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TMI Blog2008 (3) TMI 470X X X X Extracts X X X X X X X X Extracts X X X X ..... Bansal for the Applicant. Puneet Kansal and Rupinder Khosla for the Respondent. JUDGMENT Permod Kohli, J . The applicant is the auction purchaser of the property of the Punjab Wireless Systems Ltd., the company in liquidation. Through the medium of this application, a prayer is made for the following directions : ( i ) To execute the necessary conveyance deed in favour of the applicant; ( ii ) Annul the order dated May 16, 2005, passed by the Estate Officer, the Punjab Urban Development Authority (PUDA) for resumption of the property. The application proceeds on the following admitted facts : ( i ) Respondent No. 1 company was ordered to be wound up vide order dated February 1, 2001 and the official liquidator was appointed as the liquidator for the company. ( ii ) The official liquidator vide advertisement dated March 10, 2006, informed the general public about the sale of assets and property of the company in liquidation by way of court auction to be conducted by the company court on April 20, 2006. ( iii ) The bids/tenders were invited from the general public under the sealed cover along with earnest money. The immovable property of the company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D Act which is special statute and the same is not controlled by section 446 of the Companies Act, 1956. It is further pleaded that the applicant has the alternative remedy of filing an appeal against the order of the Estate Officer, the PUDA, before the Chief Administrator, the PUDA under section 45(5) of the PRTPD Act and also a revision before the State Government against the order passed by the Chief Administrator (Appellate Authority). In sum and substance, the plea raised is that the company court cannot interfere in such matters. I have heard Mr. Sanjiv Bansal advocate, for the applicant, Mr. Puneet Kansal, advocate, for the official liquidator and Mr. Rupinder Khosla, advocate, for respondent No. 3, at length. Section 446 of the Companies Act, prohibits institution and continuance of legal proceedings against the company in liquidation except with the leave of the court. For the sake of convenience, section 446 of the Companies Act is reproduced as under : "446. Suits stayed on winding up order, -(1) When a winding up order has been made or the official liquidator has been appointed as provisional liquidator, no suit or other legal proceedings shall be commenced, or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d direct that the amount of money due along with the penalty shall be paid by the transferee within such period as may be specified in the order. (3) If the transferee fails to pay the amount due together with the penalty in accordance with the order made under sub-section (2) or commits a breach of any other condition of transfer, the Estate Officer may, by notice in writing call upon the transferee to show cause within a period of thirty days, why an order of resumption of the land or building or both, as the case may be, and forfeiture of the whole or any part of the money, if any, paid in respect thereof which in no case shall exceed ten per cent, of the total amount of the consideration money, interest and other dues payable in respect of the transfer of the land or building or both, should not be made. (4) After considering the cause, if any, shown by the transferee in pursuance of a notice under sub-section (3) and any evidence that he may produce in respect of the same and after giving him a reasonable opportunity of being heard in the matter, the Estate Officer may, for reasons to be recorded, in writing, make an order resuming the land or building or both, as the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all apply. An order of attachment made prior to passing of an order of winding up may not be void, but then the execution proceedings must be allowed to continue with the leave of the court in terms of section 446 of the Companies Act (see Ovation International (India) P. Ltd., In re [1969] 39 Comp. Cas. 595 (Bom)... 23. It may be true that if there exists a statute like SICA, the provisions thereof may prevail over the Companies Act. But in the absence of a clear provision, the Companies Act cannot be held to give way to another Act providing for recovery only leaving the rights and liabilities of the parties to be dealt with a general law (see NGEF Ltd. v. Chandra Developers P. Ltd. [2005] 127 Comp. Cas. 822 (SC) and Jay Engineering Works Ltd. v. Industry Facilitation Council [2006] 133 Comp. Cas. 670 (SC))." In the case of Titan Industries Ltd. v. Punwire Mobile Communication Ltd. [2002] 40 SCL 117 (Punj. Har.), it has been observed as follows (page 126): "17. In my considered view, the aforesaid claim merits acceptance. Section 537 in unambiguous terms mandates that after the commencement of a winding up petition against a company, an order, inter alia , ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 446 of the Companies Act will not operate on the proceedings which may be pending before the Tribunal or which may be sought to be commenced before it. 19. Further, the provisions of the special Act, i.e. , the LIC Act, will override the provisions of the general Act, viz ., the Companies Act which is an Act relating to companies in general." In the case of Damji Valji Shah v. Life Insurance Corporation of India [1965] 35 Comp. Cas. 755 ; AIR 1966 SC 135, the hon'ble Supreme Court was considering the application of one of the Central Acts. Since both the Acts, i.e. , the LIC of India Act and the Companies Act are passed by Parliament and the LIC Act specifically deals with the issue, it has been held that the LIC Act being a special statute will have overriding effect over the Companies Act which deals generally with companies. However the position in the present case is different. The Companies Act is a Central legislation, whereas the PRTPD Act, is a State legislation. The Companies Act has been enacted by the Union Legislature by virtue of entry 43 in the list-I of Schedule-VII, Constitution of India whereas the PRTPD Act has been enacted by virtue of entry in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it has the jurisdiction and competence to pass the impugned order dated May 16, 2005, such jurisdiction could only be exercised with the leave of the court, the property in question being held by the company in liquidation as on the date of the passing of the order and for this purpose the provisions of section 446 of the Companies Act will prevail and powers under section 45 of the PRTPD Act cannot be exercised de hors section 446 of the Companies Act. The availability of alternative remedy under section 45(5) or 45(8) of the PRTPD Act is, no answer to the question involved. It is not the question of validity of the order of resumption on its merits. It may be valid or its validity on any other ground can definitely be questioned in appeal or revision. However, in the present case, the question is of jurisdiction to decide without leave of the company court. Order may otherwise be valid or invalid. I am not required to dwell upon this question and I refrain myself to do so. Since the order has been passed in contravention to the provisions of section 446 of the Companies Act, it cannot be sustained for want of leave of the company court which alone can entitle the authorities und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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