Non-speaking order cannot be converted into a speaking order by way of an affidavit

Kosha Doshi | Symbiosis Law School, Pune | 20th March 2020

Reebok India vs UOI Anr [Writ Petition 952/2017; Delhi High court]

Facts:

            Reebok India Company registered under the Companies Act had filled an application for conversion of its company from “Unlimited Liability Company” to a “Limited Liability Company”. This application was filed on 21^stOctober, 2014 under Section 18 of the Companies Act, 2013. The application was rejected by the Registrar of Companies wherein the order and decision of rejection had been conveyed through email. 

            The email sent on 5^th October, 2016 did not contain the reasons for the same rejection and the Reebok India company thereby filed a petition on the Delhi High Court since it found no reasons being provided for its application rejection. 

Issue:

            Whether reasons needed to be provided for the rejection of the application? And if so whether the order conveyed through email being non speaking could be converted to a speaking order by way of an affidavit?

Judgment:

            The bench comprising of Justice DN Patel and Justice Talwant Singh stated that a non-speaking order by authority could not be converted to a speaking order by way of an affidavit through subsequent legal proceedings being conducted. The court relied on the MS Gill case (1978) 1 SCC 405 wherein public orders and decisions through statutory authority cannot be constructed in light of explanations provided in subsequent reasons given by officers. Reference to the case of Commissioner of Police, Bombay v. Gordhandas Bhanji AIR 1952 SC 16 was made. Wherein it referred to Article 329 (b) of the Indian Constitution and stated that orders are not like old wine getting better as it grows older with time. 

            The order which rejected the application of Reebok India company was a non-speaking order and the reasons for its rejections cannot be stated in the counter affidavit filed by the Central government during the court proceedings of a writ petition. The non-speaking order dated 5^th October, 2016 does not gain value when reasons are provided in the counter affidavit. The order of rejection was sought to be quashed and set aside.

            The court directed the Registrar of Companies to consider the petitioner’s (Reebok India) application as afresh wherein applying the appropriate rules and regulations decide upon the application. The petitioner needs to be provided adequate opportunity to be heard and principles of natural justice need to be followed. The court stated that preferably within 8 weeks of receipt of copy of order the application should be revisited like a new application further providing the reasons for further rejection applications. 

            The decision given on 3^rd March, 2020 upheld that non-speaking order cannot be converted into a speaking order by way of an affidavit with subsequent legal proceedings keeping in light the principle of natural justice.