Companies Tribunal is empowered to pass similar order relying on Sections 241 & 242 of the Companies Act, 2013 as was empowered under Section 388B of the Companies Act 1956.

The NCLAT (hereinafter referred to as’ in the matter of Shri CP Yogeshwara vs Union of India [Company Appeal (AT) No. 111 of 2019) decided on 13.03.2020 held that even in absence of Section 388B of the Companies Act, 1956, to bring an end of the matters complained of, is empowered to pass similar order relying on Sections 241 & 242 of the Companies Act, 2013 as was empowered under Section 388B of the old Act.
Facts:
Union of India moved a petition under Section 401/397/398 read with Section 408 of the Companies Act, 1956 (now Section 241(2) read with Section 242 of the Companies Act, 2013) and sought relief under Section 388B of the Companies Act, 1956 for the appointment of the Government Nominated Directors and the control of the affairs and management of the Company ‘Megacity Bangalore Developers & Builders Limited’. The NCLT allowed the Union of India to appoint the Directors.
The Appellants shareholder of the company challenged the decision on the ground that the Tribunal misdirected itself by granting the relief under Section 388B of the Companies Act, 1956.
Issue:
The effect of the savings clause contained in Section 465 of the Companies Act, 2013 read with Section 6 of the General Clauses Act, 1897, once the Companies Act, 1956 stood repealed, the Tribunal cannot grant relief under a provision, which stood repealed.
Ratio:
It was held by the Appellate Tribunal that Section 465 of the Companies Act, 2013 which relates to repeal of certain enactments and savings includes the Companies Act, 1956. The Central Government is empowered under Section 241(2) of the Companies Act, 2013 to file an application in case if it is of the opinion that the affairs of the Company are being conducted in a manner prejudicial to the public interest. If the Tribunal in terms of Section 242 of the Companies Act, 2013 is of the opinion, that the Company’s affairs or/ are being conducted in a manner prejudicial to the public interest and to wind up the Company would unfairly prejudice member or members. But otherwise, the facts would justify the making of a winding-up order on the ground that it was just and equitable that the Company should be wound up, therefore, Tribunal with a view to bring to an end the matters complained of, make such order as it thinks fit.
In view of the aforesaid provisions of law, the Appellate Tribunal held that even in absence of Section 388B of the Companies Act, 1956, to bring an end of the matters complained of, the Company Tribunal is empowered to pass similar order relying on Sections 241 & 242 of the Companies Act, 2013 as was empowered under Section 388B of the old Act.