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2020 (10) TMI 1337 - HC - Companies LawMaintainability of application - Seeking stay on further proceedings of the Arbitral Tribunal consisting of 2nd, 3rd and 4th Respondents with regard to the dispute between the Applicant and the 1st Respondent - section 9 of the Arbitration and Conciliation Act - whether or not leave is required to continue the Arbitral Proceedings? HELD THAT:- Though the Eleventh Schedule of IBC was amended, Section 279 of the Companies Act 2013, which is correspondent to Section 446 of the Companies Act, 1956 has not been deleted or amended. As per sub-Section 2 Clause (94A) the definition of the term “winding up” means winding up under this Act or liquidation under the Insolvency and Bankruptcy Code, 2016, as applicable. The word “applicable” indicates that the Eleventh Schedule not confined to Insolvency and Bankruptcy alone and also applicable to winding up took place under the Companies Act - Section 238 of the Insolvency and Bankruptcy Code, 2016 states that ‘the provisions of this Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law’, the provision is exhaustive. Thus, whenever a special law gives out a specific provision which is clear and unambiguous and on the same subject there is a different provision in the general law and there is an inconsistency between the two, the special law will prevail and the principles of harmonious construction will have no role to play. The time frame in winding up on just and equitable grounds is not an important condition. The very object of introducing the IBC 2016 and restricting its operation to solvency of the Company alone and provision for revival of the company within time fixed and keeping the liquidation as last resort makes it clear that time frame is important under the Code while it is not so under Section 279 of the Companies 2013 Act - An Adjudicating Authority that commences exercising of its power by entertaining a petition by a creditor on account of default by the Corporate Debtor enters into the sphere of resolution process which again deals with money and money alone ends up under liquidation. If there is a suit for title pending before the civil court. Adjudicating Authority normally would not be able to reject the leave in such cases. It is to be noted that the tribunals of limited tribunals of limited jurisdiction do not have power to issue declaratory decrees. The definition of the word "claim" is found in Section 3(6), Section 3(11) defines "Debt", Section 3(12) defined "default" and Sections 3(13) to 3(18) of the Insolvency and Bankruptcy Code 2016 deals with financial aspects. Therefore the very word ‘claim' is relatable to a right of payment. Such right of payment may arise on account of debt or on account of any breach of contract provided such breach gives right to a payment. In such circumstances the provisions of Companies Act which deals with cases of winding up generally cannot be read harmoniously with IBC which is a Special Law. Section 33(5) of the IBC Code has to be interpretted on its own language. Further, as discussed, when there is no inconsistency IBC would prevail over. Such view of the fact no leave is required to continue of pending proceedings - Any order passed under Section 9 of the Arbitration and Conciliation Act upsetting the view of the tribunal taken, amounts to sitting over the order of the Tribunal ruling same amount to its jurisdiction. The purpose of Section 9 of the Arbitration and Conciliation Act is not to upset any order passed by the Tribunal. When the Tribunal has passed an order rejecting the contention of the claimant questioning the jurisdiction to continue the proceedings. Such order is amenable to challenge under Section 34 of the Arbitration and Conciliation Act, 1996, while challenging the Award. This Court is of the view that interim orders cannot be granted. The Court is also aware of the limitation to intervene the arbitral proceedings. Section 5 of the Arbitration and Conciliation Act also indicated that no judicial authority shall intervene in the arbitral proceedings except where provided in this part - Application dismissed.
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