Ganesh Lal Jain vs Vasan Health Care Pvt. Ltd.

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2019 Supreme(Mad) 2846

IN THE HIGH COURT OF MADRAS
S. Manikumar, Subramonium Prasad, JJ.
Ganesh Lal Jain and Ors. – Appellants
Versus
Vasan Health Care Pvt. Ltd. and Ors. – Respondents
Comp. A. Nos. 273, 177, 161 of 2019, 59 to 61, 336, 431, 432, 479, 480 of 2018, 462, 463, 476 to 480 of 2017, 220, 221 of 2016 in CP No. 267 of 2015 and OSA No. 93 of 2019
Decided On : 05-09-2019

Advocates Appeared:
For the Appellant : C. Seethapathy, S.R. Rajagopal, M.S. Krishnan, Sr. Counsel, P. Giridharan, Hari Radhakrishnan, Deepika Murali, K.S. Elangovan, K. Balamurali, Varun Srinivasan and M.V. Swaroop
For the Respondent:S.R. Raghunathan, R. Murari, Senior Advocate and S. Arun Suresh and S.R. Rajagopal

Headnote:
Companies Act, 1956 - Sections 434 & 439(1) - Companies Transfer of Pending Proceedings Rules, 2016 Rule 5 - Appointment of provisional liquidator - Transferred to NCLT - Petition be affixed on Court notice board and at premises of registered office of respondent company - That notice of this company petition returnable be served on respondents herein and at Registrar - That petitioner herein be and hereby is directed publish company petition in one issue of Tamil Daily and in one issue of English Daily - News Today both Chennai Edition and also in Tamil Nadu Government Gazette by fixing date of hearing - That petitioner company shall deposit Rupees Twenty Thousand only towards initial expenses to Official Liquidator in this matter - Court recorded a compromise entered into between parties landlord and the applicant company by giving a schedule of payment - This Court further directed that in case of two successive default petitioner shall be entitled to seek for revival of present winding up order was closed terms of memo of settlement vide order dated have been filed by Landlords seeking to revive pursuant to applicant company defaulting terms Memo of Compromise –Held, Counsel appearing for Laboratories India Private Limited would contend that a combined reading of all provisions would show that once proceedings has been commenced NCLT then NCLT only will have jurisdiction to continue with process and the High Court while dealing with winding up petitions Section Companies Act which have not been transferred NCLT cannot proceed further - According to senior counsel any other interpretation would not be consistent with the legislative intent to bring out IBC- Court agree with submission Counsel for applicant company are sustainable in view of decision of Honble Supreme Court in India Ltd case cited supra which has held that proceedings before NCLT will proceed ahead if fresh petition is filed under IBC even when matters are pending before the High Court - Further Section provides that the provisions of IBC will prevail over all other laws inconsistent therewith resultant position is that once a petition Sections filed by financial creditor is admitted then all the proceedings IBC must apply to that company Court - NCLT can therefore continue with proceedings - mere that post notice winding up proceedings have be dealt with in accordance with provisions of Companies Act and Companies (Court) Rules do not bar the NCLT to proceed ahead with proceedings validly instituted IBC and such proceeding validly instituted before the NCLT cannot be suspended. The process of liquidation of company will be governed reference is answered accordingly - Stay of passed by NCLT Chennai granted stands vacated - All other applications are sent to Company Court to be dealt with in accordance with law – Order accordingly

ORDER :

Subramonium Prasad, J.

1. By order dated 14.07.2017, a learned Single Judge, has referred a question of law, to a Hon'ble Division Bench, so that an authoritative pronouncement can be given on the question. The order also states that after the Hon'ble Division Bench answers the reference, the Bench may direct the Company Court to proceed in accordance with their directions. The Question of Law referred is:

"Whether when a batch of petitions, seeking winding up on the ground of inability to pay, filed under the provisions of the Companies Act, 1956, are pending before this Court and were not expressly transferred to the NCLT, could the provisions of the IBC be invoked and applications be preferred to the National Company Law Tribunal?"

2. The facts in brief, as placed by the respondent in the company petition viz., CP No. 267 of 2015 and the applicant in Company Application Nos. 462, 463, 480 of 2017, are that one Ganesh Lal Jain has filed CP No. 267 of 2015 in this Court against the applicant viz., Vasan Health Care Private Limited, for winding up of the company under Sections 433(2) and 433(f) read with Sections 434 & 439(1) of the Companies Act, 1956, for non payment of dues of Rs. 4,74,26,261/-.

3. On 10.08.2015, this Court admitted the Company petition and passed the following order.

"1. That the Official Liquidator, High Court, Madras, be and hereby is appointed as Provisional Liquidator of the respondent company viz., M/s. Vasan Health Care Pvt. Limited.

2. That the Official Liquidator appointed herein be and hereby is directed to take charge of the assets of the aforesaid respondent company.

3. That the Ex-Directors of the respondent company be and hereby is directed to file, their statement of affairs before the Official Liquidator within a period of 21 days.

4. That the notice of this company petition be affixed on the Court notice board, and at the premises of the registered office of the respondent company.

5. That the notice of this company petition returnable by 01.10.2015 be served on the respondents herein and at the Registrar of Companies, Madras.

6. That the petitioner herein be and hereby is directed to publish the company petition in one issue of Tamil Daily viz., "Makkal Kural" and in one issue of English Daily viz., "News Today" (both Chennai Edition) and also in the Tamil Nadu Government Gazette by fixing the date of hearing on 01.10.2015.

7. That the petitioner company shall deposit a sum of Rs. 20,000/- (Rupees Twenty Thousand only) towards the initial expenses to the Official Liquidator in this matter.

8. That the Company Petition No. 267 of 2015 do stands adjourned to 01.10.2015."

4. Another Company Petition viz., CP No. 389 of 2015 has been filed by one M/s. PVR Limited under Sections 433(2) and 433(f) read with Sections 434 & 439(1) of the Companies Act, 1956, for non payment of dues of Rs. 1,43,80,284/-.

5. CP No. 418 of 2015 has been filed by one Safilo India Private Limited, under Sections 433(2) and 433(f) read with Sections 434 & 439(1) of the Companies Act, 1956, for non payment of dues of Rs. 1,24,01,689/-

6. Applications have been filed by M/s. Vasan Health Care Private Limited (hereinafter referred to as applicant company), numbered as CA Nos. 967 & 968 of 2015, seeking to seaside the order dated 10.08.2015, and for a stay of the said order: This Court on 16.09.2015, directed the official liquidator to hold on, from taking charge of the assets of M/s. Vasan Health Care Private Limited, till a schedule of payment is filed by M/s. Vasan Health Care Private Limited, (hereinafter called as Applicant Company). The said order was extended on 23.09.2015, and is still in force as on today.

7. On 12.10.2015, the Company Court recorded a compromise, entered into between the parties to CP No. 267 of 2015, i.e., the landlord and the applicant company, by giving a schedule of payment. This Court further dire

Click Here to Read the rest of this document

2019 Supreme(Mad) 2846

Cases Referred (2)