P.N.SHINGHAL, J. - (1.) THIS petition for the winding up of the Maha Lakshmi Beawar hereinafter referred to as 'the. Company'' public company limited by shares, has been filed on September 30 1966, alleging that the Company is 'unable to pay its debts and that on account of mismanagement of its affairs it is just and equitable that it should be wound up. An order was made by this Court on October 25, 1966 for the issue of notices and the advertisement of the petition, The Company filed a reply disputing the allegations regarding its financial position and mismanagement. A reply was also filed on behalf of the Authorited Controller in which it was pointed out, inter alia, that the 'Central Government had taken over the management of the Company under Section 18A of the Industries Development and Regulation Act, 1951, hereinafter referred to as 'The Act', and had appointed him as the Authorized Controller by notification (Ex.A 1) No. F. 1(24) Tax (B)/65 dated January 9, 1967 for a period of 5 years. It was also pointed out that the Government of Rajasthan had issued notification (Ex, A. 2) No. F. 1 (5) IND (A)/67 dated January 10, 1967 under the Rajasthan Relief Undertaking (Special Provision) Act, 1961 declaring the Company as a relief undertaking for a period of one year from January 10, 1967 and directing that no legal proceeding shall be instituted or, commenced or, if pending, shall be proceeded with against the Company for the period during which it remained a relief undertaking It was therefore urged that the petition for the winding up of the Company could not be proceeded with and may be dismissed. Notification Ex. A. 2 was published in the State Gazette on January 16, 1967 and it is not disputed that the period of the relief granted by the Government of Rajasthan has been extended by two subsequent notifications dated December 13, 1967 and December 17, 1968. The petitioner has filed replies challenging the validity and effectiveness of the notifications.
(2.) I am, at this stage, not required to consider the validity of the notifications issued by the Government of Rajasthan an under the provisions of the Rajasthan Relief Undertaking (Special Provision) Act, 1961 for it has f been argued by Mr. Bhargavn, learned Counsel for the Company, that the petition cannot be proceeded with after the issue of the aforesaid notification Ex. 1 under Section 18A, of the Act because of the provisions of Section 18E(1)(c). The learned Counsel has supported his argument by reference to Bharat General and Textile Industries Ltd. v. Muir Mills Co. Ltd. and Ors. 1968 (38) Comp. Cas. 53, On the other hand, Mr Gupta learned Counsel for the petitioner, has argued that as the winding up petition has already been filed before the issue of the notification under Section 18A of the Act, Section 18E(1)(c). could not bar the maintainability of that petition which had to be decided on the merits. The learned Counsel has tried to support his argument by reference to a judgment of the Madhya Pradesh High Court In Re: Swadeshi Cotton and Flour Mils Limited, Indore (Company petition No. 1 of 1966) decided on April 4, 1966 The learned Counsel has also argued it that any other view of the matter will give rise to a conflict between the provisions of the Indian Companies Act, 1956 and the Act. He has also argued that as the petitioner had a right to institute the petition at the time when it was filed, the right to proceed with it could not be taken away by any subsequent notification. For this submission the learned Counsel has made a reference to Garikapati Veerya v. N. Subbiah Choudhry and Ors. : [1957]1SCR488 . In examining the controversy it may be stated that it is not in dispute that the petitioner has not obtained the consent of the Central Government under Section 18E(1)(c) of the Act, The short point for decision therefore is whether by virtue of notification/order Ex. A. 1 the petition for the winding of the Company cannot be maintained and must be dismissed under Section 18E(1)(c)of the Act.
(3.) THE relevant provision of Sub -section (1) of section 18E of the Act, reads as follows: 18E. Application of Act 7 of 1913: (1) Where the management of an industrial undertaking, being a company as defined in the Indian Companies Act, 1913, is taken over by the Central Government, then, notwithstanding anything contained in the said Act or in the memorandum or articles of association of such undertaking: (a).... (b).... (c) no proceeding for the winding up of such undertaking or for the appointment of a receiver in respect thereof shall lie in any Court except with the consent of the Central Government. It will thus appear that the word 'Proceeding' has been used in Clause (a) and not be word 'Petition' and while it was has been stated, inter alia, that no proceeding for the winding up on of an industrial undertaking taken over by the Central Government shall lie in any court, it has not expressly been stated that if the proceeding is already pending on the date of the notified order issued under Section 18A it shall not be proceeded with without the consent of the Central Government. This is why it has been argued by Mr. Gupta that as the winding up petition had already been filed before the issue of the notified order under Section 18A it cannot fall within the mischief of Section 18E(1)(c) and must be proceeded with and decided according to law,;