Jotun India Private Limited Vs PSL Limited (Company Application No. 572 of 2017) - Synopsis
Team SoOLEGAL 22 Jan 2021

In this case, Jotun India Private Limited Vs PSL Limited (Company Application No. 572 of 2017), The Hon'ble Bombay High Court had held that, after a petition has been submitted by the claimant to the respondent company as provided under Rule 26 of the Companies (Court) Rules read with Rule 5 of the 2016 Transfer Rules, the High Court will be seized of the matter and that the matter cannot be moved to the NCLT. The Transfer Rules more precisely, the second amendment specifies that those winding-up petitions which have been served on the respondent are to be decided by the High Court only, while others have to be transferred to the National Company Law Tribunal. It was also submitted that, had it been the intention of the legislature to authorise the commencement of fresh insolvency proceedings before the NCLT, it would have been expressly provided for in the Transfer Laws. National Company Law Tribunal is not a court which is subordinate to the High Court and because of the prohibition by the laws mentioned under Section 41(b) of the Special Relief Act,1963, no injunction can be issued by the High Court against the Corporate Debtor by the establishment of proceedings in the NCLT. The Court had also held that, aside from the fact that there was no clause in the Companies Act, 1956 to begin proceedings before NCLT under Insolvency Bankruptcy Code 2016, the applicant may not have recourse to the challenged order under the inherent powers of the High Court. According to Section 64(2) of Insolvency Bankruptcy Code 2016, no Tribunal or Authority can grant an injunction in respect of any action taken in compliance with any power conferred on the NCLT under Insolvency Bankruptcy Code 2016. 

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