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TMI Blog2017 (4) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... ional upon certain contingencies and compliances one being the sanction of the High Court, presently by this Tribunal, being fully aware of the contingencies and that the scheme hinges upon the statute and cannot exist independent of it. Taking into consideration the position of law presently in force, we are unable to sanction the Scheme in its present form annexed as Annexure 10 to the petition and for the reasons aforesaid the petition fails and the same is dismissed. - COMPANY PETITION NO. 912 OF 2016, COMPANY APPLICATION (MAIN) NO. 117 OF 2016 - - - Dated:- 28-3-2017 - CHIEF JUSTICE M.M. KUMAR, PRESIDENT AND R. VARADHARAJAN, JUDICIAL MEMBER For The Petitioner : Aaditya Vijay Kumar and Samaksh Goyal, Advocates For The Respondent : C. Balooni, Company Prosecutor ORDER 1. This petition was originally preferred by the petitioner under the provisions of Section 391 of the Companies Act, 1956 (1956 Act)for sanction and approval of a Scheme of Arrangement (hereinafter for brevity referred to as the Scheme ) as contemplated between the equity shareholders and creditors of the petitioner company before the Hon'ble High Court of Delhi at New Delhi. Some of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total 1,00,00,000 Subsequent to March 31, 2016 the Company is in the process of buying back 60,00,000 equity shares. 60,00,000(Sixty lacs) equity shares of ₹ 1 each fully paid up would be bought back by the company, from the all the shareholders in proportion to their existing shareholding. Pursuant to such buyback, the share capital structure of the Company would be as under: Shares Amount in Rupees 40,00,000 Equity shares of ₹ 1 each 40,00,000 Total 40,00,000 3. As per the Scheme, the 'Appointed Date' shall be the date on which the Board of Directors of the company decide to buy-back the shares pursuant to the order of the High court approving the scheme and shall not be less than 30 days of the Effective Date or any such date as may be decided by Court and the 'Effective Date' means the date on which the certified copies of the order(s) of the Court sanctioning the Scheme approved by the court is filed with the Registrar of Companies, NCT of Delhi and Haryana at New Delhi. Any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the instant petition in which the Hon'ble High Court of Delhi on 27.09.2016 had ordered notice to be issued to the Registrar of Companies as well as Regional Director and also publication to be carried out in the newspapers 'Statesman' English and 'Jansatta' Hindi, Delhi edition returnable on 10.02.2017. 6. Pending proceedings before the Hon'ble High Court of Delhi, by virtue of Notification No.3677E dated 07.12.2016, issued by the Ministry of Corporate Affairs provisions, interalia, relating to compromise, arrangements and reconstruction as contained in Sections 230 to 232 of the Companies Act, 2013 had been notified by the Central Government appointing 15th December 2016 as the date on which the provisions were to come into force and further in view of Notification No. GSR 1119(E) dated 07.12.2016 the Central Government prescribed Rules called the Companies (Transfer of Pending Proceedings) Rules, 2016 whereby all proceedings relating to compromise, arrangements and reconstruction amongst others stood transferred to the Benches of the Tribunal exercising territorial jurisdiction, save those proceedings which are reserved for orders. In pursuance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the argument of the petitioner is that even though Section 230 of the 2013 Act has been notified which effectively now governs the field of sanction of Scheme of Compromise or Arrangement, this Tribunal should consider the Scheme only under the erstwhile provisions of the 1956 Act and not under the provisions of the 2013 Act in view of the transfer of the proceedings. According to the Counsel for the Petitioner taking into consideration the provisions pf Companies Act, 1956, this tribunal has the power to sanction the Scheme on the premise that section 68 of the 2013 Act and Section 77A of the 1956 Act are pari-materia and the Hon'ble High Court of Bombay while considering Section 391 read with Section 394 and Section 77A and Section 100 to 104, all sections to pertaining 1956 Act has held that company could purchase its shares prior to introduction of section 77A provided the scheme or arrangement therefor had been sanctioned under sections 100 to 104. Section 100 does not prescribe the manner in which the reduction of capital is to be effected. Nor is there any limitation on the power of court to confirm the reduction except that it must be first satisfied that all the credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, appoint and different dates may be appointed for different provisions of this Act and any reference in any provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision. 12. Thus it is evident that there is a flexibility available to the Central Government to enforce various sections of the 2013 Act on different dates. Section l(4)(a) makes the Act applicable to companies incorporated under the Act or under any previous company law. The power of the Central Government to make rules for carrying out the provisions of the Act is contained in Section 469 of the Act. Section 434 of the 2013 Act deals with the power of the Central Government to transfer certain pending proceedings from other judicial forums including the High Courts to this Tribunal. Section 470 of the Act clothes the Central Government with the power to remove difficulties in case any difficulty arises in giving . effect to the provisions of the Act. Section 465 of the Act provides for repeal and savings of certain enactments by virtue of which Companies Act, 1956 stands repealed, however, the second proviso to sub section (1) of Section 465 saves the appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led Companies (Removal of Difficulties) Fourth Order, 2016 by virtue of powers contained in Section 470 of the Act, whereby Section 434(l)(c) of 2013 Act was notified with certain inclusions arising out of Insolvency Bankruptcy Code 2016 having been brought into force with effect from 01.12.2016 as well as transfer of all proceedings relating to arbitration, compromise, arrangements and reconstruction and winding up of companies, though not in entirety, pending before the High Court and District Courts. Since Section 434 of the 2013 Act as amended by the above said notification will have a significant bearing on issues on hand the entire Section as it stands after its amendment vide the above notification is reproduced hereunder for ready reference: 434. Transfer of certain pending proceedings. - (1) on such date as may be notified by the Central Government in this behalf,- (a) all matters, proceedings or cases pending before the Board of Company Law Administration (herein in this section referred to as the Company Law Board) constituted under sub-section (1) of section 10E of the Companies Act, 1956 (1 of 1956), immediately before such date shall stand transferred to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n relation to all proceedings for which orders have been reserved for allowing or otherwise are to be dealt with in accordance with the provisions of Companies Act, 1956 and the Companies (Court) Rules, 1959. Thus it is implied from the above that in relation to all proceedings which have been transferred from High Court to this Tribunal, the same has to be dealt with in accordance with the provisions of 2013 Act and not under the 1956 Act. 16. The above position becomes amply clear in view of Section 465 of the 2013 Act concerning repeal and savings. Those provisions which are pertinent to the issue on hand alone are reproduced hereunder: 465.(1) The Companies Act, 1956 (1 of 1956) and the Registration of Companies (Sikkim) Act, 1961 (Sikkim Act 8 of 1961) (hereinafter in this section referred to as the repealed enactments) shall stand repealed: Provided xxxxxxxxxxxxxxx (2) Notwithstanding the repeal under sub-section (1) of the repealed enactments, - (a) anything done or any action taken or purported to have been done or taken, including any rule, notification, inspection, order or notice made or issued or any appointment or declaration made or any operation under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction on the part of the Petitioner cannot be saved by this Tribunal by upholding the Scheme and sanctioning it. In effect it also makes the decision cited by Learned Counsel for the Petitioner inapplicable to the facts of the case in hand. Hence looking from any angle this Tribunal is perforce to apply the provisions of 2013 Act in considering the sanction of the Scheme and not as espoused by the Petitioner for the applicability of the 1956 Act and hence issue no (2) is thereby answered accordingly. 19. Having come to the above conclusion in relation to issue no (2), the issue of vested right becomes academic but however we also deal with the same as we are of the considered view, taking into consideration the very nature of Schemes of Compromise and Arrangement as contemplated under Sections 230 to 232 of the 2013 Act or for that matter under the 1956 Act can it be claimed that a vested right arises or in other words has a vested or substantive right accrued to the petitioner under the facts and circumstances of the case. We are unable to accept and in this we are fortified by the observations made in the judgement namely Suhas H.Pophale v. Oriental Insurance Company Limited a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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