9911796707
|
Home
Issues:
Jurisdiction of District Judge under Companies Act, 1956 Validity of application under section 394 of the Companies Act, 1956 Settlement of claims before transfer of assets Jurisdiction of District Judge under Companies Act, 1956: The appeal involves a challenge to an order passed by the District Judge, Ernakulam, under section 396 of the Indian Companies Act, 1956. The appellant contends that the District Judge lacked jurisdiction as per the Companies Act, 1956, which vests such matters with the High Court. However, the Court held that since the winding up of the company commenced before the Companies Act, 1956, the provisions of the Act do not apply. The Court cited precedents from various High Courts supporting this view, emphasizing that applications under section 394 of the Companies Act, 1956, for winding up purposes are steps-in-aid of liquidation and fall under the District Court's jurisdiction. Validity of application under section 394 of the Companies Act, 1956: The appellant raised a contention regarding the application's conformity with the Companies Act, 1956, rules and forms. The Court dismissed this argument, stating that quoting a wrong section or failing to adopt a specific form does not affect the application's substance or jurisdiction. The Court found no prejudice caused to the appellant due to procedural irregularities, emphasizing that the essence of the application remains intact despite technical deficiencies. Settlement of claims before transfer of assets: The order dated February 15, 1963, initially mandated the settlement of the appellant's claims before transferring assets, but this was later modified by an order on June 12, 1963. The appellant contested the validity of the June order, alleging lack of awareness and service. However, the Court found evidence that the appellant was informed of the order and had the opportunity to challenge it but failed to do so. The Court noted that sufficient safeguards were in place to protect the appellant's interests, with funds retained by the official liquidator exceeding the appellant's claim amount. The Court emphasized that the claims and counterclaims would be addressed separately, and no interference with the challenged order was deemed necessary. In conclusion, the appeal was dismissed with costs, affirming the District Judge's jurisdiction, validating the application under section 394 of the Companies Act, 1956, and upholding the modified order allowing asset transfers without immediate settlement of the appellant's claims.
|
