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TMI Blog2018 (2) TMI 1736X X X X Extracts X X X X X X X X Extracts X X X X ..... on or under Section 11(a) of the 'I&B Code' or due to pendency of the arbitration proceedings. 3. The question arises for consideration in this appeal is whether an application under Section 7 of the 'I&B Code' can be rejected on the ground of pendency of a winding-up? 4. The Adjudicating Authority having noticed the provisions of Section 434 of the Companies Act, 2013 and Section 255 of the 'I&B Code, as follows: "7. So, by reading section 255 of the Code and schedule thereto, it is evident that the source for amendment for section 434 of Companies Act 2013 is from section 255 of this Code, therefore when it is evident that Section 434 is amended in such a way that High Courts, as prescribed by Central Government, can proceed with pending winding-up matters other than the winding-up matters transferred to NCLT, it has to be construed that the source for saving winding up proceedings pending before High Courts has come from section 255 of this Code." 5. The Adjudicating Authority noticed the notifications issued by the Central Government on 7th December, 2016 and on 29th June, 2017, both issued in exercise of powers conferred under sub-sections (1) and (2) of Section 434 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not been served on the respondent under rule 26 of the Companies (Court) Rules, 1959 shall be transferred to the Bench of the Tribunal established under sub-section (4) of Section 419 of the Companies Act, 2013 exercising territorial jurisdiction to be dealt with in accordance with Part II of the Code: Provided that the petitioner shall submit all information, other than information forming part of the records transferred in accordance with rule 7, required for admission of the petition under Sections 7, 8 or 9 of the Code, as the case may be, including details of the proposed insolvency professional to the Tribunal upto 15th day of July, 2017, failing which the petition shall stand abated: Provided further that any party or parties to the petitions shall, after the 15th day of July, 2017, be eligible to file fresh applications under sections 7 or 8 or 9 of the Code, as the case may be, in accordance with the provisions of the Code: Provided also that where a petition relating to winding up of a company is not transferred to the Tribunal under this rule and remains in the High Court and where there is another petition under clause (e) of section 433 of the Act for winding up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is desirable to refer the relevant facts relating to 'pendency of winding-up proceedings'. 11. A Company Petition No. 468 of 2013 was preferred by the Appellant- 'Innoventive Industries Limited' for winding up of 'Kumar Motors Private Limited' before the Hon'ble High Court of Judicature at Bombay. The Hon'ble Bombay High Court having noticed the stand taken by the parties passed detailed order on 4th August, 2015, relevant portion of which is quoted below:- "14. In that view of the matter, there is absolutely no merit in any of the defences raised by the Respondent. There being no bona fide dispute concerning the Petitioner's debt and the statutory notice having not being complied with, there is a clear deemed inability to pay on the part of the Respondent Company. The Petition, accordingly, deserves to be admitted. 15. In the premises, the following order is passed: (i) The Company Petition is admitted; (ii) The Petitioner shall advertise the petition in two local newspapers, viz. "Free Press Journal" (in English) and "Navshakti" (in Marathi), and also in Maharashtra Government Gazette. Any delay in publication of the advertisement in the Maharashtra Government Gazette, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (e) of the Companies Act, 1956. The said position of law with respect to overriding provisions on account of a non-obstante clause has been settled by the Hon'ble Supreme Court of India in "Allahabad Bank v. Canara Bank, (2000) 4 SCC 406". In fact, the Hon'ble Supreme Court in the matter of "Innoventive Industries Limited v. ICICI Bank & Ors., Civil Appeal No. 8337-8338 of 1027" has categorically held that the provisions of the 'I&B Code' have an overriding effect and the non-obstante clause is to ensure that any right of the 'Corporate Debtor' under any other law cannot come in the way of the 'I&B Code'. 15. Therefore, according to learned counsel for the Appellant, in the present case, the provisions of the 'I&B Code' clearly override the provisions of the Companies Act, the 'I&B Code' being a Special Act enacted later in time as well as for a broader purpose of resolving the insolvency of the 'Corporate Debtors'. 16. It was submitted that only because the amendment to the Companies Act, 1956 was brought by means of Section 255 of the 'I&B Code', does not mean that the provisions of the 'I&B Code' will not have any overriding effect over the provisions of the Companies Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (23), the following clause shall be substituted, namely:- xxx xxx xxx "(23) "Company Liquidator" means a person appointed by the Tribunal as the Company Liquidator in accordance with the provisions of section 275 for the winding up of a company under this Act"; (b) after clause (94) , the following clause shall be inserted, namely:- "(94A) "winding up" means winding up under this Act or liquidation under the Insolvency and Bankruptcy Code, 2016, as applicable." 31. By aforesaid amendment, the legislatures have made it clear that the word "winding up" mentioned in the Companies Act, 2013 is synonymous to the word "liquidation" as mentioned in the I & B Code. 32. In view of the provisions aforesaid, we hold that, if any winding up proceeding has been initiated against the Corporate Debtor by the Hon'ble High Court or Tribunal or liquidation order has been passed, in such case the application under Section 10 is not maintainable. However, mere pendency of a petition for winding up, where no order of winding up or order of liquidation has been passed, cannot be ground to reject the application under Section 10." 18. It is true that the Appellant is not covered by Section 11 of the ' ..... X X X X Extracts X X X X X X X X Extracts X X X X
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