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2022 (1) TMI 1355 - HC - Companies LawSeeking a direction of this Court to transfer the original company petition before the National Company Law Tribunal(NCLT) in view of gazette notification dated 28th May 2016 as amended as well as further amendment to The Insolvency and Bankruptcy Code (Second Amendment) Act, 2018 published in the Gazette of India on 17th August 2018 - HELD THAT - There can be no doubt when a party applies even in a pending case seeking winding-up it is obligatory on part of the High Court or any other Courts before whom the proceedings are pending to remit the matter to the Tribunal. It would be pertinent to note herein that when the order dated 21st March 2017 was passed rejecting the application for transfer, at that stage, The Insolvency and Bankruptcy Code(second Amendment) Act, 2018 was not available for consideration. Pursuant to 2018 amendment, the present application has come to be filed by respondent-Union Bank of India. Application allowed.
Issues: Application for transfer of company petition to National Company Law Tribunal (NCLT) based on Insolvency and Bankruptcy Code amendments.
The judgment pertains to an application filed by the Union Bank of India seeking the transfer of an original company petition before the National Company Law Tribunal (NCLT) in light of amendments to The Insolvency and Bankruptcy Code. The petitioner's counsel highlighted an order from 2017 where it was decided that the proceedings could not be transferred as notice had been served on the parties. An affidavit-in-objection was filed by the respondent-original petitioner. The applicant's counsel relied on the Insolvency and Bankruptcy Code, 2016, specifically pointing out amendments to Section 434(c) of The Companies Act, 2013 published in 2016 and 2018. The 2018 amendment allows parties in winding-up proceedings to apply for transfer to the Tribunal for corporate insolvency resolution. The judgment notes that the 2018 amendment was not available for consideration when the previous order rejecting transfer was passed. Consequently, the application for transfer is allowed and disposed of. In analyzing the issues involved, the judgment first outlines the background of the application filed by the Union Bank of India seeking the transfer of the original company petition to the National Company Law Tribunal (NCLT). The application was based on amendments to The Insolvency and Bankruptcy Code, specifically focusing on Section 434(c) of The Companies Act, 2013. The petitioner's counsel referred to an earlier order from 2017 where it was decided that due to notice being served on the parties, the proceedings could not be transferred and had to be decided by the Court. An affidavit-in-objection was also filed by the respondent-original petitioner in response to the application. The judgment delves into the arguments presented by the applicant's counsel, who relied on the provisions of The Insolvency and Bankruptcy Code, 2016, and subsequent amendments, particularly the one in 2018. The 2018 amendment introduced a provision allowing parties involved in winding-up proceedings to apply for the transfer of such proceedings to the Tribunal. This provision enables the Tribunal to deal with the transferred proceedings as an application for the initiation of corporate insolvency resolution under the Insolvency and Bankruptcy Code, 2016. Furthermore, the judgment highlights that at the time the previous order rejecting the transfer was issued in 2017, the 2018 amendment to The Insolvency and Bankruptcy Code was not available for consideration. The judgment emphasizes the mandatory nature of remitting matters to the Tribunal when a party applies for winding-up proceedings, as per the amendments discussed. Consequently, considering the amendments and their implications, the Court allows and disposes of the application for transfer, thereby granting the relief sought by the applicant, Union Bank of India.
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