Hon’ble Justice Arun Misra, while explaining Section 108 of The Companies Act [Ram Parshottam Mittal v. Hotel Queen Road Pvt. Ltd., Civil Appeal No. 3934 of 2017], quoted Hon’ble Chief Justice of India, Hon’ble Justice A.N. Ray [Mannalal Khetan v. Kedar Nath Khetan, (1977) 2 SCC 424];
My Lord, Mannalal Khetan v. Kedar Nath Khetan, (1977) 2 SCC 424?
25th November, 1976.
“Negative words can rarely be directory. It has been aptly stated that there is one way to obey the command and that is completely to refrain from doing the forbidden act. Therefore, negative, prohibitory and exclusive words are indicative of the legislative intent when the statute is mandatory.
It is well established that a contract which involves in its fulfillment the doing of an act prohibited by statute is void. The legal maxim ‘a pactis privatorum publico juri non derogatur’ means that private agreements cannot alter the general law. Where a contract, express or implied, is expressly or by implication forbidden by statute, no Court can lend its assistance to give it effect.
The provisions contained in Section 108 are mandatory. The High Court erred in holding that the provisions are directory.”