Companies Act Section 303

Companies Act, Section 303: Continuity of Legal Proceedings and Right to Appeal 

Section 303 of the Companies Act, 2013 addresses a crucial aspect of legal transition and continuity the fate of orders passed under the previous company law regime just before the new Act came into force. The provision ensures that prior judicial decisions and appeal rights remain valid and enforceable, even though the Companies Act, 2013 has introduced a new legislative and adjudicatory framework. This section primarily deals with appeals relating to winding up orders passed prior to the commencement of the 2013 Act.

Key Provision: Preservation of Earlier Winding Up Orders and Appeals

This section ensures that the transition from the earlier Companies Act, 1956 to the Companies Act, 2013 does not disrupt or invalidate:

Orders already passed by competent courts before the new Act came into force, or The right to appeal against such orders. Let us understand the provision in a detailed and structured manner:

1. Applicability to Pre-Commencement Proceedings and Orders

The section specifically deals with winding up proceedings that were:
Initiated under the previous law (i.e., the Companies Act, 1956), and Orders had been passed by a Court in such proceedings immediately before the commencement of the Companies Act, 2013.
It clarifies that nothing in Chapter XX (Winding Up by Tribunal) of the new Act shall:
Affect the operation, or Prevent the enforcement of any such pre-commencement order.
This means that any winding up order made by a High Court (or another competent authority under the 1956 Act) remains valid and enforceable as if the new law had not come into effect.
2. Right to Appeal Against Pre-Commencement Orders

The section preserves the procedural and substantive rights of appeal for parties aggrieved by such pre-commencement orders. Specifically, it provides that:
An appeal against such order shall be filed before such authority competent to hear such appeals before such commencement. This means:
If an order was passed under the previous Act, then any appeal must be made to the same appellate forum that was competent under the earlier law, not under the new Companies Act, 2013 framework.
For instance, if an appeal from a winding up order under the Companies Act, 1956 was to be made to a Division Bench of a High Court, the same forum continues to have jurisdiction even after the Companies Act, 2013 has come into force.
3. Ensuring Legal Continuity and Stability

Section 303 plays a crucial role in ensuring:

Continuity of judicial proceedings and enforcement, Protection of vested rights including the right to appeal, Avoidance of legal uncertainty that could arise due to the legislative transition from one Act to another. It helps ensure that:

Parties involved in winding up proceedings are not deprived of legal remedies merely because the statutory regime has changed, and Pre-existing orders are not rendered invalid or unenforceable.
4. Harmonious Interpretation with the Companies (Transfer of Pending Proceedings) Rules, 2016

This section complements later rules issued under the 2013 Act, such as the Companies (Transfer of Pending Proceedings) Rules, 2016, which provide clarity on how pending winding up matters under the 1956 Act are to be transferred (or not) to the National Company Law Tribunal (NCLT). Section 303 reinforces that:

Final orders passed prior to the commencement of the 2013 Act are not subject to transfer or re-evaluation under the new law.
Appeals must follow the original appellate procedure under which the order was made.