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2019 Supreme(All) 1728
IN THE HIGH COURT OF ALLAHABAD
Pankaj Kumar Jaiswal, Rajnish Kumar, JJ.
M/S. Sahara India Financial Corp. Ltd. Lko. Throu. Dir. And Anr. -Appellants
Versus
Reserve Bank of India And Ors. - Respondents
Company Appeal No. - 2 of 2019
Decided On : 11-04-2019
For the Appellant : Akhilesh Kumar Kalra, Avinash Chandra, Rahul Tripathi
For the Respondent: Pritish Kumar, Savitra Vardhan Singh, Shailendra Srivastava
The main legal point established in the judgment is the requirement for authorization and compliance with the relevant provisions and rules in filing an appeal under Section 45-MC of the RBI Act and the Companies Act, 1956.
Headnote:
RBI Act - Winding-up petition - Section 45-MC - Summary of Acts and Sections: RBI Act, 1934, Section 45-MC; Companies Act, 1956, Sections 433(e), 439, 536(2), 441(z); Companies (Court) Rules, 1959, Rule 6, Rule 21; Allahabad High Court Rules, 1952, Chapter IV (Rules 9 to 12); Order VI, Order XIX, Order XXIX - Summary: The court discussed the provisions of Section 45-MC of the RBI Act, which empowers the Reserve Bank of India to file a winding-up petition under the Companies Act, 1956. It also considered the relevant rules and orders related to the practice and procedure of the court, affidavits, and suits by or against corporations. The court's decision was influenced by the interpretation of these provisions and rules, particularly in relation to the maintainability of the appeal and the authorization of the appellant.
Fact of the Case:
The Reserve Bank of India filed a winding-up petition against Sahara India Financial Corporation Limited (SIFCL) under Section 45-MC of the RBI Act. The company appealed the winding-up order, but preliminary objections were raised regarding the maintainability of the appeal and the authorization of the appellant.
Finding of the Court:
The court found that the appeal was maintainable under the provisions of the Companies Act, 1956, and that the appellant had not been authorized to file the appeal. It held that the appeal had not been instituted by an authorized person and dismissed the Company Appeal filed by the appellant No.2.
Issues: The issues included the maintainability of the appeal under Section 45-MC of the RBI Act, the authorization of the appellant to file the appeal, and compliance with the relevant rules and provisions of the Companies Act, 1956.
Ratio Decidendi: The court's decision was based on the interpretation of Section 45-MC of the RBI Act, the Companies Act, 1956, and the relevant rules governing affidavits, pleadings, and suits by or against corporations. It emphasized the importance of authorization and compliance with the law in filing the appeal.
Final Decision: The court partly allowed the preliminary objection of the respondents and dismissed the Company Appeal filed by the appellant No.2, holding that it had not been instituted by an authorized person.
JUDGMENT :
1. Heard Sri V. Giri, Senior Advocate assisted by Sri Akhilesh Kalra as well as Sri Gautam Awasthi, Sri Avinash Chandra, Sri Amith Krishnan, Sri Ram Sajan Yadav, Sri Omendra Pratap and Ms. Garima Chauhan for the appellants/applicants and Sri Prashant Chandra, Senior Advocate assisted by Sri Pratiyush Kumar, Ms. Neha Rashmi and Sri Amal Rastogi for respondent No.1, Sri Savitra Varadhan Singh for respondent No.2-Registrar of Companies and Sri Shailendra Srivastava for respondent No.3-Official Liquidator.
2. In a winding-up petition filed by the Reserve Bank of India (RBI) against M/s Sahara India Financial Corporation Limited (SIFCL) under Section 45-MC of Reserve Bank of India Act, 1934 (RBI Act), the learned Company Judge vide order dated 15.2.2015 was satisfied that a case on all the four grounds of Section 45MC-1 of the RBI Act is made out against the appellant No.1-Company and passed a detailed order. Paras 73 to 76 of the order read as under:-
"73. In view of aforesaid, a case for advertising the petition in accordance with Rule 24 of the Companies (Court) Rules, 1959 is made out. Hence, petitioner RBI is directed to advertise the petition in accordance with Rule 24 of the Companies (Court) Rules, 1959. The notice of the petition be advertised as per rules in two newspapers namely 'Hindustan Times' in English and in "Hindustan' in Hindi in their Lucknow editions. The petition shall also be published in the official gazette of the State fixing 02.04.2019 as the next date of hearing of the petition. The petitioner shall also file an affidavit of service in compliance of the aforesaid directions by the next date fixed.
74. Looking into the aforesaid facts and circumstances of the case, to preserve the assets of the company, the Official Liquidator attached to this Court is appointed Liquidator provisionally of Sahara India Financial Corporation Limited (SIFCL) together with all its assets, papers, books of accounts, documents and files etc. He is directed to proceed forthwith and take charge of all properties and effects of the company and its management. SIFCL and officers of SIFCL/all persons concerned are restrained from operating any bank account of SIFCL and its funds without leave of this Court till Official Liquidator takes charge. SIFCL is directed to fully co-operate with the Official Liquidator in smooth and immediate handover, as directed above.
75. List this case on 02.04.2019.
76. A copy of this order shall be supplied by office immediately to the Official Liquidator of this Court as well as the Senior Registrar of this Court without any costs."
3. The appellant-Company aggrieved by the aforesaid order has filed this Company Appeal/Special Appeal under Section 483 of the Companies Act, 1956 read with Chapter VIII Rule 5 of Allahabad High Court Rules, 1952 on 25.2.2019.
4. On 6.3.2019, this Court passed an order that all the parties shall maintain status quo as it existed on that day. On 8.3.2019, while extending the aforesaid order, it directed that the appellants shall not alienate anything within their domain and not create any third party rights and respondents will not proceed any further in the matter.
5. A preliminary objection has been raised regarding maintainability of the appeal on behalf of respondent No.1/Reserve Bank of India on the ground that the petition for winding-up had been instituted by the Reserve Bank of India under the power conferred under Section 45-MC (1) of the RBI Act. Institution of winding-up procedure provided in Section 45-MC (1) of the RBI Act has been incorporated by an amendment in the said Act vide amendment No.55 of 1963 inserted w.e.f. 01.12.1964. The proceedings contemplate under Section 45-MC (4) do not include the provision of appeal. The Company Appeal filed by the appellants is not maintainable and is liable to be dismissed.
6. The second preliminary objection is that the appeal has been filed by the company and its whole-time Director Satish Kumar Singh along with an
