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23. It was also submitted that any scheme under Section 391 of the Companies Act has to be in compliance with the provisions of Chapter III B which includes section 45QA of the RBI Act and a petition for winding up under Section 45MC(1)(d) of the RBI Act cannot be defeated by allowing a scheme under Section 391 of the Companies Act which is in violation of the statutory provision contained in Section 45QA of the RBI Act.

24. Mr Sudhanshu Batra appearing on behalf of CRB Capital submitted that there is no prohibition on considering a scheme under Sections 391/392 of the companies Act during the pendency of a winding up petition filed by RBI under Section 45MC of the RBI Act. In fact, according to him, Section 45MC(4) makes all the provisions of the Companies Act, 1956 "relating to winding up of a company" applicable to a winding-up proceeding initiated on the application made by RBI under Section 45MC of the RBI Act. He then submitted that Part VII of the Companies Act dealt with winding up. Chapter I thereof contained preliminary provisions dealing with modes of winding up and contributories. Chapter II of Part VII dealt with the cases of winding up by the Court/Tribunal. Section 433 which stipulated the circumstances in which a company could be wound up fell within this chapter. And, so did Section 446, which provided for stay of suit on the passing of a winding up order. Section 446(2)(c), according to Mr Batra, empowered the Court/Tribunal, notwithstanding anything contained in any other law for the time being in force, to have jurisdiction to entertain or dispose of any application made under Section 391 by or in respect of the company. Therefore, according to Mr Batra, a scheme under Section 391 of the Companies Act can be entertained even in the case of a winding up proceeding under section 45MC of the RBI Act. He referred to the decision of the Supreme Court in the case of M/s Doypack Systems Pvt. Ltd. v. Union of India: (1988) 2 SCC 299, in order to explain the meaning of the expression "in relation to". According to him, the Supreme Court held that the said expression was one of expansion and not of contraction. He submitted that even in T.N. Kalyana Mandapam Assocation v. Union of India: (2004) 5 SCC 632, the Supreme Court had recognized that the expression "in relation to" ought to be given an expansive or wide meaning and should not be construed narrowly. Consequently, Mr Batra, submitted that a scheme under Sections 391/392 could very well be considered by the company court even in a case of winding up under Section 45MC of the RBI Act inasmuch as Section 45MC(4) of the RBI Act itself makes it clear that all the provisions of the Companies Act "relating to" winding up of a company shall apply to a winding up proceeding initiated on the application made by RBI under Section 45MC of the RBI Act. With regard to the alternative arguments raised by Mr Parag Tripathi that even if it is assumed that a scheme under Section 391 can be maintained in the backdrop of a winding petition under Section 45MC of the RBI Act, such a scheme would not be maintainable if it was contrary to the provisions of Chapter III B of the RBI Act, the learned counsel for CRB Capital submitted that the scheme sanctioned by the learned company Judge was not contrary to the provisions of Chapter III B of the RBI Act.

29. The learned counsel appearing on behalf of the Official Liquidator submitted that a scheme under Section 391 of the Companies Act could be filed at any stage. He submitted that sanction for a scheme under Section 391 could be applied for even if there was no winding up petition against the company. It can be filed during the pendency of a winding up petition as well as after winding up orders have been made by the company court. It was contended that this is apparent from Section 391(1) of the Companies Act which clearly mentions that the application could be made by the company or any creditor or member of the company or in the case of a company which is being wound up, by the liquidator. Thus, it was submitted, that there is no bar under the Companies Act that an application for sanction of a scheme under Section 391 of the Companies Act cannot be filed if a winding up petition is pending under the Companies Act, 1956. It was submitted that such an application would be maintainable before a company is dissolved under Section 481 of the Companies Act, 1956. The learned counsel for the Official Liquidator, further submitted that there is no provision under the RBI Act which prohibited the filing of any application seeking sanction of a scheme under Section 391 of the Companies Act, 1956, even where an order has been passed by the RBI under Section 45 MB or where a winding up petition has been filed by the RBI under Section 45MC of the RBI Act. It was also contended that where a winding up order is made against a company under Section 433 of the Companies Act, 1956 or on a petition of RBI under Section 45 MC of RBI Act, an application for sanction of a scheme can still be filed till such time the company in question is directed to be dissolved under Section 481 of the Companies Act. Consequently, according to the learned counsel, an application for sanctioning of a scheme under Section 391 of the Companies Act, 1956 is maintainable even when RBI has filed a winding up petition under Section 45MC of the RBI Act read with Section 433 of the Companies Act, 1956. However, the learned counsel submitted that no scheme under Section 391 of the Companies Act, 1956 can be allowed contrary to the statutory provisions including Section 45QA of the RBI Act, as otherwise, such a scheme would be against the law of the land and that would be against public policy. It was contended that a scheme under Section 391 of the Companies Act, 1956 could be approved by the company court only when an NBFC complies with the provisions of Section 45QA of the RBI Act and re-pays the entire amount due to the depositors as per terms of the deposits. It was also contended that in case the NBFC in question does not comply with the requirement of section 45QA of the RBI Act such a company would be liable to be wound up and dissolved.

34. These questions have overlapping considerations and, therefore, are being dealt with together. It was contended by Mr Parag Tripathi, on behalf of the RBI, that the scheme could not be sanctioned as the concessions sought were beyond the scope of Section 391 of the Companies Act. First of all, the scheme envisaged a direction to the Income Tax Department to stay its demands and vacate ex-parte orders. The scheme also envisaged that the company be permitted to file appropriate petitions before the appropriate Court and get any delay in filing the same condoned. It was contended that income tax proceedings could not be the subject matter of a scheme under Section 391 of the Companies Act. Reliance was placed on the Supreme Court decision in the case of S.V. Kandeakar v. V.M. Deshpande: (1972) 1 SCC 438. Insofar as the criminal cases were concerned, it was contended that the scheme envisaged that all civil and criminal cases be "vacated or stayed sine die". It was contended that the learned company Judge erred in law in sanctioning this part of the scheme. It was submitted that a Division Bench of this court in D.K. Kapur v. R.B.I.: 2001 (105) Company Cases 643 (Delhi), had clearly held that the expression "suit or other legal proceedings" used in Section 446(1) of the Companies Act and the expression "suit or proceeding" used in Section 446(2) of the Companies Act, 1956 did not include criminal proceedings and therefore the company Judge could not have sanctioned the scheme as it required the 'vacation or stay sine die' of the criminal cases against CRB Capital. This was clearly beyond the jurisdiction of the company court under Section 391/392 of the Companies Act, 1956. It was further contended that the acts committed by CRB Capital or its directors were allegedly in violation of the law and guidelines laid down in various Acts including the RBI Act, SEBI Act and Income Tax Act. It was, therefore, submitted that by moving an application for sanction of a scheme of re-payment/compromise under Section 391 of the Companies Act 1956, CRB Capital could not, in law, ask for the concessions / reliefs or vacation / stay of the proceedings for such violation allegedly committed. The scheme could not take away the right of the prosecuting agency of going after the persons who were in clear contravention of the statutory provisions. It was contended that the intention / object behind Section 391 of the Companies Act is to provide a mechanism for re-structuring or for a financial re-arrangement but it could not be used as an instrument for getting away from the penal consequence of violation of a law. As such it was contended that a scheme under Section 391/392 of the Companies Act could not set aside or quash quasi-judicial orders passed by statutory authorities like SEBI, Income Tax Department or the RBI in exercise of the powers conferred on them by the relevant statute. It was also contended that criminal and income tax proceedings pending against CRB Capital and/ or its directors could not be stayed by the company court while sanctioning a scheme under Sections 391/392 of the Companies Act, 1956.

37. The learned counsel appearing on behalf of CRB Capital submitted that the concessions granted in the sanctioned scheme were within the scope of Section 391 of the Companies Act, 1956. Insofar as the concessions with regard to the Income Tax liability were concerned it was submitted that an ex-parte order passed by Income Tax Department had to be vacated so as to bring CRB Capital to a position as it existed prior to 22.05.1997 i.e., the date of passing of the order whereby the Provisional Liquidator had been appointed in respect of CRB Capital. It was submitted that the ex-parte orders which had been passed were subsequent to 22.05.1997 and CRB Capital, which ought to have been represented by the Official Liquidator, was not so represented. In this backdrop, it was submitted that the company court was not wrong in allowing the concessions. It was also contended that the decision of the Supreme Court in S.V. Kandeakar (supra) was inapplicable to the facts of the present case. Insofar as the stay of civil and criminal cases were concerned, it was contended that this was in exercise of the power under Section 391(6) of the Companies Act, 1956. Furthermore, it was contended that most of the criminal cases had been stayed on account of the consent letters obtained from the complainants. Reliance was placed once again on, inter alia, Maharashtra Apex Corporation Limited (supra). It was contended that the company court had power to stay the criminal proceedings if the complainants themselves had consented for the same. Consequently, it was submitted that it was within the powers of the company court under Section 391/392 of the Companies Act to set aside even quasi- judicial orders passed by statutory authorities like SEBI, RBI and the Income Tax Department. It was also contended that the criminal and income tax proceedings could be stayed by the company court while sanctioning the scheme under Sections 391/392 of the Companies Act, 1956. Section 391 of the Companies Act reads as under:-