TaxTMI 
TaxTMI 
2017 (3) TMI 1272
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.... Mr. Yeshi Rinchhen, Advocate for Petitioner No.2 in CO.APPL.(M) 115/2016. Mr. Sunil Gandhi, Mr. Vivek Kohli and Mr. Vishnu Anand, Advocates in CRL.O.(CO.)11/2016. Mr. Sharad Banshul, Advocate for applicant in CO.APPL.3038-3045/2016 in CO.PET.704/2014. Mr. Sanjeev Kumar, Advocate for Petitioner in CO.PET.1061/2016. Mr. Sayed Aquib Ali, Advocate for petitioner in CO.PET.704/2014. Mr. Mohd. Belal, Advocate for applicant in CO.APPL.304/2017 & 306/2017 in CO.PET.704/2014. Mr. K. Datta and Mr. Shavnak Kashyap, Advocates in CO.APPL.2615/2016 in CO.PET.704/2014. Mr. Ashish Dholakia, Mr. D. Kishore Kumar and Mr. Gautam Bajaj, Advocates for Investors in CO.APPL.(M) 115/2016 & CO.PET.704/2014. Mr. Neeraj Sharma, Advocate for applicant in CO.APPL.4226/2016 & 4227/2016 in CO.PET.704/2014. Mr. Amit Kumar Mishra, Advocate for petitioners in CO.PET.948/2016. Mr. Sanjeev Kumar, Advocate for Petitioners Nos.1,2,14,15,35,40,41,44 & 45 in CO.PET.704/2014. Mr. Mayank Goel, Advocate with Mr. Lalruatpuia Sailo and Mr. Monamshel Maring, Advocates for the Official Liquidator. SIDDHARTH MRIDUL, J (ORAL) CO. APPL. (M) 115 of 2016 & CO. APPL. No. 2615 of 2016 1. The present order will determine....
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.... encapsulated as follows: a) It has been stated by way of the said OLR that pursuant to the appointment as Provisional Liquidator in terms of order dated 08.03.2016, the Official Liquidator sent notices dated 25.04.2016 under the provisions of sections 454 and 456 of the Companies Act, 1956 and Rule 130 of the Companies (Court) Rules, 1959, to the Ex-Directors of the Respondent Company, namely, Mr. Surender Kumar Hooda, Mr. Michael Brian Collins, Mr. Vipin Kapur, Mr. Harish Chander Mehrotra, Mr. Arun Kumar Kotwal, Mr. Rakesh Kumar Nagpal and Mr. Sunil Gandhi. b) It has further been stated that the statements under Rule 130 of the Companies (Court) Rules, 1959 of Mr. Surender Kumar Hooda, Mr. Arun Kumar Kotwal, Mr. Rakesh Kumar Nagpal and Mr. Sunil Gandhi have been recorded on 08.06.2016 and 22.07.2016. It has however been stated that the Statement of Affairs in relation to the respondent company in provisional liquidation has not yet been filed, by the concerned officers. c) Further, it has been stated that in compliance to the directions in the said order of this Court dated 08.03.2016, a team from the office of the Official Liquidator visited the registered office of the Respo....
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....the Respondent Company as per Form 8 filed by the Respondent Company with the Registrar of Companies. However, as has been stated, no reply/response has been received from the Bank. 8. It is at this point of time that Company Application No. 2615 of 2016 and Company Application (Main) No. 115 of 2016 came to be filed. 9. When the proceedings in the present applications were pending adjudication before this Court, the subject notification dated 07.12.2016 came to be issued. It would be relevant to reproduce the said notification dated 07.12.2016 and the same reads as follows: "MINISTRY OF CORPORATE AFFAIRS Notification New Delhi, the 7th December, 2016 Companies (Transfer of Pending Proceedings) Rules, 2016 G.S.R. 1119(E).- In exercise of the powers conferred under sub-sections (1) and (2) of section 434 of the Companies Act, 2013 (18 of 2013) read with sub-section (1) of section 239 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016) (hereinafter referred to as the Code), the Central Government hereby makes the following rules, namely:- 1. Short title and Commencement. - (1) These rules may be called the Companies (Transfer of Pending Proceedings) Rules, 2016. (2) The....
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....ance with Rule 7, required for admission of the petition under sections 7, 8 or 9 of the Code, as the case may be, including details of the proposed insolvency professional to the Tribunal within sixty days from date of this notification, failing which the petition shall abate. (2) All cases where opinion has been forwarded by Board for Industrial and Financial Reconstruction, for winding up of a company to a High Court and where no appeal is pending, the proceedings for winding up initiated under the Act, pursuant to section 20 of the Sick Industrial Companies (Special Provisions) Act, 1985 shall continue to be dealt with by such High Court in accordance with the provisions of the Act. 6. Transfer of pending proceedings of Winding up matters on the grounds other than inability to pay debts.-All petitions filed under clauses (a) and (f) of section 433 of the Companies Act, 1956 pending before a High Court and where the petition has not been served on the respondent as required under rule 26 of the Companies (Court) Rules, 1959 shall be transferred to the Bench of the Tribunal exercising territorial jurisdiction and such petitions shall be treated as petitions under the provisions....
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....of the instant case ought not to be transferred to the National Company Law Tribunal, in terms of the subject notification. 13. Mr. P. V. Kapoor, Sr. Advocate, Mr. Kailash Vasdev, Sr. Advocate, Mr. Krishnendu Dutta, Advocate, & Mr. Saurabh Kashyap, Advocate, the learned counsel appearing on behalf of the applicants support the retention of the proceedings relating to Compromise and/or Arrangement of the Respondent Company before this Court by asserting that Clause 3 of the subject notification carves out a clear and unequivocal exception to the transfer of proceedings under the subject notification, by employing the expression 'other than the proceedings relating to winding up'. Learned counsel would urge that the expression 'other than the proceedings relating to winding up', which is of the widest amplitude, would take within its sweep, the proceedings for the revival of the Respondent Company. 14. Attention of this Court has been invited to the provisions of Section 446 of the Companies Act, 1956, and in particular sub-section 2(c) thereof, to urge that the Company Court has exclusive jurisdiction to consider and determine any application, within the meaning of the provisions ....
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....ring on behalf of the Petitioners in Company Petition No. 704 of 2014, that the express mandate of the subject notification is indicative of the legislative intent, inasmuch as, the proceedings relating to Compromise and/or Arrangement of a company stand transferred to the Benches of the National Company Law Tribunal w.e.f. from the date the said notification came into force i.e., 15.12.2016. 17. I have heard learned counsel appearing on behalf of the parties. 18. For effective determination of the issue, it would be relevant to advert to the decisions relied upon by the learned counsel for the parties. 19. In Renu Sagar Power Company (supra), the Hon'ble Supreme Court whilst determining the scope and ambit of the expression 'arising out and relating to' inter alia, came to the following finding: "(2) Expressions such as "arising out of" or "in respect of" or "in connection with" or "in relation to" or "in consequence of" or "concerning" or "relating to" the contract are of the widest amplitude and content and include even questions as to the existence, validity and effect (scope) of the arbitration agreement." (Emphasis supplied.) 20. In Mansukhlal Dhanraj Jain (supra) the H....
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....the view that such injunction suits can be said to be relating to the possession of the immovable property. Sawant, J. has taken a contrary view. We shall deal with these relevant decisions at a later stage of this judgment. However, on the clear language of the section, in our view, it cannot be said that these suits are not relating to the possession of the immovable property. It is pertinent to note that Section 41(1) does not employ the words "suits and proceedings for recovery of possession of immovable property". There is a good deal of difference between the words "relating to the recovery of possession" on the one hand and the terminology "for recovery of possession of any immovable property". The words 'relating to' are of wide import and can take in their sweep any suit in which the grievance is made that the defendant is threatening to illegally recover possession from the plaintiff-licensee. Suits for protecting such possession of immovable property against the alleged illegal attempts on the part of the defendant to forcibly recover such possession from the plaintiff, can clearly get covered by the wide sweep of the words "relating to recovery of possession" as employ....
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....h the word 'relate', see Corpus Juris Secundum, Vol. 17, page 693. The expression 'in relation to' (so also 'pertaining to'), is a very broad expression which presupposes another subject-matter. These are words of comprehensiveness which might have both a direct significance as well as an indirect significance depending on the context, see State Wakf Board v. Abdul Azeez [AIR 1968 Mad 79 : (1967) 1 MLJ 190] , following and approving Nitai Charan Bagchi v. Suresh Chandra Paul [66 CWN 767] , Shyam Lal v. M. Shyamlal [AIR 1933 All 649 : 1933 All LJ 728] and 76 Corpus Juris Secundum 621. Assuming that the investments in shares and in lands do not form part of the undertakings but are different subject-matters, even then these would be brought within the purview of the vesting by reason of the above expressions. In this connection reference may be made to 76 Corpus Juris Secundum at pages 620 and 621 where it is stated that the term 'relate' is also defined as meaning to bring into association or connection with. It has been clearly mentioned that 'relating to' has been held to be equivalent to or synonymous with as to 'concerning with' and 'pertaining to'. The expression 'pertaining to....
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.... the Hon'ble High Court of Judicature at Bombay in Associated Banking Corporation of India Limited (supra) was whether the jurisdiction of City Civil Court has been ousted and whether special jurisdiction has been conferred upon the Court by reason of the suit having been filed by the Official Liquidator in the course of the winding up of the Associated Banking Corporation of India Ltd. The Court has observed as under:- " The question that we have to consider is whether the jurisdiction of the City Civil Court has been ousted and whether special jurisdiction has been conferred upon the High Court by reason of the suit having been filed by the Official Liquidator in the course of the winding up of the Associated Banking Corporation of India, Ltd. An Act was passed by the Dominion Legislature, being the Banking Companies Act, 1949, (Act X of 1949), to amend the law relating to Banking Companies, and Part III of that Act deals with suspension of business and winding up of banking companies. When one turns to some of the provisions in that part it is clear that the object of the Legislature was as far as possible to expedite the disposal of winding up of banking companies. For instanc....
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.... the expression in s. 45A "arising out of the winding up" from the use of the expression in s. 45B "arise in the course of the winding up." Sections 45A and 45B are co-related. Section 45A ousts the jurisdiction of Courts other than the High Court, and s. 45B confers a special jurisdiction upon the High Court. There can be no doubt that by reason of these two sections extra-territorial jurisdiction has been conferred upon the High Court which it did not possess or enjoy before. Wherever the party may be resident, wherever the cause of action may have arisen, if the matter satisfies the test laid down, viz. that it relates to or arises out of the winding up of a banking company, then the High Court is invested with the jurisdiction to decide that matter. The view taken by the learned Judge below was that there must be a direct connection or a nexus between the winding up and the matter which comes for the decision of the Court before s. 45A or s. 45B would be applicable, and the view taken by the learned Judge was that the present suit arises out of contractual relations between the bank and the debtor, that the suit does not arise out of the winding up, that it is not by reason of ....
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....different thing to say that the official liquidator with the sanction of the Court is recovering the debt due by the debtor to the company under s. 179 because the official liquidator is not concerned with the contractual rights or obligations. He is primarily concerned to wind up the affairs of the company and to distribute its assets. Therefore, in filing the suit what he is doing is helping to wind up the affairs of the company and also assisting the ultimate distribution of the assets of the company. Even the Court when it gives sanction approaches the matter from the same point of view. It has got to consider what are the possibilities of Recovering the debt, what costs are likely to be incurred, whether from every point of view it is advisable to prosecute the claim, and so on and so forth; whereas the company before it is wound up would not be in any way fettered by the considerations which would weigh with the liquidator or with the Court under s. 179. Therefore, a suit filed after the company goes into liquidation by the official liquidator under s. 179 must have a relationship with the winding up of the company. It is also to be borne in mind that the Legislature has not ....
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....any including a company that is liable to be wound up or is being wound up and normally, the attempt must be to ensure that rather than dissolving a company it is allowed to revive. Moreover, Section 391(1)(b) gives a right to the liquidator in the case of a company which is being wound up, to propose a compromise or arrangement with creditors and members indicating that the provision would apply even in a case where an order of winding up has been made and a liquidator had been appointed. Equally, it does not appear to be necessary to go elaborately into the question whether in the case of a company in liquidation, only the Official Liquidator could propose a compromise or arrangement with the creditors and members as contemplated by Section 391 of the Act or any of the contributories or creditors also can come forward with such an application. xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx 37. Learned counsel argued before us whether in ....
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....ore various Metropolitan Magistrates filed by the company, observed as under, in relation to the scope and ambit of the provisions under section 446 of the Companies Act, 1956: "60. Here it must be cleared that on a plain reading of two sections, viz., 442 and 446, they cannot be put at par while considering their respective construction. Section 442 operates in much smaller field and is applicable only in respect of any suit or proceedings pending against the company in the Supreme Court or in any High Court or any other courts. It does not apply to any other proceedings pending elsewhere except before a court. In clear contrast, on making of a winding up order or appointment of provisional official liquidator section 446(1) applies to all such and other proceedings against the company wherever pending and operates as stay against commencement of new proceedings or progress in pending proceedings except with the leave of the court. Under section 446(2), the Company Court by a non obstante clause gets jurisdiction to entertain or dispose of any suit or proceedings, or claim made by or against the company, any application under section 391 proposing a scheme in respect of the compa....
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....nding petition is served by the petitioner on the respondent, the petition will continue to be dealt with by this court and the applicable provisions will be the provisions of 1956 Act." 25. In KSL & Industries (supra) the Hon'ble Supreme Court observed as under: "51. We might add that this conclusion has been guided by what is considered to be one of the most crucial principles of interpretation viz. giving effect to the intention of the legislature. The difficulty arose in this case mainly due to the absence of specific words denoting the intention of Parliament to cover applications for recovery of debts under the RDDB Act while enacting Section 22 of SICA. As observed earlier, the obvious reason for this absence is the fact that SICA was enacted earlier. It is the duty of this Court to consider SICA, after the enactment of the RDDB Act to ascertain the true intent and purpose of providing that no proceedings for execution or distraints or suits shall lie or be proceeded with. Undoubtedly, in the narrower sense an application for the recovery of debt can be giving a restricted meaning i.e. a proceeding which commences on filing and terminates at the judgment. However, there is....
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....ther because of legislative intention or on economic justification of inequitable burden of progressive approach of fiscal provisions intended to augment State revenue. But once exception or exemption becomes applicable no rule or principle requires it to be construed strictly. Truly speaking, liberal and strict construction of an exemption provision is to be invoked at different stages of interpreting it. When the question is whether a subject falls in the notification or in the exemption clause then it being in the nature of exception is to be construed strictly and against the subject but once ambiguity or doubt about applicability is lifted and the subject falls in the notification then full play should be given to it and it calls for a wider and liberal construction. (See Union of India v. Wood Papers Ltd. [(1990) 4 SCC 256 : 1990 SCC (Tax) 422] and Mangalore Chemicals and Fertilisers Ltd. v. Dy. Commr. of Commercial Taxes [1992 Supp (1) SCC 21] to which reference has been made earlier.)" (Emphasis supplied.) 27. On a conspectus of the above decisions, the following legal position emerges: (i) That the expression 'proceedings relating to winding up' is of the widest amplitu....
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....erate as an exception to the subject notification. The rules of interpretation qua an exception require a strict construction in terms of the legislative intention. However, once the ambiguity or doubt about the applicability has been lifted, then the exception has to be given a wide and liberal construction. 28. Coming to the solitary submission made on behalf of the petitioners, in relation to the legislative intent qua the proceedings relating to revival of the Respondent Company, it would be pertinent to observe as follows: (i) The winding up petition has been admitted and Provisional Liquidator has been appointed in terms of the order of this Court dated 08.03.2016. (ii) Pursuant to the order dated 08.03.2016, the Official Liquidator has complied with the directions contained in the said order and taken over the possession of the assets, books, records etc., of the Respondent Company in provisional liquidation. (iii) Applications being Company Application No. 2615 of 2016 and Company Application (Main) 115 of 2016, for revival of the Respondent Company have been pending adjudication before this Court, prior to coming into effect of the subject notification. (iv) A b....