CA Amresh Vashisht
I am a COMMON Seal of the company who ruled the corporate world for a century. I come to you with a message of leave-taking and farewell, and to share a few final thoughts with you. In India, I was born through an Indian Companies Act 1913 came into force on the first day of April 1914. It was extended to the whole of British India, including British Baluchistan and the Santhal Parganas. I completed my century with the passing of Companies Acts 2013. I survived when all my neighboring sections were hanged to death. But all of a sudden, I suffered a heart attack through an amendment in 2013 act and my heart failed. . I rested in peace by the notification “Not to have a common seal. It’s a tearful departure after my century service with all my sincerity. I just want to note down my story from birth to death so that the future generation could assess the glory, the importance and utility of my life.
Goodbyes are tough – that’s no secret. Parting with the people who have cared for you for such a long time is not easy, in general no matter the duration of your separation but here its matter as separation is permanent. I got an old age, death being 100 though I was carrying the value of the substance. I know it might sound weird, but you have no idea how bad this can get unless you go through what I went through in between after enacted by the act of 2013 but dispensed with the amendment of 2014. A number of my friend and relatives spread over to the voluminous company law were hanged by the neck till death with the passing of the companies’ act 2013. Their fate is still unknown and hanging in the air, but at least it’s clear that I got a Moksha.
In 2006, UK’s Companies Act 2006 has made me optional for the companies to have me, but with a condition that if the company wants me, then I must be engraved with the legible characters on me and failure to do attracts contravention to section 45. There they have inserted a Section 36A (3) in the British Companies Act and by that section my possession and use by companies has been dispensed with. Clicking the idea, The Indian companies act amendment bill 2015 made me optional too with the same condition to carry me, if at all they want to carry with my name engraved in legible characters and made it mandatory. From 29th May 2015, under the seal of the company has been replaced by under the seal, if any, of the company. I survived in the 2013 Tsunami by way of my presence in section 9 for effect of registration, section 12 prescribed to have my name engraved in legible characters, Section 22, 46 and above all section 223 in investigation proceedings. I marked my presence, but gone in vain. Good Bye my friends.
I am as old as the company earlier known as Joint Stock Companies. My existence surfaced in Bubble Act 1720 (6 Geo I, c 18), which was an Act of the Parliament of Great Britain that forbade all joint-stock companies not authorised by royal charter. It was passed on 11 June 1720, and was also known as the Royal Exchange and London Assurance Corporation Act 1719, because those companies were incorporated under it. Here my birth and existence was possible only by royal charter or private act and was limited owing to the Parliament’s jealous protection of the privileges and advantages thereby granted. Then Joint Stock Companies Act 1844 (7 & 8 Vict. c. 110) surfaced. It was an Act of the Parliament of the United Kingdom that expanded access to the incorporation of joint-stock companies.
I would like to recall a contribution of Robert Lowe, then Vice President of the Board of Trade, who has been dubbed the “father of modern company law” for his role in drafting the 1855 reforms and the formal Joint Stock Companies Act 1856. Unlike other Acts of Parliament that preceded it, the 1856 Act provided a simple administrative procedure by which any group of seven people could register a limited liability company for themselves. By 1862, I got a fine shape and my life started in the corporate world with the Companies (Consolidation) Act 1908. It consolidated the Companies Act, 1862 on 21st December 1908 enacted by the King’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in that Parliament assembled, and tried the authority of the same.
Through 1908 Act, I started showing my value, care, protection and my necessity. Clause No. 16 reflected my effect of registration. It was a declaration for me that from the date of incorporation mentioned in the certificate of incorporation, the members shall be capable forthwith of exercising all the functions of an incorporated company, and having perpetual succession and ME, the common seal. Clause No. 23 describes my impression as prima facia evidence of the title of the member to the shares or stock. Clause 37 gives way to issue and effect of share warrants with my impression to bearer. Clause 76 made all contracts with me effectual in law, and shall bind the company and its successors and all other parties thereto, their heirs, executors, or administrators as the case may be. My impression was made equally binding whether attested by witnesses or not. Clause 78 empowered any persons act shall bind the company, and have the same effect as if it were under my impression. Clause 79 powered me to use abroad. My movement was duly recorded and the person affixing me by writing under his hand, on the deed or other document to which I affixed, he was supposed to certify the date and place of affixing the same. Clause 119 showed me agrees to refer and may refer to arbitration.
In India, I was adopted by way of Indian Companies Act 1913. The act was replica of the 1908 consolidation act. I reached here crossing the channels with a big bang and taken up as a first task by the British India after shifting their capital to Delhi from Calcutta. After landing in India the English Act of 1908 was examined by a committee presided over by Lord Wren bury in 1918 and again by a committee presided over by Mr. Greene, K. G., in 1926. The latter committee made extensive recommendations, many of which were subsequently incorporated with or without modification in the Companies Consolidation Act, 1929 of British India. In September, 1934, the Government of India placed a lawyer with experience in the administration of Company Law on special duty to examine the problems common in India and England.
I have attained the highest respect from all. ICSI has framed standards for my use. I was supposed to be adopted in ceremony by a resolution of the Board generally at the first Board meeting and also marking places to keep me. My impression was to be made part of the minutes of the meeting in which I was adopted. I was carrying the name of the company and the state in which the registered office is situated engraved in legible characters. I was affixed to any instrument only by authority of a resolution of the board or a committee authorized by the Board. I was properly guarded and my acts of impression were monitored in the presence of managing director or any two directors, and the company secretary or any other person as the Board may authorize for the purpose. The witnesses were supposed to sign every document after my impression. The company was to maintain a register containing particulars of documents with my impression. There was a full recording of date, time, persons, and place of my affixation. I was also authorised by board to visit outside India and could show my value and act in any territory or place not situated in India.
I was a style icon. It was a relic of the days when mediaeval barons who could not read or write, used their rings making a characteristic impress. I was made of metal and capable of being manually operated. Earlier I was mounted on the iron platform as a heavy duty embossing seal, later pocket seals, thereafter small pocket seal and in India, I was bedridden by a jaguar by welding of two embossed plates on the pliers. There was no prescribed form, shape or substance for the seal. Normally I contained the word ‘Corporate seal’ and included the corporate name, place of the company, and the date of its incorporation. In general, I am a metal stamp for stamping documents with the name of the company to show that they have been approved officially. There is no definition prescribed under any companies act. ICSI standard suggests me as the metallic seal of a company which can be affixed only with the approval of the Board of Directors of the Company. I am the signature of the company to any document on which I am affixed and I bind the company for all obligations undertaken in the document.
There are many noted juristic decision for me. I am proud to be a seal impressed upon a document as evidence of authenticity or attestation. The intention of affixing the seal in the document is well explained in ‘CF Stromdale & Ball Limited V. Burclen’ – (1952) Ch.223. In this case it was held that if, on behalf of such a body, a document is signed, bearing wax or water or other indication of a seal and the intention was to execute the document as a deed or other contract, this is sufficient proof of its due execution of the body. In re ‘County Life Assurance Co.,’ – (1870) 5 Ch.288 it was held that where the seal purports to be affixed as required by the Company’s Articles, the presumption is that it was duly affixed by persons duly appointed and their signatures were duly made, the burden of proving the contrary being upon the party alleging it.
The Common Seal is a symbol of identification of the company as well as authorization. The judgment of the Supreme Court in Panchanan Dhara & Others v’s Monmatha Nath Maity (Decd.) through L.RS.  131 Comp Cas 577 (SC) lays down that “Even in the absence of a seal, the company may still be held to be liable having regard to the nature of a transaction and the authority of those who had executed it. If the act of the directors is not ultra vires or no public policy is involved, the parties acting thereupon cannot be left at large.” The Common Seal of the company is akin to the signature of a natural person.
In ICICI Bank Ltd. vs Maikaal Fibres Limited and Ors., 2006 (3) CHN 365, the High Court observed that “the document of the guarantee was sealed with the common seal and on the authority of the Board of Directors signed and such use of such common seal conclusively binds the company under subsection (2) of Section 48. The result is that there the Court shall ordinarily hold in favour of its existence and denial of guarantee given by the Company is false.”
The decision made by the Company Law Board in Sri A.M. Gopalan And Ors. Vs Panchamy Pack (Kerala) Private Company 2007 138 Comp Cas 117 CLB, 2008 84 SCL 279 CLB was that “the share certificates purportedly held by the petitioners do not confirm to rule 6 of the Companies (Issue of Share Certificates) Rules, 1960 and neither bear the signature of the authorised signatory of the Company nor is the common seal affixed. The share certificates do not disclose the transfer number thereon. Though the respondents categorically denied the transfer of shares in favour of the petitioners, the petitioners have not chosen to claim any relief in regard to title to the shares said to have been purchased by them.”
Today I’m saying goodbye to a corporate world in India. It knows I’ll never see it again as this is the last time I have been using. But I am here to say goodbye. It is feeling the naked truth of my life that if I’m dying and saying my last goodbye; I’m lingering, almost embarrassingly as if I want to address each company, each director, each manufacturer individually and say, “thank you for the memories. I hated myself for going, why couldn’t I be the kind of person who stays?” I was used by the great grandfathers of the present management. Their parents, their grandparents all have protected me, even few days back, I was protected by them also. Forgotten memories resurface, and old smell and sights allow me brief glimpses of the world as I saw it. I would rather die a meaningful death than to live a meaningless life.