JUDGMENT - Dr. CHANDRACHUD D.Y., J.:---On 14th February, 2003 Justice D.K. Deshmukh allowed an appeal filed by the respondent under section 10-F of the Companies Act, 1956 against an order of the Company Law Board. The maintainability of a Letters Patent Appeal against the order of the learned Single Judge has been questioned having regard to the amendment to section 100-A of the Code of Civil Procedure, 1908.

2. The appellants filed an application under section 111 of the Companies Act, 1956 against the refusal of the respondent to register the transfer of certain shares in their names. The appellants had entered into an agreement for the sale of Flat 6-C in a building known as Premkutir, at Backbay Reclamation in Mumbai on 2nd October, 1993. The respondent having refused to accede to the transfer of 55 equity shares and in view of the provisions of Article 40-A of the Articles of Association of the company which stipulate that the ownership of shares of the respondent is essential for the occupation of a flat, the appellants moved an application before the Company Law Board under section 111 of the Act. The Company Law Board held in favour of the appellants by its order dated 23rd February, 2001. In April 2001, an appeal was filed before the learned Single Judge by the respondent under section 10-F of the Companies Act, 1956. The appeal was allowed by an order dated 14th February, 2003.

3. The amended provisions of section 100-A of the Code of Civil Procedure came into force on 1st July, 2002. Section 100-A as amended provides as follows :

"100-A. No further appeal in certain cases-Notwithstanding anything contained in any Letters Patent for any High Court or in any other instrument having the force of law or in any other law for the time being in force, where any appeal from an original or appellate decree or order is heard and decided by a Single Judge of a High Court, no further appeal shall lie from the judgment and decree of such Single Judge."

4. Counsel appearing on behalf of the respondent while objecting to the maintainability of the appeal urges that in as much as the judgment and order of the learned Single Judge has been delivered on 14th February, 2003, after the amended provisions of section 100-A were brought into force, the Letters Patent Appeal is clearly not competent. On the other hand, on behalf of the appellants it has been urged that the right to file an appeal is not a matter of procedure, but of substance and that the filing of the application before the Company Law Board carried with it a concomitant vested right to institute proceedings in appeal on the basis of the law as it stood when the original application was filed before the Company Law Board in 1999. In the alternative, it has been urged that even if it is held that the amended provisions of section 100-A would govern a case such as a present, since the judgment and order of the learned Single Judge was delivered after 1st July, 2002, nevertheless those provisions will only operate to bar a further appeal by the respondent and not by the appellant, since it was the respondent who had filed the appeal under section 10-F against the order of the Company Law Board.

5. The right of appeal it is well settled, is a matter of substance and not of procedure. The right to institute an appeal vests on the date when the original proceedings are instituted. In (Garikapati Veerya v. N. Subbiah Choudhry)1, A.I.R. 1957 S.C. 540, a Constitution Bench of the Supreme Court laid down principles of law which have since been followed by the Supreme Court in several cases. The Supreme Court held in Garikpatis case that the right of appeal is not merely a matter of procedure, but is a matter of a substantive right. The institution of a suit carries with it the implication that all rights of appeal are preserved to the parties thereto till the rest of the career of the suit. Consequently, it was held that the right of appeal is a vested right which accrues and exists f

Click Here to Read the rest of this document