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6. The C.L.B. has held that the right of appeal under section 111(2) has been retained in the proviso to section 111-A(2). It has further held that the term "intimation of transfer" occurring in proviso to section 111-A(2) is ambiguous and uncertain. Therefore, in order to give it a harmonius construction the term "intimation of transfer" has to be read as "intimation of transmission". Use of the term "intimation of transfer" in the proviso is said to be a "drafting error". This conclusion is justified on the ground that the expression "intimation" occurring in section 111(1), 111(2) and 111A(3) is always followed by the expression "transmission". Thus the term "intimation of transfer" has to be substituted by the term "intimation of transmission". It is held that without such a construction the term "intimation of transfer" does not carry any meaning. This is further justified on the ground that if one approaches the CLB with a complaint that the Company has refused to register the transfer on delivery of "intimation of transfer", the CLB cannot direct the Company to register the same as it would be contrary to the mandatory provisions of section 108. It is also held that the observations of the CLB in Shashi Prakash Khemka's case (supra) were made when the issue relating to transmission was not in issue before the CLB. The CLB further holds that the proviso to section 111A(2) does not specify any time limit within which a petition against refusal to register the transfer should be made. The limit of two months as specified in that proviso is applicable only to the Company. It is also held that provisions of the Limitation Act are not applicable to the proceeding before the CLB. It is only if time limit is prescribed in the Companies Act itself that the petition has to be filed within the stated time limit.

8. I am of the opinion that CLB has completely ignored the above ratio of the Supreme Court. Having come to the conclusion that the term "intimation of transfer" in the proviso to section 111A(2) is a "Drafting Error", the CLB has provided a solution by substituting the term "intimation of transfer" with "intimation of transmission". The Courts or the CLB have no jurisdiction to "Draft" the provision. They have only to interpret the provision. It is not the function of the Courts to legislate. The "Drafting Error" conclusion, therefore, has to be over-ruled at this stage only. By giving this interpretation, the CLB has ignored both the text as well as context of the proviso. The text has been ignored in that the term" intimation of transfer" has been substituted by "intimation of transmission". Context of the proviso has been ignored as the interpretation to the proviso has not been given in co-relation to the other provisions of the Companies Act read with the Depositories Act, 1996. By giving this interpretation, the CLB has merely justified its earlier finding that the proviso to section 111A(2) deals with appeals in the matter of "transmission of shares" also. Since the CLB had come to the conclusion that the provisions is vague, it ought not to have applied the rule of literal interpretation. The function of the Court whilst interpreting the statue is to avoid an interpretation which would produced an absurd result. The underlying purpose of all the Rules with regard to interpretation of statutes is to ascertain, discover or decipher the intention of the legislature. The literal construction has in general but prima facie preference. To arrive at the real meaning it is always necessary to get an exact conception of the aim. Scope and objection the whole Act. Thus it is necessary to keep in mind as to what was the law before the Act was passed? What was the mischief or defect for which the law had not provided? What remedy Parliament has appointed and the reason of the remedy? If a literal construction would not promote the object of an Act but would produce an absurd result, the Court would avoid such a result if another construction of the relevant provision was possible. This is precisely what has been laid down by the Supreme Court in the Peerless case (supra). The CLB, therefore, ought to have analysed the text as well as the context of the various provisions of the Companies Act, 1956 read with the Depositories Act. It should have found out the reasons for the enactment. For this purpose the whole statute had to be read clause by clause, phrase by phrase. Interpretation ought to have been such that every phrase has its place within the section and be in affinity with the objects which prompted the enactment. The CLB ought not to have ignored the argument based on section 111A(7). Then it would not have been necessary to describe the proviso as a "Drafting Error".

16. The CLB in my view, has unnecessarily fallen into confusion over the term "intimation of transfer". As noticed earlier all shares held in Depositories are to be dematerialised and fungible. Transfers are to be effected electronically. Remedy of appeal is provided if the transfer is not registered by the Company (issuer) or Depository within two months of the receipt of "intimation of transfer". It is in this sense that the term "intimation of transfer" has been used in the proviso.

17. Another justification given by the CLB for the "Drafting Error" conclusion is that" without such a construction, the term, "intimation or transfer" does not carry any meaning as, if one approaches the CLB with a complaint that the Company has refused to register the transfer on delivery of intimation of transfer, CLB cannot direct the Company to register the same as it would be contradictory to the mandatory provisions of section 108." This conclusion is not warranted from section 108 of the Companies Act read with the Depositories Act, 1996. Under the Depositories Act the transfers of shares are to be effected under the provisions of the Depositories Act. Detailed provisions are made about the ownership and transfer of shares by electronic means. Further elaborate provisions are made under the SEBI (Depositories & Participants) Regulations, 1996. To make this absolutely clear the legislature has amended section 108 of the Companies Act and inserted sub-section (3) to section 108. This sub-section is as follows :

20. In view of the above it is held that the CLB has wrongly come to the conclusion that there is a drafting error in proviso to section 111A(2). It is also held that there is no conflict between the powers of the CLB under section 111A and section 108 of the Companies Act. The share transfers effected under the Depositories Act are not to be registered under section 108 of the Act. They are to be registered by virtue of the provisions of the Depositories Act read with the Regulations made thereunder of SEBI.