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2019 (5) TMI 609

013 Act, which was not even a statutory provision in force at the relevant time of orders in the present Company Petition, can have no bearing on the authority or jurisdiction of this Court to grant leave under Section 446 of the 1956 Act in a petition that was and continues to remain within the jurisdiction of this Court. At the relevant time this Court undoubtedly had jurisdiction to consider the Application for leave under Section 446 of the 1956 Act. Section 465(2) of the 2013 Act states that notwithstanding the repeal of the 1956 Act, any Order made under the 1956 Act, shall be deemed to have been made 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 - 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 sai .....

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n the submission of the Applicant, it is contended that the grant of leave under Section 446 of the 1956 Act is contrary to the doctrine of estoppel as the Original Petitioner/Petitioning Creditor has already elected its remedy of filing the Suit for recovery of moneys against the Company and the Applicant, who stood guarantor for the credit facilities extended to the Company. It was submitted that the effect of grant of such leave was to allow two proceedings to proceed simultaneously against the Company or its ex Director, the Applicant herein. 4. Although the Application accepts and admits that the Company Petition having been filed and allowed much prior to 1st June 2016, is a saved Petition and continues to remain within the jurisdiction of this Court, the learned Advocate for the Applicant submitted that by the coming into force 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 .....

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nt in support of the Application are entirely without any merit and are liable to be rejected. In support of the submission of estoppel or cause of action estoppel the learned Advocate for the Applicant relied upon the decision of Thoday v. Thoday reported in (1964) 1 All ER 341. The principles laid down in that case have no bearing on the issue in the present matter as the distinction between a suit for recovery and winding up proceedings is now well settled and the nature of the two proceedings is entirely different. A company petition is filed on the basis that a company is commercially insolvent or deemed to be commercially insolvent and is therefore liable to be wound up because it is unable to pay its debts. It is not a recovery proceeding based on a claim for money neither is it a proceeding for realisation of a security for 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, wh .....

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ermine by or under this Act or any other law for the time being in force and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or any other law for the time being in force, by the Tribunal or the Appellant Tribunal. 12. It is ex facie clear that Section 430 of the 2013 Act, which was not even a statutory provision in force at the relevant time of orders in the present Company Petition, can have no bearing on the authority or jurisdiction of this Court to grant leave under Section 446 of the 1956 Act in a petition that was and continues to remain within the jurisdiction of this Court. At the relevant time this Court undoubtedly had jurisdiction to consider the Application for leave under Section 446 of the 1956 Act. Moreover, 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. .....

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ot inconsistent with the provisions of this Act, be deemed to have been done or taken under the corresponding provisions of this Act; (b) subject to the provisions of clause (a), any order, rule, notification, regulation, appointment, conveyance, mortgage, deed, document or agreement made, fee directed, resolution passed, direction given, proceeding taken, instrument executed or issued, or thing done under or in pursuance of any repealed enactment shall, if in force at the commencement of this Act, continue to be in force, and shall have effect as if made, directed, passed, given, taken, executed, issued or done under or in pursuance of this Act; … (Emphasis Supplied) 15. Section 465(2) of the 2013 Act states that notwithstanding the repeal of the 1956 Act, any Order made under the 1956 Act, shall be deemed to have been made 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 d .....

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