TMI Blog2017 (2) TMI 1049X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 1 company in this regard need not detain the Court save and except to state that by a detailed description of the manufacturing process the respondent No. 1 company had sought to contend that it is an industrial company. Surely, the rejection of the above stand could have been made only by a process of adjudication which power and jurisdiction clearly and undoubtedly is vested by the SICA and the Regulations framed thereunder in a Bench of the Board and not in authorities like the Registrar and the Secretary. The High Court, in view of what has been discussed above, was correct in coming to the conclusion that the refusal of registration of the reference sought by the respondent Company by the Registrar, Secretary/Chairman of the Board was non-est in law. The reference must, therefore, understood to be pending before the Board on the relevant date attracting the provisions of Section 252 of the Insolvency and Bankruptcy Code. Whether the reference before the Board stood foreclosed by the order of winding up of the respondent Company and the appointment of liquidator was answered in the negative by HC relying on Real Value Appliances Ltd. (1998 (5) TMI 334 - SUPREME COURT OF ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been made to enable the company to seek a reference as per provisions of Part VI-A of the Companies Act, 1956 within 180 days from the date of the repeal Act. Interestingly, the provisions of Part VI-A of the Companies Act, 1956 which, though brought about by the Companies (Second Amendment) Act of 2002 had/have not been made effective. In fact, effective 1.11.2016 Section 4(b) of the Repeal Act has been amended by Section 252 of the Insolvency and Bankruptcy Code of 2016 (hereinafter referred to as the Code ) and provisions have been made therein akin to those in repealed Section 4(b) except that reference by a company in respect of an abated proceeding is to be made to the National Company Law Tribunal within 180 days of the Code coming into force. Such a reference is required to be dealt with in accordance with the provisions of the Code. The code has been enacted and given effect to w.e.f. 1.12.2016. Relevant details thereof will be noticed hereinafter. 4. At this stage, it will also be necessary to take note of the fact that the National Company Law Tribunal envisaged under the Companies (Second Amendment) Act of 2002 has been authorized to exercise and discharge its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; (c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. (2) The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period. (3) The provisions of sub-section (1) shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. (4) The order of moratorium shall have effect from the date of such order till the completion of the corporate insolvency resolution process: Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al thereof by the Adjudicating Authority failing which the liquidation process of the corporate debtor as contemplated in Chapter III of the Code would be required to be initiated. 7. The above provisions of the Code have been noticed in some detail and the provisions thereof, so far as the same are material for the purposes of the present case, have also been extracted and highlighted. We may now proceed to examine and see what has happened in the present case. 8. Briefly the facts relevant are as follows. On 23.07.2013 the respondent No. 1 company-Zenith Infotech Ltd. filed a Reference before the Board for Industrial and Financial Reconstruction (hereinafter for short the Board ) under Section 15 of the SICA. The said application was refused registration by the Registrar of the Board on 12.08.2013 on the ground that respondent No.1 company is not an industrial company within the meaning of Section 3(e) and 3(f) of the SICA. An appeal was filed by the respondent No. 1 company before the Secretary of the Board against the order of Registrar which was dismissed on 13.09.2013. There was a further appeal to the Chairman of the Board against the order of the Secretary. Though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt, there is any further scope for registration of the Reference sought for by the respondent No. 1 company under the provisions of the SICA if the order declining registration by the aforesaid authorities is to be understood to be non est. 12. The High Court, by the impugned order, took the view that under the provisions of the SICA read with the Regulations, the Registrar and the other authorities like the Secretary and the Chairman of the Board have not been conferred any power of adjudication which would necessarily be involved in determining the question as to whether the respondent No.1 company is an industrial company within the meaning of Section 3(e) and 3(f) of the SICA. Since an adjudicatory function and role has been performed by the Registrar, whose order has been affirmed by the Secretary and the Chairman of the Board and as registration of the Reference sought for by the respondent No. 1 company was refused on that basis the said orders are non est in law. Regarding the second question, the High Court of Delhi relying on the decisions of this Court in Real Value Appliances Ltd. Vs. Canara Bank and Others (1998) 5 SCC 554 and Rishabh Agro Industries Ltd. Vs. P.N.B. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the point or points on which they differ, and make a reference to the Chairman of the Board or, as the case may be, the Appellate Authority who shall either hear the point or points himself or refer the case for hearing on such point or points by one or more of the other Members and such point or points shall be decided according to the opinion of the majority of the Members who have heard the case including those who first heard it. 13. Procedure of Board and Appellate Authority.- (1) Subject to the provisions of this Act, the Board or, as the case may be, the Appellate Authority, shall have powers to regulate- (a) the procedure and conduct of the business; (b) the procedure of the Benches, including the places at which the sittings of the Benches shall be held; (c) the delegation to one or more Members of such powers or functions as the Board or, as the case may be, the Appellate Authority may specify. (2) In particular and without prejudice to the generality of the foregoing provisions, the powers of the Board or, as the case may be, the Appellate Authority, shall include the power to determine the extent to which persons interested or claimin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns deals with References sought under Section 15 of the Act (SICA) and contains provisions as to how such References are required to be made and dealt with. Regulation 19 would need to be extracted to show what is contemplated to be the role of the Registrar and the Secretary on receipt of a Reference. The said provision therefore is extracted below. 19.(1) Every reference to the Board under sub-section (1) of section 15 shall be made- (i) in Form A in respect of an industrial company other than a Government Company; (ii) in Form AA in respect of a Government Company,] and shall be accompanied by five further copies thereof alongwith four copies each of all the enclosures thereto. [(2) Every reference to the Board under sub-section (2) of section 15 shall be made- (i) in Form B in respect of an industrial company other than a Government Company; (ii) in Form BB in respect of a Government Company,] and shall be accompanied by five further copies thereof alongwith four copies each of all the enclosures thereto. (3) A reference may be filed either by delivering it at the office of the Board or by sending it by registered post. [(4) On rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the Bench. When the Regulations framed under the statute vests in the Registrar or the Secretary of the Board the power to scrutinize an application prior to registration thereof and thereafter to register and place the same before the Bench, we do not see how such power of scrutiny can be understood to be vesting in any of the said authorities the power to adjudicate the question as to whether a company is an industrial company within the meaning of Section 3(e) read with 3(f) and 3(n) of the SICA. A claim to come within the ambit of the aforesaid provisions of the SICA i.e. to be an industrial company, more often than not, would be a contentious issue. In the present case, it certainly was. The specific stand of the respondent No. 1 company in this regard need not detain the Court save and except to state that by a detailed description of the manufacturing process the respondent No. 1 company had sought to contend that it is an industrial company. Surely, the rejection of the above stand could have been made only by a process of adjudication which power and jurisdiction clearly and undoubtedly is vested by the SICA and the Regulations framed thereunder in a Bench of the Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the High Court, often by making a provision in the Rules or under the orders of the Chief Justice or by issuing practice directions, and at times, in the absence of rules, by sheer practice. The practice gathers the strength of law and the older the practice the greater is the strength. The Judges rarely receive personally any document required to be presented to the Court. Plaints, petitions, memoranda or other documents required to be presented to the Court are invariably received by the administrative or ministerial staff, who would also carry out a preliminary scrutiny of such documents so as to find that they are in order and then make the documents presentable to the Judge, so that the valuable time of the Judge is not wasted over such matters as do not need to be dealt with personally by the Judge. 14. The judicial function entrusted to a Judge is inalienable and differs from an administrative or ministerial function which can be delegated or performance whereof may be secured through authorization. The judicial function consists in the interpretation of the law and its application by rule or discretion to the facts of particular cases. This involves the ascerta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the person who presented (with such other particulars as may be prescribed) are to be endorsed truly and mechanically on the document presented. It is a ministerial function simpliciter. It can safely be left to be performed by one of the administrative or ministerial staff of the High Court which is as much a part of the High Court. It may be delegated or be performed through someone authorized. The manner of authorization is not prescribed. 18. The High Court, in view of what has been discussed above, was correct in coming to the conclusion that the refusal of registration of the reference sought by the respondent Company by the Registrar, Secretary/Chairman of the Board was non-est in law. The reference must, therefore, understood to be pending before the Board on the relevant date attracting the provisions of Section 252 of the Insolvency and Bankruptcy Code. 19. The second question arising before the High Court, namely, whether the reference before the Board stood foreclosed by the order of winding up of the respondent Company and the appointment of liquidator was answered in the negative relying on Real Value Appliances Ltd. (supra) and Rishab Agro Industries Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X
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