to
the
company
itself
and
the
majority
of^
the
members?
A
court
of
law
can
hardly
satisfy
all
the
litigants
before
it.
This,
however,^
by
itself
would
not
mean
that
the
Company
Law
Board
would
refuse
to
exercise^
its
jurisdiction,
although
the
statute
confers
such
a
power
on
it.