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Team Code: P 426

4th KIIT UNIVERSITY NATIONAL MOOT COURT COMPETITION, 2016

BEFORE THE HONBLE


SUPREME COURT OF ISLANDIA

SPECIAL LEAVE PETITION

SLP (CIVIL) NO. _________ OF 2016


UNDER ARTICLE 136 OF THE CONSTITUTION OF ISLANDIA

James McLinder ......... APPELLANT


v.
Christopher Ryland .................... RESPONDENT

UPON SUBMISSION TO THE HONBLE CHIEF JUSTICE AND HIS COMPANION


JUSTICES OF THE SUPREME COURT OF ISLANDIA

WRITTEN SUBMISSION ON BEHALF OF THE APPELLANT

4th KIIT UNIVERSITY NATIONA L MOOT COURT COMPETITION, 2016

TABLE OF CONTENTS

TABLE OF CONTENTS ..

LIST OF ABBREVIATIONS .

III

INDEX OF AUTHORITIES .. IV
STATEMENT OF JURISDICTION .. IX
STATEMENT OF FACTS

..... X

STATEMENT OF ISSUES ....... XI


SUMMARY OF ARGUMENTS . XII
ARGUMENTS ADVANCED ... 1
I. THE ISSUE OF LIMITATION

WAS

REQUIRED

TO BE HEARD

AS

PRELIMINARY ISSUE IN TERMS OF 9A OF THE CODE OF CIVIL PROCEDURE,


1908 ....

A. The issue of limitation is a facet of jurisdiction .. 1


B. 9A of the CPC, 1908 was incorporated with the intention to set departure from the
general rule provided under Order XIV Rule 2 of the CPC, 1908 .

C. The petition filed by the respondent in the High Court was barred by the Doctrine of
Laches . 4

II. 196(3)(a) OF THE 2013 ACT OPERATES AS AN ELIGIBILITY CONDITION


WHICH ONLY APPLIES AT THE TIME OF APPOINTMENT AND THERE IS
DISTINCTION BETWEEN ELIGIBILITY CRITERIA AND CONDITION FOR
DISQUALIFICATION ........

A. 196(3)(a) of the Companies Act, 2013 operates as an eligibility condition which only
applies at the time of appointment .. 5
B. There is a distinction between eligibility criteria and condition for disqualification .. 7

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III. THE AGE LIMIT OF 70 YEARS UNDER 196(3)(a) OF THE COMPANIES ACT 2013,
CANNOT APPLY TO A WHOLE-TIME DIRECTOR VALIDLY APPOINTED PRIOR
TO 01.04.2013 ..... 8
A. There is no clear provision showing legislative intent . 8
B. Retrospective application of 196(3)(a) of the Companies Act, 2013 is violative of
principles of natural justice . 10
IV. THE WORD CONTINUE USED IN 196(3) OUGHT TO BE CONSTRUED IN
CONTEXT OF 193(3)(b), (c) AND (d) ALONE AND NOT 196(3)(a) . 13

PRAYER ....... XV

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LIST OF ABBREVIATIONS

&

And

Paragraph

A.P.

Andhra Pradesh

AIR

All India Reporter

Art

Article

Bom CR

Bombay Criminal Reporter

Co.

Company

CONST

Constitution

Corpn.

Corporation

CPC

Civil Procedure Code or Code of Civil Procedure

ed.

Edition

Honble

Honorable

Ker

Kerala

Ltd.

Limited

Or.

Order

Ors.

Others

Para

Paragraph

Pg. No.

Page Number

R.

Rule

S. No.

Serial Number

SC

Supreme Court

SCC

Supreme Court Cases

SCR

Supreme Court Reporter

SLP

Special Leave Petition

U.P.

Uttar Pradesh

v.

Versus

WTD

Whole Time Director


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INDEX OF AUTHORITIES

STATUTES REFERRED
Code of Civil Procedure (1908).
The Companies Act (1956).
The Companies Act (2013).
The Constitution of Islandia (1950).
The Limitation Act (1963).
Winchester Act 25 of 1950, the Code of Civil Procedure (Winchester Amendment) (1970).
Winchester Act 65 of 1977, the Code of Civil Procedure (Winchester Amendment) (1977)

TABLE OF CASES
SUPREME COURT CASES
S. No.

Cases

Pg. No.

1.

A.K. Kraiapak v. Union of India, AIR 150 SC 1970.

2.

Amrit Lal v. Collector, C.E.G., AIR 538 SC 1975.

3.

Arjan Singh v. State of Punjab, AIR 703 SC 1970.

4.

B.R.Singh v. Union of India, AIR 1 SC 1990.

5.

B.S. Bajwa v. State of Punjab, AIR 1510 SC 1999.

6.

Central Board of Dawoodi Bohra Community v. State of Maharashtra, 2 SCC 2


673 (2005).

7.
8.

Central Inlnad Water Transport Corporation Linmited v. Briojo Nath, 2 SCR 12


278 (1986).
Dominion of India v. Shrinbai A. Irani, AIR 596 SC 1955.
4

9.

Dr. L.P. Agarwal v. Union of India & Ors., AIR 1872 SC 1992.

11

10.

Durga Pd v. Chief Controller, AIR 769 SC 1970.

11.

Food Corporation of India v. Kamdhenu Cattle Feed Industries, AIR 1601 SC

11

1999.
12.

Foreshore Co-operative Housing Society Limited and Ors. v. Praveen D. Desai 3, 5


and Ors, Civil Appeal No. 7732 of 2011.
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13.

Gian Singh Mann v. High Court of Punjab & Haryana, AIR 1894 SC 1908.

14.

ITW Signode India Ltd. v. CCE, 3 SCC 48 (2004).

15.

J.S. Yadav v. State of Uttar Pradesh, 6 SCC 570 (2011).

16.

Janardan Reddy v. State, AIR 124 SC 1951.

17.

Jitendra Kumar v. State of Haryana, 2 SCC 161 (2008).

11

18.

Jivabhai Purshottam v. Chhagan Karson, AIR 1491 SC 1961.

19.

K.C. Arora v. State of Haryana, 3 SCC 281 (1984).

20.

K.S. Paripooran v. State of Kerala, AIR 1012 SC 1995.

21.

Keshvan v. State of Bombay, AIR 128 SC 1951.

22.

Krishnaswamy v. Union of India, AIR 118 SC 1973.

23.

M.P. Oil Extraction v. State of M.P., 7 SCC 592 (1997).

11

24.

Mahdeolal Kanodia v. Administator General of W.B., AIR 307 SC 1960.

25.

Maneka Gandhi v. Union of India, AIR 597 SC 1978.

12

26.

Manick Chandra Nandy v. Debdas Nandy, 1 SCC 512 (1986).

27.

Mithilesh Kumari v. Prem Bahadur Khare, AIR 1247 SC 1989.

28.

Municipal Corp. of Greater Bombay v. Industrial Development Investment Co. 4


Ltd., AIR 482 SC 1997.

29.

Municipal Council, Ahmednagar v. Shah Hyder Baig, AIR 671 Sc 2000.

30.

National Building Construction Corp. v. S. Raghunathan, 7 SCC 566 (1998).

12

31.

National Thermal Power Corpn. Ltd. v. Siemens Atkeingesellschaft, 4 SCC 451 2


(2007).

32.

Naujyoti Coop. Group Housing Society v. Union of India, 4 SCC 477 (1992).

11

33.
34.

Nusli Neville Wadia v. Ferani Hotels (Pvt.) Ltd. and others, Civil Appeal 3, 5
No(s). 3396 of 2015.
O.P. Singla v. Union of India, 4 SCC 450 (1984).
6

35.

Official Trustee v. Sachindra Nath Chatterjee, AIR 823 SC 1969.

36.

P. Suseela and Ors. v. University Grants Commission and Ors., 8 SCC 129 7, 9, 10

(2015).
37.

P. Venugopal v. Union of India, 5 SCC 1 (2008).

11

38.

P.D. Aggarwal & Ors. v. State of U.P. & Ors., AIR 1676 SC 1987.

12

39.

Pandurang Dhondi Chougule v. Maruti Hari Jadhav, AIR 153 SC 1633.

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40.

Petroleum Corpn. Ltd. v. Mumbai Shramil Sangha, 4 SCC 448 (2001).

41.
42.

Punam Co-operative Housing Society v. Pratap Issardas Bhatia and others, 3, 5


Civil Appeal No(s). 3397 of 2015.
R. S. Makashi v. I.M. Menon, AIR 101 SC 1982.
4

43.

Raj Krushna Bose v. Binod Kanungo, AIR 202 SC 1954.

44.

Ram Narain v. Shimla Banking & Industrial Co. Ltd, AIR 614 SC 1956.

45.

Rama Vijay Kumar Oberoi thr. GPH v. Sunita Sudam Ranaware etc., Civil 3, 5
Appeal NO(s). 3393-95 of 2015.
Rattan Chandra Sammanta v. Union of India, AIR 2276 SC 1993.
4

46.
47.

48.

Razia Amirali Shroff and others v. M/s Nishuvi Corporation and others, Civil 3, 5
Appeal No. 5514 of 2012.
Roshan Lal v. International Airport Authority, AIR 597 SC 1981.
4

49.

Sarwan Singh v. Kasturi Lal, 1 SCC 750 (1977).

50.

Satyadhyan Ghosal v. Deorjin Debi, AIR 941 SC 1960.

51.

Schedule Caste and Weaker Welfare Assn. v. State of Karnataka, 2 SCC 604 11
(1991).

52.

Shakti Tubes Ltd. v. State of Bihar, 7 SCC 673 (2009).

53.

Shyam Sunder v. Ram Kumar, AIR 2472 SC 2001.

54.

Sridhar Sundararajan v. Ultramarine & Pigments Limited, [Notice of Motion 7, 10


(L) No. 434 of 2015 in Suit (L) No. 146 of 2015 decided on July 16, 2015].

55.

State of Bombay v. Vishnu Ramchandra, AIR 307 SC 1961.

56.

State of Kerala v. K.G. Madhavan Pillai, AIR 49 SC 1989.

11

57.

State of Madhya Pradesh v. Bhailal Bhai, AIR 1006 SC 1964.

58.

State of Madhya Pradesh v. Rameshwar Rathore, AIR 1849 SC 1990.

59.

State of Punjab & Ors. v. Bhajan Kaur & Ors., AIR 2276 SC 2008.

60.

State of U.P. & Anr. v. Dr. S.K. Sinha & Ors., AIR 768 SC 1995.

11

61.

State of U.P. v. Synthetics and Chemicals Ltd., 4 SCC 139 (1991).

62.

State of U.P. v. Ved Pal Singh, 9 SCC 212 (2003).

63.

Sulochana Amma v. Narayatianan Nair, AIR 152 SC 1994.

64.

Suresh Koshy George v. University of Kerala, AIR 198 SC 1969.

65.

Surjeet Singh v. Union of India, AIR 2560 SC 1990.

66.

Trimbak Damodhar Rajpurkar v. Assaram Hiraman Patil, AIR 1758 SC 1966.

67.

Union of India & Ors. v. Tushar Ranjan Mohanty & Ors., 5 SCC 450 (1994).

12

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68.

Union of India v. Hindustan Development Corpn., 3 SCC 499 (1993).

11

69.

Union of India v. Raghubir Singh, 2 SCC 754 (1989).

70.

UT of Chandigarh v. Dilbagh Singh, 1 SCC 154 (1993).

12

71.

Zile Singh v. State of Haryana, AIR 5100 SC 2004.

3, 8

HIGH COURT CASES


72.

Burhanuddin Hussain v. State of A.P., AIR 137 AP 1970.

73.

Meher Singh v. Deepak Sawhny, 1 Bom CR 107 (1999).

74.

P.M. Kurien v. P.S. Raghavan, AIR 142 Ker 11970.

75.

R. Govindasamy v. Kasturi Ammal, AIR 218 Mad 1998.

FOREIGN CASES
76.

Abdul v. Sulivon, All ER 226 1 [1952].

77.

Doolubdass Pettamberdass v. Ramloll Thackoorseydass, 5 MIA 109 [1850].

78.

John v. Rees, All ER 274 2 [1969].

79.

Maclean v. workers Union, ChD 602 1 [1969].

80.

Re, Pulborough Parish School Board Election, Bourke v. Nutt, 1 QB 725

[1894].
81.

West v. Gwynne, 2 Ch 1 [1911].

BOOKS REFERRED
A. RAMAIYA , A G UIDE TO THE COM PANIES ACT, 2 (18th ed. 2015).
A. RAMAIYA, A G UIDE TO THE COMPANIES ACT, 3 (18th ed. 2015).
A.K. MAJUMDA R & G.K. K APOOR, TAXMANNS COMPA NY LAW (16th ed. 2011).
A.R. BISWAS & S.P. S EN GUPTA , P RINCIPLES OF INTERPRETATION OF STATUTES (2010).
BHA RAT, COMPANIES ACT W ITH RULES (24th ed. 2015).
C.K. TAKWANI, CIVIL P ROCEDURE CODE WITH LIM ITATION ACT, 1963 (17th ed. 2014)
I.P. MASSEY, ADMINISTRATIVE LAW (8th ed. 2012).
JUSTICE G.P. S INGH , PRINCIPLES O F STATUTORY INTERPRETATION (13th ed. 2012).
M.P. JAIN, I NDIAN C ONSTITUTIONA L LAW (7th ed. 2014).
MULLA , THE C ODE OF C IVIL P ROCEDURE ABRIDGED (16th ed. 2014).
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P.M. BAKSHI, THE CONSTITUTION OF I NDIA (12th ed. 2013).


VEPA P. SARATHI, I NTERPRETATION OF STATUTES (5th ed. 2013).
T.R. DESAI, COMM ENTARY O N THE LIMITATION ACT (10th ed. 2011).
K.M. GHOSH & K.R. CHANDRATRE, C OM PANY LAW (14th ed. 2013).
C.R. DATTA, THE COM PANY LAW (6th ed. 2009).
M.P. JAIN, THE CODE OF CIVIL P ROCEDURE (2nd ed. 2010).
JUSTICE. T.S. DOA BIA, CODE O F CIVIL P ROCEDURE, 1 (13th ed. 2009).
SUDIPTO SARKAR & V.R. MANOHA R, SARKARS CODE O F CIVIL P ROCEDURE, 1 (11th ed.
2010).
C.K.THAKKER, CODE OF CIVIL P ROCEDURE, 1 (2011).
MAHENDRA P. SINGH, V,N, SHUKLAS CONSTITUTION O F INDIA (12th ed. 2016).
DURGA DAS BASU, C OMM ENTA RY O N THE CONSTITUTION OF I NDIA (8th ed. 2008).

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STATEMENT OF JURISDICTION

THE APPELLANT INVOKES THE JURISDICTION OF THE HONBLE SUPREME COURT


OF ISLANDIA UNDER ARTICLE 136 1 OF THE CONSTITUTION OF ISLANDIA2 .

THE PARTIES SHALL ACCEPT ANY JUDGMENT OF THE COURT AS FINAL AND
BINDING FOR THEM AND SHALL EXECUTE IT IN ITS ENTIRETY AND IN GOOD
FAITH.

1
2

I SLANDIAN CONST . art 136 deals with special leave to appeal by the Supreme Court.
Constitution of Islandia or Islandian Constitution hereinafter has been referred to as Constitution.

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STATEMENT OF FACTS
The Appellant humbly states before the Honble Supreme Court:
1. That, Goodenough Limited is a public limited company registered under the law of the
Republic of Islandia. Goodenough has been listed o n various stock exchange since 1997 and
has more than 250,000 public shareholders on date.
2. That, the Appellant, James McLinden was validly appointed under 1956 Act as Whole Time
Director of Goodenough for a period of 5 years with effect from 12th February 2013 by an
ordinary resolution passed by the shareholders of Goodenough at the Annual General Meeting
held on 25th March 2013. On 15th April 2013, Mr. McLinden attained the age 70 years.
3. That, the Respondent, Mr. Christopher Ryland (a shareholder of Goodenough) o n 12th May
2016, filed a suit before the High Court of the State of Winchester challenging the continuation
of Mr. McLinden as WTD under 196(3)(a) of the 2013 Act along with a Notice of Motion of
the same date seeking urgent interim relief restraining Mr. McLinden from functioning or
continuing to exercise powers as WTD, pending disposal of the Suit.
4. That, in response to the Notice of Motion, the Appellant, Mr. McLinden filed a detailed reply
dated 19th May 2016.
5. That, by an order dated 13th June 2016, a Single Judge of the High Court of Essos held that the
issue of limitation was not required to be heard as a preliminary issue in terms of 9A of the
CPC. On the merits, the learned Single Judge held that after the commencement of the 2013
Act, no person who has suffered one of the disqualifications there in, can be appointed or
continued in appointment as a WTD.
6. That, accordingly, the learned Single Judge allowed the Notice of Motion and issued an interim
injunction restraining the Appellant, Mr. McLinden from continuing as WTD of Goodenough
pending disposal of the Suit.
7. That, the Appellant, Mr. McLinden challenged the judgment of learned Single Judge in an
appeal before a Division Bench of the High Court of Winchester.
8. That, by an order dated 28th July 2016, the Honble Division Bench upheld the order of the
Single Judge and dismissed the appeal.
9. That, being aggrieved, the Appellant, Mr. McLinden challenged the judgments of the High
Court of Winchester before the Honble Supreme Court of Islandia, by way of a special leave
petition.
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STATEMENT OF ISSUES

I.

WHETHER THE ISSUE OF LIMITATION WAS REQUIRED TO BE HEARD AS A


PRELIMINARY ISSUE IN TERMS OF 9A OF THE CODE OF CIVIL PROCEDURE,
1908?

II.

WHETHER 196(3)(a) OF THE COMPANIES ACT, 2013 OPERATES AS AN


IMMMEDIATE

DISQUALIFICATION

ON

THE

APPOINTMENT

AND

CONTINUATION OF A PERSON AS WHOLE-TIME DIRECTOR OR WHETHER


THE SAME IS AN ELIGIBILITY CONDITION WHICH ONLY APPLIES AT THE
TIME OF APPOINTMENT, AND WHETHER THERE IS ANY DISTINCTION
BETWEEN THE TWO?

III.

WHETHER THE AGE LIMIT OF 70 YEARS UNDER 196(3)(a) OF THE


COMPANIES ACT 2013, CAN APPLY TO A WHOLE-TIME DIRECTOR VALIDLY
APPOINTED PRIOR TO 01.04.2013?

IV.

WHETHER THE WORD CONTINUE USED IN 196(3) OUGHT TO BE


CONSTRUED IN CONTEXT OF 193(3)(b), (c) AND (d) ALONE AND NOT
196(3)(a)?

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SUMMARY OF ARGUMENTS

I.

THE ISSUE OF LIMITATION

WAS

REQUIRED

TO BE HEARD

AS

PRELIMINARY ISSUE IN TERMS OF 9A OF THE CODE OF CIVIL PROCEDURE,


1908.
It is most humbly submitted that the High Court ought to have decided the issue of limitation as a
preliminary issue before proceeding to adjudicate the matters on merits because the issue of limitation
is a facet of jurisdiction as issue of limitation goes to the root of jurisdiction and may oust the
jurisdiction of the court. 9A of the CPC, 1908 was incorporated under the Act through State
Amendment with the intention to get departure from the general rule provided under Order XIV Rule 2
of the CPC, 1908 wherein 9A of the CPC provides a self- contained scheme with a non- obstante
clause which mandates the court to follow the provision and the intention of the law is to decide the
issue relating to jurisdiction of court as a preliminary issue notwithstanding the provision contained in
Order XIV Rule 2 of CPC. Moreover, as per the Doctrine of Laches, the petition filed by the
respondent in the High Court was barred. Thus, the issue of limitation was required to be heard as a
preliminary issue in terms of 9A.

II.

196(3)(a) OF THE COMPANIES ACT, 2013 OPERATES AS AN ELIGIBILITY


CONDITION WHICH ONLY APPLIES AT THE TIME OF APPOINTMENT, AND
THERE IS DISTINCTION BETWEEN ELIGIBILITY CRITERIA AND CONDITION
FOR DISQUALIFICATION.

It is most humbly submitted that 196(3)(a) of the 2013 Act acts as an eligibility condition which only
applies at the time of appointment. The Companies Act, 2013 has provided distinct and clear provisions
for vacation of office of director in the form of 167 and disqualifications for appointment of director
in the form of 164 and these two s nowhere mention about age limit as a criteria for vacation of
office or disqualification of director. Hence, reading 196 of the Act with correspondence to 164 and
167 of the Act, it can be inferred that only 196(3)(b), (c) and (d) act as conditions for
disqualification whereas 196(3)(a) acts as an eligibility criteria. Moreover, there is a distinction
between eligibility condition and disqualification as the eligibility condition operates only at the stage
of appointment whereas clause related to disqualification operates both at the stage of appointment as
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well as during the continuation of the tenure. Thus, 196(3)(a) of the 2013 act operates as an eligibility
condition which only applies at the time of appointment and there is distinction between eligibility
criteria and condition for disqualification.

III.

THE AGE LIMIT OF 70 YEARS UNDER 196(3)(a) OF THE COMPANIES ACT 2013,
CANNOT APPLY TO A WHOLE-TIME DIRECTOR VALIDLY APPOINTED PRIOR
TO 01.04.2013

It is most humbly submitted that the age limit of 70 years under 196(3)(a) of the Companies Act,
2013 cannot apply to a WTD validly appointed prior to 01.04.2013 as there is no clear provision
showing legislative intent to that effect. It is a cardinal principle of construction that every statute is
prima facie prospective unless it is expressly or by necessary implication made to have retrospective
operation and for applying any statute retrospectively, there must be a clear provision either express or
through necessary implications showing legislative intent to that effect. Moreover, the age limit of 70
years cannot apply retrospectively to a WTD validly appointed prior to 01.04.2013 as it would violate
the principles of natural justice. Moreover, reading 202(2)(e) and 167(1)(e) of the Companies Act,
2013 together, it can be inferred that apart from being denied of WTDs legitimate expectation to
continue his job for the next five years, he would also be denied from getting any compensation if he is
required to vacate his office merely on the basis of his age limit, i.e. attaining the age of 70 years which
clearly violates Article 14 of the Constitution as he would not be vacating the office for any fault on his
part. Thus, the age limit of 70 years under 196(3)(a) of the Companies Act, 2013 cannot apply to a
WTD validly appointed prior to 01.04.2013.

IV.

THE WORD CONTINUE USED IN 196(3) OUGHT TO BE CONSTRUED IN


CONTEXT OF 193(3)(b), (c) AND (d) ALONE AND NOT 196(3)(a).

It is most humbly submitted that the word continue used in 196(3)(a) is ought to be construed in
context of 196(3)(b), (c) and (d) alone and not 196(3)(a) as the age of 70 years is not an absolute
bar. If we read the proviso attached to 196(3)(a), it yields a clue to how the word continue should be
interpreted in 196(3). No special resolution can ever be required to continue an appointment. A
special resolution is only ever required for an appointment or reappointment. This is entirely distinct
from the three situations contemplated under 267 of the 1956 Act, the same as those in sub
196(3)(b),(c) and (d) of the 2013 Act. Moreover, it is further submitted that 196(3)(a) operates as an
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eligibility condition which only applies at the stage of appointment therefore the word continue used
in 196(3) of the 2013 Act will not form any conformity with 196(3)(a) and will only apply on
196(3)(b), (c) and (d) of the Act. Thus, the word continue used in 196(3)(a) is ought to be construed
in context of 196(3)(b), (c) and (d) alone and not 196(3)(a).

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ARGUMENTS ADVANCED

I.

THE ISSUE OF LIMITATION

WAS

REQUIRED

TO BE HEARD

AS

PRELIMINARY ISSUE IN TERMS OF 9A OF THE CODE OF CIVIL PROCEDURE,


1908.

1. It is most humbly submitted before the Honble Supreme Court of Islandia that the High Court of
Winchester ought to have decided the issue of limitation as a preliminary issue before proceeding to
adjudicate the matters on merits because the issue of limitation is a facet of jurisdiction [A] and
9A3 of the CPC, 1908 was incorporated under the Act through State Amendment with the intention
to set departure from the general rule provided under Order XIV Rule 2 4 of the CPC, 1908 [B].
Moreover, the issue of limitation might have disposed off the matter as the petition filed by the
respondent in the High Court was barred by the Doctrine of Laches [C].

A. THE ISSUE OF LIMITATION IS A FACET OF JURISDICTION.


2. It is most humbly submitted that the issue of limitation is a facet of jurisdiction as issue of
limitation goes to the root of jurisdiction and may result in the ousting the jurisdiction of a court of
law. The juridical and jurisprudential meaning of the term Jurisdictio n as used inter-alia in 9A
of the CPC and by virtue of Order XIV Rule 2(b) initially interpreted in a catena of judgments
cannot be limited in its sweep to exclude a case where the suit is barred by limitation.
3. In the case of Official Trustee v. Sachindra Nath Chatterjee, 5 a three Judges Bench of this Honble
Court while deciding the question of jurisdiction of the Court observed that before a Court can be
held to have jurisdiction to decide a particular matter it must not only have jurisdiction to try the
suit brought but must also have the authority to pass the orders sought for. It is not sufficient that it
has some jurisdiction in relation to the subject- matter of the suit. Its jurisdiction must include the
power to hear and decide the questions at issue, the authority to hear and decide the particular
controversy that has arisen between the parties.
3

As provided under CPC 9A (1908), Where at the hearing of application relating to interim relief in a suit, objection to
jurisdiction is taken such issue to be decided by the court as a preliminary issue.
4
CPC Or. XIV R. 2 (1908).
5
AIR 823 SC 1969.

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4. Further, a Constitution Bench of five Judges of this Honble Court in the case of Pandurang Dhondi
Chougule v. Maruti Hari Jadhav, 6 while dealing with the question of jurisdiction, observed that a
plea of limitation or plea of res judicata 7 is a plea of law which concerns the jurisdiction of the
court which tries the proceeding.
5. In the case of Manick Chandra Nandy v. Debdas Nandy, 8 this Honble Court, while considering the
nature and scope of High Courts revisional9 jurisdiction in a case where a plea was raised that the
application under Order IX Rule 1310 was barred by limitation, it was held that a plea of limitation
concerns the jurisdiction of the court which tries a proceeding for a finding on this plea in favor of
the party raising it would oust the jurisdiction of the court.
6. In the case of National Thermal Power Corpn. Ltd. v. Siemens Atkeingesellschaft, 11 this Honble
Court considering the similar question held that in the larger sense, any refusal to go into the merits
of a claim may be in the realm of jurisdiction. Even the dismissal of the claim as barred by
limitation may in a sense touch on the jurisdiction of the court or tribunal. When a claim is
dismissed on the ground of it being barred by limitation, it will be, in a sense, a case of the court or
tribunal refusing to exercise jurisdiction to go into the merits of the claim.
7. In the case of ITW Signode India Ltd. v. CCE, 12 a similar question came before a three Judges
Bench of this Court, where this Court opined that the question of jurisdiction involves a question of
limitation.
8. Thus, it can be inferred from the juridical rulings mentioned above, that the issue of limitation is a
facet of jurisdiction and acts as a binding principle 13 for subsequent cases.

B. 9A OF THE CPC, 1908 WAS INCORPORATED WITH THE INTENTION TO SET


DEPARTURE FROM THE GENERAL RULE PROVIDED UNDER ORDER XIV RULE
2 OF THE CPC, 1908.

AIR 153 SC 1633.


Satyadhyan Ghosal v. Deorjin Debi, AIR 941 SC 1960; R. Govindasamy v. Kasturi A mmal, AIR 218 Mad 1998;
Sulochana Amma v. Narayatianan Nair, AIR 152 SC 19994.
8
1 SCC 512 (1986).
9
CPC 115 (1908).
10
CPC Or. IX R. 13 (1908).
11
4 SCC 451 (2007).
12
3 SCC 48 (2004).
13
State of U.P. v. Synthetics and Chemicals Ltd., 4 SCC 139 (1991); Union of India v. Raghubir Singh, 2 SCC 754 (1989);
Petroleu m Corpn. Ltd. v. Mumbai Sh ramil Sangha, 4 SCC 448 (2001); Central Board of Dawoodi Bohra Co mmunity v.
State of Maharashtra, 2 SCC 673 (2005).
7

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9. 914 of the CPC confer power and jurisdiction to courts to try all suits of civil nature excepting
suits of which their cognizance is either expressly or impliedly barred. Immediately, after 9, 9A
was inserted by the Code of Civil Procedure (Winchester Amendment) Act, 1977 with the assent of
the President of Islandia as required under Art 254(2) 15 of the Constitution of Islandia. The object
and reason behind this amendment was to prevent the grave abuse caused by the city court in
granting injunctions, without going into the question of jurisdiction. 16 Thus, after this amendment,
it was made mandatory that if a question of jurisdiction which includes issue of limitation is raised
at the hearing of any application for granting or setting aside an order granting an interim relief, the
court shall determine that question first.
10. However, under Order XIV Rule 2 of the CPC, 1908, if the Court is of opinion that the case or any
part thereof may be disposed of on an issue of law only, it may try that issue first.
11. The moot question, therefore, that falls for consideration is as to whether courts shall be guided by
the provisions of Order XIV Rule 2 of the CPC, 1908 or 9A of the Code as amended by the State
Amendment Act, in the matter of deciding the objection with regard to jurisdiction of the court
which concerns the bar of limitation as a preliminary issue.
12. In a recent pronouncement, this Honble Court in the case of Foreshore Co-operative Housing
Society Limited and Ors. v. Praveen D. Desai and Ors 17 while analyzing this moot question held
that 9A of the Amendment Act is a complete departure from the procedure provided under Order
XIV Rule 2 of the Code. Moreover, notwithstanding the inconsistency contained in the Act of the
Parliament viz., the CPC and the provisions contained in 9A of the State Act, having regard to the
fact that the assent of the President was received, the provisions of the said has to be complied
with and can be held to be a valid legislation.
13. Further, validly accepting the judgment related to giving of opportunity to the parties to lead
evidence, if required under 9A, pronounced by the concerned High Court in the case Meher Singh
v. Deepak Sawhny, 18 this court observed that 9A provides a self- contained scheme with a non-

14

As provided under CPC 9 (1908), Courts to try all civ il suits unless barred.
I SLANDIAN CONST . art 254 deals with inconsistency between laws made by Parliament and laws made by the
Legislatures of States.
16
As provided under Winchester Act 25 of 1950, the Code of Civil Procedure (Winchester Amend ment), 1970 &
Winchester Act 65 of 1977, the Code of Civ il Procedure (Winchester Amendment), 1977.
17
Civil Appeal No. 7732 of 2011; Razia Amirali Shroff and others v. M/s Nishuvi Corporation and others, Civil Appeal No.
5514 of 2012; Nusli Neville Wadia v. Ferani Hotels (Pvt.) Ltd. and others, Civil Appeal No(s). 3396 of 2015; Punam Co operative Housing Society v. Pratap Issardas Bhatia and others, Civil Appeal No(s). 3397 of 2015; Rama Vijay Ku mar
Oberoi thr. GPH v. Sunita Sudam Ranaware etc., Civil Appeal NO(s). 3393-95 of 2015.
18
1 Bo m CR 107 (1999).
15

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obstante clause 19 which mandates the court to follow the provision and the intention of the law is to
decide the issue relating to jurisdiction of court as a preliminary issue notwithstanding the provision
contained in Order XIV Rule 2 of CPC, 1908.

C. THE PETITION FILED BY THE RESPONDENT IN THE HIGH COURT WAS


BARRED BY THE DOCTRINE OF LACHES.
14. It is humbly submitted that as per the Doctrine of Laches20 , the petition filed by the respondent in
the High Court was time barred as in the instant case, the cause of action arose on 15.04.2013 21 , but
the respondent without giving any sufficient grounds for delay, instituted the case on 12.05.201622 ,
that is after the expiry of three years and twenty seven days which is more than the half o f the
tenure period of the Appellant.
15. There is no period of limitation prescribed for a High Court to exercise its power under Art 226 23 of
the Constitution of Islandia. Nevertheless, a writ petition under Art 226 may be dismissed by a
High Court on the ground of petitioners laches because courts do not prefer stale claims being
agitated and unsettle a settled matter. Therefore, writ petitions filed after inordinate delay are
usually dismissed. 24
16. It is further submitted that the Limitation Act, 1963, as such, does not apply to writ petition but it
may provide a standard to measure delay in invoking Art 226 As the Honble Supreme Court has
observed in Bhailal Bhai 25 :
The provisions of the Limitation Act do not as such apply to the granting of relief under
Art 226. However, the maximum period fixed by the legislature as the time within which
the relief by a suit in a civil court must be brought may ordinarily be taken to be a
reasonable standard by which delay in seeking remedy under Art 226 can be measured.

19

Raj Krushna Bose v. Binod Kanungo, AIR 202 SC 1954; Do min ion of India v. Shrinbai A. Irani, AIR 596 SC 1955;
Sarwan Singh v. Kasturi Lal, 1 SCC 750 (1977); Ram Narain v. Shimla Banking & Industrial Co. Ltd, A IR 614 SC 1956.
20
Durga Pd v. Chief Controller, AIR 769 SC 1970; Krishnaswamy v. Union of India, AIR 118 S C 1973; Gian Singh Mann
v. High Court of Punjab & Haryana, AIR 1894 SC 1908; Roshan Lal v. International Airport Authority, AIR 597 SC
1981; R. S. Makashi v. I.M. Menon, AIR 101 SC 1982, A mrit Lal v. Co llector, C.E.G., AIR 538 SC 1975; Rattan Chandra
Sammanta v. Union of India, AIR 2276 SC 1993; B.S. Bajwa v. State of Punjab, AIR 1510 SC 1999; Municipal Corp. of
Greater Bo mbay v. Industrial Development Investment Co. Ltd., AIR 482 SC 1997; Municipal Council, Ah mednagar v.
Shah Hyder Baig, AIR 671 Sc 2000; State of U.P. v. Ved Pal Singh, 9 SCC 212 (2003).
21
4, Moot Problem.
22
5, Moot Problem.
23
I SLANDIAN CONST . art 226 deals with Power o f High Court to issue certain writs.
24
Supra note 16.
25
State of Madhya Pradesh v. Bhailal Bhai, A IR 1006 SC 1964.

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17. After extrapolating the above observations made by this Honble Court and applying it in the
present case, it can be said that there was unreasonable delay in filing the petition if we take into
consideration the statutory limitation period (i.e. three years). Further, it is humbly submitted that it
would be sound and wise exercise of discretion for this Honble Court to refuse to exercise its
extraordinary power under Art 226 of the Constitution against the respondent who did not approach
it when cause of action arose for relief and who stood by and allowed things to happen for three
long years and had approached the court when the appellate has completed more than half of his
tenure.
18. Thus, it is humbly submitted that the High Court should have considered the issue of limitation as a
preliminary issue in terms of 9A of the CPC, 1908 as based on the judgment given in the case of
Foreshore Co-operative Housing Society Limited and Ors. v. Praveen D. Desai and Ors,26 the term
jurisdiction under 9A was held to have been used in a wider sense and the plea of limitation
was held to be a question of law which related to the jurisdiction of the court and the court was held
to be precluded from adjudicating the matter on merits when the suit was barred by limitatio n.

II. 196(3)(a) OF THE COMPANIES ACT, 2013 OPERATES AS AN ELIGIBILITY


CONDITION WHICH ONLY APPLIES AT THE TIME OF APPOINTMENT AND
THERE IS DISTINCTION BETWEEN ELIGIBILITY CRITERIA AND CONDITION
FOR DISQUALIFICATION.

19. It is humbly submitted that 196(3)(a) 27 of the 2013 Act acts as an eligibility condition which only
applies at the time of appointment [A] and there is distinction between eligibility criteria and
condition for disqualification [B].

A. 196(3)(A) OF THE COMPANIES ACT, 2013 OPERATES AS AN ELIGIBILITY


CONDITION WHICH ONLY APPLIES AT THE TIME OF APPOINTMENT.

26

Civil Appeal No. 7732 of 2011; Razia Amirali Shroff and others v. M/s Nishuvi Corporation and others, Civil Appeal No.
5514 of 2012; Nusli Neville Wadia v. Ferani Hotels (Pvt.) Ltd. and others, Civil Appeal No(s). 3396 of 2015; Punam Co operative Housing Society v. Pratap Issardas Bhatia and others, Civil Appeal No(s). 3397 of 2015; Rama Vijay Ku mar
Oberoi thr. GPH v. Sunita Sudam Ranaware etc., Civil Appeal NO(s). 3393-95 of 2015.
27
As provided under Co mpanies Act 196 (2013), Appointment of managing director, whole-t ime d irector or manager.

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20. It is humbly submitted that 196(3)(a) of the 2013 Act operates as an eligibility condition which
only applies at the stage of appointment not as further disqualification for continuation as Whole
Time Director 28 of the concerned company.
21. The Companies Act, 2013 clearly demarcates the provisions relating to eligibility criteria for
appointment and conditions for disqualification of the WTD. Part I of Schedule V 29 of the 2013
Act states that
No person shall be eligible for appointment as a managing or whole-time director or a
manager (hereinafter referred to as managerial person) of a company unless he satisfies the
following conditions, namely:
(c) he has completed the age of twenty-one years and has not attained the age of seventy
years:
Provided that where he has attained the age of seventy years; and where his appointment is
fapproved by a special resolution passed by the company in general meeting, no further
approval of the Central Government shall be necessary for such appointment.
22. A bare reading of the aforesaid provision clearly shows that in order to be eligible for getting
appointed as a WTD of a Public Company 30 , a person must fulfill the conditions as specified in
Part I of Schedule V which clearly corresponds to the provision mentioned in 196(3)(a) of the
2013 Act and hence it can be inferred that since both the provisions mentioned in Part I of
Schedule V and 196(3)(a) are similar, 196(3)(a) serves as an eligibility criteria rather than a
condition for disqualification.
23. The appellant further submits that 167 31 of the 2013 Act states that the office of the director shall
become vacant under circumstances incorporated in this Section. In addition to this, 16432 of the
2013 Act states about disqualifications for appointment of director which acts as one of the
circumstances under which the office of the director can be vacated.
24. In the case of O.P. Singla v. Union of India, 33 the Court held that when a rule or a Section is a part
of an integral scheme, it should not be considered or construed in isolation. One must have regard
to the scheme of the fasciculus of the relevant rules or s in order to determine the true meaning of
any one or more of them. An isolated consideration of a provision leads to the risk of some other
interrelated provision becoming otiose or devoid of meaning.
28

Whole Time Director hereinafter has been referred to as WTD.


As provided under Part I of Schedule V of the Companies Act (2013), Conditions to be fulfilled for the appointment of a
managing or whole-t ime d irector or a manager without the approval of the central government.
30
As provided under Co mpanies Act 2(71) (2013).
31
As provided under Co mpanies Act 167 (2013), Vacat ion of office of director.
32
As provided under Co mpanies Act 196 (2013), Disqualificat ions for appointment of director.
33
4 SCC 450 (1984).
29

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25. Analyzing 167 along with 164 in the light of abovementioned judgment, it can be understood
that both these provisions correspond with 196(3)(b), (c) and (d) of the 2013 Act. Thus, it can
be seen that the Companies Act has provided distinct and clear provisions for vacation of office of
director in the form of 167 and disqualifications for appointment of director in the form of 164
and these two Sections nowhere mention about age limit as a criteria for vacation of office or
disqualification of director. Hence, reading 196 of the Act with correspondence to 164 and
167 of the Act, it can be inferred that only 196(3)(b), (c) and (d) act as conditions for
disqualification whereas 196(3)(a) acts as an eligibility criteria.

B. THERE

IS

DISTINCTION

BETWEEN

ELIGIBILITY CONDITION

AND

DISQUALIFICATION.
26. It is humbly opined that, there is a distinction between eligibility condition and disqualification.
The eligibility condition operates only at the stage of appointment whereas clause related to
disqualification operates both at the stage of appointment as well as during the continuation of the
tenure. Moreover, unlike disqualification clause, the eligibility condition after the initial
appointment, vests a right in favor of the appointee and this right cannot be extinguished by adding
new eligibility criterion retrospectively.
27. The Supreme Court in the case of P. Suseela and Ors. v. University Grants Commission and Ors.34
held that that a new eligibility condition would only be prospective and it would apply only at the
stage of appointment. The division bench of Winchester High Court in the case of Sridhar
Sundararajan v. Ultramarine & Pigments Limited, 35 in which the facts were almost similar to the
case in hand, reiterated the same principle and held that there is a distinction between the
disqualification which is added after the appointment and the eligibility criteria which is added
after the appointment. In the former case, disqualification would operate even after appointment
but in the latter case, it would operate prospectively.
28. Thus, in the case at hand, 196 (3)(a) of the 2013 Act prima facie operates as new eligibility
criterion and hence cannot disqualify the appellant upon attaining the age of 70 years from
continuing as WTD of the company.

34
35

8 SCC 129 (2015).


[Notice of Motion (L) No. 434 o f 2015 in Suit (L) No. 146 of 2015 decided on July 16, 2015].

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III.

THE AGE LIMIT OF 70 YEARS UNDER 196(3)(a) OF THE COMPANIES ACT 2013,
CANNOT APPLY TO A WHOLE-TIME DIRECTOR VALIDLY APPOINTED PRIOR
TO 01.04.2013.

29. It is humbly submitted that the age limit of 70 years under 196(3)(a) of the Companies Act, 2013
cannot apply to a WTD validly appointed prior to 01.04.2013 as there is no clear provision
showing legislative intent to that effect [A]; and the application of the age limit of 70 years to a
WTD director validly appointed prior to 01.04.2013 under 196(3)(a) of the Companies act, 2013
is violative of principles of natural justice 36 [B].

A. THERE IS NO CLEAR PROVISION SHOWING LEGISLATIVE INTENT.


30. It is humbly submitted that the age limit of 70 years under 196(3)(a) of the Companies Act, 2013
cannot apply to the appellant who was appointed as a whole time director of Goodenough Limited
on 12.02.2013 37 because for applying any statute retrospectively, there must be a clear provision
either express or through necessary implications showing le gislative intent to that effect 38 .
31. It is a cardinal principle of construction that every statute is prima facie prospective unless it is
expressly or by necessary implication made to have retrospective operation. 39 But the rule in
general is applicable where the object of the statute is to affect vested rights or to impose new
burdens or to impair existing obligations. Unless there are words in the statute sufficient to show
the intention of the Legislation to affect existing rights, it is deemed to be prospective only nova
constitutio futuris formam inponere debet non praeteripis 40 . 41

36

John v. Rees, All ER 274 2 [1969]; Maclean v. workers Union, ChD 602 1 [1969]; Ab dul v. Su livon, All ER 226 1 [1952];
P.M. Kurien v. P.S. Raghavan, AIR 142 Ker 11970; A.K. Kraiap k v. Union of India, AIR 150 SC 1970; B.R.Singh v.
Union of India, AIR 1 SC 1990; Surjeet Singh v. Un ion of India, AIR 2560 SC 1990; Burhanuddin Hussain v. Sta te of
A.P., AIR 137 AP 1970; Suresh Koshy George v. University of Kerala, AIR 198 SC 1969.
37
2, Moot Problem
38
Mahdeolal Kanodia v. Ad ministator General of W.B., AIR 307 SC 1960; State of Bo mbay v. Vishnu Ramchandra, A IR
307 SC 1961; State of Madhya Prades h v. Rameshwar Rathore, AIR 1849 SC 1990; J.S. Yadav v. State of Uttar Pradesh,
6 SCC 570 (2011); Mithilesh Ku mari v. Prem Bahadur Khare, AIR 1247 SC 1989.
39
Keshvan v. State of Bombay, AIR 128 SC 1951; Janardan Reddy v. State, AIR 124 SC 1951; Arjan Singh v. State of
Punjab, AIR 703 SC 1970; Shyam Sunder v. Ram Ku mar, AIR 2472 SC 2001.
40
JUST ICE G.P. SINGH, P RINCIPLES OF ST AT UTORY INTERPRETATION, 532 (13th ed. 2012).
41
Doolubdass Pettamberdass v. Ramloll Thackoorseydass, 5 MIA 109 [1850]; K.C. Arora v. State of Haryana, 3 SCC 281
(1984); Zile Singh v. State of Haryana, AIR 5100 SC 2004. See further K.S. Paripooran v. State of Kerala AIR 1012 SC
1995; Shakt i Tubes Ltd. v. State of Bihar, 7 SCC 673 (2009).

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32. Moreover, in the case of Re, Pulborough Parish School Board Election, Bourke v. Nutt, 42 Lopes.
L.J., observed that Every statue which takes away or impairs vested rights acquired under existing
laws, or creates a new obligation or imposes a new duty, or attaches a new disability in respect of
transactions already past, must be presumed to be intended not to have a retrospective effect.
33. In addition to this, the Honble Court in State of Punjab & Ors. v. Bhajan Kaur & Ors., 43 held as
under:
"A statute is presumed to be prospective unless held to be retrospective, either expressly
or by necessary implication. A substantive law is presumed to be prospective. It is one of
the facets of the rule of law.....Where a right is created by an enactment, in the absence of
a clear provision in the statute, it is not to be applied retrospectively."
34. In this regard this Apex Court in the cases of Jivabhai Purshottam v. Chhagan Karson 44 and
Trimbak Damodhar Rajpurkar v. Assaram Hiraman Patil, 45 observed that:
" it is relevant to distinguish between an existing right and a vested right. Where a statute
operates in future it cannot be said to be retrospective merely because within the sweep of
its operation all existing rights are included. As observed by Buckley L.J. in West v.
Gwynne 46 retrospective operation is one matter and interference with existing rights is
another. "If an Act provides that as at a past date the law shall be taken to have been that
which it was not, that Act I understand to be retrospective.
35. In addition to this the Apex Court in 15 of its judgment in P. Suseela and Ors. v. University
Grants Commission and Ors 47 held that A vested right would arise only if any of the appellants
before us had actually been appointed to the post of Lecturer/Assistant Professors. Till that date,
there is no vested right in any of the appellants. At the highest, the appellants could only contend
that they have a right to be considered for the post of Lecturer/Assistant Professor. This right is
always subject to minimum eligibility conditions, and till such time as the appellants are appointed,
different conditions may be laid down at different times. Merely because an additional eligibility
condition in the form of NET test is laid down, it does not mean that any vested right of the
appellants is affected, nor does it mean that the regulation laying down such minimum eligibility
condition would be retrospective in operation. Such condition would only be prospective as it

42

1 QB 725 [1894].
AIR 2276 SC 2008.
44
AIR 1491 SC 1961.
45
AIR 1758 SC 1966.
46
2 Ch 1 [1911].
47
8 SCC 129 (2015).
43

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would apply only at the stage of appointment. It is clear, therefore, that the contentions of the
private appellants before us must fail."
36. The appellant submits that the present case fits the alternative scenario described in 15 of P.
Suseela 48 . The appellant was already the WTD of Goodenough Limited when he turned 70 years.
The 2013 Act cannot operate as an immediate termination of his appointment. That would mean
dating the operation of the 2013 Act back to the date of his appointment in 12-02-2013, i.e., giving
it a retrospective effect.
37. The appellant further submits that retrospective application of 196 (3)(a) doesnt serve the
interest of public at large as public purpose is one of the exception for interpreting a statute
retrospectively. There is no discernible legislative intent for public purpose that can possibly be
said to be achieved by said interpretation and too slavish and adherence to the cold letter of the
statute without allowance for context is not just impermissible.
38. It actually defeats avowed statutory intent. After all, the proviso only adds a further check or
balance i.e. it demands a justification in the form of the special resolution for the appointment of a
person over 70 years. It is hardly plausible to suggest that on turning 70 years surely an occasion
for celebration and barring the unfortunate, a physiological inevitability, a WTD, only for that
reason, should find himself keeping the company of insolvency, fraudsters and the morally
discombobulated. 49

B. RETROSPECTIVE

APPLICATION

OF

SEC

196(3)(A)

IS

VIOLATIVE

OF

PRINCIPLES OF NATURAL JUSTICE.


39. It is humbly submitted that the age limit of 70 years cannot apply retrospectively to a WTD validly
appointed prior to 01.04.2013 as it would violate the principles of natural justice. The appellant
humbly accepts the fact the legislature has the power to enact a law retrospectively. However,
retrospective effect must be under the constitutional mandate and should not violate any principle
of natural justice.
40. In the case at hand, the appellant was appointed as WTD of Goodenough for a fix tenure of 5 years
by an ordinary resolution passed by the shareholders of Goodenough 50 without any reasonable
48

Id at 15.
Sridhar Sundararajan v. Ultramarine & Pig ments Limited, [Notice of Motion (L) No. 434 of 2015 in Suit (L) No. 146 of
2015 decided on July 16, 2015].
50
2, Moot problem.
49

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knowledge that he will be disqualified from holding the position of WTD after attaining the age of
70 years. Further, the appointment accrues the vested rights on the appellant from the date of his
appointment.
41. The Honble Supreme Court in the cases of Dr. L.P. Agarwal v. Union of India & Ors., 51 and State
of U.P. & Anr. v. Dr. S.K. Sinha & Ors., 52 observed that an employee appointed for a fixed period
under the Statute is entitled to continue till the expiry of the tenure and in such a case there can be
no occasion to pass the order of superannuation for the reason that the tenure comes to an end
automatically by afflux of time.
42. In P. Venugopal v. Union of India, 53 this Court considered the case wherein the Director of All
India Institute of Medical Sciences, New Delhi, having been duly appointed for a period of five
years had been removed prior to completion of the said period. The court observed as under:
"Service conditions make the post of Director a tenure post and as such the question of
superannuating or prematurely retiring the incumbent of the said post does not arise at
all..... The appointment is for a tenure to which the principle of superannuation does not
apply. `Tenure' means a term during which the office is held. It is a condition of holding the
office. Once a person is appointed to a tenure post, his appointment to the said post begins
when he joins and when it comes to an end on the completion of tenure unless curtailed on
justifiable grounds. Such a person does not superannuate. He only comes out of the office
on completion of his tenure."
43. By applying the abovementioned observations made by this Honble Court in its various rulings in
the case at hand, it can be asserted that the appe llant is entitle to continue his job as he was
appointed to a tenure post, where his appointment to the said post begins when he joins and it will
come to an end on the completion of fixed tenure only creating a legitimate expectation 54 in the
mind of the appellant that he will continue his office for complete five years.
44. In the case of Union of India v. Hindustan Development Corporation, 55 the Court while explaining
the meaning of the Doctrine of Legitimate Expectation 56 held that time is three fold present; the
present as we experience it, the past as a present memory and future as a present expectation.

51

AIR 1872 SC 1992.


AIR 768 SC 1995.
53
5 SCC 1 (2008).
54
Un ion of India v. International Trading Co., 3 SCC 437 (2003), New Southwale v. Quin, 64 Australian LJR 327 [1990].
55
AIR 988 SC 1994.
56
Food Corporation of India v. Kamdhenu Cattle Feed Indusries, AIR 1601 SC 1999; State of Kerala v. K.G. Madhavan
Pillai, AIR 49 SC 1989; Schedule Caste and Weaker Section Welfare Assn. v. State of Karnataka, 2 SCC 604 (1991);
Naujyoti Coop. Group Housing Society v. Union of India, 4 SCC 477 (1992); Union of India v. Hindustan De velopment
Corpn., 3 SCC 499 (1993); Jitendra Ku mar v. State of Haryana, 2 SCC 161 (2008); M .P. Oil Extraction v. State of M.P., 7
52

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45. In the case at hand, the Appellant who was appointed under the 1956 Act has legitimate
expectation to continue his job for next five years and his legitimate expectation was based on the
sanction of law (1956 Act) and an established procedure followed in regular and natural sequence.
Thus, if the 2013 Act is applied retrospectively in the present case, then the appellant will be
denied his legitimate expectation resulting in the violation of the principles of natural justice.
46. The appellant further submits that in the case of Union of India & Ors. v. Tushar Ranjan Mohanty
& Ors. 57 , this Honble Court declared the amendment with retrospective operation as ultra vires as
it takes away the vested rights of the petitioners therein and thus, was unreasonable, arb itrary and
violative of Art 14 58 and Art 16 59 of the Constitution. While deciding the said case, this Honble
Court placed very heavy reliance on the judgment in P.D. Aggarwal & Ors. v. State of U.P. &
Ors.,60 wherein this Court has held as under:
"...the Government has power to make retrospective amendments to the Rules but if the
Rules purport to take away the vested rights and are arbitrary and not reasonable then such
retrospective amendments are subject to judicial scrutiny if they have infringed Art 14 and
Art 16 of the Constitution."
47. Moreover, as per Sec 202(2)(c) 61 of the 2013 Act regarding compensation for loss of office of
WTD , no payment shall be made where the office of the director is vacated under sub section (1)
of Sec 167. Further Sec 167(1)(e) states that the office of the director shall become vacant in case
he becomes disqualified by an order of a court or the Tribunal. Reading both these provisions
together, it can be inferred that apart from being denied of his legitimate expectation to continue
his job for the next five years, the WTD would also be denied from getting any compensation if he
is required to vacate his office merely on the basis of his age limit, i.e. attaining the age of 70 years
which clearly violates Art 14 62 of the Constitution as he would not be vacating the office for any
fault on his part.
48. Thus, the age limit of 70 years cannot apply retrospectively to a WTD validly appointed prior to
01.04.2013 as it would violate the principles of natural justice.
SCC 592 (1997); National Bu ild ing Construction Corp. v. S. Raghunathan, 7 SCC 566 (1998); UT of Chandigarh v.
Dilbagh Singh, 1 SCC 154 (1993).
57
5 SCC 450 (1994).
58
I SLANDIAN CONST . art 14 deals with fundamental right of equality before Law.
59
I SLANDIAN CONST . art 16 deals with fundamental right of equality of opportunity in matters of Public employment.
60
AIR 1676 SC 1987.
61
As provided under Companies Act 202 (2013), Co mpensation for loss of office of managing or whole-time d irector or
manager
62
Maneka Gandhi v. Union of India, AIR 597 SC 1978; Central In lnad Water Transport Corporation Lin mited v. Brio jo
Nath, 2 SCR 278 (1986).

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IV.

THE WORD CONTINUE USED IN 196(3) OUGHT TO BE CONSTRUED IN


CONTEXT OF 193(3)(b), (c) AND (d) ALONE AND NOT 196(3)(a).

49. It is humbly submitted that the word continue used in 196(3) is ought to be construed in context
of 196(3)(b), (c) and (d) alone and not 196(3)(a) as the age of 70 years is not an absolute bar. A
public limited company may also appoint a person above the age of 70 years as a WTD; all that is
needed is a special resolution prescribed under proviso of 196(3)(a).
50. It is further submitted that if we read the proviso attached to 196(3)(a), it yields a clue to how the
word continue should be interpreted in 196(3). No special resolution can ever be required to
continue an appointment. A special resolution is only ever required for an appointment or
reappointment. This is entirely distinct from the three situations contemplated under 267 of the
1956 Act, the same as those in sub 196(3)(b),(c) and (d) of the 2013 Act. Those provided for
eventuality that must result in an instantaneous cessation of whole time directorship. If a person,
appointed as a Managing Director, WTD or Manager, is an undischarged insolvent, or is so
adjudged; or if he suspends payment to or makes a composition with his creditors; or is convicted
of an offence involved moral turpitude, he cannot be allowed to occupy that position for a minute
longer. 63 Evidently, none of these three situations could ever admit of an exception by means of a
proviso or otherwise. That person cannot, in those situations, be allowed to continue; and there
can be no exception to this. This is very different from an age bar. That can always be relaxed
subject to certain conditions. This is precisely what the proviso to 196(3)(a) does. It, therefore,
operates very differently from the other sub s of 196(3).
51. Moreover, as explained above, 196(3)(a) of the 2013 Act operates as an eligibility condition
which only applies at the stage of appointment not as further disqualification for continuation as
WTD of the company and reading 196 of the Act with correspondence to s 164 and 167 of the
Act, it can be inferred that only s 196(3)(b), (c) and (d) act as conditions for disqualification.
Since, 196(3)(a) operates as an eligibility condition which only applies at the stage of
appointment therefore the word continue used in 196(3) of the 2013 Act will not form any
conformity with 196(3)(a) and will only apply on s 196(3)(b), (c) and (d) of the Act.

63

As provided under Co mpanies Act 167 (2013), Vacat ion of office of director.

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PRAYER

It is hereinafter most humbly prayed before the Honble Supre me Court that, in the light of the
facts stated, issues raised, argume nts advanced and authorities cited, the Honble Court may be
pleased to uphold the contentions of the Appellant and hold that;

1. The issue of limitation was required to be heard as a preliminary issue in terms of Section 9A of
the Civil Procedure Code, 1908.
2. Section 196(3)(a) of the Companies Act,2013 operates as eligibility condition which applies
only at the time of appointment.
3. The age limit of 70 years under Section 196(3)(a) of the Companies Act, 2013 cannot apply to a
whole time director validly appointed prior to 01.04.2013.
4. The word continue used in Section 196(3) of the Companies Act, 2013 ought to be construed
in context of 196(3)(b), (c) and (d) alone and not 196(3)(a).
And Pass any other Orde r or Direction, that it may deem fit in the Best Interest of Justice,
Fairness, Equity and Good Conscience.
For This Act of Kindness, the Appellant Shall Be Duty Bound For Ever Pray.

Sd/-

(Counsel for Appellant)

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