M/S Pioneer Aqua v. M/S Top Line Build-Tech (P) Ltd
Delhi High Court·30 Nov 2023·2023:DHC:9188
Dharmesh Sharma
CO.PET. 49/2014
2023:DHC:9188
corporateotherSignificant
AI Summary
The Delhi High Court transferred an initial-stage winding up petition to the NCLT under Section 434 of the Companies Act, 2013, holding that such proceedings must be adjudicated by the Tribunal unless irreversible steps have been taken.
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Translation output
CO.PET. 49/2014 HIGH COURT OF DELHI Date of Decision: 30th November, 2023
CO.PET. 49/2014 M/S PIONEER AQUA ..... Petitioner Through: Mr. Vikas Kumar, Proxy Counsel for Mr. Dhiraj K. Sammi, Adv.
VERSUS
M/S TOP LINE BUILD-TECH (P) LTD ..... Respondent Through: Mr. Arvind K. Gupta and Mr. A. Gupta, Advs.
CORAM:
HON'BLE MR. JUSTICE DHARMESH SHARMA DHARMESH SHARMA, J. (ORAL) FACTUAL BACKGROUND:
JUDGMENT
1. Learned counsel appearing for the legal representatives of the deceased petitioner requests for an accommodation stating that the main counsel is not available today.
2. However, learned counsel appearing for the respondent submits that in this case the claim of the petitioner is admitted. However, the company has stopped running its operation and there are practically no assets remaining with the company so as to pay the debts of the secured or unsecured creditors.
3. This is a winding up petition under Section 433 (1) (e) and 434 Companies Act, 2013[1] moved on behalf of the petitioner company 1 Act against the respondent company. In a nutshell, it is the case of the petitioner that it specialises in waterproofing in multi-storey residential and commercial spaces and supplies its own manpower, labour etc. The petitioner firm entered into an agreement with the respondent to provide its services on certain projects of the respondent company and the petitioner company has been submitting running bills and also has a running account. It was the case of the petitioner firm that there accrued a sum of Rs.25, 59,282/-, which were not paid by the respondent firm despite several reminders, requests and personal visits. Eventually, a statutory notice dated 17.06.2013 was served upon the respondent, but in vain; and hence this petition was filed.
FINAL ORDER/DIRECTIONS:
4. It is borne out from the record that no provisional liquidator as yet has been appointed and the winding up a petition has been a complete non-starter.
5. The present petition is a non-starter, as it is still at the initial stage and as yet no Provisional Liquidator has been appointed in this matter. Section 434 of the Act envisages the transfer of proceedings relating to the winding up that are pending before High Courts to the National Company Law Tribunal[2], the said provision reads as under:
“434. Transfer of certain pending proceedings
(1) On such date as may be notified by the Central Government in
this behalf,-
(a) all matters, proceedings or cases pending before the Board of Company Law Administration (herein in this section referred to as the Company Law Board) constituted under sub-section (1) of
2 NCLT section 10E of the Companies Act, 1956 (1 of 1956), immediately before such date shall stand transferred to the Tribunal and the Tribunal shall dispose of such matters, proceedings or cases in accordance with the provisions of this Act; (b) any person aggrieved by any decision or order of the Company Law Board made before such date may file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Company Law Board to him on any question of law arising out of such order: Provided that the High Court may if it is satisfied that the appellant was prevented by sufficient cause from filing an appeal within the said period, allow it to be filed within a further period not exceeding sixty days; and
(c) all proceedings under the Companies Act, 1956 (1 of 1956), including proceedings relating to arbitration, compromise, arrangements and reconstruction and winding up of companies, pending immediately before such date before any District Court or High Court, shall stand transferred to the Tribunal and the Tribunal may proceed to deal with such proceedings from the stage before their transfer: Provided that only such proceedings relating to the winding up of companies shall be transferred to the Tribunal that are at a stage as may be prescribed by the Central Government. Provided further that only such proceedings relating to cases other than winding-up, for which orders for allowing or otherwise of the proceedings are not reserved by the High Courts shall be transferred to the Tribunal [Provided also that]-
(i) all proceedings under the Companies Act, 1956 other than the cases relating to winding up of companies that are reserved for orders for allowing or otherwise such proceedings; or
(ii) the proceedings relating to winding up of companies which have not been transferred from the High Courts; shall be dealt with in accordance with provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959.] Provided also that proceedings relating to cases of voluntary winding up of a company where notice of the resolution by advertisement has been given under subsection (1) of section 485 of the Companies Act, 1956 but the Company has not been dissolved before the 1st April, 2017 shall continue to be dealt with in accordance with provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959.”
6. It would also be apposite to cite the decision of the Supreme Court in Action Ispat and Power Limited v. Shyam Metalics and Energy Limited[3] wherein it was held as under:
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“22. Given the aforesaid scheme of winding up under Chapter XX of the Companies Act, 2013, it is clear that several stages are contemplated, with the Tribunal retaining the power to control the proceedings in a winding up petition even after it is admitted. Thus, in a winding up proceeding where the petition has not been served in terms of Rule 26 of the Companies (Court) Rules, 1959 at a preadmission stage, given the beneficial result of the application of the Code, such winding up proceeding is compulsorily transferable to the NCLT to be resolved under the Code. Even post issue of notice and pre admission, the same result would ensue. However, post admission of a winding up petition and after the assets of the company sought to be wound up become in custodia legis and are taken over by the Company Liquidator, section 290 of the Companies Act, 2013 would indicate that the Company Liquidator may carry on the business of the company, so far as may be necessary, for the beneficial winding up of the company, and may even sell the company as a going concern. So long as no actual sales of the immovable or movable properties have taken place, nothing irreversible is done which would warrant a Company Court staying its hands on a transfer application made to it by a creditor or any party to the proceedings. It is only where the winding up proceedings have reached a stage where it would be irreversible, making it impossible to set the clock back that the Company Court must proceed with the winding up, instead of transferring the proceedings to the NCLT to now be decided in accordance with the provisions of the Code. Whether this stage is reached would depend upon the facts and circumstances of each case.”
7. Hence, in the opinion of this Court, given the inceptive nature of the proceedings and the absence of any definitive orders pertaining to the winding up of the company, it is hereby determined that this petition shall be forthwith transferred to the NCLT.
8. It is left in the domain of the NCLT to consider the matter and pass appropriate orders in accordance with law.
9. The electronic record of this petition be transmitted to the NCLT within a period of one week by the Registry. List before the NCLT on 06.02.2024.
DHARMESH SHARMA, J. NOVEMBER 30, 2023
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