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        Companies Law

        2018 (9) TMI 337 - HC - Companies Law

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        Implied repeal and forum transfer in company law: pending proceedings may move to tribunal under a broad saving clause. The text explains that company-law jurisdiction may be removed by necessary implication when a later statutory scheme covers the same field and is ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.

                          Implied repeal and forum transfer in company law: pending proceedings may move to tribunal under a broad saving clause.

                          The text explains that company-law jurisdiction may be removed by necessary implication when a later statutory scheme covers the same field and is inconsistent with the earlier arrangement. It further states that parties have no vested right to continue in a particular forum once the legislature substitutes a tribunal and transfers pending matters. On Section 434(1)(c) of the Companies Act, 2013, the words "all" and "including" are treated as expansive, extending to pending proceedings under the earlier company law regime. It also notes that Section 68 of the Companies (Amendment) Act, 1988 was impliedly repealed as inconsistent with the later scheme.




                          Issues: (i) Whether the jurisdiction of the High Court in company matters could be ousted by implication; (ii) Whether parties could insist on retaining the original forum after transfer of company proceedings; (iii) Whether the words "all" and "including" in Section 434(1)(c) of the Companies Act, 2013 were restrictive or expansive; (iv) Whether Section 68 of the Companies (Amendment) Act, 1988 survived after Section 434(1)(c) came into force.

                          Issue (i): Whether the jurisdiction of the High Court in company matters could be ousted by implication.

                          Analysis: The jurisdiction in company matters was created by special company legislation and not by the ordinary civil jurisdiction of the High Court. A later statutory scheme may therefore take away that jurisdiction without an express repeal if the later enactment clearly operates in the same field and is inconsistent with the earlier arrangement.

                          Conclusion: The ouster of jurisdiction could be by implication and did not require express words.

                          Issue (ii): Whether parties could insist on retaining the original forum after transfer of company proceedings.

                          Analysis: A litigant has a right to a remedy, but not a vested right to a particular forum. Where the legislature substitutes a tribunal for the court in respect of proceedings under a special enactment, the forum may validly change and the pending matters may be transferred accordingly.

                          Conclusion: The parties could not insist on continuing in the original forum.

                          Issue (iii): Whether the words "all" and "including" in Section 434(1)(c) of the Companies Act, 2013 were restrictive or expansive.

                          Analysis: Read in their context, the words "all proceedings" and "including proceedings" were used to cover the full range of proceedings under the earlier company law regime, not merely the illustrative categories that follow. The provision was therefore meant to operate broadly and not as a restrictive transfer clause.

                          Conclusion: The words were expansive, and Section 434(1)(c) covered all pending matters under the Companies Act, 1956.

                          Issue (iv): Whether Section 68 of the Companies (Amendment) Act, 1988 survived after Section 434(1)(c) came into force.

                          Analysis: A transitional provision continues only so long as it remains consistent with the later statutory regime. Once the later enactment comprehensively deals with the same subject and creates a direct inconsistency, the earlier transitional provision is repugnant and stands impliedly repealed.

                          Conclusion: Section 68 did not survive and stood impliedly repealed.

                          Final Conclusion: The transfer of the pending company proceedings to the National Company Law Tribunal was upheld, and the challenge to the Single Judge's decision failed.

                          Ratio Decidendi: Where a later company law provision comprehensively transfers pending proceedings to a tribunal, any earlier transitional saving provision inconsistent with that scheme is impliedly repealed, and the change of forum can be effected by necessary implication.


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