Company Court retains exclusive jurisdiction over revival applications under Companies Act, 1956 despite notification

The High Court of Delhi held that the Company Court maintains exclusive jurisdiction to decide on applications under Section 391 of the Companies Act, 1956, for reviving a company in provisional liquidation, despite the 07.12.2016 notification. The applications for the revival of the respondent company will not be transferred to the NCLT and will remain under the Company Court's jurisdiction. The court deemed these revival proceedings as "proceedings relating to winding up," affirming the Company Court's exclusive authority over them.

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Issues Involved:
1. Jurisdiction of the Company Court post the notification dated 07.12.2016.
2. Applicability of Section 391 of the Companies Act, 1956 in the context of a company in provisional liquidation.
3. Interpretation of the expression "proceedings relating to winding up" under the Companies Act, 1956.
4. Transfer of pending proceedings to the National Company Law Tribunal (NCLT).

Detailed Analysis:

1. Jurisdiction of the Company Court Post the Notification Dated 07.12.2016:
The primary issue addressed is whether the Company Court retains exclusive jurisdiction to adjudicate applications under Section 391 of the Companies Act, 1956, for the revival of a company in provisional liquidation, following the notification dated 07.12.2016 by the Ministry of Corporate Affairs. The notification, effective from 15.12.2016, stipulates the transfer of pending proceedings, other than those related to winding up, to the NCLT.

2. Applicability of Section 391 of the Companies Act, 1956:
The judgment clarifies that Section 391 of the Companies Act, 1956, applies to companies in provisional liquidation. The Company Court retains the power to sanction a scheme of compromise or arrangement for a company that is being wound up. This is supported by the provisions of Section 446(2)(c) of the Companies Act, 1956, which grants the Company Court exclusive jurisdiction over such applications.

3. Interpretation of the Expression "Proceedings Relating to Winding Up":
The term "proceedings relating to winding up" is interpreted broadly. The expression is of the widest amplitude and includes applications for the revival of a company in provisional liquidation. The judgment emphasizes that the proceedings for the revival of the respondent company are inextricably linked to the winding up proceedings and should be considered as "proceedings relating to winding up."

4. Transfer of Pending Proceedings to the NCLT:
The judgment concludes that the applications for the revival of the respondent company do not fall under the category of independent proceedings that should be transferred to the NCLT. The Company Court retains jurisdiction over these applications. The notification's clause 3, which excludes "proceedings relating to winding up," supports this conclusion. The Company Court is deemed to have the exclusive jurisdiction to adjudicate revival applications for companies in provisional liquidation.

Conclusion:
The High Court of Delhi ruled that the Company Court retains exclusive jurisdiction to adjudicate applications under Section 391 of the Companies Act, 1956, for the revival of a company in provisional liquidation, despite the notification dated 07.12.2016. The applications for the revival of the respondent company will not be transferred to the NCLT and will continue to be dealt with by the Company Court. The proceedings for the revival of the respondent company are considered "proceedings relating to winding up" and fall within the exclusive purview of the Company Court.

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