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2022 (9) TMI 643 - HC - Companies LawLegislative power of state government - Matter covered within the scope of Companies Act - Beneficial provisions of the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act 1999 (MPID Act) - whether the provisions are entirely denuded and reduced to meaninglessness when the financial establishment in question is a corporate entity in liquidation? - HELD THAT:- MPID Act does not contemplate a situation of a company in liquidation at all. There are two reasons for this. The first is that the MPID Act deals with a financial establishment as defined. It is not limited to a company. In that scenario, i.e. where the financial establishment is not a company, no question of winding up arise. Second, it appears from a careful reading Section 4 that the MPID Act is in fact predicated on the financial establishment (where it is a company) not being in liquidation and of it being an active and going concern. This is inter alia apparent from the provisions of Section 4 which speaks of an ongoing action not only against the financial establishment but also against a promoter, director - and then come the other words - partner, manager or member of the financial establishment. Mr Kumbhakoni’s construct, if read in its strictest fashion, would probably result in a liability attaching to shareholders of the company because they would be ‘members’ of the financial establishment in question, i.e., the company. The State Legislature could never have framed an enactment or a legislation on any entry that falls within List I. There was simply no legislative competence for it. If this be so, the MPID Act cannot possibly be said to cover any portion of the field that is fully occupied by the Companies Act - there are no provision in the MPID Act to support the stand taken by the State Government. There can be no divesting of the powers and authority of the company Court and of the OL only on account of the MPID Act. Appeal dismissed.
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