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2013 (12) TMI 173 - HC - Central ExciseMaintainability of Reference made by CESTAT Winding up proceedings - Held that - The Reference, is not an appeal so as to fall within the exception contained u/s 446 (4) of the Companies Act - without obtaining leave of the Company Court, proceedings are not maintainable Following Deutsche Bank Vs. S.P. Kala and another 1991 (1) TMI 364 - HIGH COURT OF BOMBAY - If the suit that is already filed against the company along with other defendants, where particularly the company under liquidation is the principal defendant is under the control of the company court - it is difficult to see why such a suit where there are defendant other than the company under liquidation is not contemplated under sub-sections (2) and (3) of Section 446 of the Companies Act, particular when the company under liquidation is a principal defendant in such a suit and the plaintiff insist upon execution of its decree against the company under liquidation also - in appropriate cases, the company court can itself entertain and dispose of a suit in which there are defendants other than the company under liquidation.
Issues:
1. Whether the Reference sent to the High Court by the Customs, Excise, and Services Tax Tribunal is maintainable without obtaining leave of the Company Court dealing with winding up proceedings. 2. Whether the Reference is maintainable against the Managing Director of the respondent company. Issue 1: The High Court of Himachal Pradesh addressed the issue of the maintainability of the Reference sent by the Customs, Excise, and Services Tax Tribunal without obtaining leave of the Company Court dealing with the winding up proceedings of the respondent company. The Court noted that the Company Court in Delhi had already ordered the winding up of the respondent company, with liquidation proceedings in progress and an Official Liquidator appointed. Citing Section 446 of the Companies Act, the Court emphasized that no legal proceedings can be initiated or continued against a company under winding up without the leave of the Company Court. The Court clarified that the Reference made by the authority did not fall within the exceptions of Section 446(4) and thus required leave of the Company Court to be maintainable. Issue 2: Regarding the maintainability of the Reference against the Managing Director of the respondent company, the Court considered arguments referencing legal precedents. The Assistant Solicitor General highlighted a case from the Punjab & Haryana High Court, while the Advocate for the respondent referred to a decision by the Division Bench of the High Court of Bombay. The Court examined the decision in Deutsche Bank vs. S.P. Kala, where it was established that the Company Court can entertain and dispose of a suit involving defendants other than the company under liquidation. The Court noted that the Managing Director was sued on behalf of the company in his capacity and not personally. Ultimately, the Court advised the petitioner to first utilize remedies under Section 446 of the Companies Act before making a Reference for adjudication to the High Court. In conclusion, the High Court of Himachal Pradesh disposed of the Excise Reference, emphasizing the necessity of obtaining leave from the Company Court for legal proceedings against a company under winding up and providing guidance on the maintainability of references against individuals associated with such companies.
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