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2018 (9) TMI 1220 - HC - Companies LawSeeking transfer of petition to the NCLT - Held that - The present winding up petition is at an initial stage. This court on 15.05.2018 had revived the order appointing the OL as the provisional liquidator. The order appointing the OL was originally passed on 07.08.2015 which had been put in abeyance on account of settlement between the petitioner and, the respondent. Pursuant to this order of revival passed on 15.05.2018 the OL has taken steps and sealed the head office, as per ROC records, which is located at A-257, Road No.6, Mahipalpur, New Delhi-110037. Regarding the Factory premises, the possession of the same has already been taken over by the UCO Bank under the SARFAESI Act, 2002. Clearly the proceedings for winding up of the respondent company are at an initial stage. The other factor which is admitted by learned counsel for the parties is that other than the factory and land at District Rudrapur, Uttrakhand, there is no immovable or worthwhile movable asset of the respondent company. The registered office at Mahipalpur, New Delhi is a tenanted property which has been sealed by the OL. The landlord of the premises is seeking desealing of the suit premises. Thus in the facts and circumstances of this case, it would be in the interest of the creditors that the proceedings are transferred to NCLT and an attempt is made for initiation of corporate insolvency resolution. In case the same is successful, the same would be in the interest of creditors. To overcome any objection raised by the petitioner and the exdirectors, I also allow CA No. 741/2018 and implead UCO Bank as a party to the present company petition. The order appointing the OL as the provisional liquidator initially passed on 07.08.2015 and revived on 15.05.2018 is revoked subject to UCO Bank paying the expenses of ₹ 75,000/- which has been incurred by the OL.On payment of the expenses to the OL, the order appointing the OL as the provisional liquidator would stand revoked.
Issues:
1. Impleadment of UCO Bank in the company petition 2. Transfer of the petition under section 434 of the Companies Act, 1956 to the NCLT Impleadment of UCO Bank: The UCO Bank filed CA Nos.741-742/2018 seeking to be impleaded as a party in the company petition and transfer the petition to the NCLT. The bank claimed that it was unaware of the petition until 23.05.2018 during proceedings under the Insolvency Code. The UCO Bank asserted that the respondent company owed significant amounts to them and other consortium banks, with the only valuable assets being immovable properties. The bank argued that transferring the matter to NCLT would expedite the resolution process under the Insolvency & Bankruptcy Code, 2016. The court considered the newly added proviso in section 434 of the Companies Act, 2013, allowing parties to request transfer to the Tribunal. Opposition to Transfer: The petitioner and ex-directors opposed the transfer, claiming the UCO Bank had been inactive despite the respondent's account being declared an NPA in 2014. They highlighted that an e-auction in 2017 yielded no bids and the debt had increased substantially. The ex-directors cited the appointment dates of the OL and the challenges faced by the respondent due to external factors like floods. The Official Liquidator initially had no objections to the transfer but later sought to file a fresh reply opposing it. Legal Provisions and Discretion: Section 434 of the Companies Act, 2013 was examined, emphasizing the proviso allowing transfer of winding up proceedings to the NCLT upon application by parties involved. The court noted the discretionary nature of the proviso, providing the court with the authority to decide on transfers. Despite the appointment of the OL as the provisional liquidator, the court considered the early stage of the winding up petition and the lack of significant assets apart from the factory premises in Uttarakhand. Decision and Order: Considering the interests of creditors, the court decided to transfer the proceedings to the NCLT for possible corporate insolvency resolution. The UCO Bank was impleaded as a party, and the order appointing the OL as the provisional liquidator was revoked upon payment of incurred expenses. The court directed the UCO Bank to provide proof of payment to initiate the transfer process. The OL was instructed to de-seal the property upon receiving the expenses and preserve any records pending further orders from the NCLT. In conclusion, the court disposed of the applications, allowing the transfer of the matter to the NCLT after fulfilling the specified conditions. The detailed analysis of the issues involved in impleadment and transfer, along with the legal provisions and considerations, led to the decision to expedite the resolution process for the benefit of the creditors and stakeholders involved in the case.
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