The main legal point established in the judgment is the interpretation of the Companies Act, 2013, particularly Section 434 and 465, and the application of the judgment of the Hon'ble Supreme Court in Forech India Ltd. vs. Edelweiss Assets Reconstruction Co. Ltd. 2019 SCC Online SC 87.

JUDGMENT :

SUBRAMONIUM PRASAD, J.

Prayer: Writ Petition is filed under Article 226 of the Constitution of India, issuance of a writ of declaration, declaring that Companies (Transfer of Pending Proceedings) Rules, 2016 and consequently that the Companies (Removal of Difficulties) Fourth Order 2016 are ultra vires Sections 434 and 465 of the Companies Act, 2013 and unconstitutional as it is violative of Articles 14, 19 and 21 of the Constitution of India.)

1. The petitioner, a practicing Advocate, has filed this instant writ petition, for a declaration that the Companies (Transfer of Pending Proceedings) Rules, 2016 and consequently that the Companies (Removal of Difficulties) Fourth Order 2016, are ultra vires to Section 434 and 465 of the Companies Act, 2013 and also that they are violative of Articles 14, 19 and 21 of the Constitution of India.

2. It is the contention of the petitioner that the Companies (Transfer of Pending Proceedings) Rules, 2016 should be applied prospectively, since it affects the rights of the petitioner which accrued to the parties prior to the amendment of the Companies Act.

3. The petitioner states that it is settled law that the rights of the parties in relation to legal proceedings are crystallised on the date of commencement of such proceedings and the rights so conferred cannot be taken away by a subsequent repeal of the provisions under which such proceedings have commenced, unless there is a specific statutory mandate to that effect.

4. The petitioner further states that in the present case, there is no statutory mandate, either in the Companies Act, 2013 nor in the Insolvency and Bankruptcy Code, 2016 [hereinafter referred to as Code] to enable conversion of matters filed under the Companies Act, much prior to the enforcement of the Code, to be converted into petitions under the Code, so as to divest parties of substantive rights in relation to the petition itself.

5. It is submitted that the Companies Act, 2013 deals with transfer of proceedings to the tribunal. The impugned rules have been made, under the powers conferred under Section 433 of the Companies Act, 2013. Section 433 provides that "all proceedings under the Companies Act, 1956 including proceedings relating to arbitration, compromise, arrangements and reconstruction and winding up of companies, pending immediately before such date before any District Court or High Court, shall stand transferred to the Tribunal and the Tribunal may proceed to deal with such proceedings from the stage before their transfer."

6. The petitioner states that a bare reading of the aforesaid provision clearly establishes that transfer of proceedings to the tribunal as provided for in section 434 only contemplates a change in forum which will hear applications and petitions previously heard by Courts and the said section did not contemplate that a different law may be made applicable than the one under which, the transferred proceedings were conducted prior to the transfer.

7. The petitioner states that the transferred proceedings merely contemplates a change (transfer) in forum and not a change in law, which the rules seek to provide for. The right to enforce a right through a particular proceeding, being a substantive right conferred by a statute in force at the time of commencement of the proceedings cannot be taken away subsequent by a repeal of those proceedings or by subordinate legislation in the form of rules. Any such action, can only be undertaken by the Parliament, by providing a clear and unambiguous legislative mandate, divesting the petitioners in pending proceedings of their vested rights.

8. The petitioner relies on the judgment of the Hon'ble Supreme Court in Garikapati Veeraya vs. N. Subbiah Choudhry, AIR 1957 SC 540, wherein it is held that a vested right of appeal, can be only taken away, when the enactment specifically says so.

9. The petitioner has submitted that mere reading of Section 434 of the Companies Act, 2013 would, clearly establishes