Allahabad High Court
Jagriti Upbhogta Kalyan Parishad ... vs Union Of India And Others on 16 March, 2022
Bench: Surya Prakash Kesarwani
HIGH COURT OF JUDICATURE AT ALLAHABAD
A.F.R.
Court No. - 3
Case :- COMPANY PETITION No. - 16 of 2019
Petitioner :- Jagriti Upbhogta Kalyan Parishad Thru Its Joint Secretary
Respondent :- Union Of India And Others
Counsel for Petitioner :- A.K. Ganguli,Amrendra Nath Singh,B.B. Paul,K.P.Singh,K.R.Singh,Kunwar Bhadur Dixit,N.C.Gupta,R.C. Srivastava,Rachna Srivastava,Rajeev Mishra,Rani Chhabra,Sujeet Kumar,U.N. Khare,Vikash Pathak
Counsel for Respondent :- V.A. Mehta,A.S.G.I.,Amit Mishra,Anil Katiyar,B.N.Singh,C.S.C,G.S.Hajela,Gyan Prakash,Javed Husain Khan,Jitendra Pandey,K.C. Rajput,K.C. Sinha,Mahesh Srivastava,Mis Laxmi Arvind,Mrs.V.D. Khanna,N.I.Jafri,Prabhakar Tripathi,S.C.,V K Saxena,W.H. Khan
Hon'ble Surya Prakash Kesarwani,J.
1. Heard Sri W.H. Khan, learned senior advocate assisted by Sri Gulrez Khan, learned counsel for the applicant/ respondent No.12 and Sri Vivek Saran holding brief of Sri Vikas Pathak, learned counsel for the petitioner on Civil Misc. Application No.48 of 2019, dated 09.09.2019, Civil Misc. Application No. 49 of 2019 dated 30.11.2019 and Civil Misc. Application No.52 of 2020 dated 30.07.2020, filed by the respondent No.12 and objections thereto filed by the petitioner being objection Nos. 54 of 2020, 55 of 2020 and 56 of 2020, dated 20.10.2020, 20.10.2020 and 03.11.2020 respectively.
2. By the aforesaid three applications, the applicant/respondent no.12 has prayed as under :
Civil Misc. Application No.
Civil Misc. Application No.
Civil Misc.Application No.
48, dated 09.09.2019
49 dated 30.11.2019
52 dated 30.07.2020
"1. That the Winding up Petition may be dismissed.
2. That the Company be permitted to restart its business with the assets it possessed and prosecute the objects for which it was incorporated.
3. That the claims made against the Company S.B. Petroleum Ltd. Is denied by the Company and is disputed and the claim requires evidence oral and documentary for which remedy lies in the common court/appropriate court of law. "
"1. That the winding up petition may be dismissed.
2. That the claimants (if any) against the Company S.B. Petroleum Ltd may be directed to file their claims before the NCLT."
"1. further appointment of a Special Commissioner may be dispensed off with.
2. the winding up petition may be dismissed.
3. the claimants if any, against the Company S.B. Petroleum Ltd may be directed to file their claims before the NCLT."
3. The main contention of learned counsel for the applicant/respondent no.12 is that since the Company's Act, 1956 has been repealed by the new Act i.e. The Companies's Act, 2013 (hereinafter referred to as "the Act 2013") and the Insolvency and Bankruptcy Code 2016 (hereinafter referred to as "the IBC") has been enacted, therefore, by virtue of Section 434(1)(c) of the Act, 2013 read with Rule 5 of the Companies (Transfer of pending proceedings) Rules, 2016 (hereinafter referred to as "the Transfer Rules, 2016"), the present Company petition is not maintainable before this Court and it has to be transferred to the National Company Law Tribunal (for short "NCLT") constituted under Section 408 read with Section 410 of the Act 2013.
4. This petition was heard on several occasions and detailed orders including the orders dated 29.09.2020, 02.12.02020 and 20.01.2021 were passed incorporating the submissions of learned counsels for the parties.
5. By order dated 02.12.2020, following questions were framed for consideration :-
(i) Whether in view of Section 434(1)(c) of the Companies Act 2013 read with Rule 5 of the Companies (Transfer of Pending Proceedings) Rules, 2016, the present Company petition which by order dated 28.5.2019 passed by the Division Bench converted the PIL No.12324 of 2003 into the present Company Petition, can be proceeded with by the High Court or it has to be transferred to the NCLT" ?
(ii) Whether after the enactment of the Companies Act 2013, the present petition could have been registered as Company Petition by converting PIL No.12324 of 2003 by order dated 28.05.2019 whereas after enactment of the Act 2013 and constitution of the Tribunal NCLT under Section 408 read with Section 410 of the Act 2013, no Company Petition would lie to the High Court ?
6. Learned counsel for the applicant/respondent no.12 has submitted as under :-
(A) In view of Section 408, 410 and 434(1)(c) of the Companies Act, read with the 5th proviso, the High Court has no jurisdiction to entertain or proceed with a Company Petition inasmuch as the jurisdiction in Company Petition for winding up on the ground of inability to pay tax is maintainable only before the NCLT. Reliance is place on the judgment of Hon'ble Supreme Court dated 22.01.2019 in Civil Appeal No.818 of 2018 (Forech India Ltd. Vs. Edelweiss Assets Reconstruction Co. Ltd.) (paras 12 and 17).
(B) As per Rule 5 of the Companies (Transfer of Pending Proceedings) Rules, 2016, enacted by Notification dated 07.12.2016 as amended by 2nd amendment Notification dated 29.06.2017, all petitions relating to winding up under Clause (e) of Section 433 of the Companies Act, 1946 on the ground of inability to pay debts, pending before the High Court as on 15.12.2016 stood transferred to the NCLT. Therefore, this Court should also transfer the present petition to NCLT.
(C) It is admitted that the order dated 28.05.2019 in PIL No.12324 of 2003 was passed by the Division Bench with the consent of the parties. The relevant portion of paragraph-47 of the aforesaid order dated 28.05.2019, reads as under:
"(II) Since it is an old matter, Registry of this Court now shall register a Winding Up Company Petition and place this matter before Company Judge so that Court may proceed in the matter by considering claims of the parties The property, movable or immovable, in the custody of District Administration or the Registrar General etc., shall be taken in custody by Company Judge or if so directed, shall be handed over to Official Liquidator for maintenance of property and dealing with the same in the manner as directed by Company Judge in the winding up petition.
(III) Till further order is passed by Company Judge, Registrar General is directed to keep the entire money, as detailed in para 38 of this order, in a fixed deposit and thereafter it shall be dealt with in the manner as directed by Company Judge.
(IV) Claim of M/s Pushpa Petroleum is said to be founded on a compromise between the said Firm and M/s SBPL dated 04.04.2005. The Company Judge shall look into its genuineness and pass appropriate order."
(D) The aforesaid order was passed on no objection/ consent of the applicant/ respondent No.12 but that consent or no objection does not confer any power upon the High Court to proceed with the present matter as a company petition, inasmuch as the High Court has no jurisdiction to proceed with the company petition under the Companies Act, 2013. Now company petition can be filed by the petitioner only before the NCLT in accordance with the provisions of the Companies Act, 2013.
(E) In any case, this court cannot proceed with the present company petition and instead the matter should be remitted to the NCLT under Section 271 of the Companies Act, 2013.
7. Learned counsel for the petitioner has submitted as under :-
(a) A Writ (C) No.758 of 1996 (Jagriti Upbhogta Kalyan Parishad and others Vs. Union Of India and Others was filed by the present petitioners before the Hon'ble Supreme Court under Article 32 of the Constitution of India and by Order dated 13.01.2003, Hon'ble Supreme Court has disposed of the writ petition with certain directions and consequent thereto a public interest litigation (PIL) No.12324 of 2003 (Jagriti Upbhogta Kalyan Parishad Thru Its Joint Secretary Vs. Union Of India and Others) was registered in this Court and after various steps were taken under directions of this Court pursuant to the aforesaid order of Hon'ble Supreme Court, the aforesaid PIL was disposed of by order dated 28.05.2019 with the following directions :-
"(I) CBI Court shall proceed to decide the cases pending before it ensuring hearing on day to day basis. It should endeavor to complete trial in all these cases expeditiously since sufficient time has already elapsed. Now it is expedient that proceedings should be completed within two years, but if for any good or valid reason, it fails to do so, it may submit a progress report to the Court seeking further time.
(II) Since it is an old matter, Registry of this Court now shall register a Winding Up Company Petition and place this matter before Company Judge so that Court may proceed in the matter by considering claims of the parties The property, movable or immovable, in the custody of District Administration or the Registrar General etc., shall be taken in custody by Company Judge or if so directed, shall be handed over to Official Liquidator for maintenance of property and dealing with the same in the manner as directed by Company Judge in the winding up petition.
(III) Till further order is passed by Company Judge, Registrar General is directed to keep the entire money, as detailed in para 38 of this order, in a fixed deposit and thereafter it shall be dealt with in the manner as directed by Company Judge.
(IV) Claim of M/s Pushpa Petroleum is said to be founded on a compromise between the said Firm and M/s SBPL dated 04.04.2005. The Company Judge shall look into its genuineness and pass appropriate order."
(b) Pursuant to the aforesaid directions, the aforesaid PIL was converted/registered as the present Company petition No.16 of 2019, with the consent of the applicants herein/respondent no.12.
(c) Vide para (a) of the order, Hon'ble Supreme Court transferred entire papers of the aforesaid Writ Petition requesting Hon'ble the Chief Justice of this Court to constitute the Special Bench to deal with the matter and the Special Bench will appoint a retired Judge of the High Court as a Special Commissioner.
(d) The Special Commissioner, in terms of the aforequoted order of Hon'ble Supreme Court and pursuant to the orders passed by the High Court from time to time, took effective steps and did the needful to adjudicate the claims. The aforesaid writ petition was registered as PIL No.12324 of 2003 but by order dated 28.05.2019, the High Court directed the PIL to be converted into a Company petition which is the present Company Petition No.16 of 2019.
(e) Present case is not a winding up proceedings under the Companies Act, 1956 but it is a petition registered under the order dated 28.05.2019 passed by the High Court in PIL No.12324 of 2003.
(f) The jurisdiction of the High Court to proceed with the present Company Petition, under the peculiar facts and circumstances of the case and the aforequoted order of Hon'ble Supreme Court; is not ousted even as per provisions of Section 434(1)(c) of the Act, 2013 read with Rule 5 of the Companies (Transfer of Pending Proceedings) Rules, 2016, particularly when this company petition was not pending as on the cut off date i.e. 15.12.2016. Therefore, present company petition should be concluded by the High Court.
(g) PIL No.12324 of 2003 was converted into the present Company petition by order dated 28.05.2019, passed by the High Court which was passed on "no objection" filed by all the contesting parties including the petitioners and the respondent no.12. Therefore, after getting the P.I.L. converted with consent into a company petition, the respondent no.12/applicants can not raise objections that the present company petition can not be adjudicated by the High Court.
(h) Since PIL No.12324 of 2003 was converted into the present Company Petition by order dated 28.05.2019, passed by the Division Bench of this court, therefore, the present petition is not a petition for the purposes of Section 434(1)(c) or Section 271 of the Companies Act, 2013. It is a petition under the orders passed in the aforesaid PIL, therefore, the provisions of Section 271 or Section 434(1)(c) of the Companies Act, 2013, shall not be attracted. Reliance is placed on the principles laid down in Reserve Bank of India A Statutory Boday vs. M/s. Sahara India Financial Corporation Ltd., 2019 (3) ADJ 540 (LB).
(i) A company petition cannot be automatically transferred by the High Court to the Tribunal under Section 434 (1)(c) of the Companies Act, 2013 rather third proviso to Rule 5 of the Companies (Transfer of Pending Proceedings) Rules, 2016 as amended by the Second Amendment Rules vide GSR 732(E) dated 29.06.2017 leaves the discretion with the court where the winding up proceedings are pending to transfer it or not to transfer it to the Tribunal. Rule 5 of the Companies (Transfer of Pending Proceedings) Rules, 2016 as amended on 29.06.2017, reads as under:
"5. Transfer of pending proceedings of Winding up on the ground of inability to pay debts.- (1) All petitions relating to winding up of a company under clause (e) of section 433 of the Act on the ground of inability to pay its debts pending before a High Court, and, where the petition 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 against the same company pending as on 15th December, 2016, such other petition shall not be transferred to the Tribunal, even if the petition has not been served on the respondent."
(j) In support of his submissions, Sri Saran has relied upon paragraphs-57 and 58 of the judgment of this court in the case of Reserve Bank of India A Statutory Boday vs. M/s. Sahara India Financial Corporation Ltd. (supra).
Facts
8. The petitioners filed a writ petition before Hon'ble Supreme Court under Article 32 of the Constitution of India bringing to its notice that how various consumers, distributors and dealers of the respondent no.12 i.e. M/s. S.B. Petroleum Ltd., spread in nine states, namely, Madhya Pradesh, Maharashtra, Karnataka, Uttar Pradesh, Haryana, Rajasthana, Bihar, Delhi and Punjab were taken for a ride and cheated by collection of crores of rupees and syphoned it by acquiring personal properties. The matter was heard by Hon'ble Supreme Court for several years and ultimately the writ petition was disposed of by order dated 13.01.2003 as under :-
"This writ petition under Article 32 of the Constitution of India was filed in public interest, approximately six years earlier, bringing to the notice of this Court how various consumers, distributors and dealers of respondent No. 12 -M/s. S.B. Petroleum Ltd. spread in nine States, namely Madhya Pradesh, Maharashtra, Karnataka, Uttar Pradesh, Haryana, Rajasthan, Bihar, Delhi, Punjab were taken for a ride and cheated by collection of crores of rupees. According to the petitioners crores of rupees were syphoned and personal properties acquired. Various orders were passed by this Court from time to time against respondent. 12-Company and its Managing Director and his family members and also other Directors. Directions were also issued to various authorities noticing a total inaction on the part of the authorities. Some of the orders passed to which reference can be made in this regard are the orders dated 20th October and 17th November, 1997, 6th February and 20th March, 1998 and 3rd December, 2001. Various bank accounts and properties have been attached. The matter was also investigated by CBI and the Economic Offences Wing (CID) U.P. We have been informed by Shri Altaf Ahmad, learned Additional Solicitor General that 22 chargesheets were filed on 24th December, 1999 before Additional Chief Judicial Magistrate III, Lucknow. Learned Additional Solicitor General submits that primarily on account of the non-cooperation of the accused charges have not been framed. We, however, refrain from expressing any opinion except observing that all concerned are directed to cooperate in the expeditious disposal of the cases that have been initiated as a result of directions issued in this matter.
Having regard to the facts and circumstances of the case, we do not think it possible for this Court to either examine from time to time the progress of the criminal cases so as to ensure its expeditious disposal and to also go into the factual details of a large number of consumers and their rights, and also the rights, if any, of dealers/distributors. We may note that though large sums have been refunded, according to respondent no.12, to the consumers but it seems that still there may be large number of consumers to get the refunds. We feel it would be appropriate, if the matter is transferred to the High Court in terms of the prayer made in I.A.No.27/2002 filed by learned Amicus Curiae. Accordingly, we issue the following directions:
a) All the case papers of this matter be transferred to High Court of Allahabad with a request to Hon'ble Chief Justice of Allahabad High Court to constitute a special bench either at Allahabad or at Lucknow to deal with the matter. The special bench will appoint a retired Judge of the High Court as a Special Commissioner and decide about his remuneration/ expenses etc. The Special Commissioner will take charge of all the assets including the bank accounts of respondent no.12.
b) The bank accounts disclosed in the affidavit of Dr.KPD Shastri shall remain frozen till further orders.
c) All the concerned banks are directed to furnish details of operations of the accounts since 1993 to the Special Commissioner.
d) The Special Commissioner so appointed would take charge of the following bank accounts:-
1. Bank of Baroda, Aliganj Branch, Lucknow, Account No.Current A/c 391.
2. State Bank of India, Main Branch, Hajrat Ganj, Lucknow.
3. Syndicate Bank, Hajrat Ganj, Lucknow.
4. Oriental Bank of Commerce, Hajrat Ganj,Lucknow.
5. ABN Amro Bank, New Delhi.
6. State Bank of Indore, Hajrat Ganj, Current A/c No.207.
7. Bank of Baroda, Nishant Ganj, Lucknow A/c No.1673
8. Bank of Baroda A/c No.1730
9. Bank of Baroda, Gore Gaon, Bombay A/c No.3284
10. Bank of Baroda, Gandhi Dham, Gujrat A/c No.1366
11. Bank of Baroda, Gandhi Dham, Gujarat No.1465
12. Bank of Baroda, Asharami Ahmedabad, Gujarat A/c No.30157
13. Bank of Baroda, Aliganj, Lucknow, Krishna International A/c No.316
14. Bank of Baroda, Aliganj, Lucknow, SB International Oil & Energy No.610
15. Bank of Baroda, Aliganj, Lucknow, SB Petroleum, Port Terminal A/c No.617
16. Bank of Baroda, Aliganj, Lucknow, Saushail Enterprises A/c No.618
17. Bank of Baroda, Aliganj, Lucknow, SBLPG Bottling, No.640
18. Bank of Baroda, Aliganj, Lucknow A/c No.493
19. Bank of Baroda, Aliganj, Lucknow. A/c No.6343
20. Bank of Baroda, Nishatganj, Lucknow, Shell Petroleum A/c No.1606
21. Bank of Baroda, Nishatganj, Lucknow, SB Petroleum Port Terminal A/c No.1692
22. Bank of Baroda, Nishatganj, Lucknow, SB International Oil & Energy A/c No.1623
23. Bank of Baroda, Nishatganj, Lucknow, Saushil Enterprises A/c No.1640
24. State Bank of India, Main Branch, Hajrat Ganj, Lucknow, Saurpika Investment & Properties A/c No.CC51
25. Federal Bank, 29, Vidhan Sabha Marg, Lucknow, Saushil Enterprises A/c No.1226
26. Federal Bank, 29, Vidhan Sabha Marg, Lucknow, Krishna Exim Pvt.Ltd. A/c No.1229
27. Fedral Bank, 29, Vidhan Sabha Marg, Lucknow, SB International Oil & Energy A/c No.1225
28. Bank of Baroda Gandhi Dham, SB Inter Oil & Energy Ltd. A/c No.1515
e) The Special Commissioner will also take charge of the following properties:-
1. Land at Mohanlal Ganj, Meerut, Mainpuri, Mathura (sale deed in favour of M/s SB Petroleum free from all encumbrances: 12.73 lacs)
2. Bottling plant at Mohanlal Ganj, Lucknow (fully owned by respondent no.12 fre from all encumberances: 168.85 lacs)
3. SKO storage at Mohanlal Ganj, Lucknow (fully owned by respondent no.12, free from all encumbrances: 116.86 lacs)
4. Kerosene and LPG port storage facility project at Pipavav Port, Gujarat (lease hold right in favour of respondent no.12: 122.73 lacs)
5. Vehicle (staff cars & scooters: 12.00 lacs)
6. Furniture & Fixtures (27.03 lacs)
7. Electrical Equipments (0.92 lacs)
8. Electrical installations (0.60 lacs)
9. Computers (2.52 lacs)
10. Stock of lubricating oil (30.25 lacs)
11. LP Gas (3.25 lacs)
12. Cylinders and regulators (4.90 lacs)
13. Sundry debtors (1.67 lacs)
14. Other current assets (0.37 lacs)
15. Loans and advances (87.08 lacs)
16. Eight bighas of Agricultural land situated at Mohan Lal Ganj, Lucknow.
17. Office Complex at 20A/3, Gokhle Marg, Lucknow which she acquired in the year 1983
18. B-65, Sec.C, Mahanagar, Residential house which she acquired in the year 1986
19. A flat at Wazir Hasan Road, Lucknow.
20. Two acres of land situated in Gata No.988-A, Mauza-Zara Mai, Tehsil and Distt. Mainpuri, UP
21. Two acres of land situated in Gata No.112, Vill.Bhagwanpur, Pargana-Sarawa, Tehsil and Distt. Meerut, UP
22. Two acres of land situated in Khasra No.53, Min-Jumla, Rakba-0,737, Mouza-Mahuwan, Tehsil and Distt. Mathura, UP at Agra-Mathura Road.
23. Twenty Acres of land, Vill.Rampura-II, Pipavav port, Post-Uchaiya, Tehsil-Rajula, Distt. Amreli.
24. RECLAIM OF LOAN/ADVANCE TO:
M/s Kashinath Kailashnath
Jewellers Lucknow UP Rs.25.00 lacs
Refund of Security Deposit
for land at Pipavav Port for
LPG & SKO Storage Rs.7.00 lacs
Sale of land at Mathura, Meerut
& Mainpuri Rs.15.00 lacs
25. Investments made at Mohanlal Ganj, Lucknow, UP, such as: -
LPG Bottling Plant Rs.169.00 lac approx.
SKO Storage Plant Rs.130.00 lacs approx.
f) The Special Commissioner would also take charge of the following FDRs:-
3rd August 1993 20 Lacs
18th December, 1993 15 lacs
5th May, 1994 10 lacs
1st June, 1994 7.5 lacs
5th October, 1994 7.5 lacs
15 lacs
10 lacs
7th September, 1994 33,70049/-
September, 1994 25 lacs
October 1994 7.5 lacs
January, 1995 7,63,291
12th July, 1994 -Two FDRs -7.5 lacs each
11th September, 1994 15 lacs
5th October, 1994 7.5 lacs
g) The Special Commissioner would insert two advertisements in the Times of India, Indian Express, Dainik Jagran or such other important newspapers having large circulation in the concerned States announcing his appointment and inviting all concerned who have deposited their money with the dealers/distributors of S.B.Petroleum Ltd. and also the concerned dealers/distributors to file their claims before the Special Commissioner within a time stipulated in the said publication.
h) The Special Commissioner shall formulate a scheme whereby the consumers are repaid their deposits without insisting their personal presence before the Commissioner. The Special Commissioner would, of course, ensure that the amount reaches the right person.
i) In so far as the dealers/distributors are concerned, they may file their claims before the Special Commissioner. Respondent no.12- Company claims to have serious disputes with the dealers/distributors. According to the company - respondent No. 12 they are not entitled to claim any refund. It would be open to the Company and also to all dealers/distributors to take such pleas as are available to them in law before the Special Commissioner. The Special Commissioner will go into the respective pleas of the Company and dealers/distributors and adjudicate upon their claims whereafter orders for refund, if any, or other appropriate orders will be passed by him.
j) The Company and its Managing Director Mr.VK Tiwari and all other concerned are directed to furnish all books of accounts/all deeds of the properties of the Company and alsoof Mr.VK Tiwari and all his family members and the Directors of the Company as are attached under the orders of this Court to the Special Commissioner within 15 days of the appointment of the Special Commissioner.
In respect of properties 20A/3, Gokhale Marg, Lucknow and B-65, Sector 'C' Mahanagar, Lucknow it has been claimed that these properties were acquired in 1981 and 1987 respectively by Smt.Abha Tiwari w/o VK Tiwari even before the formation of the Company and thus the plea is that these properties cannot be utilised for the alleged claims of any person against the Company. On the other hand, the claimants may dispute this factual statement and may also contend that for various reasons it would be permissible to lay hand to these properties as well. We have only noticed in brief the pleas which may be raised before the Special Commissioner. We however, express no opinion on any of the pleas . The Special Commissioner would examine the respective submissions in respect of these two properties and decide the matter in accordance with law as also the matters in respect of which mention has been made by his chartered accountant.
k) The CBI and Economic Offences Wing, CID (UP) are directed to report the progress of the case before the special bench at the High Court.
l) It would be open to the Special Commissioner to to approach the special bench of the High Court for any clarification/directions/orders.
m) Some amounts are lying in fixed deposites pursuant to the orders passed by this Court from time to time. Those FDRs be transmitted to the High Court. The Special Commissioner, as and when necessary, may seek directions from the High Court in respect of the amounts in those FDRs.
Before concluding we place on record this Court's deep appreciation for the services rendered by the amicus curiae Mr. AK Ganguly, Senior Advocate and Ms. Rachna Srivastava, Advocate.
The writ petition and all applications are disposed of in the above terms."
9. Vide direction No.(a) of the aforequoted order, Hon'ble Supreme Court transferred case papers of the aforesaid Writ Petition (c) No.758 of 1996 to this Court with a request to Hon'ble Chief Justice of Allahabad High Court to constitute a Special Bench either at Allahabad or at Lucknow Bench to deal with the matter. The Special Bench will appoint a retired judge of the High Court as a Commissioner and decide about his remuneration/expenses etc. The Special Commissioner will take charge of all the assets including the Bank accounts of the respondent no.12. Pursuant to the aforesaid directions the Public Interest Litigation (PIL) No.12324 of 2003 (Jagriti Upbhogta Kalyan Parishad Thru Its Joint Secretary Vs. Union Of India And Others) was registered in this Court. A Special Commissioner was also appointed who carried out tremendous job before the assets may be sold and the proceeds may be distributed amongst the claimants/petitioners, the aforesaid PIL was disposed of by a detailed order dated 28.05.2019. The directions given by the Division Bench in the aforesaid PIL No.12324 of 2003 while disposing of the aforesaid PIL no.12324 of 2003 by order dated 28.05.2019, are as under :-
"(I) CBI Court shall proceed to decide the cases pending before it ensuring hearing on day to day basis. It should endeavor to complete trial in all these cases expeditiously since sufficient time has already elapsed. Now it is expedient that proceedings should be completed within two years, but if for any good or valid reason, it fails to do so, it may submit a progress report to the Court seeking further time.
(II) Since it is an old matter, Registry of this Court now shall register a Winding Up Company Petition and place this matter before Company Judge so that Court may proceed in the matter by considering claims of the parties The property, movable or immovable, in the custody of District Administration or the Registrar General etc., shall be taken in custody by Company Judge or if so directed, shall be handed over to Official Liquidator for maintenance of property and dealing with the same in the manner as directed by Company Judge in the winding up petition.
(III) Till further order is passed by Company Judge, Registrar General is directed to keep the entire money, as detailed in para 38 of this order, in a fixed deposit and thereafter it shall be dealt with in the manner as directed by Company Judge.
(IV) Claim of M/s Pushpa Petroleum is said to be founded on a compromise between the said Firm and M/s SBPL dated 04.04.2005. The Company Judge shall look into its genuineness and pass appropriate order.
10. Pursuant to the direction of the Division Bench of this Court in para 47(II)/(III)/(IV) of the order dated 28.05.2019 in the aforesaid PIL No.12324 of 2003 the present petition has been registered and listed before me as Company Judge nominated by Hon'ble the Chief Justice by order dated 17.06.2020 on administrative side. This is how the present company petition has came up before this court for consideration.
11. However, the present case could not be proceeded to reach the logical ends on account of further obstructions created by the applicants/respondent no.12 by making successive application being Civil Misc. Application No.48 dated 09.09.2019, Civil Misc. Application No. 49 dated 30.11.2019 and Civil Misc. Application No.52 dated 30.07.2020 which are being hereby decided.
Discussion and Findings
12. I have carefully considered the submissions of learned counsels for the parties and perused the records of the case.
13. It is undisputed that the entire proceedings against the applicants/respondent no.12 and their properties took place pursuant to the directions of Hon'ble Supreme Court vide order dated 13.01.2003 in Writ Petition (c) No.752 of 1996, filed by the petitioner herein under Article 32 of the Constitution of India. The direction given by the Hon'ble Supreme Court in the order dated 13.01.2003, has already been reproduced above. It is also admitted to the applicants/respondent no.12 that the Special Commissioner, in terms of the aforequoted order of Hon'ble Supreme Court and pursuant to the orders passed by the High Court from time to time in the aforesaid PIL no.12324 of 2003, took effective steps and did the needful to adjudicate the claim.
14. Now, mainly the process of selling the assets and distribution of proceeds amongst the claimants in adjudication of their claims, is left. It appears that under the facts and circumstances of the case the Division Bench thought it fit to provide by order dated 28.05.2019 that the PIL may now be converted and registered as a winding up company petition so that the matter may reach to its logical ends. Thus, the present case is not winding up proceedings under the Companies Act, 1956 but it is a petition registered under the orders of the Division Bench dated 28.05.2019 in PIL No.12324 of 2003, which itself was the result of order of Hon'ble Supreme Court dated 13.01.2003, passed under Article 32 of the Constitution of India in Writ Petition (c) No.758 of 1996.
15. It has been admitted by learned counsel for the applicant/respondent no.12 that the aforesaid PIL No.12324 of 2003 was converted into the present company petition by order dated 28.05.2019 on "no objection" filed by all the contesting parties including the petitioners and the applicants/respondent no.12. Thus, the aforesaid PIL was converted into the present petition with the consent of the applicants/ respondent no.12. Consequently, the respondents can not raise objection that the present company petition can not be adjudicated by the High Court. Without prejudice to the above, it is further relevant to mention that neither the applications presently under consideration filed by the applicants/respondent no.12 have disclosed any reason for transfer of the present petition to NCLT nor learned counsel for the applicants/respondent no.12 has raised any contention disclosing reasons for transfer, except that the present petition deserves to be transferred to the NCLT under the Transfer Rules, 2016. There is no doubt that the second proviso to Section 434(1)(c) provides that any party to winding up proceedings pending before any Court immediately before the commencement of IBC, may file an application for transfer of such proceedings and the Court may transfer all such proceedings to the NCLT. However, the said proviso does not mandate that the proceedings would automatically stands transferred rather it leaves the decision with the Court where the winding up proceedings are pending, to transfer the same or not to transfer the same. The applications of the applicants/respondent no.12 do not even disclose specifically as to why power to transfer the winding up petition should be exercised by this Court and the winding up petition should be transferred, particularly when after journey of about 25 years the matter is now about to reach to its logical end. Similar is the view taken by Lucknow Bench of this Court in the case of Reserve Bank of India a Statutory Body Vs. Sahara India Financial Corporation Ltd. 2019 3 ADJ 540(LB)(para 43,51,53,56,57 & 58). The judgment of this Court in the case of Saumya Co-operative Housing Society Vs. State of U.P., 2019 (143) RD relied by learned counsel for the applicants/respondent no.12 laying down the principle that jurisdiction can not be conferred on a Court by consent, is distinguishable on facts of the present case. Reasons in this regard have already been stated in foregoing paragraphs. It would be relevant to mention at the cost of repetition that the present petition has come into existence on account of the orders of Hon'ble Supreme Court dated 13.01.2003 in Writ Petition (c) No.758 of 1996 followed by order of the Division Bench of this Court dated 28.05.2019 in PIL No.12324 of 2003.
16. It would not be out of place to mention that pursuant to the direction of Hon'ble Supreme Court particularly those given in paragraphs g, h, i and l of the order dated 13.01.2003, the Special Commissioner took up the entire matter and after issuance of notices publicised in largely circulated news papers, adjudicated the claims. An interim report dated 11.01.2006 was submitted by the Special Commissioner, namely, Sri Justice R.A. Sharma (Retd.) and thereafter a supplementary final report dated 05.09.2006 was also submitted. The interim report dated 11.01.2006 is a very detailed report which discloses various steps taken by the Special Commissioner pursuant to the orders of Hon'ble Supreme Court and also the Division Bench of this Court in the aforesaid PIL No.12324 of 2003.
17. In the supplementary final report the Special Commissioner concluded as under :-
"By his orders dated 28.03.2006, the Special Commissioner has decided 153 claims. The judgments of the decided claims are contained in two volumes. All these judgments have been filed before this Hon'ble Court.
In the final report, it was mentioned that five cases; two from U.P. and three from Maharashtra, have been adjourned from time to time at the request of the parties and are fixed in April and June, 2006. Now, these five cases have also been decided. There were also five highly belated claims, which were left undecided. These claims have also been decided.
The Special Commissioner has awarded Rs. 9,42,65,989/- + Rs. 1,68,82,865/- = Rs. 11,11,48,854/- to the claimants whose claims have been allowed.
As all the pending claims have been decided by the Special Commissioner, his judicial work is over. Sale of the properties, mentioned in the Special Commissioner's order dated 28.03.2006, which is part of volume I of the judgments, and payment of the amount to the claimants whose claims have been decreed are the only work left. The sale of the properties is likely to take time, as the orders of the Special Commissioner have been challenged.
This report is, accordingly, submitted to bring on record the position with regard to the disposal of the claims filed before the Special Commissioner."
18. Thereafter, on account of death of Sri Justice R.A. Sharma, by order of the Division Bench this Court Sri Justice R.R.K. Trivedi (Retd.) was appointed as a Special Commissioner on 06.08.2013 to carry out the orders of Hon'ble Court. A lot of amount has been collected which are kept in three bank accounts and details of which have been given by Sri Justice R.R.K. Trivedi (Retd.) in his application dated June 10, 2020. The amounts is available in the bank in the form of FDRs. are about 1.25 crores.
19. The facts as briefly noted above clearly indicates that such steps have already been taken which are irreversible. Therefore, in terms of the provisions of Section 434 (c) of the Companies Act, 2013 read with Rule 5 of the Transfers Rules, 2016, the transfer applications in question filed by the applicants/respondent no.12 deserve to be rejected.
20. In the case of Action Ispat and Power Private Limited Vs. Shyam Metalics and Energey Limited (2021) 2 SCC 641 (para 14 to 26) Hon'ble Supreme Court considered the provisions of Section 434(c) of the Companies Act, 2013 and the Transfer Rules 2016 and held that transfer of petition pending in High Court to NCLT can be made when no irreversible steps towards winding up of the Company have otherwise taken place. Therefore, even in view of the law laid down by Hon'ble Supreme Court the present company petition need not to be transferred to the NCLT.
21. For all the reasons aforestated, the Civil Misc. Application No.48 of 2019 dated 09.09.2019, Civil Misc. Application No. 49 of 2019 dated 30.11.2019 and Civil Misc. Application No.52 of 2020 dated 30.07.2020, filed by the applicants/ respondent No.12 are hereby rejected.
22. The matter is released and be listed on 25.03.2022 before the appropriate court.
Order Date :- 16.3.2022/vkg
