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TMI Blog2010 (1) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... y involved and as the electricity company is not claiming any sum from the liquidator or the company, but is claiming from the applicant, as an intending consumer of power, certain sums payable as a precondition to process application to avail power supply, the right to make such demand is legal in view of the condition contained in the conditions of supply of power and is even otherwise, without its existence, such condition in the statutory conditions of supply is recognised by the apex court. The true scope and ambit of the powers under section 446(2) and other relevant provisions does not render any assistance to the applicant in view of the fact that this court has no jurisdiction to entertain the matter and grant reliefs as prayed for. Thus the applicant is not entitled to either temporary or permanent power supply and hence, at this stage, the applicant does not deserve any relief from this court. - MISC. CIVIL APPLICATION NO. 58 OF 2009 O.L.R. NO. 37 OF 2008 C.P. NO. 1 OF 2003 - - - Dated:- 11-1-2010 - K.A. PUJ, J. N.K. Pahwa for the Applicant. J.S. Yadav for the Official Liquidator. M.D. Pandya and Ms. Maya Desai for the Respondent. JUDGMNET 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the applicant that M/s. Jalan Forgings Ltd., came to be wound up by this court vide its order dated December 1, 2005, passed in Company Petition No. 325 of 1999. This court has confirmed the terms and conditions of sale of the assets of the company in liquidation and directed the official liquidator to invite bids for sale of the properties of the company in liquidation. Pursuant to the said order, the official liquidator published public advertisements in the local dailies and offers received by the official liquidator were placed before the sale committee for consideration. After the sale committee considered the offers, the official liquidator filed his Report No. 37 of 2008 before the court for confirmation of sale. This court directed the official liquidator to intimate all the bidders for inter se bidding before this court and after inter se bidding took place before this court, the offer of M/s. Ajar Enterprises came to be accepted at Rs. 4.25 crores in respect of the composite lot, which included the land in question. By order dated March 18, 2008, passed by this court in O. L. R. No. 37 of 2008, this court has confirmed the sale on the terms and conditions approved by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the official liquidator. The claim of the electricity company is entirely for the pre-liquidation period and therefore, the stand of the respondent electricity company is not correct as per the say of the applicant. The applicant has also lodged a complaint with the Consumer Grievances Redressal Forum, which came to be disposed of by the Forum without appreciating the relevant provisions of the Companies Act, 1956 and the terms and conditions governing the sale in respect of the property in question. The applicant has thereafter taken out the present judges summons seeking the above declaration as well as direction to the respondent authorities. 6. Mr. N. K. Pahwa, the learned advocate appearing for the applicant submitted that the applicant is not required to make payment of the statutory dues of the predecessor of the company in liquidation. The claim of the respondent-company is in respect of pre-liquidation period and therefore as per the clause 15 of the terms and conditions of sale, the applicant is not liable to make such payments. Even the sale deed in terms stipulated that payment of dues for pre-liquidation period shall be settled as per the provisions of the Compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d order. 8. In support of his submission that the applicant is not liable to pay the dues of the previous owner, as per the terms of the sale as well as the order of this court, Mr. Pahwa relied on the following decisions and/or judgments : (I) In (Gujarat Industrial Development Corpn. v. Official Liquidator [2010] 157 Comp Cas 233 (Guj.), this court held that so far as any other liability of the lessee towards local taxes outstanding of the notified area, it can be termed as individual liability of such company in liquidation who is the occupier of the property and such can be equated with the other taxes of the local authorities. As per the decision of the apex court in the case of AI Champdany Industries Ltd. v. Official Liquidator [2009] 90 SCL 271 , the amount outstanding towards such taxes would fall in the category of debt under section 530 and such taxes would not be recoverable as obligations to be discharged by the company in liquidation as lessee with GIDC. The said principle was reiterated by the court in the case of Narmada Coaters (P.) Ltd. v. Official Liquidator of Gujarat Rodrel Engg. Products [Company Application No. 201 of 2009], dated 13-8-2009. (II) In AI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the official liquidator, fully ignoring the attachment. (VI) In Regional Director, E. S. I. Corpn. v. Official Liquidator of Prasad Mills Ltd. [2006] 131 Comp Cas 652 (Guj.), the Division Bench of this court held that the Companies Act is a complete code in itself. It provides that in what manner the company petition is to be entertained ; how a company is to be taken up for winding up, in what manner an official liquidator is to be appointed, how the official liquidator shall enter upon the properties belonging to the company and after the property comes under the hands of the official liquidator, in what manner it shall be distributed. The court further held that sections 529A and 530 of the Companies Act, 1956, provides for a clear scheme in relation to distribution of the properties belonging to the company. The first priority is to distribute the assets of the company in favour of the claimants under section 529A of the Companies Act, 1956 and thereafter the question of Government dues or the taxes or the property attached to them shall arise. (VII) In Rajratna Naranbhai Mills Co. Ltd. v. New Quality Bobbin Works [1973] 43 Comp Cas 131 (Guj.), this court held that when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trolled by the company Court. The Companies (Court) Rules, 1959, gives wide powers to the company court to pass any order in furtherance of justice taking into consideration the charge created over the properties. (IX) In Textile Labour Association v. Official Liquidator of Vijaya Mills Ltd. [2005] 62 SCL (Guj.), it is held that the company court has ample power under section 446(2) of the Companies Act, 1956, to entertain and dispose of any suit or application by or against the company. Accordingly, the court has held that respondent No. 3 was never and is not the tenant of the mills company in liquidation. His possession was that of an encroacher and he was illegally and unauthorisedly occupying the disputed premises. The court, therefore, directed the official liquidator to take away the possession from respondent No. 3 immediately and he was further directed to inform the Ahmedabad Electricity Company to disconnect the electricity supply forthwith. (X) In Official Liquidator, Himalaya Tools (India) (P.) Ltd. v. Gujarat State Finance Corpn. [1991] 2 GLH 208, it is held that once winding up order is passed, the undertaking and the assets of the company passed under the contro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly nor impliedly barred. He has, therefore, submitted that the natural corollary is that, unless a particular matter is specified in the Act to be dealt with by the company court, it cannot exercise jurisdiction merely because in some distant way the company comes into picture. 10. Mr. Pandya further submitted that section 2(11) of the Companies Act, 1956, defines "court" to mean the court having jurisdiction under the Act with respect to the matters relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters that are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as sections 17, 79, 101, 391(2) and 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. It is only when there is a special mode prescribed under the Companies Act could ordinary jurisdiction of the civil court be ousted. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the provisions of the Companies Act and would not be governed by the provisions of the Companies Act and would not attract the provisions of sections 529, 529A read with 530 of the Companies Act. The claim by the respondent is not under the Companies Act but is a claim outside the purview of the said Act and is a claim for a sum made by the respondent supplier of electric power against an intending consumer as a condition of such consumer being entitled to be considered for grant of new power connection as per the statutory condition governing supply of power by the respondent, the validity whereof is upheld by the Division Bench of this court and legal authority to demand which sum is even without the existence of any statutory provisions upheld by the apex court. Mr.Pandya has, therefore, submitted that this court could not as a company court grant any declaration as prayed for in respect of a claim not made or arising under the Companies Act and which claim is held to be legal. Mr. Pandya has, therefore, submitted that the present proceedings instituted before this court should not be entertained and deserve to be summarily rejected. 12. Mr. Pandya, in support of his submis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) The same principle is reiterated by the Delhi High Court in the case of Maharaja Exports v. Apparels Exports Promotion Council [1986] 60 Comp Cas 353 . While dealing with the suit filed by the plaintiff, a shareholder in a company, who had filed a suit against the company for a declaration that the notice issued by the company regarding the holding of an annual general meeting was illegal and had, besides other reliefs, sought a declaration that the 27 members of the existing executive committee (i.e., the board of directors) were not entitled to hold their respective offices and further that 18 members who had retired by rotation were not entitled to continue in office, the court held that (headnote) : ". . . the civil court had jurisdiction to entertain that suit." (3) The Andhra Pradesh High Court has also reiterated the same principle in the case of Avanthi Explosives (P.) Ltd. v. Principal Subordinate Judge, Tirupathi [1987] 62 Comp Cas 301 , and held that (headnote) : ". . . the director of a company could maintain a suit before the civil court challenging the validity of resolutions passed by its board of directors to the effect that he had been disqualified from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to propose himself as a candidate for the ensuing election to the council of management of the company." (6) In M. G. Doshit v. Reliance Petrochemicals Ltd. [1994] 79 Comp Cas 830 (Guj), it is held that (headnote) : "Section 10 of the Companies Act, 1956, which provides that the location of the registered office of the company would determine the territorial jurisdiction of the High Court cannot be construed to mean that the High Court has jurisdiction with respect to all matters relating to that company. The High Court is a special court or a company court with special company jurisdiction and that jurisdiction has to be found from specific provisions of the Act. The High Court does not have any general plenary or residuary jurisdiction to deal with all matters and all questions arising under the Companies Act. No special remedy is provided under the Companies Act, 1956, for breach of the provisions of section 166 of the Act, which prescribes the time and place for holding annual general meetings of companies. Therefore the common law remedy within the jurisdiction of the civil court would remain. Therefore, the High Court, in the absence of a specific provision, has no ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in the Companies Act, 1956, enabling the company court to entertain a petition seeking a declaration that a notice in the newspapers of forfeiture of shares in a public company is void and that certain persons continue to be the holders of those shares. If the forfeiture is claimed to be invalid due to any legal infirmity, no specific power is provided therefor in the articles. The only section which may be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996, section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m which the appeal had arisen and as such the jurisdiction of the civil court vested under section 9 of the Code of Civil Procedure, 1908, was not ousted by the Companies Act." The court further held that (headnote) : "To fall within the jurisdiction of the court as defined in section 2(11) read with section 10 of the Companies Act, 1956, the matter should be such as is provided by the Act to be adjudicated by the court . In respect of matters regarding which the Act does not provide for adjudication by court, the adjudicating authority cannot mean the court as defined by section 2(11). It is only where the Act provides for adjudication by the court , that the court would mean the court as defined in section 2(11). The definition clause cannot be given the interpretation that whenever there is a dispute relating to a company, it is the company court as defined in section 2(11) that will have the jurisdiction." (12) In Dwarka Prasad Agarwal v. Ramesh Chandra Agarwala [2004] 49 SCL 25 (SC) the apex court held that (headnote) : "By sections 9 and 10 of the Companies Act, 1956, the jurisdiction of the civil court has not been ousted. Section 9 of the Code of Civil Proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tainability of the suit was dismissed by the civil court. On a revision application." The court while dismissing the application, held that (headnote) : ". . . neither by express provision nor by necessary implication had the suit been barred nor was there any provision for adequate or efficacious remedy provided under the Companies Act with regard to the dispute raised in the plaint." The court therefore held that (headnote) : "The suit was maintainable." (14) In Smt. Premvati v. Smt. Bhagwati Devi [2008] 145 Comp Cas 440 (Delhi), it is held that (headnote) : "Except in cases where the Companies Act, 1956, confers jurisdiction on the company court or some other authority like the Central Government or the Company Law Board, either expressly or by implication all other disputes pertaining to a company are to be resolved through the forum of the civil courts. A dispute as regards the right of inheritance between parties is a civil dispute and cannot be said to be a dispute as regards oppression of minority shareholders by the majority shareholders and/or mismanagement." (15) In B. K. Syed Zakir v. Bangalore Electricity Supply Co. Ltd., AIR 2005 Karn 289, it is held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided with a remedy which is to approach the Ombudsman. The applicant has chosen to bypass the said remedy and without disclosure of the said proceedings and order passed therein, has chosen to file the present proceedings which is not permissible in law. If the said remedy is not availed of the adjudication by the forum, he has submitted that the same attained finality and could not be ignored by filing the present proceedings. 14. Mr. Pandya has further submitted that the decision on which the applicant has placed reliance is not applicable in this wise that while deciding the said matter, this court has not considered the impact of statutory condition No. 2(j) of the conditions of supply governing the parties to any contract relating to supply of power nor the judgment upholding validity thereof nor the judgment of the apex court referred to by the respondent. All these questions arise before this court for the first time and hence the proceedings referred to in paragraph 15 could in no way come in the way of this court deciding the issues raised by the respondent. 15. Mr. Pandya further submitted that in the light of the observations made by the apex court in Isha Marble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 49 introducing condition 2(j) despite repealed of the Electricity (Supply) Act, 1948, by the Electricity Act, 2003, still continues to operate. Mr. Pandya relies on the following decisions : (a)In State of Punjab v. Mohar Singh Pratap Singh AIR 1955 SC 84, it is held that whenever there is a repeal of an enactment, the consequences laid down in section 6 of the General Clauses Act will follow unless, as the section itself says, a different intention appears. In the case of a simple repeal there is scarcely any room for expression of a contrary opinion. But when the repeal is followed by fresh legislation on the same subject the court would undoubtedly have to look to the provisions of the new Act, but only for the purpose of determining whether they indicate a different intention. The line of enquiry would be, not whether the new Act expressly keeps alive old rights and liabilities, but whether it manifests an intention to destroy them. The court cannot therefore subscribe to the broad proposition that section 6 of the General Clauses Act is ruled out when there is repeal of an enactment followed by a fresh legislation. Section 6 would be applicable in such cases also unless the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of section 153C of the Act of 1913 have been substantially re-enacted by the Act of 1956 and this would indicate an intention not to destroy the rights created by section 153C. The court further held that section 24 of the General Clauses Act, does not cancel the notification empowering the District Judge to exercise jurisdiction under the Act of 1913. Since under section 6 of the General Clauses Act the proceeding in respect of the application under section 153C of the Act of 1913 is continued after the repeal of that Act, it follows that the District Judge continues to have jurisdiction to entertain it. If it were not so, then section 6 would become infructuous. (d)In Jayantilal Amratlal v. Union of India AIR 1971 SC 1193, it is held that in order to see whether the rights and liabilities under the repealed law have been put an end to by the new enactment, the proper approach is not to enquire if the new enactment has by its new provisions kept alive the rights and liabilities under the repealed law but whether it has taken away those rights and liabilities. The absence of a saving clause in a new enactment preserving the rights and liabilities under the repealed law is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to continue beyond the period of one year in which clause 4(1)(iii) occurs, it is not unreasonable to construe the power to make rules vested in the board under that clause as things done within the meaning of article 357(2). There can be no doubt about the intention to preserve and continue the rules even after the period of one year after the cessation of the emergency so that there may not be any hiatus in the administration of the affairs of the bank. (i)In Hasan Nurani Malak v. S.M. Ismail, Asstt. Charity Commissioner AIR 1967 SC 1742, it is held that the words "anything duly done" in sub-clause (a) of section 86(3) of Madhya Pradesh Public Trusts Act, 1951, are very often used by the Legislature in saving clauses such as we have in section 86(3). Section 6 of the General Clauses Act, 1897, also provides that unless a different intention appears the repeal of an Act would not affect anything duly done or suffered thereunder. The object of such a saving clause is to save what has been previously done under the statute repealed. The result of such a saving clause is that the pre-existing law continues to govern the thing done before a particular date from which the repeal of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quidator on the basis of the terms and conditions to be approved by this court. Any issue arising from the interpretation of the terms and conditions as approved by this court or arising from the confirmation of the sale can be decided only by this court. During the pendency of the winding up proceedings, the company court is as such deemed to be a court of winding up and it is competent to decide all issues arising out of the winding up proceedings. Any person aggrieved by any action/order is entitled to maintain an application before the company court and the company court has jurisdiction to entertain and decide all such issues. The claims by or against the company are required to be decided by this court as per the provisions of section 446 of the Act. The official liquidator is obliged to settle the claims of the secured creditors, unsecured creditors and statutory creditors as per the provisions of sections 529, 529A and 530 of the Act. He has, therefore, submitted that this court has jurisdiction to decide the priorities in claims of various claimants. The stand taken by the respondent-company is thus misconceived and contrary to the scheme of the Act. 22. Mr. Pahwa furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2003, would govern the field which in terms observed that condition No. 2(j) no longer exists. Mr. Pahwa submitted that this is without prejudice to the contention that this condition in any case would have no applicability in cases of sales effected under the supervision and orders of this court. He has further submitted that the judgment of the apex court in the case of Paschimanchal Vidyut Vitran Nigam Ltd. (supra) also not applicable to the facts of the present case. The findings recorded in the said judgment by the apex court would have no application in cases of sales effected under the orders of this court. The respondent-company is bound by the terms and conditions approved by this court and is also bound by the provisions of the Act, which is a special Act. Mr. Pahwa has, therefore, submitted that the reliefs prayed for in the present application deserve to be granted and the application be allowed. 24. Based on the above submissions and judicial precedents, Mr. Pahwa submitted that this court is well within its jurisdiction to decide this application and grant the reliefs as prayed for. 25. While dealing with the applicant s case on merits and even with regard to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entertain proceedings of the present nature. Though this court has jurisdiction to decide the claims by or against the company in liquidation as per the provisions of section 446(2) read with the other relevant provisions of the Act, inasmuch as in the present proceedings, there is no claim by or against the company involved and as the electricity company is not claiming any sum from the liquidator or the company, but is claiming from the applicant, as an intending consumer of power, certain sums payable as a precondition to process application to avail power supply, the right to make such demand is legal in view of the condition contained in the conditions of supply of power and is even otherwise, without its existence, such condition in the statutory conditions of supply is recognised by the apex court. The true scope and ambit of the powers under section 446(2) and other relevant provisions does not render any assistance to the applicant in view of the fact that this court has no jurisdiction to entertain the matter and grant reliefs as prayed for. 28. There is no dispute about the effect of an order of winding up. No issue arises for interpretation of terms and conditions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the company, for which claim is lodged with the official liquidator, then the applicant will be entitled to refund in accordance with the said provision. The electricity company is not claiming to recover its dues from the assets of the company in liquidation. For its dues against the company, a claim is lodged with the official liquidator and the same may be settled as per law and whatever is realised upon settlement of the said claim in accordance with the provisions of the Act, the intending consumer who as per conditions of supply and as per law declared by the apex court deposits the sum due from the previous consumer, will become entitled to refund. There is no question in the present case of any encumbrance or any attachment becoming ineffective. A basic difference between a claim by a creditor against the company in liquidation before the official liquidator and requirement to fulfil any condition to avail power supply from a distributing company which condition is legally upheld is being lost sight of, while submissions are made based upon the scheme of the Act and liability of the company in respect of pre-liquidation claims. There is no question of the creditor makin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... khariya 66/1 KV S/S from which the applicant will have to be connected by 11KV line gets its supply from 220/66 KV Chandrapura S/S. The said 66 KV line of supply to Khakhariya S/S has existing capacity of 300 Amp. with DOG conductor and the existing load on the said line is 296 Amp. The load demanded by the applicant is 4,000 KVA, i.e., 213 Amp. and the total Amp. load exceeds the existing capacity of the line. The electricity company while evaluating the technical feasibility to supply the applicant the power demanded had got in touch with the Gujarat Energy Transmission Corporation Ltd. (GETCO). The Corporation alone is authorised to lay down lines of 66 KV. In response thereto, GETCO has informed that the technical position is that unless 66 KV line from Chandrapura is strengthened, it cannot carry the further load as is demanded by the applicant. The said strengthening involves considerable expense and would require sufficient time to carry out the said work. Thus, to enable the electricity company to supply to the applicant through the new 11 KV underground cable from Khakhariya S/S to the point of supply of the applicant, the first requirement is of strengthening of the 66 KV ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsumers getting power from the existing line and in view of such nature of work, the said work would consume about 80 days. Strengthening of new panther conductor may take about 3 days. The estimated time as indicated is conveyed which is subject to everything else being normal and there being no obstruction to availability of right of way. The laying down of 11 KV underground cable by the electricity company may take about 30 days. It is also stated that these details are furnished on a rough and ready estimate and upon the applicant fulfilling all the pre-requirements for availing power including deposit of outstanding dues, payment as per FQ, executing agreement on stamp paper, furnishing the required NOC and other certificates from the concerned offices, application for power supply could be processed. Upon fulfilment thereof, the applicant would be entitled to have power supply as demanded by them. 34. From the above details and averments in the affidavit which are not denied, the court is of the view that till the above conditions are fulfilled, the applicant is not entitled to either temporary or permanent power supply and hence, at this stage, the applicant does not dese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e premises. 36. In Prime Dairy Products (P.) Ltd. v. Gujarat Electricity Board [Special Civil Application No. 6678 of 2003, dated 2-9-2009] the Division Bench of this court, while deciding the question as to whether the Electricity Board can insist for payment of arrears of electricity dues of the earlier consumer as a condition precedent either to restoration of electricity supply or release a fresh connection in favour of the new owner/occupier of the premises of the shop, and whether clause 2(j) of Conditions of Supply framed by the board is ultra vires of the provisions of the Indian Electricity Act, 1910, read with Electricity (Supply) Act, 1948, or Electricity Act, 2003, held that this question has already been considered by a Division Bench in Letters Patent Appeal No. 1484 of 2004. The Division Bench vide its judgment dated July 18, 2005, also referred to the challenge to clause 2(j) of the conditions of supply and held that they do not find anything manifestly arbitrary in the board s insistence on the charges/dues as a condition precedent for restoration of the supply or release of fresh connection. Clause 2(j) of the Conditions of Supply has been framed by the Board wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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