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2017 (4) TMI 538 - HC - Companies LawJurisdiction of this court to hear and dispose of the present proceeding - cases transfer to NCLT - Held that - Sec. 434 (1)(c) of the 2013 Act carries an absolutely clear mandate that all proceedings under the Companies Act, 1956 including proceedings relating to arbitration, compromise, arrangements and reconstruction and winding up of companies before the date of coming into operation of that Section in the High Court shall stand transferred to the NCLT. The word all means all. It admits of no exception. The use of the word including in the said sub-Section cannot by any stretch of imagination mean that the words all proceedings under the Companies Act have to be understood as proceedings relating to arbitration, compromise, arrangements and reconstruction and winding up of companies. The word including in that sub-Section is only clarificatory. As have no doubt in my mind that each and all proceedings instituted under the Companies Act, 1956 including the proceedings like the present one, pending in the High Court as on 15 December, 2016 stand transferred to the NCLT. It is an automatic transfer by operation of law. No sanction of the court is required. It is a statutory mandate and has to be followed whether such mandate is wise or not. All that the Court is required to do is to send the records of this Court to the NCLT. In view of the aforesaid, with effect from 15 December, 2016 this Court lost jurisdiction to hear and dispose of the present proceeding which stands transferred to the NCLT by operation of law. Accordingly, direct the Registrar, Original Side, to send the records of CP 611 of 1988 along with all connected applications excepting the contempt application being CC 43 of 2014 to the Regional Bench of the National Company Law Tribunal.
Issues Involved:
1. Jurisdiction of the High Court to hear and dispose of the company petition in light of Section 434 of the Companies Act, 2013. 2. Interpretation and application of Section 68 of the Companies (Amendment) Act, 1988. 3. Impact of various notifications issued by the Ministry of Corporate Affairs regarding the transfer of proceedings to the National Company Law Tribunal (NCLT). Detailed Analysis: Jurisdiction of the High Court: The primary issue was whether the High Court retained jurisdiction to hear Company Petition No. 611 of 1998 in light of Section 434 of the Companies Act, 2013. The High Court examined the transitional provisions and the notifications issued by the Ministry of Corporate Affairs, which established the National Company Law Tribunal (NCLT) and mandated the transfer of proceedings from the High Court to the NCLT. Section 68 of the Companies (Amendment) Act, 1988: Mr. S. B. Mookherjee, representing the petitioners, argued that Section 68 of the 1988 Amendment Act preserved the High Court's jurisdiction over pending matters. He cited that the 1988 Act, which came into force on 31 May 1991, allowed the High Court to continue hearing cases that were pending before the commencement of the Act. This argument was supported by Mr. P.C. Sen, who emphasized that Section 68 was never repealed and thus remained in force. Notifications and Transfer of Proceedings: Mr. Mookherjee referred to various notifications and amendments, including Sections 10FA and 647A of the Companies Act, 1956, and the corresponding provisions in the Companies Act, 2013. He highlighted that the Ministry of Corporate Affairs issued notifications on 1 June 2016 and 7 December 2016, which brought Sections 434(1)(a) and (b) of the 2013 Act into force and established the NCLT and the National Company Law Appellate Tribunal (NCLAT). Mr. Jaydip Kar, representing the respondents, argued that Section 434(1)(c) of the 2013 Act mandated the transfer of all proceedings under the Companies Act, 1956 to the NCLT. He contended that the High Court's jurisdiction ceased with the enforcement of this section on 15 December 2016. Court's View: The Court analyzed the historical context of amendments to the Companies Act, noting the establishment of the Company Law Board (CLB) by the 1988 Amendment Act and the subsequent amendments that aimed to transfer jurisdiction from the High Court to the CLB and later to the NCLT. The Court concluded that Section 68 of the 1988 Amendment Act was a transitional provision that did not preserve the High Court's jurisdiction indefinitely. The Court held that Section 434(1)(c) of the 2013 Act carried a clear mandate for the transfer of all proceedings under the Companies Act, 1956 to the NCLT, effective from 15 December 2016. This included the present company petition, which was automatically transferred by operation of law. The Court directed the Registrar to send the records of the case to the NCLT and ensure that the case was marked as disposed of in the High Court's records. Implied Repeal: The Court addressed the argument against implied repeal, noting that while courts generally lean against it, the inconsistency between Section 68 of the 1988 Act and Section 434(1)(c) of the 2013 Act was so glaring that the earlier provision must be deemed impliedly repealed. The Court emphasized that the words of the later statute were crystal clear and left no room for harmonious construction with the earlier statute. Conclusion: The High Court concluded that it no longer had jurisdiction to hear the company petition due to the statutory mandate of Section 434(1)(c) of the Companies Act, 2013. The operation of the judgment was stayed for three weeks to allow the aggrieved party to approach the appellate court. Separate Judgment: The judgment was delivered solely by Hon'ble Justice Arijit Banerjee, and no separate judgments by other judges were mentioned.
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