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2024 (4) TMI 242 - HC - Companies LawSeeking conversion from an unlimited liability company to a limited liability company - Section 18 of the Companies Act, 2013 - whether the Appellant’s application filed on 21st October, 2014 before the ROC will be governed by the conditions in the statutory provision of Section 18 of the Act as it existed on the said date or the additional criteria provided in Rule 37, which was inserted subsequently by the Legislature w.e.f. 27th July, 2016, would also be applicable to the said application? - HELD THAT:- The submissions of the Appellant cannot be accepted and it is opined that the Appellant did not acquire any vested right of conversion upon filing the application under Section 18 of the Act on 21st October, 2014 with the ROC. It is well settled by Supreme Court that the relevant law for grant of approval of an application would be the date on which the approval is granted. Reference made to the judgment of Supreme Court in USMAN GANI J. KHATRI OF BOMBAY AND ORS VERSUS CANTONMENT BOARD AND ORS [1992 (5) TMI 205 - SUPREME COURT] where it has been held that At present the statutory bye-laws published on April 30, 1988 are in force and the fresh building plans to be submitted by the petitioners, if any, shall now be governed by these bye-laws and not by any other bye-laws or schemes which are no longer in force now. Further the Supreme Court in RAMESH PRASAD VERMA VERSUS THE STATE OF BIHAR AND ORS [2009 (8) TMI 1291 - PATNA HIGH COURT] has held that a legislation, if clarificatory, declaratory or explanatory in nature and purport will have retrospective operation especially in the absence of any indication to the contrary. The contention of the Appellant that the ROC by insisting on NOCs from the creditors, lenders and stakeholders has sought to render Section 18(3) otiose is without any merit. The requirement of NOC has been statutorily incorporated in Rule 37 and the said Rule also contemplates issuance of notice by the applicant-company to each of its creditors inviting objections, if any, to the proposed conversion. The Appellant has not challenged the vires of the Rule 37 and, in fact, consciously abandoned the challenge initially made to the said Rule. Thus, with the said Rule existing on the statute book, the objection of the ROC with respect to the non-circulation of this application of conversion to the creditors, lenders and stakeholders of the applicant-company is not arbitrary and is in conformity with Rule 37. The contention of the Appellant that ROC in the impugned decision erred in referring to Section 366 of the Act read with Rules 3 and 4 of the Companies (Authorised to Register) Rules, 2014 as it is not attracted to an application filed under Section 18 of the Act, does not persuade to set aside the impugned decision. The ROC has recorded in the impugned order that it adverted to the principles laid down in Section 366 and the Rules, 2014 as the applicant herein was objecting to the newly inserted Rule 37 and as per ROC, the Rules of 2014 also embodied the same spirit of the statute. There are no merit in the present appeal and the same is dismissed.
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