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2019 (5) TMI 609

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..... whatsoever, inconsistent with the provisions thereof - In any view of the matter the Order dated 17th September 2013 passed by this Court in exercise of its powers under Section 446 of the 1956 Act, shall be deemed to be an Order passed under Section 279 of the 2013 Act. Accordingly, any reliance on Section 430 of the 2013 Act to contend that the said Order is annulled or void by the enaction of Section 430 of the 2013 Act is without any basis whatsoever, as the said Order would be expressly saved by Section 465 read with Section 279 of the 2013 Act. The Company Application is accordingly dismissed. - COMPANY APPLICATION NO. 698OF 2018 IN COMPANY PETITION NO. 376 OF 2010 - Dated:- 3-5-2019 - S.J. KATHAWALLA, J. Mr. Matthew Nedumpara alongwith Ms. Preeti Dambre instructed by C.J. Joveson for the Applicant. Mr. Sharan Jagtiani along with Mr. Sumeet Nankani for the Official Liquidator. P.C.: 1. The Applicant is an ex-director of the Company in liquidation, M/s. Minar International Limited ( the Company ). The Company was ordered to be wound up by an Order of this Court dated 16th March 2012 and the Official Liquidator was accordingly appointed as liquidator of the Company. By an Orde .....

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..... ce of Section 430 of the 2013 Act on 1st June 2016, this Court has lost all jurisdiction over the winding up proceedings and that the Order granting leave under Section 446 of the Act ceased to be alive. It was also submitted that Section 430 of the 2013 Act is a procedural provision that operates retrospectively. It is further submitted that all orders passed in the Suit also are a nullity as a result of the aforesaid submission. 5. Mr. Sharan Jagtiani, learned Counsel for the Official Liquidator, opposed the Application and submitted that the same is totally misconceived in law. As regards the doctrine of election, it is submitted that the same has no application to the present case because the same can never apply as between the Suit and the winding up proceeding. The Suit is a proceeding for recovery of money against the Company and the Applicant in his personal capacity as guarantor and for realisation of security whereas the winding up proceeding is based on the exercise of a statutory right of a creditor that would result in winding up of a company, which is an order in rem. 6. It was then contended on behalf of the Official Liquidator that the other submission that the 2013 .....

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..... recovery of a money claim. The cause of action or legal basis for both these proceedings is entirely distinct. This scope of a company petition has been clearly stated by the Hon ble Supreme Court in the case of Haryana Telecom Ltd. v. Sterlite Industries (India) Ltd. reported in (1999) 5 SCC 688 at paragraph 5, relied upon by the Official Liquidator, which reads as follows: The claim in a petition for winding up is not for money. The petition filed under the Companies Act would be to the effect, in a matter like this, that the company has become commercially insolvent and, therefore, should be wound up. The power to order winding up of a company is contained under the Companies Act and is conferred on the court…. (Emphasis Supplied) 9. There is another reason why the principle of estoppel or cause of action estoppel can have no application in the present case. The Company Petition is between the Petitioning Creditor and the Company alone, whereas the Suit was filed against both, the Company and the Applicant, in his individual capacity as the exdirector/ guarantor thereof. The Applicant as ex-Director is not and could not be a party Respondent to the Petition for winding up .....

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..... eover, this Court was acting as a Company Court in granting such leave to allow the Suit to continue. The Suit has accordingly continued and it is also clear that the Suit, being for recovery of money, is not in respect of a matter that even after the coming into force of the 2013 Act is within the jurisdiction of the Tribunal or Appellate Tribunal. 13. Further, I also find no merit in the submission that Section 430 applies retrospectively because it is a procedural provision. It is clearly not a procedural provision but a substantive provision on the ouster of jurisdiction of a civil court and, in any event, apart from the issue of retrospective operation, I find there is no merit in this submission relying on Section 430 of the 2013 Act. 14. Lastly, and in any view of the matter there is also merit in the submission of the Official Liquidator that the Order granting leave under Section 446 of the 1956 Act would be saved under the repeal and saving clause of the 2013 Act. Section 465 of the 2013 Act reads as follows: 465. Repeal of certain enactments and savings (1) The Companies Act, 1956 and the Registration of Companies (Sikkim) Act,1961 (hereafter in this section referred to .....

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..... under the corresponding provision of the 2013 Act, provided that such Order is not inconsistent with the provisions of the 2013 Act. Section 446 of the 1956 Act corresponds to Section 279 of the 2013 Act and is not, in any manner whatsoever, inconsistent with the provisions thereof. I am therefore of the opinion that in any view of the matter the Order dated 17th September 2013 passed by this Court in exercise of its powers under Section 446 of the 1956 Act, shall be deemed to be an Order passed under Section 279 of the 2013 Act. Accordingly, any reliance on Section 430 of the 2013 Act to contend that the said Order is annulled or void by the enaction of Section 430 of the 2013 Act is without any basis whatsoever, as the said Order would be expressly saved by Section 465 read with Section 279 of the 2013 Act. 16. Additionally, it may be noted that there is gross delay in filing the Company Application. However, as the contentions of the Applicant have been considered and rejected on merits, the aspect of delay is not being dealt with in detail except to note that there is unexplained delay in filing the Company Application. For all of the above reasons there is absolutely no merit .....

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