TMI Blog2021 (9) TMI 670X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 430 of the Act provides the jurisdiction of all Civil Courts is barred in respect of the matter which the NCLT or the NCLAT is empowered to determine by or under Act. This Court does not have territorial jurisdiction to entertain this Writ Petition as the company petition is filed before the NCLT at Allahabad and in respect of the companies having its registered office in the State of Uttar Pradesh that is beyond the jurisdiction of this Court - This Court does not exercise supervisory jurisdiction under Article 227 over NCLT at Allahabad and such jurisdiction vests solely with High Court of Judicature at Allahabad. The Hon ble Supreme Court in various judgments have held Section 430 of the Companies Act has to be construed strictly and the NCLT has been given inherent powers to decide the matters of the companies and should not be interfered with lightly - reliance can be placed in the case of SAS HOSPITALITY PVT LTD ANR. VERSUS SURYA CONSTRUCTIONS PVT LTD ORS. [ 2018 (12) TMI 1123 - DELHI HIGH COURT] . Power of Central Government to file application before NCLT u/s 212(14) - Disgorgement occurring in Section 212 (14A) cannot be read in blissful isolation whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 212(14) of the Companies Act if the final report is filed before the Central Government, it needs to be examined by it and after taking legal advice it may initiate the prosecution. Section 212(14) of the Companies Act runs as under: 212. Investigation into affairs of Company by Serious Fraud Investigation Office (1) to (13) xxxxx. (14) On receipt of the investigation report, the Central Government may, after examination of the report (and after taking such legal advice, as it may think fit), direct the Serious Fraud Investigation Office to initiate prosecution against the company and its officers or employees, who are or have been in employment of the company or any other person directly or indirectly connected with the affairs of the company. (15) to (17) xxxxxx It is submitted the officers of the Central Government were to examine and apply their mind on the report. It is alleged the final report dated 27.06.2019 was filed before the Central Government and it was humanly impossible to examine such report, consisting of lakhs of pages within two days and then pass the impugned order; b) Section 212(14A) of the Companies Act came into effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, the proviso added to Section 113 of the Act is not beneficial to the assessee. On the contrary, it is a provision which is onerous to the assessee. Therefore, in a case like this, we have to proceed with the normal rule of presumption against retrospective operation. Thus, the rule against retrospective operation is a fundamental rule of law that no statute shall be construed to have a retrospective operation unless such a construction appears very clearly in the terms of the Act, or arises by necessary and distinct implication. Dogmatically framed, the rule is no more than a presumption, and thus could be displaced by out weighing factors. 34. It would also be pertinent to mention that assessment creates a vested right and an assessee cannot be subjected to reassessment unless a provision to that effect inserted by amendment is either expressly or by necessary implication retrospective. (See Controller of Estate Duty Gujarat-I v. M.A. Merchant[9]. 5. Further in Hitendra Vishnu Thakur Ors. Vs. State of Maharashtra Ors. (1994) 4 SCC 602 the Court held as under: 26. The Designated Court has held that the amendment would operate retrospectively and would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aised before the NCLT. Companies Act is a complete code hence statutory mechanism under it cannot be bypassed. Section 430 of the Act provides the jurisdiction of all Civil Courts is barred in respect of the matter which the NCLT or the NCLAT is empowered to determine by or under Act. 8. Section 430 of Companies Act is as under: 430. No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Tribunal or the Appellate Tribunal is empowered to determine 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 Appellate Tribunal. 9. Thus though the provisions of the Act do not take away the jurisdiction of this Court under Article 226 but it is a trite law in case where the statute provides for an exhaustive mechanism to deal with all matters pertaining to statute and manifest an intention to bar the jurisdiction of all other Courts, such Writs should not be entertained unless t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been passed in total violation of the principles of natural justice, the proposition laid down in Thansingh Nathmal case, Titaghur Paper Mills case and other similar judgments that the High Court will not entertain a petition Under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field. Therefore, when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation. 13. Further in Arcelormittal India (P) Ltd. vs. Satish Kumar Gupta (2019) 2 SCC 1 the Court held: 84. xxxxx The non-obstante Clause in Section 60(5) is designed for a different purpose: to ensure that the NCLT alone has jurisdiction when it comes to applications and proceedings by or against a corporate debtor covered by the Code, making it clear that no other forum has jurisdiction to entertain or dispose of such applications or proceedings. 14. This Court does not have territorial jurisdiction to entertain this Writ Petition as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt in support of his argument would contend that situs of framing law or rule would give jurisdiction to Delhi High Court and in support of the said contention relied upon the decisions of this Court in Nasiruddin v. State Transport Appellate Tribunal MANU/SC/0026/1975 : [1976] 1 SCR 505 and U.P. Rashtriya Chini Mill Adhikari Parishad, Lucknow v. State of U.P. and Ors. MANU/SC/0422/1995 : AIR 1995 SC 2148. So far as the decision of this Court in Nasiruddin v. State Transport Appellate Tribunal (supra) is concerned it is not an authority for the proposition that the situs of legislature of a State or the authority in power to make subordinate legislation or issue a notification would confer power or jurisdiction on the High Court or a bench of the High Court to entertain petition under Article 226 of the Constitution. In fact this Court while construing the provisions of United Provinces High Courts (Amalgamation) Order, 1948 stated the law thus: The conclusion as well as the reasoning of the High Court is incorrect. It is unsound because the expression cause of action in an application under Article 226 would be as the expression is understood and if the cause of action a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with powers that are far reaching in respect of management and administration of companies. The said powers of the NCLT include powers as broad as '(regulation of conduct of affairs of the company) under Section 242(2)(a), as also various other specific powers. NCLT is a tribunal which has been constituted to have exclusive jurisdiction in the conduct of affairs of a company and its powers can be contrasted with that of the CLB under the unamended Companies Act, 1956. 26. The bar under Section 430 of the 2013 Act has, therefore, to be strictly construed and there can be no doubt about that. The Division Bench also considered Dhulabai v. State of M.P. AIR 1969 SC 78 (hereinafter, 'Dhulabai'), and held as under: ..... 34. Yet another reason for holding that this Court would have no jurisdiction is fact that the matter is also pending before the CLB (now transferred to the NCLT at the instance of one of the directors}. The interim order passed by this Court has been in operation since 12th March, 2014. The said interim order would, continue for a further period of 4 weeks in order to enable the Plaintiff to approach the NCLT ... 18. Thus facts discuss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a punishment nor is it concerned with the damages sustained by the victims of the unlawful conduct. Disgorgement of illgotten gains may be ordered against one who has violated the securities laws/regulations but it is not every violator who could be asked to disgorge. Only such wrongdoers who have made gains as a result of their illegal act(s) could be asked to do so. Since the chief purpose of ordering disgorgement is to make sure that the wrongdoers do not profit from their wrongdoing, it would follow that the disgorgement amount should not exceed the total profits realized as the result of the unlawful activity 23. Thereafter, again in Shadilal Chopra v. SEBI, the SAT, Mumbai in Appeal No.201/2009 decided on 02.2.2009 held that: Disgorgement is the forced giving up of profits obtained by illegal or unethical acts. It is a repayment of ill-gotten gains that is imposed on wrongdoers. It is a monetary equitable remedy that is designed to prevent a wrongdoer from unjustly enriching himself as a result of his illegal conduct. It is not a punishment. In this view of the matter, no fault can be found with the impugned order passed by the whole-time member. 24. Dis ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
