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of <h1>Petition dismissed for Rent Controller not falling under Companies Act, denying transfer to High Court.</h1> <h3>Dr. SP. Bhargava Versus Haryana Electric Steel Co. Ltd.</h3> The court dismissed the petition, ruling that the execution proceedings before the Rent Controller do not fall under the Companies Act's purview. It held ... Winding up - Suits stayed on winding-up order Issues Involved:1. Whether proceedings for the execution of an order creating a limited tenancy under section 21 of the Delhi Rent Control Act, 1959, are 'other legal proceedings' within the meaning of section 446(1) of the Companies Act, 1956.2. Whether the Rent Controller is 'a court' within the meaning of section 446(3) of the Companies Act, 1956, allowing the High Court to transfer the proceedings to its own file.Issue-wise Detailed Analysis:1. Whether proceedings for the execution of an order creating a limited tenancy under section 21 of the Delhi Rent Control Act, 1959, are 'other legal proceedings' within the meaning of section 446(1) of the Companies Act, 1956:A bare reading of section 446 of the Companies Act, 1956, indicates that once a winding-up order has been made, no suit or other legal proceeding shall be commenced or, if pending, shall be proceeded with against the company except by leave of the court. The court winding up the company shall have jurisdiction to entertain or dispose of any suit or proceeding or any claim by or against the company. The key question is whether the execution proceedings pending before the Rent Controller, Delhi, fall under these provisions.The court examined the nature of the proceedings under section 21 of the Delhi Rent Control Act, which allows for the creation of tenancies for limited periods. The Rent Controller has exclusive jurisdiction over matters relating to eviction and tenancy under the Rent Act, as emphasized by section 50 of the Rent Act, which bars the jurisdiction of civil courts in these matters. The Supreme Court in Inder Mohan Lal v. Ramesh Khanna, AIR 1987 SC 1986, clarified that the Rent Controller must satisfy himself about the compulsive requirements of section 21 and that the tenant can challenge the validity of the tenancy conditions at the time of execution.Given the exclusive jurisdiction of the Rent Controller over these matters, the court concluded that such proceedings do not fall under the purview of section 446 of the Companies Act. The objective of section 446 is to bring the company's assets under the control of the winding-up court and avoid expensive litigation, but this does not extend to disputes exclusively within the jurisdiction of specialized tribunals like the Rent Controller.2. Whether the Rent Controller is 'a court' within the meaning of section 446(3) of the Companies Act, 1956, allowing the High Court to transfer the proceedings to its own file:The court analyzed whether the Rent Controller qualifies as 'a court' under section 446(3) of the Companies Act, which would allow the High Court to transfer the proceedings. The Rent Controller's role, as defined by the Delhi Rent Control Act, involves adjudicating matters exclusively related to tenancy and eviction, which are outside the jurisdiction of civil courts.In Damji Valji Shah v. LIC of India [1965] 35 Comp Cas 755, the Supreme Court held that tribunals of exclusive jurisdiction, such as those established under the Life Insurance Corporation Act, have the authority to decide disputes without requiring leave under section 446 of the Companies Act. Similarly, in S. V. Kondaskar, Official Liquidator v. V. M. Deshpande, ITO [1972] 83 ITR 685, the Supreme Court ruled that the Income-tax Officer's proceedings are not 'legal proceedings' under section 446, as the company court cannot perform the functions of the Income-tax Officer.Applying this rationale, the court determined that the Rent Controller, being a tribunal of exclusive jurisdiction, is not 'a court' within the meaning of section 446(3) of the Companies Act. Consequently, the execution proceedings before the Rent Controller cannot be transferred to the High Court.Conclusion:The court dismissed the petition, concluding that the execution proceedings pending before the Rent Controller, Delhi, do not fall under the purview of section 446 of the Companies Act, 1956, and that the Rent Controller is not 'a court' within the meaning of section 446(3) of the Act. The petition was dismissed with no order as to costs.
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