Companies Act, 1956 — Sections 391, 392, 430, 433, 446, 529, 529-A & 530 —

June 24th, 2013

Companies Act, 1956 — Sections 391, 392, 430, 433, 446, 529, 529-A & 530 — Winding-up — Petition by RBI u/s 45-MC of RBI Act — Sanction of rehabilitation scheme, permissibility — Held, a scheme u/s 391/392 is maintainable and can be considered by company court even in winding-up petition filed by RBI u/s 45-MC of RBI Act, but such a scheme cannot be sanctioned if it is in violation of any statutory provisions including provisions of Chapter IIIB of RBI Act — Reserve Bank of India Act, 1934 — Sections 45-MC, 45-MB, 45-QA, 58-B & 58-C.

Miheer H Mafatlal v. Mafatlal Industries Limited, (1997) 1 SCC 579, Relied on.

HELD: Although an application for sanction of a scheme could be made under Section 391 of the Companies Act, 1956 even during the pendency of a winding up petition filed by the RBI under Section 45MC of the RBI Act, the terms of the scheme cannot violate or contravene any of the provisions of law including the provisions of Chapter III-B of the RBI Act, and, if the scheme contains any term or condition which is in derogation of any statutory provision, the same cannot be sanctioned. Furthermore, it is a part of public policy itself that statutory provisions are to be followed and are not to be disregarded or contravened. Therefore, a scheme which ignores or side-steps statutory provisions would clearly be opposed to public policy.

Therefore, the answer to the first question is that while a scheme under Sections 391/392 of the Companies Act could be considered by the company court even during the pendency of the winding up petition filed by RBI under Section 45MMC of the RBI Act, such a scheme cannot be sanctioned if it is in violation of any of the statutory provisions including the provisions of Chapter III-B of RBI Act.

Reserve Bank of India v. CRB Capital Markets Ltd.[DB], Co. App. 8/2006, 9/2006, 15/2006, & 18/2006(21/11/2012), 2012(195) DLT 204 [Badar Durrez Ahmed, J.: Veena Birbal, J.]

Entry Filed under: Commercial Laws

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