M.K. Shrawat, Member - (1.) Petition under consideration was filed on 16.09.2016 under the provisions of Sec. 14 of Companies Act, 2013 (herein below referred as "the Act"). The Company was incorporated on 05.03.2001. At the outset, it is worth to reproduce the relevant portion of the Section as under:-- JUDGEMENT_17_LAWS(NCLT)1_2017_1.html "Alteration of Articles. 14.(1) Subject to the provisions of this Act and the conditions contained in its memorandum, if any, a company may, by a special resolution, alter its articles including alterations having the effect of conversion of-- (a) a private company into a public company; or (b) a public company into a private company: Provided that ** ** ** Provided further that any alteration having the effect of conversion of a public company into a private company shall not take effect except with the approval of the Tribunal which shall make such order as it may deem fit. (2) Every alteration of the articles registered under sub-section (2) shall, subject to the provisions of this Act, be valid as if it were originally in the articles." It is important to clarify that the transition period of Companies Act, 1956 into Companies Act, 2013 was fairly large; hence, in the interregnum, certain arrangements were made by the Ministry of Corporate Affairs, and one of such arrangements was in respect of the provisions of Section 14 of Companies Act, 2013. In this regard, during the hearing of this C.P., a notification dated 11.06.2014 is placed on record; relevant portion extracted below:--
(2.) By issuance of the Notification it was made clear that the corresponding provisions of Companies Act, 1956 shall remain in force till corresponding provisions of Companies Act, 2013 are notified. As a result, the impact of this Notification was that after the MCA Notification dated 01.06.2016 (to be discussed hereinabove), the applicability of the old provisions along with the attached rules got suspended. To proceed with the matter, it is requisite to hold that Rule 33 of the Companies (Incorporation) Rules, 2014, which had prescribed that for effecting the conversion of a Private Company into a Public Company was to be approved by the competent authority i.e. Central Government; had become redundant.
(3.) My reason to hold Rule 33 as redundant is twofold: (a) First is that Section 14(2) of the Act 2013 vide an official Gazette of India, Extraordinary Part II dated 01.06.2016 SO 1934(E) in exercise of the powers conferred the Central Government has appointed/declared the date 01.06.2016, as the date on which certain provisions of the Act came into force, and among the long list of several sections, the Second proviso to sub-section (1) of section 14 and sub-section (2) of section 14 were included. As a result, the powers conferred vide section 14(2) of the Act to the Tribunal (NCLT) to pass an appropriate order in connection of proposed conversion had superseded the old provisions. Therefore, the operation of Rule 33 of the Companies (Incorporation) Rules, 2014 shall be limited to give effect of the order of NCLT by the Registrar within Fifteen days on receipt. (b) Second reason to proceed with the matter is that once the provision of Section 14(2) (now stood notified supra) has enshrined power to NCLT; hence, the Statute prevails over the Rules. There are no two opinions in respect of this accepted position of interpretation of statute.;