Section 434 of the Companies Act, 2013 – Transfer of certain pending proceedings
Updated: Oct 14, 2022
Section 434 of the Companies Act, 2013 deals with the transfer of certain proceedings pending before the authorities constituted under the Companies Act, 1956. The section is divided into two clauses. The first clause lays down provisions on how the pending proceedings are to be dealt with and is elaborated below:
Before the date notified by the Central Government, all matters, proceedings, or cases that were pending before the Board of Company Law Administration, which was established pursuant to subsection (1) of section 10 E of the Companies Act, 1956, shall be transferred to the Tribunal, which shall decide all such matters, proceedings, or cases following the provisions of this Act.
Any person aggrieved with any decision or order made by the Board of Company Law Administration prior to that date may appeal to the High Court within sixty days of the date on which the decision or order was communicated to him on any legal issue arising from such order. However, the High Court may grant an extension of time not exceeding sixty days to file the appeal if it determines that the appellant was prevented from doing so for a good reason.
All cases under the Companies Act, 1956 that were pending before that date before any District Court or High Court, including cases involving arbitration, compromise, arrangements, reconstruction, and winding up of companies, shall stand transferred to the Tribunal, and the Tribunal may continue to handle those cases from the stage before their transfer.
Any appeal made to the Appellate Authority for Industrial and Financial Reconstruction, any inquiry pending before the Board of Industrial and Financial Reconstruction, or any other proceeding under the Sick Industrial Companies (Special Provisions) Act, 1985, that was pending before the Board for Industrial and Financial Reconstruction or the Appellate Authority for Industrial and Financial Reconstruction; given that such an appeal, referral, or inquiry is abated according to this section, a company may refer a matter under this Act to the Tribunal within 180 days after the effective date of this Act following its provisions. Furthermore, a company whose appeal, reference, or inquiry is diminished due to this provision must not be charged any expenses for filing such a reference under this Act.
The second clause says that to facilitate the prompt transfer of all disputes, proceedings, or cases pending before the Board of Company Law Administration or the courts to the Tribunal according to this section, the Central Government may make rules following this provisions Act.
In exercising the powers conferred under Section 434, the Central Government made the ‘The Companies (Transfer of Pending Proceedings) Rules, 2016’.