Pending conversion applications governed by curative amended rules; rejection upheld where eligibility and creditor protection concerns remained unresolved.

A pending conversion application had to be tested under Rule 37(8) of the Companies (Incorporation) Third Amendment Rules, 2016 as amended, because the change was treated as curative and aimed at protecting creditors and stakeholders. The Court held that no applicant had a vested right to have the matter decided only under the unamended regime, so the law in force on the date of decision governed the application. The amended eligibility conditions, including scrutiny of net worth and pending inquiry, inspection or investigation, applied to the pending request. On the facts, the rejection was sustained by the company's adverse financial position, pending prosecutions, and inadequate supporting material.

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Issues: Whether Rule 37(8) of the Companies (Incorporation) Third Amendment Rules, 2016 applied to a conversion application already pending when the amendment came into force, and whether the Registrar of Companies could reject the conversion application on the grounds recorded in the order dated 07.08.2020.

Analysis: The amendment was treated as curative in nature, intended to remedy the earlier position and protect creditors and stakeholders. The Court held that an applicant for conversion had no vested right to insist that the application be decided only under the law as it stood on the date of filing. Pending applications had to be considered on the law applicable when the authority decided the matter. The additional eligibility conditions introduced by the 2016 amendment, including scrutiny of net worth and pending inquiry, inspection or investigation, were therefore applicable to the petitioner's pending application. On the facts, the rejection was supported by the company's adverse financial position, pending prosecutions, absence of the required supporting material, and the need to protect creditor interests.

Conclusion: The amended rule applied to the pending conversion application, and the rejection order was upheld.

Final Conclusion: The challenge to the refusal of conversion failed because the amended eligibility regime governed the pending application and the Registrar's decision was not found unsustainable.

Ratio Decidendi: A pending application for conversion must be decided under the law in force on the date of decision where a subsequent amendment is curative and intended to protect public or creditor interests, and no vested right exists to insist on consideration under the unamended regime.

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