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2023 (3) TMI 23 - AT - Companies LawSeeking winding up of company - appellant after lapse of several years from the date when company/industry was declared sick to the reasons best known to it claiming to be contributory under Section 272(1)(b) of the Companies Act, 2013 preferred application for winding up of company - Section 271 (e) and 272(1)(b) of the Companies Act, 2013 - HELD THAT - Admittedly the appellant before the NCLT had claimed to be contributory under Section 272(1) (b) and invoked the jurisdiction of the NCLT under Section 271(e). On examination of Section 271(e) it is evident that under this provision the Tribunal was having discretionary jurisdiction. Had the Tribunal was of the opinion that it was just and equitable to pass order of winding up of the company, this jurisdiction would have been exercised by the Tribunal. This power is not similar to the power given to the Tribunal under Section 271(a)(b)(c) and (d). Similarly sub-section (2) of Section 273 clearly indicates that if such petition is filed i.e. petition filed under Section 271(e) read with Section 272 (1)(b) of the New Act, onus is on the applicant to satisfy that there is just and equitable ground for winding up of a company. Meaning thereby that if an applicant is not in a position to satisfy on the point of just and equitable ground, the tribunal may refuse to make an order for winding up. Moreover in a situation the Tribunal is of the opinion that some other remedy is available to the applicant and applicant are acting unreasonably in seeking the company to be wound up instead of pursuing other remedy, the Tribunal may refuse to exercise its discretion in favour of such applicant. On perusal of the impugned order it is difficult to infer that the appellant herein was in a position to satisfy the Learned Tribunal that there was just and equitable ground for passing winding up order. Moreover, the appellant may not deny that other remedies were also available to the appellant. Besides this on examination of the order impugned it is evident that one of the secured creditor namely Cargil India Pvt Ltd had filed an objection petition against the application filed by the appellants. Thus, Learned NCLT has committed no error in passing the impugned order - appeal dismissed.
Issues Involved:
1. Whether the NCLT's rejection of the winding-up petition under Sections 271(e) and 272(1)(b) of the Companies Act, 2013, was justified. 2. Whether the appellant had other alternative remedies available and if they acted unreasonably in seeking winding-up. 3. Whether the non-joinder of a secured creditor as a party in the appeal affects the case. 4. Applicability of the judgment in Bihar State Cooperative Marketing Union Ltd Vs Uma Shankar Sharan and others to the present case. Detailed Analysis: Issue 1: Justification of NCLT's Rejection of the Winding-Up Petition The appellant, a promoter of Premier Proteins Ltd, filed an application under Sections 271(e) and 272(1)(b) of the Companies Act, 2013, seeking the winding-up of the company. The NCLT rejected this petition, and the appellant challenged this decision under Section 421 of the Companies Act, 2013. The appellant argued that the company was declared sick in 2005 and delisted by the Bombay Stock Exchange in 2016, with substantial financial losses and liabilities. Despite these facts, the NCLT rejected the petition. The Tribunal's decision was based on the discretionary nature of Section 271(e), which requires the Tribunal to be satisfied that it is "just and equitable" to wind up the company. The appellant failed to convince the Tribunal of this requirement. Issue 2: Availability of Alternative Remedies The NCLT considered the availability of other remedies under the Insolvency and Bankruptcy Code (IBC) 2016. Section 273(2) of the Companies Act, 2013, allows the Tribunal to refuse a winding-up order if other remedies are available and the petitioner is acting unreasonably by not pursuing them. The appellant had alternative remedies but chose to file for winding-up, which the Tribunal found unreasonable. The Tribunal's discretion under Section 271(e) was thus exercised appropriately. Issue 3: Non-Joinder of a Secured Creditor One of the secured creditors, Cargil India Pvt Ltd, had filed an objection against the winding-up petition. Although the appellant claimed that the creditor raised no objection during the proceedings, the appellant did not implead this creditor in the present appeal. The Tribunal noted this non-joinder of parties as a significant procedural lapse, further justifying the rejection of the appeal. Issue 4: Applicability of the Bihar State Cooperative Marketing Union Ltd Judgment The appellant cited the judgment in Bihar State Cooperative Marketing Union Ltd Vs Uma Shankar Sharan to argue that the choice of remedy under Sections 271 and 272 should not be dismissed due to the availability of alternative remedies. However, the Tribunal found that the facts and circumstances of the present case were different, and the cited judgment did not provide any substantial assistance to the appellant's case. Conclusion The NCLT's rejection of the winding-up petition was upheld. The appellant failed to demonstrate that it was "just and equitable" to wind up the company, had alternative remedies available, and did not address the non-joinder of a necessary party. The cited Supreme Court judgment did not apply to the present case's specific circumstances. The appeal was dismissed, but the appellant was not precluded from pursuing other legal remedies.
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