Winding-up Petition filed after Appointment of a liquidator: Delhi HC transfers Petition to NCLT [Read Order]

The Delhi High Court transferred the Winding-up Petition filed after Appointment of a liquidator to the National Company Law Tribunal (NCLT).

Trigo Imagement Slovakia, the petitioner filed the petition under Section 433(1)(e) of the Companies Act, 1956 for winding up of the Respondent Company. Counsel for the Respondent submits that in terms of the judgment of the Supreme Court in Action Ispat and Power Pvt. Ltd. vs Shyam Metalics and Energy Limited and Notification G.S.R. 1119(E) dated 07.12.2016 issued by the Ministry of Corporate Affairs, the matter is to be transferred to the National Company Law Tribunal for adjudication.

A review of the record shows that the winding up petition although pending for some time before the Court is at a preliminary stage. The petition has not been admitted and thus the Professional Liquidator or Official Liquidator has not been appointed. In fact, no substantive orders have been passed in this petition for several years.

The scheme of winding up under Chapter XX of the Companies Act, 2013, states 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 pre-admission stage, given the beneficial result of the application of the Code, such winding-up proceeding is compulsorily transferable to 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.

A single bench of Justice Tara Vitasta Ganju transferred the petition to the National Company Law Tribunal. The Petitioner is at liberty to take appropriate steps in accordance with law for further proceedings before the National Company Law Tribunal.

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