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2017 (6) TMI 985 - HC - Insolvency and BankruptcyTransfer of pending winding up petitions to NCLT - Held that - Though the starting sentence refers to all pending petitions relating to winding up on the ground of inability to pay debt as a condition for transfer to the NCLT, it is a conjunctive sentence, the later part of which specifies or refers to a situation where the petition has not been served on the respondent as required under Rule 26 of the Companies (Court) Rules, 1959. Petitions, which have been filed but not served, would also come within the ambit of the all encompassing expression used in the first two words of the aforesaid provision. In my opinion, however, since all the petitions have been qualified with the expression where the petition has not been served , only those petitions, filed in the Court but service thereof have not been effected on the respondent, shall stand transferred We do not contemplate transfer of winding up petitions which are pending before this Court in respect of which service has already been made.
Issues Involved:
1. Recall of consent orders in Company Petition No. 575 of 1982. 2. Transfer of pending proceedings to the National Company Law Tribunal (NCLT) under the Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016. Detailed Analysis: 1. Recall of Consent Orders in Company Petition No. 575 of 1982: The main matter before the court was an application seeking the recall of consent orders passed in Company Petition No. 575 of 1982 on 25th March 1983 and 27th April 1983. The applicants, Angelo Brothers Ltd. and Hungerford Investment Trust Ltd., sought the recall of these consent orders. Bennett Coleman & Co. Ltd. filed an application for the dismissal of this recall application, registered as CA 187 of 2016. The hearing was scheduled for 11th January 2017. 2. Transfer of Pending Proceedings to NCLT: During the hearing, the learned senior counsel for Bennett Coleman & Co. Ltd. referred to a notification (G.S.R. 1119(E)) and a Statutory Order (S.O. 3676(E)) both dated 7th December 2016. These instruments were issued under the Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016. The notification and order stipulated the transfer of certain pending proceedings to the NCLT. Specifically, G.S.R. 1119(E) provided rules for the transfer of pending proceedings, including those related to winding up, to the NCLT. The relevant clauses of G.S.R. 1119(E) included: - Clause 3: Transfer of pending proceedings other than winding up to the Tribunal. - Clause 4: Pending proceedings relating to voluntary winding up to continue in the High Court. - Clause 5: Transfer of pending proceedings of winding up on the ground of inability to pay debts to the Tribunal, provided the petition has not been served on the respondent. The Statutory Order (S.O. 3676(E)) further clarified the transfer of proceedings to the Tribunal, emphasizing that only those proceedings not reserved for orders or not served on the respondent would be transferred. Interpretation and Jurisdictional Issue: The court needed to interpret Clause 5 of G.S.R. 1119(E) to determine whether the recall application should be transferred to the NCLT. The court noted that the interpretation of the clause was crucial, as it specified that only petitions not served on the respondent should be transferred. The court concluded that the conjunction "and" in the clause qualified the petitions to be transferred, meaning only those not served on the respondent should be transferred. This interpretation was supported by an unreported judgment of the Bombay High Court in West Hills Realty Pvt. Ltd. vs. Neelkamal Realtors Tower Pvt. Ltd., which held that petitions served on the respondent would continue in the High Court. Conclusion: The court determined that the statutory instruments did not contemplate the transfer of winding up petitions already served on the respondent to the NCLT. Therefore, the recall application in CP 575 of 1982 would not be transferred and would continue to be dealt with by the High Court. The applications related to CP 575 of 1982 were scheduled for further hearing the next day.
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