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Each And All Proceedings Under Companies Act 1956 Stands Transferred To NCLT

"In case of inconsistency, new act will override older act"

In Prasanta Kumar Mitra vs India Steam Laundry (P) Ltd., appeal was filed before the divisional bench of the Calcutta High Court against order that the High court has lost jurisdiction from 15th December 2016 to entertain all proceedings under Companies Act, 1956 and the same stood transferred to the National Company Law Tribunal.

The Division bench comprising of Chief Justice Jyotirmay Bhattacharya and Justice Shekhar B. Saraf, upholding the single bench order, held as follows:
      
1) The jurisdiction of the High Court in company matters being a special jurisdiction conferred by the 1956 Act, and not being a civil jurisdiction under the Code of Civil Procedure, 1908, the same can always be ousted by the amendment of the enactment that conferred the said jurisdiction. Hence, no express repealing is required and the same can be repealed by implication

2) Change of forum is not a choice of parties, but is the choice of the legislature. The parties cannot contend that they have a vested right to continue in the forum the lis was initiated. The legislature can always change the forum. Forum is a matter of procedure and change of the same does not result in change of substantive rights of parties

3) The term ‘including’ in Section 434(1)(c) of the 2013 Act is extensive and expansive and not restrictive in nature. Accordingly, Section 434(1)(c) of the 2013 Act that states “all proceedings under the Companies Act 2013 including proceedings relating to....” would include all matters, without any exception, pending before the District Courts and High Court and all such matters would have to be transferred to the NCLT.

4) The moment a new enactment comes into the statutory books, dealing with the same subject matter and specifically dealing with the same issue, and the transitional provision becomes inconsistent with the new enactment, the transitional provision has to go due to repugnancy. As held in (c) above, Section 434(1)(c) deals with all proceedings under the 1956 Act. Therefore, there is a clear inconsistency between the said provision and Section 68 of the Amendment Act, 1988. Consequentially, since the transitional provision is inconsistent with the new provision, it is impliedly repealed.

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