M/S. RISHYASHRINGA JEWELLERY LTD. AND ANR. versus THE STOCK EXCHANGE, BOMBAY AND ORS.

Citation: [1995] SUPP. 4 S.C.R. 579 · Decided: 31-10-1995 · Supreme Court of India · Bench: J.S. VERMA · Disposal: Dismissed
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Judgment (excerpt)

M/S. RISHYASHRINGA JEWELLERY LTD. AND ANR. 
A 
v. 
THE STOCK EXCHANGE, BOMBAY AND ORS. 
OCTOBER 31, 1995 
f.1.S. VERMA AND K. VENKATASWAMI, .I.I.] 
B 
Companies Ac' 1956: 
S.73( IA)-Company-En/istmcllt of share.1~Applic~tions for pennis-
sion made to three stock exchanges-One stock exchange rejecting applica-
C 
tion-Held, if pennission not granted by anyone of several stock exchanges 
nanted in prospectus, entire allot111ent is rendered void and grant of pennis-
sion by one of them is inconsequential. 
Words and Phrases : 
Word "each" occuning in S.73(la) of Companies Act, 1956--Mean-
ing-Explained. 
The appellant-company issued on 31.5.1994 a prospectus offering to 
the public for subscription of certain equity shares intimating that appHca-
tions had been made to the Stock Exchanges at Coimbatore, Bombay and 
Madras for permission to deal in and for an official quotation in respect 
of the equity shares of the company offered in terms of prospectus. The 
date of closing the subscription was 19.7.1994. The period prescribed 
under S.73(1A) of the Companies Act, 1956 for grant of permission by the 
Stock Exchange expired on 27.9.1994. Permission was granted by the 
Coimbatore Stock Exchange on 26.9.1994 and by the Madras Stock Ex-
change on 28.10.1994. But company's application was rejected by the 
Bombay Stock Exchange on 28.9.1994, as the Company did not complete 
the necessary formalities in this respect. Having failed before the High 
Court, the company filed the appeal by special leave. 
On the question: whether the entire allotment of shares was rendered 
void by virtue of S.73(1A) of the Act, because of the rejection of the 
application by the Bombay Stock Exchange to render ineffective even the 
grant of permission by the Coimbatore Stock Exchange within the specified 
D 
E 
F 
G 
period. 
H 
579 
580 
SUPREME COUIU'REPORTS [1995] SUPP. 4 S.C.R. 
A 
Dismissing the appeal, this Court 
B 
c 
D 
E 
F 
HELD : I. I. Where the prospectus of a Company held out that enlist-
1nenl of shares \\'ould be in n1orc than one stock exchange, the conset1uence 
by virtue of sub-section (IA) of S.73 of the Companies Act, 1956 is to render 
the entire allotnu!nt void if the pcr1nission has not been granted by anyone 
of the several stock exchanges na1ned in the prospel:tus and the grant of 
per1nission by one of them is inconsequential. [586-G, H, 587-A] 
1.2. Sub-section (IA) of S.73 of the Act requires that if the prospectus 
states that application has been n1adc to more than one recognised stock 
exchanges then it ·shall state the na1ne of each such stock exchange, i.e. eve1y 
such stock exchange or in other \Vords, all the stock exchanges to which the 
application has been made. The second part of the sub- section (IA) 
provides the consequences of refusal of the permission by saying that any 
allotment made on an application in pursuance of such prospectus shall be 
voidu if the permission has not be engranted by the stock exchange or each 
such stock exchange", as the case n1ay been before the expiry of ten \\'eek.Iii 
from the date of the closing of the subscription list. This means that any 
allotment made shall be void if the permission has not been granted by the 
stock exchange where the application is made only to one stock exchange 
or each such stock exchange "where the application is made to more than 
one stock exchange". The expression "each such stock exchange' here must 
mean the same as in the earlier part of sub-section (lA) of S.73 i.e., each 
and every or in other words, all such stock exchanges. The clear objeet of 
insertion of sub-section (lA) in S.73 was to overcome the decision in Allied 
Inte1national Products Ltd.* by amending the law in this Manner. (586-B-E) 
*Union of India v.Al/ied Intonational Products Ltd. & Anr., (1970) 3 
sec 594, referred t<i . 
Collins Dictionmy of the English Language & Stroud'.< Judicial Diction-
a1y of Words and Phrases, referred to. 
G 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 9723 of 
1995. 
From the Judgment and Order dated 15.3.95 of the Bombay High 
Court in W.P. No. 514 of 1995. 
H 
F.S. Nariman, Navroj Sccrai, S. Merchant, Ramesh Singh and Ms. 
RISHYASHRINGAJEWELLERYLTD. i·. STOCK EXCHANGE. BOMBAY [J.S. VERMA.J.J 
581 
Bina Gupta for the Appellants. 
Harish N. Salve, Pratap Venugopal, K. J. John, Mukul Mudgal, Sunil 
Dogra, S.S. Shroff, Ms. Monica Sharma P. Dalar and V. Krishnamurthy, 
for the Respondents. 
The Judgment of the Court was delivered by 
J.S
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