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Punjab National Bank and Etc. Vs. Official Liquidator and Etc. - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtRajasthan High Court
Decided On
Case NumberCompany Appln. Nos. 19 of 1981, 10 of 1982 and 2 and 3 of 1983
Judge
Reported inAIR1986Raj40; 1985(1)WLN484
ActsCoking Coal Mines (Nationalisation) Act, 1972 - Sections 3(1) and 28; Coal Mines (Nationalisation) Act, 1973 - Sections 28; Companies Act, 1956 - Sections 446, 446(2) and 446 (3)
AppellantPunjab National Bank and Etc.
RespondentOfficial Liquidator and Etc.
Appellant Advocate N.K. Jain, Adv. in C.A. No. 19/1981,; U.N. Bhandari and;
Respondent Advocate N.K. Jain, Adv. in C.A. No. 3/1983 and; S.R. Surana, Adv.
DispositionApplication allowed
Excerpt:
companies act, 1956 - sections 546 & 466 and coking coal mines (nationalization) act, 1972--section 28 and coal mines (nationalization) act, 1973--section 28--commissioner of payment cannot be restrained under section 426 from discharging his functions--commissioner to send balance amount & statement of accounts after settling claims--held, notices under section 466 cannot be sustained and must be withdrawn.;no direction can be issued in the present case under section 446 of the companies act restraining the commissioner of payments from discharging the functions assigned to him under the provision of the coking coal mines (nationalization) act, 1972 and the coal mines (nationalization) act, 1973 and that the only directing that can be issued is that after claims are settled by..........the companies act. one such notice was issued on 30th aug. 1979 to the commissioner of payments (coal mines) calcutta and the commissioner of payment (coking coal mines) p.o. seraidhela, distt. dhanbad by the said notice the aforesaid commissioners of payments were requested to refrain from settlement and payment of the claims of the creditors/contributors of the company without obtaining the leave of this court under the provisions of section 446 of the companies act.3. feeling aggrieved by the aforesaid notices the punjab national bank, who is a creditor of the company, has filed the application (s. b. company applications no. 19/1981) wherein it has been prayed that the notice dt. 30th aug. 1979 issued by the official liquidator may be withdrawn and the said applicant be allowed to.....
Judgment:
ORDER

S.C. Agrawal, J.

1. All these four applications raised a common question and, therefore, they are being disposed of by this common order.

2. M/s. Sahu Minerals and Properties Ltd. (hereinafter referred to as 'the Company') is a company incorporated under the provisions of the Companies Act. The Registrar of Companies of Rajasthan, Jaipur moved a petition for winding up of the Company under Section 439(5) read with Clause (c) of Section 433 of the Companies Act 1956 (hereinafter referred to as the Companies Act). In the said petition this Court passed an order dt. 8th Aug. 1978 directing that the Company be wound up under the provision of the Companies Act and the Official Liquidator was appointed as the Liquidator of the Company. After the aforesaid order has been passed, the Official Liquidator issued notices under Section 446 of the Companies Act. One such notice was issued on 30th Aug. 1979 to the Commissioner of Payments (Coal Mines) Calcutta and the Commissioner of Payment (Coking Coal Mines) P.O. Seraidhela, Distt. Dhanbad By the said notice the aforesaid Commissioners of Payments were requested to refrain from settlement and payment of the claims of the creditors/contributors of the Company without obtaining the leave of this Court under the provisions of Section 446 of the Companies Act.

3. Feeling aggrieved by the aforesaid notices the Punjab National Bank, who is a creditor of the Company, has filed the application (S. B. Company applications No. 19/1981) wherein it has been prayed that the notice dt. 30th Aug. 1979 issued by the Official Liquidator may be withdrawn and the said applicant be allowed to receive the payment of claim as settled by Assistant Commissioner of Payments under the Coking Coal Mines (Nationalisation) Act, 1972, Dhanbad. In this application it has been submitted that the Collieries of the Companies were nationalised under the provisions of the Coking Coal Mines (Nationalisation) Act, 1972, and the Coal Mines (Nationalisation) Act 1973 and that thereafter on 23rd Nov. 1973 the said applicant lodged a claim for Rs. 6,35,536.81p. before Commissioner of Payments, Dhanbad, and that the said claim has been allowed by the Assistant Commissioner of Payments, Dhanbad for Rs. 5,52,422.54 p. by his order dt. 20-8-1979.

4. S. B. Company Misc. Application No. 10/82 has been submitted by S.L. Bagda who was an employee of the Company. The said applicant has stated that he has claimed Rs. 27,592.67 p. on account of dues of salary, leave wages etc. before the Commissioner of Payments and the Assistant Commissioner of Payments, Asansol by his order dt. 30-10-1976 has allowed the claim of the said applicant in full. In the application, the said applicant has prayed that a suitable direction may be given to the Official Liquidator to withdraw the notice issued by him and the said applicant be allowed to receive payment of his claim as settled by the Assistant Commissioner of Payments, Asansol.

5. Misc. Application No. 2/83 has been submitted by the Commissioner of Payments under the Coal Mines (Nationalisation) Act, 1973. In the said application it has been prayed that the order of this Court dt. 8th August, 1978 may be modified so as to enable him to dispose of pending claim cases and to make payments to the successful claimants and to the owner/receiver in accordance with the procedure laid down under the Coal Mines (Nationalisation) Act. 1973.

6. Misc. Application No. 3/83 has been submitted by the Commissioner of Payments appointed under the Coking Coal Mines (Nationalisation) Act, 1972, and in the Misc. Application No. 2/83.

7. I have heard Shri N.K. Jain, Shri U.N. Bhandari and Shri B.P. Gupta, learned Counsel for applicants in these applications and Shri S.R. Surana, the learned counsel for the Official Liquidator.

8. The learned Counsel for the applicants have submitted that the Company is a 'Mining Company' both under the provisions of the Coking Coal Mines (Nationalisation) Act, 1972 as well as Coal Mines (Nationalisation) Act, 1973 and that both these Acts contain provision for appointment of a Commissioner of Payments who has been empowered to entertain claims of creditors of a mining company and to settle such claims and to make payments to the claimants out of the amount payable to the mining company under (sic) the learned counsel for the applicants (sic) that Section 28 of the Coking Coal Mines (Nationalisation) Act. 1972 as well as Section 28 of the Coal Mines (Nationalisation) Act, 1973 give overriding effect to the provisions of both the Acts over all other laws including the provisions of Companies Act and, therefore, no proceedings under Section 446 of the Companies Act can be initiated against the Commissioner of Payments functioning under the provisions of these Acts and no direction can be given under Section 446 of the Companies Act restraining the Commissioner of Payments from discharging his functions assigned to him under the provisions of both these enactments. It has also been urged by learned counsel for the applicant that in view of the provisions contained in Section 32 in both these Acts no proceedings for winding up of a mining company can be instituted except with previous sanction of the Central Government and that in the present case no such sanction of the Central Government under Section 32 of the Coking Coal Mines (Nationalisation) Act, 1972 and Section 32 of the Coal Mines (Nationalisation) Act, 1973 was obtained for moving the petition for winding up and, therefore, the order passed by this Court with regard to the winding up of the Company on 8th Aug. 1978 is not a valid order and for that reason also no proceedings can be initiated by the Official Liquidator under Section 446 of the Companies Act.

9. Shri Surana, the learned Counsel for the Official Liquidator, has, however, submitted that in spite of the provisions contained in the Coking Coal Mines (Nationalisation) Act, 1972 and the Coal Mines (Nationalisation) Act, 1973, it is permissible to the Official Liquidator to proceed under Section 446 of the Companies Act and the notices that have been issued by the Official Liquidator to the Commissioner of Payments under both the aforesaid Acts are valid notices. In this connection the submission of Shri Surana was that the Company cannot be regarded as a mining Company in as much as apart from Coking Coal Mines and the Coal Mines which were nationalised under the provisions of the Coking Coal Mines (Nationalisation) Act 1972 and the Coal Mines (Nationalisation) Act, 1973 the Company has other assets also.

10. The expression 'Mining Company' has been defined in Section 3(1) of the Coking Coal Mines (Nationalisation) Act, 1972 to mean a company owning a coking coal mine. The aforesaid definition implies that a company would be a mining company under the aforesaid Act if one of the assets of the company is a coking coal mine and it is not necessary that a company is to be regarded as a mining Company under the aforesaid Act only if all its assets are Coking Coal Mines. A perusal of the first Schedule to the said Act shows that the name of the Company is mentioned at Sl. Nos. 98 and 99 as the owner of Meheshpur (J-24) and Ekra Khas (J-76) Mines. The Company is thus a mining company under provisions of the Coking Coal Mines (Nationalisation) Act, 1972.

In the Coal Mines (Nationalisation) Act, 1973 the expression 'mining company' has been defined in Section 2(j) to mean a company owning a coal mine.

11. At Sl. No. 439 in the schedule to the said Act, the name of the company has been mentioned as owner of 'Chapuri Khas' Mine. This would show that the company is a mining company under the provisions of Coal Mines (Nationalisation) Act 1973.

12. A perusal of the provisions of the Coking Coal Mines (Nationalisation) Act, 1972 and the Coal Mines (Nationalisation) Act, 1973 shows that both these Acts provide for the appointment of Commissioner of Payments for the purpose of disbursement of the amount payable to the owner of Coking Coal Minesor Coal Mines nationalised under these Acts, and these Commissioners of Payments have been empowered to entertain claims against the owner of the Coking Coal Mine or the Coal mine and to determine the said claims and to make payments out of the amount payable as compensation to the owner of the Coking Coal Mines or Coal Mines as the case may be. Section 28, which is identical in both the enactments provides as under : --

'The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act or in any decree or order of any Court tribunal or other authority.'

13. By the aforesaid provision Parliament has indicated that the provisions of the Coking Coal Mines (Nationalisation) Act 1972 and the Coal Mines (Nationalisation) Act, 1973 shall have overriding effect over other laws including the Companies Act. The intention of Parliament in enacting this provision appears to be that in respect of matters for which provision has been made in the Coking Coal Mines (Nationalisation) Act, 1972 and Coal Mines (Nationalisation) Act, 1973, the said provisions should be given effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. Since in both the aforesaid enactments specific provision has been made for the settlement of the Claims of creditors of a mining company and for the payment of the amount of claims thus settled to the claimants out of the amount payable to the mining company for the acquisition of its mine, the said provisions with regard to the determination of the claim and payment thereof must prevail over the provision contained in the Companies Act for the settlement of the claims of creditors. In this context it may be mentioned that Sub-sections (2) and (3) of Section 446 of the Companies Act also contain a non obstante clause which gives overriding effect to the provisions contained in those sub-sections over the provisions of any other law for the time being in force. Thus I find that there is apparent conflict between Section 28 of the Coking Coal Mines (Nationalisation) Act, 1972 and the Coal Mines (Nationalisation) Act, 1973 on the one hand and Sub-sections (2) and (31 of Section 446 of the Companies Act on the other hand. This conflict can be resolved by applying the principle that the operation of prior general law may be curtailed by a later particular law. Companies Act is a general law enacted in 1956 and Nationalisation Acts are special laws enacted much later in 1972 and 1973. The non obstante clause contained in Sub-sections (2) and (3) of Section 446 of the Companies Act must, therefore, be so construed as to be curtailed in its operation by the non obstante clause contained in Section 28 of the Nationalisation Act. This would mean that in respect of the Coking Coal Mines (Nationalisation) Act, 1972, and the Coal Mines (Nationalisation) Act, 1973 no proceedings can be taken under Section 466 of the Companies Act so as to interfere with the performance of the functions assigned to the Commissioner of Payments under these Acts. In such a case, however, the Commissioner of Payments can be directed to send the statement of account showing the amount payable to the mining company for the mines acquired, the amount determined as payable to the claimants in respect of the claims submit by them and the amount paid to the claimants out of the amount found payable to the mining company. The Commissioner of Payments can also be directed to pay to the Official Liquidator the balance amount tying with the Commissioner of Payments after satisfying the claims of the claimants.

14. In my opinion, therefore, no direction can be issued in the present case under Section 446 of the Companies Act restraining the Commissioner of Payments from discharging the functions assigned to him under the provision of the Coking Coal Mines (Nationalisation) Act, 1972 and the Coal Mines (Nationalisation) Act, 1973, and that the only direction that can be issued is that after claims are settled by the Commissioner under the provisions of these Acts and after the aforesaid claims have been paid by the Commissioner of Payments out of the amount payable to the Company the balance amount, if any, may be remitted by the Commissioner of Payment to the Official Liquidator along with the Statement of Account and in case, the amount payable to the Company is found insufficient to meet the claims of the claimants, the Commissioner of Payment may send the statement of account showing the amount payable to the Company the amount claimed by the claimants, the amount of claims settled as payable to the claimants, and the amount paid by him to the claimants out of the amount payable to the company. In these circumstances, the notices that were issued by the Official Liquidator under Section 466 of the Companies Act to the Commissioner of Payments under both the Nationalisation Acts cannot be upheld, must be withdrawn but the appropriate directions as indicated above can be given to the Commissioner of Payments.

15. Since I am of the opinion, that the provisions of Section 446 of the Companies Act cannot be invoked to restrain the Commissioner of Payments from exercising the powers conferred upon him under the Coking Coal Mines (Nationalisation) Act, 1972 and the Coal Mines (Nationalisation) Act, 1973, and for that reason the notices issued by the Official Liquidator to the Commissioner of Payments under the aforesaid Acts must be withdrawn. I do not consider it necessary to deal with the submission of the learned counsel for the applicants that the order passed by this Court on 8th Aug. 1978 for the winding up of the company is liable to be set aside for the reason that the petition for winding up of the Company was not maintainable as the Registrar of Companies had not obtained the prior sanction of the Central Government under Section 32 of the Coking Coal Mines (Nationalisation) Act, 1972 and Section 32 of the Coal Mines (Nationalisation) Act, 1973 for moving such application.

16. In the result all the applications are allowed and the notices dt. 30th Aug. 1979 issued by the Official Liquidator to the Commissioner of Payments (Coking Coal Mines), Calcutta and the Commissioner of Payments (Coal Mines) P.O. Saraidhela, Dhanbad, Bihar are ordered to be withdrawn. It will be open to the aforesaid Commissioner of Payments to determine the claims submitted before them by the claimants and the creditors of the Company and to make payment of amounts settled against the aforesaid claims to the claimants out of the amount payable to the Company under the Coking Coal Mines (Nationalisation) Act, 1972 and the Coal Mines (Nationalisation) Act, 1973. After the aforesaid payments have been made to the claimants, the balance amount, if any, may be remitted by the Commissioner of Payments to the Official Liquidator. The Commissioner of Payments may also send to the Official Liquidator a statement of account showing the amount determined as payable to the company for the Mines acquired the amount claimed by the claimants, the amount determined as payable to the various claimants, the amount paid to the claimants and the balance amount, if any, being remitted. There will be no order as to costs in these applications.


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