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TMI Blog2016 (12) TMI 1253X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 26 of the Companies (Court) Rules, 1959, stand transferred to the appropriate Bench of the National Company Law Tribunal ("NCLT") exercising territorial jurisdiction over the mater. It is the case of the Respondent that these petitions are covered in the mandate of the notification and stand transferred thereunder, whilst the Petitioners submit that the petitions having been served on the Respondent as required by Rule 26, the transfer notification does not apply to them and accordingly, this court retains its jurisdiction over them. 2 Since the controversy involves a question which would commonly arise in a number of petitions pending before this court, this court thought it fit to notify the petitions on the daily cause list, calling upon other interested parties wanting to make submissions on the issue to appear at the hearing. Accordingly, submissions are made at the Bar not only by the parties to these petitions, but also other interested parties whose petitions are pending before this court. 3 The crucial question, which arises for the consideration of the court, is : what amounts to a notice under Rule 26 of the Companies (Court) Rules, 1959 for the purposes of transfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, by notification in the Government Gazette, appoint and different dates may be appointed for different provisions of the Act. The whole of 2013 Act is not yet brought into force. The Central Government has been, by separate notifications, bringing into force different provisions of 2013 Act piecemeal. (iii) Sections 408 and 410 of 2013, respectively, confer powers on the Central Government to constitute NCLT and NCLAT to exercise and discharge the powers and functions as are, or may be, conferred on them by the Act. In exercise of these powers, the Central Government through separate notifications issued by the Ministry of Corporate Affairs on 1 June 2016 constituted NCLT and NCLAT on 1 June 2016. (iv) On the same day, i.e. 1 June 2016, the Central Government, in exercise of the powers conferred by clause (a) of subsection (1) of Section 434 of 2013 Act, by Notification, appointed 1 June 2016 as the date on which all matters or proceedings or cases pending before the Board of Company Law Administration ("CLB") shall stand transferred to NCLT, to be disposed of in accordance with the provisions of 2013 Act or 1956 Act, as the case may be. (v) By another Notification issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Code: Provided that the petitioner shall submit all information, other than information forming part of the records transferred in accordance 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." 5 As we have noticed above, for operation of Rule 5, the crucial question is, whether or not the petition has been served on the Respondent "as required under Rule 26 of the Companies (Court) Rules, 1959". That brings us to the requirement of Rule 26 and service of petitions thereunder. It is contended on behalf of the Respondent herein and others who argue f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28 clear days before the date of hearing." 28. Service on company (1) Where a petition is presented against a Company, it shall be accompanied by a notice of the petition in the prescribed form together with a copy of the petition for service on the company and an envelope addressed to the company at its registered office or its principal place of business and sufficiently stamped for being sent by registered post for acknowledgement. The Registrar shall immediately on the admission of the petition send the notice together with the copy of the petition to the company by registered post. (2) Every petition and, save as otherwise provided by these Rules or by an order of Court, every application, shall unless presented by the Company, be served on the company at its registered office, or if there is no registered office, at its principal or last known principal place of business, by leaving a copy thereof with an officer or employee of the company, and in case no such person is available, in such manner, as the Judge or Registrar may direct, or, by sending a copy thereof by prepaid registered post addressed to the company at its registered office, or, if there is no registered offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and directions as to advertisement Upon the filing of the petition, it shall be posted before the Judge in Chambers for admission of the petition and fixing a date for the hearing thereof and for directions as to the advertisements to be published and the persons, if any, upon whom copies of the petition are to be served. The Judge may, if he thinks fit, direct notice to be given to the company before giving directions as to the advertisement of the petition. 98. Copy of petition to be furnished Every contributory or creditor of the company shall be entitled to be furnished by the petitioner or by his advocate with a copy of the petition within 24 hours of his requiring the same on payment of the prescribed charges." 7 It may be noted at the outset that Rules 26 to 29, quoted above, come within Part-I entitled "GENERAL", whereas Rules 96 and 98 are under Part III entitled "WINDINGUP". It is also important to note that the rules concerning winding up contained in Part III do not provide for compulsory service of the petition or its notice on the Respondent company, though they provide for the discretion in the Judge in chambers hearing the petition for admission to direct a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istinct fallacy in this argument. First of all, if a petition had to be served on the respondent as well as other persons only as and if the Act or the Rules may require or the Judge or the Registrar may direct, there was no need to make any separate provision for such service in Rule 26. The Act or the Rules or the order of the Judge or the Registrar, as the case may be, anyway would have provided for the same. A separate provision for such service would make little sense. Secondly, even lexicologically the structure of the sentence in Rule 26 providing for such service does not support the interpretation suggested by Mr.Andhyarujina. A correct reading of Rule 26 implies that the requirement of service of petition is provided for in Rule 26 itself. It contains two commands, namely, (i) every petition shall be served on the respondent, if such respondent be named in the petition, and (ii) every petition shall be served on such other person as the Act or the Rules may require or as the Judge or the Registrar may direct. In other words, if a respondent is named in the petition, the requirement of service of the petition on such respondent is the requirement of Rule 26 itself. One doe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion should not admitted; or (ii) admit the petition, fix a date for hearing and issue a notice to the company before giving directions about advertisement of the petition; or (iii) may admit the petition, fix the date of hearing of the petition, order that the petition be advertised, and direct that the petition be served upon persons specified in the order. Whereas the requirements of Rules 27 and 28 of a post admission notice of the petition to the company are absolute, the requirement of a notice at the stage of admission or before advertisement of the petition as provided in Rule 96, is a matter of discretion of the court. As held by the Allahabad High Court in the case of U.P. Twiga Fiberglass Ltd. vs. Parekh Marketing P. Ltd. 1986 Company Cases (Vo.59) 886, Rule 26 is general in nature and does not control the requirement of Rule 96 to serve the "company". The notice to the company in Rule 96 is not required to be issued in any prescribed form. The company has only to be apprised of the fact that a petition for winding up has been filed. Such notice may be accompanied with a copy of the petition. 11 Mr.Andhyarujina and Mr.Madon submitted that the proviso to Rule 5 makes it c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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