Bhopinder Singh Dhillon, J. - (1.) KHOSLA Fans India (Private) Limited was ordered to be wound up by this Court. The Official Liquidator attached to this Court filed complaint against the Respondents under Sections 538, 478 read with Section 446 of the Companies Act, 1956 (hereinafter referred to as the Act) and read with Rule 9 of the Companies (Court) Rules, 1959 (hereinafter referred to as the Rules), inter alia, alleging that the Respondents being officers of the liquidated company failed to deliver to the Liquidator, as desired by him, all the moveable and immovable property of the company, which was in their custody and control, which in law they were enjoined upon to deliver after the company was ordered to be wound up. It has been alleged that the Respondents have intentionally not handed over the records and books of the company and thus have violated the provisions of Section 538 of the Act. An objection has been taken on behalf of the Respondents that this Court has no jurisdiction to try the complaint and in -fact the complaint should have been filed before the Judicial Magistrate 1st Class. This matter came up before me sitting singly and, I referred the same to a larger bench for the reasons recorded in the reference order. This is how the question whether this Court has the jurisdiction to try the complaint filed by the Official Liquidator against the Respondents has been placed before us.
(2.) WITH a view to appreciate the respective contentions raised by the learned Counsel for the parties, the relevant provisions of the Act may be referred to Section 2(11) of the Act as follows: 2(11) "the Court" means, - - (a) With respect to any matter relating to a company (other than any offence against this Act), the Court having jurisdiction under this Act with respect to that matter relating to that company, as provided in Section 10; (b) with respect to any offence against this Act, the Court of a Magistrate of the First Class or, as the case may be, a Presidency Magistrate, having jurisdiction to try such offence; Section 10 of the Act reads as under: - - 10(1) Jurisdiction of Courts. The Court having jurisdiction under this Act shall be - - (a) the High Court having jurisdiction in relation to the place at which the registered office of the company concerned is situate, except to the extent to which jurisdiction has been conferred ion any District Court or District Courts subordinate to that High Court in pursuance of Sub -section (2), and (b) where jurisdiction has been so conferred, the District Court in regard to matters falling within the scope of the jurisdiction conferred in respect of companies having their registered offices in the district. (2) The Central Government may, by notification in the Official Gazette and subject to such restrictions, limitations and conditions as it thinks fit, empower any District Court to exercise all or any of the jurisdiction conferred by this Act upon the Court, not being the jurisdiction conferred - - (a) in respect of companies generally, by Sections 237, 391, 394, 395 and 297 to 407, both inclusive; (b) in respect of companies with a paid -up share capital of not less than one lakh of rupees, by Part VII (Sections 425 to 560) and the other provisions of this Act relating to the winding up of companies. (3) For the purposes of jurisdiction to wind up companies, the expression "registered office" means the place which has longest been the registered office of the company during the six months immediately preceding the presentation of the petition for winding up. Section 446 of the Act is as follows: Suits stayed on winding up order. 446(1) When a winding up order has been made or the Official Liquidator has been appointed as provisional liquidator, no suit or other legal proceeding shall be commenced, or if pending at the date of the winding up order, shall be proceeded with against the company, except by leave of the Court and subject to such terms as the Court may impose. (2) The Court which is winding up the company shall, notwithstanding anything contained in any other law for the time being in force, have jurisdiction to entertain, or dispose of - - (a) any suit or proceeding by or against the company; (b) any claim made by or against the company (including claims by or against any of its branches in India); (c) any application made under Section 391 by or in respect of the company; (d) any question of priorities or any other question whatsoever, whether of law or ,fact, which may relate to or arise in course of the winding up of the company; whether such suit or proceeding has been instituted or is instituted or such claim or question has arisen or arises or such application has been made or is made before or after the order for the winding up of the company, or before or after the commencement of the Companies (Amendment) Act, 1950. (3) Any suit or proceeding by or against the company which is pending in any Court other than that in which the winding up of the company is proceeding may, notwithstanding anything contained in any other law for the time being in force, be transferred to and disposed of - -by that Court. (4) Nothing in Sub -section (1) or Sub -section (3) shall apply to any proceeding pending in appeal before the Supreme Court or a High Court. The relevant portion of Section 454(1) is reproduced hereunder: 454(1) * * * * *. (5A) The Court by which the winding up order is made or the provisional liquidator is appointed, may take cognizance of an offence under Sub -section (5) upon receiving a complaint of facts constituting such an offence and trying the offence itself in accordance with the procedure laid down in the Code of Criminal Procedure, 1893, for the trial of summons cases by magistrates. Reference may also be made to the provisions of Sections 162, 165, 210, 293A, 299, 300 to 304 of the Act, wherein provisions have been made for prosecuting the company and its office bearers for violation enumerated in the said sections. It may be observed that complaint for prosecuting the company or its office bearers for violation of the above -mentioned sections has to be filed by the Registrar of Companies. There are certain other offences as provided in Sections 538, 539, 540, 541, 542, 543 and 545, which offences are supposed to have been committed during the pendency or after the finalisation of the winding up proceedings before the High Court and the prosecution for commission of said offences has to be at the instance of the Official Liquidator appointed by the High Court.
(3.) IT has been vehemently contended by Mr. Narang, the learned Counsel for the Official Liquidator, that the jurisdiction vested in this Court under the provisions of Section 446(2) of the Act is wide enough to exercise jurisdiction to entertain or dispose of any suit or proceeding by or against the company. It has been contended that the words "any suit or proceeding by or against the company" are wide enough to include the criminal proceedings launched by way of complaint at the instance of the Official Liquidator. On the other hand, it has been contended by Mr. Bhagirath Dass, learned Counsel for the Respondents that the provisions of Section 446(2) of the Act, do not vest any special jurisdiction in this Court to entertain or dispose of complaints which are filed for the violation of the offences committed under the Act. It may be observed that for deciding the question in issue, we have to give meaning to all the relevant provisions of the Act, including Sections 2(11), 10, 446 and 454 (5A) of the Act. The said provisions have to be interpreted keeping in view the scheme of the Act and the main object for which the Act was enacted. It is no doubt true that with respect to any matter relating to a company, other than any offence against the Act, jurisdiction under the Act has been vested in this Court under Section 10 of the Act, whereas jurisdiction with respect to any offence against the Act has been vested in the Magistrate 1st Class, but the fact remains that the provision of Section 446 is a special provision, which has vested the High Court with jurisdiction to entertain or dispose of any suit or proceedings by or against the company. The prosecution sought to be launched by the Official Liquidator on behalf of the company is certainly a proceeding by the company against the acts of the office bearers. It has been vehemently contended by Mr. Bhagirath Dass, learned Counsel for the Respondents, that "any proceeding" would not include criminal proceedings and for this he relies on a Full Bench decision of the Lahore High Court in Smt. Shukantla v. Peoples Bank of Northern India Ltd. in liquidation through Bhagwati Shanker Official Liquidator and Anr. : A.I.R. 1941 Lah 392. This judgment, in our opinion, is not much help for determining the present question. In that case, the Full Bench held that the expression "legal proceeding" used in Section 171 of 19(1) Act which provision is analogous to the provisions of Section 446 of the Act, means proceeding in the Court of first instance, analogous to a suit, initiated by means of a petition similar to a plaint. It was held that the said proceeding does not include proceedings taken in the course of the suit, nor proceedings arising from the suit and continued in a higher court, like an appeal from an interlocutory or final order passed in the suit. It would thus be seen that unless the question whether 'any proceeding' would include the criminal proceedings also, was not examined at all. The Federal Court in Governor -General in Council v. Shiromani Sugar Mills Ltd., 1946 R.C. 16, while disagreeing with the observations of the Full Bench of the Lahore High Court in Smt. Shukantla's case (supra) observed that the expression "other legal proceedings" under Section 171 of the Old Act, need not and, therefore, should not be confined to original proceedings in a Court of first instance analogous to a suit, initiated by means of a petition similar to a plaint.;