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2020 (12) TMI 918 - HC - Companies LawMaintainability of petition - conversion of PIL to company petition - HELD THAT - Sri W.H. Khan, learned Senior Advocate, appearing for the applicants prays for a little time to address on the phrase pending immediately before such date used in Section 434(1)(c) of the Act 2013 as well as on the point of whether a PIL on conversion into a company petition under the facts and circumstances of the present case, can be proceeded with by the High Court? As prayed by learned counsel for the applicants/respondent no.12, put up in the additional cause list on 07.12.2020 at 3.00 P.M.
Issues Involved:
1. Maintainability of the Company Petition in the High Court post Companies Act, 2013. 2. Jurisdiction of the High Court to entertain and proceed with the Company Petition post enactment of the Companies Act, 2013 and Insolvency and Bankruptcy Code, 2016. Detailed Analysis: Issue 1: Maintainability of the Company Petition in the High Court Post Companies Act, 2013 The respondent raised objections regarding the maintainability of the Company Petition, arguing that with the repeal of the Companies Act, 1956 and the enactment of the Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016, the petition should be transferred to the National Company Law Tribunal (NCLT). They cited Section 434(1)(c) of the Companies Act, 2013, read with Rule 5 of the Companies (Transfer of Pending Proceedings) Rules, 2016, which mandates the transfer of pending winding-up petitions to the NCLT. The petitioners countered that the Writ Petition (c) No. 758 of 1996 was filed under Article 32 of the Constitution of India and was disposed of by the Supreme Court on 13.01.2003. The Supreme Court had transferred the case papers to the Allahabad High Court, requesting the constitution of a special bench to handle the matter. The High Court subsequently converted the PIL into a Company Petition by order dated 28.05.2019. The petitioners argued that the present case is not a winding-up proceeding under the Companies Act, 1956 but a continuation of the Supreme Court's directive. They contended that the jurisdiction of the High Court to proceed with the Company Petition is not ousted by the Companies Act, 2013, particularly since the petition was not pending as of the cut-off date of 15.12.2016. Issue 2: Jurisdiction of the High Court to Entertain and Proceed with the Company Petition Post Enactment of the Companies Act, 2013 and Insolvency and Bankruptcy Code, 2016 The respondent argued that the High Court lacks jurisdiction to entertain or proceed with the Company Petition, as jurisdiction now lies with the NCLT for winding-up petitions based on the inability to pay debts, as per the Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016. They relied on the Supreme Court judgment in Civil Appeal No.818 of 2018 (Forech India Ltd. Vs. Edelweiss Assets Reconstruction Co. Ltd.). The petitioners emphasized that the Supreme Court had specifically transferred the matter to the High Court with a request to constitute a special bench and appoint a Special Commissioner to handle the case. They argued that the High Court's jurisdiction is not ousted due to the unique circumstances and the Supreme Court's order. They also pointed out that the conversion of the PIL into a Company Petition was done with the consent of all parties, including the respondent. The respondent requested additional time to address the interpretation of the phrase "pending immediately before such date" in Section 434(1)(c) of the Companies Act, 2013, and whether a PIL converted into a Company Petition can be proceeded with by the High Court. Conclusion: The High Court adjourned the matter to allow the respondent to further address the issues raised, particularly the interpretation of Section 434(1)(c) of the Companies Act, 2013, and the maintainability of the converted Company Petition. The case was scheduled for further hearing on 07.12.2020.
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