Wednesday, 21 June 2017

Whether Registrar of BIFR can dismiss application for reference under SICA Act?

Regulation 19(5) extracted above, requires the
Registrar or the Secretary, as may be, to make an
endorsement of the date of receipt of the
Reference [Regulation 19(4)] and thereafter on
scrutiny thereof to register the same and place
before the Chairman for being referred to the
Bench. When the Regulations framed under the
statute vests in the Registrar or the Secretary of
the Board the power to “scrutinize” an application
prior to registration thereof and thereafter to
register and place the same before the Bench, we
do not see how such power of scrutiny can be
understood to be vesting in any of the said
authorities the power to adjudicate the question
as to whether a company is an industrial company
within the meaning of Section 3(e) read with 3(f)
and 3(n) of the SICA. A claim to come within the
ambit of the aforesaid provisions of the SICA i.e.
to be an industrial company, more often than not,
would be a contentious issue. In the present case,
it certainly was. The specific stand of the
respondent No. 1 company in this regard need not
detain the Court save and except to state that by
a detailed description of the manufacturing
process the respondent No. 1 company had sought to
contend that it is an industrial company. Surely,
the rejection of the above stand could have been
made only by a process of adjudication which power
and jurisdiction clearly and undoubtedly is vested
by the SICA and the Regulations framed thereunder
in a Bench of the Board and not in authorities
like the Registrar and the Secretary.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
 CIVIL APPEAL NO.3055 OF 2017
(Arising out of S.L.P.(C) No.1587 of 2015)
BANK OF NEW YORK MELLON
LONDON BRANCH 
V
ZENITH INFOTECH LIMITED.
Dated:FEBRUARY 21, 2017.
Citation: AIR 2017 SC 1735

2. At the very outset, it will be necessary to
take note of the relevant statutory enactments and
changes that have come about after hearing of the
case had been concluded. The said enactments and
the changes in the existing enactments give rise
to a somewhat altered scenario, as will be noticed
hereinafter, though essentially the core of the
question that has arisen remains substantially
unaffected.
3. The Sick Industrial Companies (Special
Provisions) Act, 1985 (hereinafter referred to as
“the SICA”) had been repealed by the SICA Repeal
Act, 2003. However, it is only by Notification
dated 25.11.2016 that the repeal has been given
effect to on and from 1.12.2016. Under Section
4(b) of the repeal Act, all proceedings before the
B.I.F.R. or the Appellate Authority, as the case
may be, stood abated and in respect of such abated
proceedings provisions have been made to enable
the company to seek a reference as per provisions
of Part VI-A of the Companies Act, 1956 within 180
days from the date of the repeal Act.
Interestingly, the provisions of Part VI-A of the
Companies Act, 1956 which, though brought about by
the Companies (Second Amendment) Act of 2002
had/have not been made effective. In fact,
effective 1.11.2016 Section 4(b) of the Repeal Act
has been amended by Section 252 of the Insolvency
and Bankruptcy Code of 2016 (hereinafter referred
to as “the Code”) and provisions have been made
therein akin to those in repealed Section 4(b)
except that reference by a company in respect of
an abated proceeding is to be made to the National
Company Law Tribunal within 180 days of the Code
coming into force. Such a reference is required to
be dealt with in accordance with the provisions of
the Code. The code has been enacted and given
effect to w.e.f. 1.12.2016. Relevant details
thereof will be noticed hereinafter.
4. At this stage, it will also be necessary to
take note of the fact that the National Company
Law Tribunal envisaged under the Companies (Second
Amendment) Act of 2002 has been authorized to
exercise and discharge its powers and functions
with effect from 1.6.2016 and, in fact, the
Tribunals with Benches throughout the country have
since been constituted and are presently
functioning.
5. Having noticed the above position, we may now
turn to the provisions of the Insolvency and
Bankruptcy Code, 2016. It is a comprehensive Code
enacted as the Preamble states, to
“consolidate and amend the laws relating
to reorganisation and insolvency
resolution of corporate persons,
partnership firms and individuals in a
time bound manner for maximisation of
value of assets of such persons, to
promote entrepreneurship, availability of
credit and balance the interests of all
the stakeholders including alteration in
the order of priority of payment of
Government dues and to establish an
Insolvency and Bankruptcy Board of India,
and for matters connected therewith or
incidental thereto”.
6. Section 3(8) defines a ‘Corporate Debtor’ to
mean “a corporate person who owes a debt to any
person.”
Section 5(1) of the Code defines “Adjudicating
Authority” to means the National Company Law
Tribunal constituted under Section 408 of the
Companies Act, 2013. The definition of “corporate
applicant” in Section 5(5) includes a “corporate
debtor.” Under Section 6, amongst others, a
“corporate debtor” who has committed a default may
file an application with the Adjudicating
Authority for initiating a corporate insolvency
resolution process. Such a process may also be
initiated by others, including a financial
creditor, against the corporate debtor in respect
of default committed by the corporate debtor.
Under Section 7 (Explanation-1), default includes
“a default in respect of a financial debt owed not
only to the applicant financial creditor but to
any other financial creditor of the corporate
debtor. Under Section 13 once the Adjudicating
Authority admits the application of the corporate
applicant [defined by Section 5(5)] filed under
Section 10, the said Authority may proceed to
declare a moratorium for the purposes referred to
in Section 14. Section 14 is in the following
terms:
“14(1) Subject to provisions of
sub-sections (2) and (3), on the
insolvency commencement date, the
Adjudicating Authority shall by
order declare moratorium for
prohibiting all of the following,
namely:—
(a) the institution of suits or
continuation of pending suits or
proceedings against the corporate
debtor including execution of any
judgment, decree or order in any
court of law, tribunal,
arbitration panel or other
authority;
(b) transferring, encumbering,
alienating or disposing of by the
corporate debtor any of its assets
or any legal right or beneficial
interest therein;
(c) any action to foreclose, recover
or enforce any security interest
created by the corporate debtor in
respect of its property including
any action under the
Securitisation and Reconstruction
of Financial Assets and
Enforcement of Security Interest
Act, 2002;Page 7
7
(d) the recovery of any property by an
owner or lessor where such
property is occupied by or in the
possession of the corporate
debtor.
(2) The supply of essential goods or
services to the corporate debtor
as may be specified shall not be
terminated or suspended or
interrupted during moratorium
period.
(3) The provisions of sub-section (1)
shall not apply to such
transactions as may be notified by
the Central Government in
consultation with any financial
sector regulator.
(4) The order of moratorium shall have
effect from the date of such order
till the completion of the
corporate insolvency resolution
process:
Provided that where at any time during
the corporate insolvency resolution
process period, if the Adjudicating
Authority approves the resolution plan
under sub-section (1) of section 31 or
passes an order for liquidation of
corporate debtor under section 33, the
moratorium shall cease to have effect
from the date of such approval or
liquidation order, as the case may
be.”
Section 16 of the Code visualizes the
appointment of an interim resolution professional
to manage the affairs of the corporate debtor.
Such appointment is to be made by the Adjudicating
Authority.
Under Section 20 of the Code, the interim
resolution professional appointed under Section 16
is to manage the operations of the corporate
debtor as a going concern and make every endeavour
to protect and preserve the value of the property.
Section 25 which enumerates the duty of the
resolution professional is in the following terms:
“25(1) It shall be the duty of the
resolution professional to preserve
and protect the assets of the
corporate debtor, including the
continued business operations of the
corporate debtor.
 (2) For the purposes of sub-section
(1), the resolution professional shall
undertake the following actions,
namely:—
(a) take immediate custody and control
of all the assets of the corporate
debtor, including the business
records of the corporate debtor;
(b) represent and act on behalf of the
corporate debtor with third
parties, exercise rights for the
benefit of the corporate debtor in
judicial, quasi-judicial or
arbitration proceedings;
(c) raise interim finances subject to
the approval of the committee of
creditors under section 28;
(d) appoint accountants, legal or
other professionals in the manner
as specified by Board;
(e) maintain an updated list of
claims;
(f) convene and attend all meetings of
the committee of creditors;
(g) prepare the information memorandum
in accordance with section 29;
(h) invite prospective lenders,
investors, and any other persons
to put forward resolution plans;
(i) present all resolution plans at
the meetings of the committee of
creditors;
(j) file application for avoidance of
transactions in accordance with
Chapter III, if any; and
(k) such other actions as may be
specified by the Board. Page 10
10
Section 30 of the Code contemplates submission
of a resolution plan and approval thereof by the
Adjudicating Authority failing which the
liquidation process of the corporate debtor as
contemplated in Chapter III of the Code would be
required to be initiated.
7. The above provisions of the Code have been
noticed in some detail and the provisions thereof,
so far as the same are material for the purposes
of the present case, have also been extracted and
highlighted. We may now proceed to examine and see
what has happened in the present case.
8. Briefly the facts relevant are as follows.
On 23.07.2013 the respondent No. 1
company-Zenith Infotech Ltd. filed a Reference
before the Board for Industrial and Financial
Reconstruction (hereinafter for short “the Board”)
under Section 15 of the SICA. The said application
was refused registration by the Registrar of thePage 11
11
Board on 12.08.2013 on the ground that respondent
No.1 company is not an industrial company within
the meaning of Section 3(e) and 3(f) of the SICA.
An appeal was filed by the respondent No. 1
company before the Secretary of the Board against
the order of Registrar which was dismissed on
13.09.2013. There was a further appeal to the
Chairman of the Board against the order of the
Secretary. Though the maintainability of the
second appeal before the Chairman of the Board
would be in serious doubt in view of the
provisions of Regulation 19(4) read with sub
Regulation 8 (1) and (2) of Regulation 19 of the
Board for Industrial and Financial Reconstruction
Regulations, 1987 (hereinafter for short “the
Regulations”) it will not be necessary to deal
with the said question in the present proceedings
except to state that the Chairman of the Board
also dismissed the second appeal filed by thePage 12
12
respondent No. 1 company by order dated
03.04.2014.
9. What would be of significance is the events
that had transpired while the matter was before
the authorities of the Board, namely, the
Secretary and Chairman of the Board. It appears
that on 30.07.2013 a petition for winding up of
the respondent No.1 company was admitted by the
High Court of Bombay and the order of admission
was affirmed by the Division Bench in appeal. The
approach to this Court also was not successful
with the Special Leave Petition filed by the
respondent No.1 company having been dismissed on
30.09.2013. Thereafter, it appears that on
13.12.2013 the High Court of Bombay passed orders
for winding up of the respondent No. 1 which was
upheld in appeal by the Division Bench of the High
Court on 23.04.2014. Though, a stay was ordered
by the High Court of its winding up order till
31.08.2014, it would appear that the High CourtPage 13
13
understood the said interim order to have been
vacated by efflux of time, in the absence of any
specific order of extension. Thereafter the
Official Liquidator came to be appointed by the
High Court on 02.09.2014.
10. The orders of the Secretary and Chairman of
the Board rejecting the application for Reference
filed by the Respondent No.1 company were
subjected to a challenge in a writ petition filed
by the respondent-company before the Delhi High
Court out of which the present proceedings have
arisen.
11. Two questions arose before the High Court of
Delhi in the writ petition.
The first was whether the dismissal of the
application for Reference by the Registrar,
Secretary and Chairman of the Board was within the
jurisdiction of the said authorities. The second
question, which was implicit if there was to be aPage 14
14
positive answer to the first, is whether in view
of the order of winding up passed by the Company
Court, and affirmed by the Division Bench of the
Bombay High Court, there is any further scope for
registration of the Reference sought for by the
respondent No. 1 company under the provisions of
the SICA if the order declining registration by
the aforesaid authorities is to be understood to
be non est.
12. The High Court, by the impugned order, took
the view that under the provisions of the SICA
read with the Regulations, the Registrar and the
other authorities like the Secretary and the
Chairman of the Board have not been conferred any
power of adjudication which would necessarily be
involved in determining the question as to whether
the respondent No.1 company is an industrial
company within the meaning of Section 3(e) and
3(f) of the SICA. Since an adjudicatory function
and role has been performed by the Registrar,Page 15
15
whose order has been affirmed by the Secretary and
the Chairman of the Board and as registration of
the Reference sought for by the respondent No. 1
company was refused on that basis the said orders
are non est in law. Regarding the second
question, the High Court of Delhi relying on the
decisions of this Court in Real Value Appliances
Ltd. Vs. Canara Bank and Others1 and Rishabh Agro
Industries Ltd. Vs. P.N.B. Capital Services Ltd.2
came to the conclusion that the winding up order
passed by the Company Court would not foreclose
the proceedings under the SICA and registration of
a Reference under Section 15 and the inquiry under
Section 16 can still be made. The question that
was agitated in the present appeal is
consequential to the above determination and
revolve around the application of Section 22 of
SICA to bar further steps in the winding up
proceeding before the High Court. The above
1 (1998) 5 SCC 554
2 (2000) 5 SCC 515Page 16
16
question would no longer survive in the context of
the provisions of the now repealed Act but would
still require an answer from the stand point of
the provisions of the Insolvency and Bankruptcy
Code in force with effect from 1.12.2016.
13. The first question, namely, the one with
regard to the power and jurisdiction of the
Registrar and Secretary to refuse registration of
the application for reference made by the
respondent company on the grounds mentioned above
may now be taken up. To answer the aforesaid
question, the following provisions of SICA may be
noticed:
 “3. Definitions.—
(1) In this Act, unless the context
otherwise requires,—
(e) “industrial company” means a
company which owns one or more
industrial undertakings;
(f) “industrial undertaking” means
any undertaking pertaining to
a scheduled industry carriedPage 17
17
on in one or more factories by
any company but does not
include-
(i) any ancillary industrial
undertaking as defined
in clause (aa) of
Section 3 of the
Industries (Development
and Regulation) Act,
1951 (65 of 1951); and
(ii) a small scale industrial
undertaking as defined
in clause (j) of the
aforesaid section 3;
(n) “scheduled industry” means any
of the industries specified
for the time being in the
First Schedule to the
Industries (Development and
Regulation) Act, 1951 (65 of
1951);
12. Constitution of Benches of Board
or Appellate Authority.—
(1) The jurisdiction, powers and
authority of the Board or the
Appellate Authority may be
exercised by Benches thereof.
(2) The Benches shall be
constituted by the Chairman
and each Bench shall consist
of not less than two Members.Page 18
18
(3) If the Members of a Bench
differ in opinion on any
point, the point shall be
decided according to the
opinion of the majority, if
there is a majority, but if
the Members are equally
divided, they shall state the
point or points on which they
differ, and make a reference
to the Chairman of the Board
or, as the case may be, the
Appellate Authority who shall
either hear the point or
points himself or refer the
case for hearing on such point
or points by one or more of
the other Members and such
point or points shall be
decided according to the
opinion of the majority of the
Members who have heard the
case including those who first
heard it.
13. Procedure of Board and Appellate
Authority.—
(1) Subject to the provisions of this
Act, the Board or, as the case may
be, the Appellate Authority, shall
have powers to regulate—
(a) the procedure and conduct of
the business;
(b) the procedure of the Benches,
including the places at whichPage 19
19
the sittings of the Benches
shall be held;
(c) the delegation to one or more
Members of such powers or
functions as the Board or, as
the case may be, the Appellate
Authority may specify.
(2) In particular and without prejudice
to the generality of the foregoing
provisions, the powers of the
Board or, as the case may be, the
Appellate Authority, shall include
the power to determine the extent
to which persons interested or
claiming to be interested in the
subject-matter of any proceeding
before it may be allowed to be
present or to be heard, either by
themselves or by their
representatives or to
cross-examine witnesses or
otherwise to take part in the
proceedings.
(3) The Board or the Appellate
Authority shall, for the purposes
of any inquiry or for any other
purpose under this Act, have the
same powers as are vested in a
civil court under the Code of
Civil Procedure, 1908 (5 of 1908)
while trying suits in respect of
the following matters, namely:—
(a) the summoning and enforcing
the attendance of any witness
and examining him on oath;Page 20
20
(b) the discovery and production
of document or other material
object producible as evidence;
(c) the reception of evidence on
affidavit;
(d) the requisitioning of any
public record from any court
or office;
(e) the issuing of any commission
for the examination of
witnesses;
(f) any other matter which may be
prescribed.
14. Proceedings before Board or
Appellate Authority to be judicial
proceedings.—
The Board or the Appellate
Authority shall be deemed to be a
civil court for the purposes of
section 195 and Chapter XXVI of
the Code of Criminal Procedure,
1973 (2 of 1974) and every
proceeding before the Board or the
Appellate Authority shall be
deemed to be a judicial proceeding
within the meaning of sections 193
and 228 and for the purposes of
section 196 of the Indian Penal
Code (45 of 1860).
15. Reference to Board.—
(1) When an industrial company has
become a sick industrial company,Page 21
21
the Board of Directors of the
company, shall, within sixty days
from the date of finalisation of
the duly audited accounts of the
company for the financial year as
at the end of which the company
has become a sick industrial
company, make a reference to the
Board for determination of the
measures which shall be adopted
with respect to the company:
Provided that ..... .....
..... “
14. In addition, Section 16 deals with the inquiry
to be made by the Board for determining whether an
industrial company has become sick, whereas
Section 17 deals with the power of the Board to
make suitable orders on completion of inquiry.
15. Under Section 13 of the SICA the Board has
enacted a set of Regulations, namely, the Board
for Industrial and Financial Reconstruction
Regulations, 1987. Chapter II of the Regulations
deals with References sought under Section 15 of
the Act (SICA) and contains provisions as to how
such References are required to be made and dealtPage 22
22
with. Regulation 19 would need to be extracted to
show what is contemplated to be the role of the
Registrar and the Secretary on receipt of a
Reference. The said provision therefore is
extracted below.
“19.(1) Every reference to the Board under
sub-section (1) of section 15 shall be
made—
(i) in Form A in respect of an
industrial company other than a
Government Company;
(ii)in Form AA in respect of a
Government Company,]
 and shall be accompanied by five
further copies thereof alongwith
four copies each of all the
enclosures thereto.
[(2) Every reference to the Board under
sub-section (2) of section 15 shall be
made—
(i) in Form B in respect of an
industrial company other than a
Government Company;
(ii)in Form BB in respect of a
Government Company,]
and shall be accompanied by five
further copies thereof alongwithPage 23
23
four copies each of all the
enclosures thereto.
(3) A reference may be filed either by
delivering it at the office of the
Board or by sending it by registered
post.
[(4) On receipt of a reference, the
Secretary, or as the case may be, the
Registrar shall cause to be endorsed on
each reference, the date on which it is
filed or received in the office of the
Board.
(5) If on scrutiny, the reference is
found to be in order, it shall be
registered, assigned a serial number
and submitted to the Chairman or
assigning it to a Bench.
Simultaneously, remaining information/
documents required, if any, shall be
called for from the informant.
(6) If on scrutiny, the reference is
not found to be in order, the Secretary
or, as the case may be, the Registrar
may, by order, decline to register the
reference and shall communicate the
same to the informant.
(7) A reference declined to be
registered shall be deemed not to have
been made.]
(8) (1) An appeal against the order of
the Registrar declining to register a
reference shall be made by the
aggrieved person to the Secretary
within fifteen days of communication to
him of such an order.
(2) An appeal against the order of the
Secretary declining to register a
reference shall be made by the
aggrieved person to the Chairman within
fifteen days of communication to him of
such an order and the Chairman's
decision thereon shall be final.”
16. From the provisions of Regulation 19(5) it
would appear that on receipt of a Reference under
Regulation 19(4) the Secretary or the Registrar,
as may be, after making an endorsement of the date
on which the same has been received in the office
of the Board is required to make a scrutiny and,
thereafter, if found to be in order, to register
the same; assign a serial number thereto and place
the same before the Chairman for being assigned to
a Bench. After completion of the aforesaid
exercise under Regulation 19(5) the later part of
the said Regulation contemplates that
simultaneously, remaining information/documents
required, if any, may be called for from the
applicant. Regulation 20 contained in Chapter III
and Regulation 21 contained in Chapter IV deal
with the manner in which the proceedings of
inquiry after registration of the Reference is to
be made.
17. Regulation 19(5) extracted above, requires the
Registrar or the Secretary, as may be, to make an
endorsement of the date of receipt of the
Reference [Regulation 19(4)] and thereafter on
scrutiny thereof to register the same and place
before the Chairman for being referred to the
Bench. When the Regulations framed under the
statute vests in the Registrar or the Secretary of
the Board the power to “scrutinize” an application
prior to registration thereof and thereafter to
register and place the same before the Bench, we
do not see how such power of scrutiny can be
understood to be vesting in any of the said
authorities the power to adjudicate the question
as to whether a company is an industrial company
within the meaning of Section 3(e) read with 3(f)
and 3(n) of the SICA. A claim to come within the
ambit of the aforesaid provisions of the SICA i.e.
to be an industrial company, more often than not,
would be a contentious issue. In the present case,
it certainly was. The specific stand of the
respondent No. 1 company in this regard need not
detain the Court save and except to state that by
a detailed description of the manufacturing
process the respondent No. 1 company had sought to
contend that it is an industrial company. Surely,
the rejection of the above stand could have been
made only by a process of adjudication which power
and jurisdiction clearly and undoubtedly is vested
by the SICA and the Regulations framed thereunder
in a Bench of the Board and not in authorities
like the Registrar and the Secretary. In this
regard, one can only be reminded of the
observations made by this Court in paras 13 and 14
in the case of Jamal Uddin Ahmad Vs. Abu Saleh
 Najmuddin and Another3 which may be extracted
below.
“13. The functions discharged by a
High Court can be divided broadly
into judicial and administrative
functions. The judicial functions
are to be discharged essentially by
the Judges as per the Rules of the
Court and cannot be delegated.
However, administrative functions
need not necessarily be discharged
by the Judges by themselves,
whether individually or
collectively or in a group of two
or more, and may be delegated or
entrusted by authorization to
subordinates unless there be some
rule of law restraining such
delegation or authorization. Every
High Court consists of some
administrative and ministerial
staff which is as much a part of
the High Court as an institution
and is meant to be entrusted with
the responsibility of discharging
administrative and ministerial
functions. There can be
“delegation” as also there can be
“authorization” in favour of the
Registry and the officials therein
by empowering or entrusting them
with authority or by permitting a
few things to be done by them for
and on behalf of the Court so as to
aid the Judges in discharge of
3 (2003) 4 SCC 257
their judicial functioning.
Authorization may take the form of
formal conferral or sanction or may
be by way of approval or
countenance. Such delegation or
authorization is not a matter of
mere convenience but a necessity at
times. The Judges are already
overburdened with the task of
performing judicial functions and
the constraints on their time and
energy are so demanding that it is
in public interest to allow them to
devote time and energy as much as
possible in discharging their
judicial functions, relieving them
of the need for diverting their
limited resources of time and
energy to such administrative or
ministerial functions, which, on
any principle of propriety, logic,
or necessity are not required
necessarily to be performed by the
Judges. Receiving a cause or a
document and making it presentable
to a Judge for the purpose of
hearing or trial and many a
functions post-decision, which
functions are administrative and
ministerial in nature, can be and
are generally entrusted or made
over to be discharged by the staff
of the High Court, often by making
a provision in the Rules or under
the orders of the Chief Justice or
by issuing practice directions, and
at times, in the absence of rules,
by sheer practice. The practice
gathers the strength of law and the
older the practice the greater is
the strength. The Judges rarely
receive personally any document
required to be presented to the
Court. Plaints, petitions,
memoranda or other documents
required to be presented to the
Court are invariably received by
the administrative or ministerial
staff, who would also carry out a
preliminary scrutiny of such
documents so as to find that they
are in order and then make the
documents presentable to the Judge,
so that the valuable time of the
Judge is not wasted over such
matters as do not need to be dealt
with personally by the Judge.
14. The judicial function entrusted
to a Judge is inalienable and
differs from an administrative or
ministerial function which can be
delegated or performance whereof
may be secured through
authorization.
“The judicial function consists
in the interpretation of the
law and its application by rule
or discretion to the facts of
particular cases. This involves
the ascertainment of facts in
dispute according to the law of
evidence. The organs which the
State sets up to exercise the
judicial function are called
courts of law or courts of
justice. Administration
consists of the operations,
whatever their intrinsic nature
may be, which are performed by
administrators; and
administrators are all State
officials who are neither
legislators nor judges.”
(See Constitutional and
Administrative Law, Phillips and
Jackson, 6th Edn., p. 13.) P.
Ramanatha Aiyar’s Law Lexicon
defines judicial function as the
doing of something in the nature of
or in the course of an action in
court. (p. 1015) The distinction
between “judicial” and “ministerial
acts” is:
If a Judge dealing with a
particular matter has to
exercise his discretion in
arriving at a decision, he is
acting judicially; if on the
other hand, he is merely
required to do a particular act
and is precluded from entering
into the merits of the matter,
he is said to be acting
ministerially. (pp. 1013-14)
Judicial function is exercised
under legal authority to decide on
the disputes, after hearing the
parties, maybe after making an
enquiry, and the decision affects
the rights and obligations of the
parties. There is a duty to act
judicially. The Judge may construe
the law and apply it to a
particular state of facts presented
for the determination of the
controversy. A ministerial act, on
the other hand, may be defined to
be one which a person performs in a
given state of facts, in a
prescribed manner, in obedience to
the mandate of a legal authority,
without regard to, or the exercise
of, his own judgment upon the
propriety of the act done. (Law
Lexicon, ibid., p. 1234). In
ministerial duty nothing is left to
discretion; it is a simple,
definite duty. Presentation of
election petition to the High Court
within the meaning of Section 81 of
the Act without anything more would
mean delivery of election petition
to the High Court through one of
its officers competent or
authorized to receive the same on
behalf of and for the High Court.
Receiving an election petition
presented under Section 81 of the
Act is certainly not a judicial
function which needs to be
performed by a Judge alone. There
is no discretion in receiving an
election petition. An election
petition, when presented, has to be
received. It is a simple, definite
duty. The date and time of
presentation and the name of the
person who presented (with such
other particulars as may be
prescribed) are to be endorsed
truly and mechanically on the
document presented. It is a
ministerial function simpliciter.
It can safely be left to be
performed by one of the
administrative or ministerial staff
of the High Court which is as much
a part of the High Court. It may be
delegated or be performed through
someone authorized. The manner of
authorization is not prescribed.”
18. The High Court, in view of what has been
discussed above, was correct in coming to the
conclusion that the refusal of registration of the
reference sought by the respondent Company by the
Registrar, Secretary/Chairman of the Board was
non-est in law. The reference must, therefore,
understood to be pending before the Board on the
relevant date attracting the provisions of Section
252 of the Insolvency and Bankruptcy Code.
19. The second question arising before the High
Court, namely, whether the reference before the
Board stood foreclosed by the order of winding up
of the respondent Company and the appointment
of liquidator was answered in the negative relying
on Real Value Appliances Ltd. (supra) and Rishab
Agro Industries Ltd. (supra). The core principles
laid down in the said decisions of the Court,
namely, that immediately on registration of a
reference under Section 15 of the erstwhile SICA,
the enquiry under Section 16 is deemed to have
commenced and that the winding up proceedings
against a company stood terminated only after
orders under Section 481 of the Companies Act,
1956, are passed, will have to be noticed to
adjudge the correctness of the said view of the
High Court. In any event, the aforesaid question
becomes redundant in view of our conclusion that
the reference sought by the respondent Company
must be deemed to have been pending on the date of
commencement of the Insolvency and Bankruptcy
Code, particularly, Section 252 thereof (effective
1.11.2016).
20. We, therefore, dispose of the appeal by
holding that it would still be open to the
respondent Company to seek its remedies under the
provisions of Section 252 of the Code read with
what is laid down in Sections 13, 14, 20 and 25.
We make it clear that we should not be understood
to have expressed any opinion on the scope and
meaning of the said or any other provisions of the
Code and the adjudicating authority i.e. National
Company Law Tribunal would be free and, in fact,
required to decide on the said questions in such
manner as may be considered appropriate.
21. Appeal, consequently, is disposed of
accordingly.
....................,J.
 (RANJAN GOGOI)
....................,J.
 (ABHAY MANOHAR SAPRE)
NEW DELHI
FEBRUARY 21, 2017.
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