Case Laws Companies Act The Brihan Maharashtra Sugar Syndicate Vs Janardan Ramchandra Kulkarni

PETITIONER:
THE BRIHAN MAHARASHTRA SUGAR SYNDICATE LTD.

Vs.

RESPONDENT:
JANARDAN RAMCHANDRA KULKARNI AND OTHERS

DATE OF JUDGMENT:
22/02/1960

BENCH:
SARKAR, A.K.
BENCH:
SARKAR, A.K.
DAS, S.K.
HIDAYATULLAH, M.

CITATION:
1960 AIR 794 1960 SCR (3) 85
CITATOR INFO :
R 1992 SC 180 (3)
ACT:
Company Law-Proceedings Pending under the repealcd Act-If
and when could be continued-Indian Companies Act, 1913. (VII
of 1913) s. 153-C-Companies Act, 1956, (1 of 956) ss. 10 and
647.

HEADNOTE:

The respondent had made an application under s. 53-C Of the
Companies Act, 1913, with an alternative prayer for winding
up against the appellant company, to the District judge,
Poona, who had been authorised under the Act to exercise
jurisdiction. While the application was pending the
Companies Act, 1913, was repealed by the Companies Act,
1956. The appellant company thereupon applied to the
District judge to dismiss the application on the ground that
he had ceased to have any jurisdiction to deal with the
application on the repeal of the Companies Act Of 1913.
Held, that s. 6 of the General Clauses Act preserved the
jurisdiction of the District judge to deal with the
application under S. 153-C Of the Indian Companies Act Of
1913, notwithstanding the repeal of that Act.
Section 647 of the Companies Act, 1956 did not indicate any
intention to affect the rights under the Indian Companies
Act of 19I3, for s. 658 of the Companies Act of 1956 made s.
6 of the General Clauses Act applicable notwithstanding
anything contained in s. 647 of that Act.
86
Section 24 of the General Clauses Act does not put an end to
any notification. It does not therefore cancel the
notification issued under the Indian Companies Act of I9I3
in so far as that notification empowered the District judge
to exercise jurisdiction under s. 153-C of the Indian
Companies Act of I9I3 even though under s. 10 of the
Companies Act of 1956, a District judge can no longer be
empowered to exercise jurisdiction under (a) sections 1397
to 407 of the Companies Act, 1956, which correspond to S.
I53-C Of the Indian Companies Act, 19I3 or (b) in respect of
the winding up of a company with a paid up share capital of
not less than Rs. 1,00,000/- which the appellant company
was.

JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 513 of 1958.
Appeal by special leave from the judgment and order dated
November 20, 1957, of the Bombay High Court in First Appeal
No. 600 of 1956, arising out of the judgment and order dated
October 17, 1956, of the District Judge, Poona, in Misc.
Petition No. 2 of 1956.
H. D. Banaji, S. N. Andley, J. B. Dadachanji, Rameshwar
Nath and P. L. Vohra, for the appellant.
A. V. Viswanatha Sastri, Sorab N. Vakil, B. K. B. Naidu
and I. N. Shroff, for respondents Nos. 1 and 2.
1960. February, 22. The Judgment of the Court was
delivered by
SARKAR, J.-Respondents Nos. I to 4 are shareholders in the
company which is the appellant in this case. They made an
application against the appellant and its directors under s.
153-C of the Companies Act, 1913 before that Act was
repealed on April 1, 1956, as hereinafter mentioned, for
certain reliefs which it is not necessary to state. This
Act will be referred to as the Act of 1913. This
application had been made to the Court of the District Judge
of Poona which Court had been empowered to exercise
jurisdiction under the Act of 1913 by a notification issued
by the Government of Bombay under s. 3(1) of that Act.
Before the application could be disposed of by the District
Judge, Poona, the Act of 1913 was repealed and re-enacted on
April 1, 1956, by the Companies Act of 1956, which will be
referred to as the Act of 1956.
On or about June 28, 1956, the appellant made an application
to the District Judge of Poona for an order dismissing the
application under s. 153-C of the
87
Act of 1913 on the ground that on the repeal of that Act the
Court had ceased to have jurisdiction to deal with it. The
District Judge of Poona dismissed this application. The
appellants appeal to the High Court of Bombay against this
dismissal also failed. Hence the present appeal.
Section 644 of the Act of 1956 repeals the Act of 1913 and
certain other legislation relating to companies. Sections
645 to 657 of the Act of 1956 contain various saving
provisions. Mr. Banaji appearing for the appellant
contended that the proceeding before the District Judge of
Poona under s. 153-C of the Act of 1913 had not been saved
by any of these provisions. We do not consider it necessary
to pronounce on this question for it seems to us clear that
that proceeding can be continued in spite of the repeal of
the Act of 1913 in view of s. 6 of the General Clauses Act.
Section 658 of the Act of 1956 expressly provides that, “The
mention of particular matters in ss. 645 to 657 or in any
other provision of this Act shall not prejudice the general
application of s.6 of the General Clauses Act, 1897 (X of
1.897), with respect to the effect of repeals.” Mr. Banaji
said that s. 658 had been enacted ex abundante cautela. Be
it so. Section 6 of the General Clauses Act none the less
remains applicable with respect to the effect of the repeal
of the Act of 1913.
Section 6 of the General Clauses Act provides that where an
Act is repealed, then, unless a different intention appears,
the repeal shall not affect any right or liability acquired
or incurred under the repealed enactment or any legal
proceeding in respect of such right or liability and the
legal proceeding may be continued as, if the repealing Act
had not been passed. There is no dispute that s. 153-C of
the Act of 1913 gave certain rights to the shareholders of a
company and put the company as also its directors and manag-
ing agents under certain liabilities. The application under
that section was for enforcement of these rights and
liabilities. Section 6 of the General Clauses Act would
therefore preserve the rights and liabilities created by s.
153-C of the Act of 1913 and a continuance of the proceeding
in respect thereof would be
88
competent in spite of the repeal of the Act of 1913, unless
of course a different intention would be gathered.
Now it has been held by this Court in State of Punjab v.
Mohar Singh (1) that s. 6 applies even where the repealing
Act contains fresh legislation on the same subject but in
such a case one would have to look to the provisions of the
new Act for the purposes of determining whether they
indicate a different intention. The Act of 1956 not only
repeals the Act of 1913 but contains other fresh legislation
on the matters enacted by the Act of 1913. It was further
observed in State of Punjab v. Mohar Singh (1) that in
trying to ascertain whether there is a contrary intention in
the new legislation, ” the line of enquiry would be not
whether the new Act expressly keeps &live old rights and
liabilities but whether it manifests an intention to destroy
them.”
The question then is whether the Act of 1956 indicates that
it was intended thereby to destroy the rights created by s.
153-C of the Act of 1913. Mr. Banaji said that s. 647 of
the Act of 1956 indicates an intention to destroy the rights
created by s. 153-C of the Act of 1913. We find nothing
there to support this view. That section only says that
where the winding up of a company commences before the
commencement of the Act of 1956, the company shall be wound
up as if that Act had not been passed, but s. 555(7) of the
Act of 1956 will apply in respect of moneys paid into the
Companies Liquidation Account. All that this section does
is to make the provisions of the repealed Act applicable to
the winding up notwithstanding the repeal. The provisions
of s. 555(7) need not be referred to as they do not affect
the question. Section 647 of the Act of 1956 therefore
indicates no intention that the rights created by s. 153-C
of the Act of 1913 shall be destroyed. Nor is an argument
tenable that since by s. 647 the Act of 1956 expressly makes
the repealed Act applicable to a winding up commenced under
it, it impliedly indicates that in other matters the
repealed Act cannot be resorted to, for, in view of s. 658
of the Act of 1956,
(1) [1955] 1 S.C.R. 893
89
the mention of a particular matter in s. 647 would not
prejudice the application of s. 6 of the General Clauses
Act; in other words, nothing in s. 647 is to be understood
as indicating an intention that s. 6 of the General Clauses
Act is not to apply. On the other hand, the parties are
agreed that the provisions of s. 153-C of the Act of 1913
have been substantially re-enacted by the Act of 1956 and
this would indicate an intention not to destroy the rights
created by s. 153-C.
Mr. Banaji then drew our attention to s. 10 of the Act of
1956 and s. 24 of the General Clauses Act. Section 10 of
the Act of 1956 corresponds to s. 3 of the Act of 1913 and
deals with the jurisdiction of Courts. Under s. 10 the
Central Government may empower a District Court to exercise
jurisdiction under the Act, not being the jurisdiction
conferred among others by ss. 397 to 407 nor in respect of
the winding up of companies with a paid up share capital of
not less than Rs. 1,00,000. Sections 397 to 407 of the Act
of 1956, it is agreed, contain’ substantially the provis-
sions of s. 153-C of the Act of 1913. It has also to be
stated that the paid up capital of the appellant is more
than Rs. 1,00,000 and the application under s. 153-C of the
Act of 1913 contained a prayer in the alternative for the
winding up of the appellant. Section 24 of the General
Clauses Act provides that where any Act is repealed and re-
enacted with or without modifications, then, unless it is
otherwise expressly provided, any notification issued under
the repealed Act shall, so far as it is not inconsistent
with the provisions re-enacted, continue in force and be
deemed to have been issued under the provisions so re-
enacted unless and until it is superseded by a notification
issued under those provisions..
Mr. Banaji points out that in view of s. 10 of the Act of
1956 a District Court can no longer be empowered to deal
with an application of the kind made to the District Judge
of Poona, as that application asks for reliefs similar to
those contemplated by ss. 397 to 407 of the Act of 1956 and
also asks for the winding up of a company whose paid up
capital exceeds Rs. 1,00,000 and power to deal with such an
90
application cannot now be given to a District Court. He,
therefore, says that the notification issued under the Act
of 1913 empowering the District Judge of Poona to deal with
the application would be inconsistent in this respect with
the provisions of the Act of 1956 and could not in view of
s. 24 of the General Clauses Act be deemed to continue in
force after the repeal of the Act of 1913. Hence it is
contended that the notification has ceased to have any force
and the District Judge of Poona has no longer any jurisdic-
tion to hear the application. It is also said that this
shows that the Act of 1956 indicates that the rights
acquired under the Act of 1913 would come to an end on its
repeal.
We are unable to accept these contentions. Section 10 of
the Act of 1956 deals only with the jurisdiction of courts.
It shows that the District Courts can no longer be empowered
to deal with applications under the Act of 1956 in respect
of matters contemplated by s. 153-C of the Act of 1913.
This does not indicate that the rights created by s. 153-C
of the Act of 1913 were intended to be destroyed. As we
have earlier pointed out from State of Punjab v. Mohar Singh
(1), the contrary intention in the repealing Act must show
that the rights under the old Act were intended to be
destroyed in order to prevent the application of s. 6 of
the General Clauses Act. But it is said that s. 24 of the
General Clauses Act puts an end to the notification giving
power to the District Judge, Poona to hear the application
under s. 153-C of the Act of 1913 as that notification is
inconsistent with s. 10 of the Act of 1956 and the District
Judge cannot, therefore, continue to deal with the applica-
tion. Section 24 does not however purport to put an end to
any notification. It is not intended to terminate any
notification; all it does is to continue a notification in
force in the stated circumstances after the Act under which
it was issued, is repealed. Section 24 therefore does not
cancel the notification empowering the District Judge of
Poona to exercise jurisdiction under the Act of l9l3. It
seems to us that since under s. 6 of the General Clauses Act
the proceeding in respect of the application under s. 153-C
(1) [1955] I S.C.R. 893
91
of the Act of 1913 may be continued after the repeal of that
Act, it follows that the District Judge of Poona continues
to have jurisdiction to entertain it. If it were not so,
then s. 6 would become infructuous.
For these reasons we think that the appeal must fail and it
is therefore dismissed with costs.
Appeal dismissed.

 

 

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