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The Meaning of The Expression "Legal Proceedings" and Its Judicial Interpretation
The Meaning of The Expression "Legal Proceedings" and Its Judicial Interpretation
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The expression "legal proceeding/s" nds place in several Union and State statutes in
India. The expression is most commonly used in negatively worded sections that bar the
such sections are For instance, sections such as Section 98 of the Consumer Protection
Act, 2019[1] Section 157 of the Central Goods and Services Tax Act, 2017,[2] Section 42B
of the Arbitration and Conciliation Act, 1996,[3] Section 69 of the Narcotic Drugs and
Psychotropic Substances Act, 1985 etc. prohibit a suit, prosecution or "other legal
proceedings" from being led against the Government or its o cials, Judicial O cers,
Arbitrators etc. The said expression is also commonly used in "Repeal and Saving"
Clauses of new statutes that save pending proceedings that may have been initiated
under a previous statute. Some examples of such clauses are Section 6 of the General
Clauses Act[4] or Section 126 (6) of the Multi-State Cooperative Societies Act, 2002.[5]
But what does this expression mean and what is its scope? Does it apply to purely
judicial proceedings in a court of law or can its scope expand beyond to other
proceedings that are not court proceedings but have trappings of court proceedings? Is
in which it is found? The purpose of column is to examine the meaning of this expression
and analyze its nature and scope through certain judicial decisions that have been
seized and diverted from his general creditors." The de nition goes on to state that
"this term includes all proceedings authorized or sanctioned by law and brought or
instituted in a court of justice or legal tribunal, for the acquiring of a right or the
enforcement of a remedy."[7]
an arbitration; and
any investigation or inquiry under the CrPC, 1973 (2 of 1974), or under any other law
for the time being in force for the collection of evidence, conducted by a police
o cer or by any other person (not being a magistrate) authorised in this behalf by a
magistrate or by any law for the time being in force. [Banker's Books Evidence Act
Expln.]
Legal proceeding mean any proceedings authorised by law for redressal of a legal
3. One of the earliest decisions that dealt with the expression was delivered by the
under Section 171[10] of the erstwhile Companies Act, 1913 for initiating recovery
proceedings under Section 46 (2) of the Indian Income Tax Act 1922.[11] As per
Section 171, "no suit or other legal proceeding" could be proceeded with or
commenced against the company except by the leave of the Court when a winding
According to the Federal Court, the term " other legal proceedings" could not be
initiated by means of a petition similar to a plaint."[13] The Court stated that Section
171 had to be construed with reference to other sections of the Act.[14] The Court
further opined that "no narrow construction" should be placed upon the words "or
other legal proceedings" and the said words were held to cover distress and
execution proceedings in ordinary courts.[15] One of the questions before the
Federal Court was whether recovery proceedings under Section 46 of the Indian
Income Tax Act, 1922 were covered by the phrase "other legal proceeding."[16] In the
Court's opinion it saw no reason why "in British India no " legal proceeding" can be
described as a "legal proceeding." " The Court eventually held that proceedings
under Section 46 (2) of the aforesaid Act were "other legal proceedings."
In Binod Mills Co. Ltd. Ujjain ( M.P.) v. Suresh Chandra Mahaveer Prasad Mantri,
Adhiniyam, 1978 as per which "no suit or other legal proceeding" could be instituted,
which it remained "a relief undertaking under any law, usage, custom, contract,
instrument, decree, order, award, settlement" or as per any other provision.[18] The
would fall within "other legal proceedings" under Section 5 of the aforesaid Act and
once the decree was passed by the Bombay High Court and transferred to an
executing court in Madhya Pradesh (the District Judge Ujjain), could the plea of
Court?[19] The Supreme Court held that execution proceedings would fall within the
purview of "other legal proceedings", as not doing so "would render Section 5 of the
Shiromani Sugar Mills was also followed in a decision of the Bombay High Court in
Amravati Growers Co-operative Spinning Mills Ltd. v. Sheshrao K. Ingale and
others[21] in which the court held that the expression "other legal proceedings"
under Section 107 of the Maharashtra Cooperative Societies Act, 1960[22] would
Goveia v. Cirila Rosa Maria Pinto and others,[24] the Court relied on both Shiromani
Sugar Mills and Binod Mills[25] to hold that the expression "any legal proceeding"
pending in any court found in the Repeal and Saving Clause in Section 126 (6) of the
proceedings that had been initiated under Section 85 (c) of the repealed Multi-State
5. Shiromani Sugar Mills was however distinguished by the Supreme Court in S.V.
for Income Tax O cer to obtain leave of the liquidation court under Section 446 of
the Companies Act, 1956[29] in order to re-assess a company for escaped income in
respect of past years.[30] The Court distinguished Shiromani Sugar Mills on the
ground that the proceedings initiated by the Income Tax Department were recovery
proceedings after the company had been wound up, whereas in the present case
before it, the Court was dealing with assessment proceedings.[31] According to the
Supreme Court, in Shiromani Sugar Mills, it was held that the expression "other
legal proceedings" covered distress and execution proceedings but "the expression
was not held to cover assessment proceedings" under the Income Tax Act, 1961[32]
and therefore according to the Supreme Court, Shiromani Sugar Mills would not
apply.[33] The Supreme Court eventually held that the Income Tax O cer does not
Companies Act[34] and since the Income Tax Act is "a complete code" assessment
proceedings under Section 446 of the Companies Act could not be held to be "other
legal proceedings" and therefore, the leave of the liquidating court was not required.
[35]
6. Dealing with the same provision of the previous Companies Act, 1956, the Bombay
High Court in Ion Exchange Finance Ltd. and Bombay Leasing Co. Pvt. Ltd.[36] had
to decide whether the expression "suit or other legal proceedings in Section 446 (1)
and "suit or proceedings" in Section 442 of the Companies Act would include
criminal complaints led under Section 138 of the Negotiable Instruments Act.[37] It
was contended by the Petitioners in the said case that the expression "legal
proceedings" or "other legal proceedings" had to be read ejusdem generis with the
expression "suit" which meant that the expression would apply only to civil
proceedings and not criminal proceedings.[38] The High Court was of the view that
wherever Parliament choose to confer power on the Company Court to try criminal
offences, it had done so,[39] like it did in Section 457 (1) (a) of the Companies Act
Therefore in this context when the word "prosecution" is used, the expression "other
However, when it came to Section 446, the Court held that the expression "legal
proceedings" in the said section meant "only those proceedings which have a
bearing on the assets of a Company in winding up or have some relation with the
issue in winding up."[42] It did not mean "each and every civil proceedings" having no
liable to be prosecuted for".[43] The Court eventually held that it was "impossible to
contend that the Company Court in winding up would have jurisdiction to stay the
7. The principle of ejusdem generis was also applied by the Hon'ble Supreme Court in
"other legal proceedings" in Section 40 (2) of the Central Excises and Salt Act, as it
"No suit, prosecution or other legal proceeding shall be instituted for anything done or
ordered to be done under the Act after the expiration of six months from the accrual of
the cause of action or from the date of the act or order complained of."
The issue before the Supreme Court was whether the issuance of a show cause notice
legal proceedings" within the meaning of sub-section 40(2) of the said Act.[46] By
applying the principal of ejusdem generis, the Court held that "there can be no doubt that
'suit' or 'prosecution' are those judicial or legal proceedings which are lodged in a court of
law and not before any executive authority," even if it were a statutory one.[47] The
Supreme Court then stated that "the wide expression 'other legal proceeding' must be
read ejusdem generis with the preceding words 'suit' and 'prosecution' as they constitute
a genus." The Court ultimately held that "penalty and adjudication proceedings" did not
fall within the expression "other legal proceedings."[48] Incidentally, Shiromani Sugar
8. The aforesaid decision along with Binod Mills and Kandekar was referred to and
relied upon by a later Bench of the Supreme Court in General O cer Commanding,
of Section 6 of the Armed Forces (Special Powers) Act, 1958[50] and the pari
Special Powers Act, 1990[52] that prohibited institution of any "prosecution, suit or
other legal proceeding" without previous sanction of the Central Government. After
explaining the difference between "prosecution" and "civil suit",[53] the Supreme
Court examined the expression "legal proceeding." The relevant portion of the
"The phrase 'legal proceeding' connotes a term which means the proceedings in a court
of justice to get a remedy which the law permits to the person aggrieved. It includes any
formal steps or measures employed therein. It is not synonymous with the 'judicial
proceedings'. Every judicial proceeding is a legal proceeding but not vice-versa, for the
reason that there may be a 'legal proceeding' which may not be judicial at all, e.g.
statutory remedies like assessment under Income Tax Act, Sales Tax Act, arbitration
proceedings etc. So, the ambit of expression 'legal proceedings' is much wider than
proceedings, e.g. proceedings for registration of trade marks etc. The terms used in
Section 7 i.e. suit, prosecution and legal proceedings are not inter-changeable or convey
the same meaning. The phrase 'legal proceedings' is to be understood in the context of
the statutory provision applicable in a particular case, and considering the preceding
The Court then referred to Ramdev Tobacco and another judgment delivered by it in
Maharashtra Tubes Ltd. v. State Industrial & Investment Corpn. of Maharashtra Ltd.[54]
and further held that "Legal proceedings" do not include administrative proceedings,
9. This has been further reiterated in a judgment delivered by the Bombay High Court
proceedings" [see Section 3(p)[57]] under Section 14A of the Scheduled Caste and
Scheduled Tribe (Prevention of Atrocities) Act, 1980.[58] The Court in this case held
that department proceedings are not "other legal proceedings."[59] The Court
referred to Ramdev Tobacco and the CBI case and set out the following precedential
"(1) If particular words of a certain genus precede a wide expression, that wide
expression must be limited to things ejusdem generis; that is, it takes colour from the
(2) "Suit" or "prosecution" are those judicial or legal proceedings before a Court of law-but
provision applicable in a particular case, and by considering the preceding words if any.
appellate authority" would not fall within the expression "other legal proceedings".
(6) The "legal proceedings" are the proceedings in a court of justice to get a remedy
(7) And the legal proceedings quite differ from the departmental and administrative
proceedings."
A reading of the judgments delivered by the Supreme Court and Bombay High Court
show that the expression "legal proceedings" cannot be assigned a xed meaning and it
varies depending on the context and manner in which it is used in a provision. The
in the absence of a particular statute de ning it. However, the Supreme Court and High
Court judgments hold that "legal proceedings" are proceedings in a court of law and
the Bombay High Court in Prabhakar Ramchandra Desai has helped simplify and
consolidate the meaning, nature and scope of the expression. This would in turn certainly
be of great assistance to both judges and advocates in dealing with this innocuous, yet
complicated expression.
(The author is a practicing Advocate at the Bombay High Court and the National
Company Law Tribunal.)
Reference: -
[1] Sec 98. Protection of action taken in good faith. No suit, prosecution or other legal
proceeding shall lie against the Presidents and members of the District Commission, the
State Commission and the National Commission, the Chief Commissioner, the
Commissioner, any o cer or employee and other person performing any duty under this
Act, for any act which is in good faith done or intended to be done in pursuance of this
[2] Sec 157. Protection of action taken under this Act (1) No suit, prosecution or other
legal proceedings shall lie against the President, State President, Members, o cers or
other employees of the Appellate Tribunal or any other person authorised by the said
Appellate Tribunal for anything which is in good faith done or intended to be done under
(2) No suit, prosecution or other legal proceedings shall lie against any o cer appointed
or authorised under this Act for anything which is done or intended to be done in good
3 Sec 42B Protection of action taken in good faith.- No suit or other legal proceedings
shall lie against the arbitrator for anything which is in good faith done or intended to be
[4] Section 6. Effect of repeal.—Where this Act, or any Central Act or Regulation made
after the commencement of this Act, repeals any enactment hitherto made or hereafter
to be made, then, unless a different intention appears, the repeal shall not—
(e) affect any investigation, legal proceeding or remedy in respect of any such right,
privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid; and any such
(6) Save as otherwise provided in this Act, any legal proceeding pending in any court or
before the Central Registrar or any other authority at the commencement of this Act shall
be continued to be in that
court or before the Central Registrar or that authority as if this Act had not been passed.
[7] Ibid
[8] P. Ramanatha Aiyar Concise Law Dictionary, Third Edition Reprint 2006 Wadhwa
Nagpur, p. 677
[10] Section 171 Suits stayed on winding-up order: When a winding up order has been
made or a provisional liquidator has been appointed no suit or other legal proceeding
shall be proceeded with or commenced against the company except by leave of the
(2) The Income-tax O cer may forward to the Collector a certi cate under his signature
specifying the amount of arrears due from an assessee, and the Collector, on receipt of
such certi cate, shall proceed to recover from such assessee the amount speci ed
shall, for the purpose of recovering the amount speci ed in the certi cate, have also all
(a) a Collector has under the Revenue Recovery Act, 1890 (I of 1890),
(b) a Civil Court has under the Code of Civil Procedure, 1908 (V of 1908), for the purpose
[12] The section corresponds to the present-day Section 279 of the Companies Act, 2013.
[14] Ibid
[15] Ibid p. 56
[16] Ibid
undertakings. As from the date of speci ed in the noti cation under sub-section (1) of
pending, shall be proceeded with against the industrial undertaking during the period in
which it remains a relief undertaking any law, 4 usage, custom, contract, instrument,
[20] Ibid
Save as expressly provided in this Act, no Civil Court shall take cognizance of any matter
connected with the winding up or dissolution of a society, under this Act; and when a
winding up order has been made no suit or other legal proceedings shall lie or be
proceeded with against the society or the Liquidator, except by leave of the Registrar and
Provided that, where the winding up order is cancelled the provisions of this section shall
cease to operate so far as the liability of the society and of the members thereof to be
sued is concerned but they shall continue to apply to the person who acted as Liquidator.
[23] Section 28. Procedure for dealing with complaints relating to unfair labour practices
[26] (6) Save as otherwise provided in this Act, any legal proceeding pending in any court
or before the Central Registrar or any other authority at the commencement of this Act
shall be continued to be in that court or before the Central Registrar or that authority as if
Every decision of order made under section 30, section 31, section 73, section 76,
been made.
[29] Section 446. Suits stayed on winding up order (1) When a winding up order has
been made or the O cial Liquidator has been appointed as provisional liquidator, no suit
or other legal proceeding shall be commenced, or if pending at the date of the winding up
order, shall be proceeded with, against the company, except by leave of the Court and
(2) The Court which is winding up the company shall, notwithstanding anything
contained in any other law for the time being in force, have jurisdiction to entertain, or
dispose of-
(b) any claim made by or against the company (including claims by or against any of its
branches in India);
(c) any application made under section 391 by or in respect of the company;
(d) any question of priorities or any other question whatsoever, whether of law or fact,
whether such suit or proceeding has been instituted, or is instituted, or such claim or
question has arisen or arises or such application has been made or is made before or
after the order for the winding up of the company, or before or after the commencement
than that in which the winding up of the company is proceeding may, notwithstanding
anything contained in any other law for the time being in force, be transferred to and
(4) Nothing in sub-section (1) or sub-section (3) shall apply to any proceeding pending in
(1) The liquidator in a winding up by the Court shall have power, with the sanction of the
Court,-
(a) to institute or defend any suit, prosecution, or other legal proceeding, civil or criminal,
[43] Ibid
[50] Section 6. Protection to persons acting under Act.―No prosecution, suit or other
legal proceeding shall be instituted, except with the previous sanction of the Central
[51] Except for the use of the word "good faith" in the marginal note to Section 7 of the
[52] Section 7. Protection of persons acting in good faith under this Act.—No
prosecution, suit or other legal proceeding shall be instituted, except with the previous
sanction of the Central Government, against any person in respect of anything done or
[57] Section 3. Punishments for offences atrocities.—(1) Whoever, not being a member of
(p) institutes false, malicious or vexatious suit or criminal or other legal proceedings
Procedure,1973 (2 of 1974), an appeal shall lie, from any judgment, sentence or order, not
being an interlocutory order, of a Special Court or an Exclusive Special Court, to the High
(2) Notwithstanding anything contained in sub-section (3) of section 378 of the Code of
Criminal Procedure, 1973 (2 of 1974), an appeal shall lie to the High Court against an
order of the Special Court or the Exclusive Special Court granting or refusing bail.
(3) Notwithstanding anything contained in any other law for the time being in force, every
appeal under this section shall be preferred within a period of ninety days from the date
of the judgment, sentence or order appealed from: Provided that the High Court may
entertain an appeal after the expiry of the said period of ninety days if it is satis ed that
the appellant had su cient cause for not preferring the appeal within the period of ninety
days: Provided further that no appeal shall be entertained after the expiry of the period of
within a period of three months from the date of admission of the appeal.
CENTRAL GOODS AND SERVICES TAX ACT 2017 ARBITRATION AND CONCILIATION ACT
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