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CASE NO.: Appeal (civil)  651 of 2001

PETITIONER: Pyrites Phosphates & Chemicals Ltd. & Anr

RESPONDENT: Union of India & Ors

DATE OF JUDGMENT: 26/11/2007

BENCH: TARUN CHATTERJEE & DALVEER BHANDARI

JUDGMENT: JUDGMENT O R D E R

CIVIL APPEAL NO. 651 OF 2001 (With C.A. No. 1761 of 2002)

Civil Appeal No. 1761 of 2002 : 1.      A notification bearing No. SO 565 (E) dated 21st of June, 1995  whereby an amendment was made in paragraph 1.3 of Schedule X of  the Companies Act 1956, was sought to be declared as ultra vires the  Constitution of India and was challenged by way of a writ petition  before the High Court of Calcutta. A learned single judge held that the  purported amendment was unreasonable being against the legislative  policy and quashed the Notification dated 21st of June, 1995. The  operative part of the judgment reads as follows: -

"For the purpose of registration of the increase in share  capital only certain amendments have to be made in  certificate issued therefore and certain alternations have  to be made in the Registers maintained by the  Respondent No. 1 for that purpose. Such a regulatory fee  is not meant to be a profit making venture nor thereby a  retrospective effect can be given so as to completely  given a go-bye to the amount paid by the petitioner at the  time of initial registration and/or subsequent increase in  the authorized share capital prior to coming into force of  the impugned Notification.

Imposition of enhanced fee in such a manner must also  be held to be wholly unreasonable.

In that view of the matter only, the impugned orders  cannot be sustained. The purported enhancement has  therefore, be held to be unreasonable being against the  legislative policy. For the reasons aforementioned, these applications are  allowed, the impugned Notification are set aside but in  the facts and circumstances of the case, there will be no  order as to costs."

2.      Feeling aggrieved by the aforesaid order of the learned  single judge, an appeal was carried by the appellant-The Registrar of  Companies, West Bengal, which was dismissed on a finding that the  notification in question was violative of Article 14 of the Constitution  and if the word "pay" was read in place of the second "payable" in  Clause 3 of Schedule X, then it made no sense and in any event, the  mere substitution of the word "paid" in the above place could not have  the meaning of giving credit to the company for the fees already paid

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by it from time to time. It is this judgment of the Division Bench,  which is now under challenge in this court by way of a special leave  petition in respect of which leave has already been granted. 3.      We have heard the learned counsel for the parties and  examined the materials on record, including the notification in  question, which was challenged before the High Court. It has now  been brought to our notice that by a further order, by virtue of the  striking down of the notification dated 21st of June, 1995 by the High  Court, the Central Government had withdrawn the said notification  and restored the position which was prevailing before the notification  in question was brought into force. Such being the admitted position  now, we are not inclined to interfere with the impugned order of the  High Court. Accordingly, the appeal is disposed of without going into  the arguments advanced by the learned counsel for the parties.  However, we direct the appellant to refund the money, recovered on  the basis of the amendment made by the notification which was struck  down by the High Court, within three months from the date of supply  of a copy of this order without payment of interest on the same. The  appeal is thus disposed of. There will be no order as to costs.  However, we make it clear that this order shall not be taken as a  precedent in respect of other matters relating to the same question.  

Civil Appeal No. 651 of 2001 : 1.      A notification bearing No. SO 565 (E) dated 21st of June,  1995 whereby an amendment was made in paragraph 1.3 of Schedule  X of the Companies Act, 1956 was sought to be declared as ultra vires  the Constitution of India and was challenged by way of a writ petition  before the Patna High Court. However, a Division Bench of the High  Court at Patna dismissed the writ petition. This special leave petition  has been preferred against the aforesaid judgment and order of the  Patna High Court. 2.      In view of the reasoning given in CA No. 1761 of 2002, we  set aside the order of the High Court and strike down the notification  dated 21st of June, 1995 and allow this appeal. Since we have struck  down the notification, we direct the respondent to refund the amount  already recovered pursuant to the amendment made by the notification  dated 21st of June, 1995 within three months from the date of supply  of a copy of this order. No interest shall be payable and/or the  appellants shall not press for the payment of interest on the aforesaid  amount which shall be refunded to them. 3.      The appeal is thus allowed to the extent indicated above.  There will be no order as to costs.