2024 (5) TMI 1522 - HC - Companies Law

Seking winding up of the respondent company on the grounds of non-payment of outstanding dues along with due interest - Section 433 of the Companies Act 1956 - HELD THAT - The entire statutory scheme in respect of winding up of companies as also a catena of judgements has been considered by the Supreme Court in holding that even post admission such a petition may be transferred by the High Court to the NCLT as long as no irreversible steps have been taken pursuant to the winding up of the company concerned. Further the submission of the learned Counsel for the petitioner that no application seeking transfer of the present petitions to the NCLT has been moved cannot be countenanced. A decision to transfer the matter to the NCLT is a matter of jurisdiction of the Court which transfer can be effected suo moto by this Court and mere moving or non-moving of an application by any of the parties seeking such transfer will not be decisive. Conclusion - It is the opinion of this Court that since no substantive proceedings have been undertaken towards winding up of the company the present petitions can not be allowed to be continued before this Court. Hence the instant petitions are transferred to the NCLT. It is left to the NCLT to consider these matters on merits and pass appropriate orders in accordance with law. List before the NCLT on 08.07.2024.

Summary

The issues presented and considered in the judgment are as follows:1. Whether the winding-up petitions filed under Section 433 of the Companies Act, 1956 seeking winding up of the respondent company on the grounds of non-payment of outstanding dues amounting to Rs. 2,48,39,128/- and Rs. 2,34,53,258/- along with due interest are maintainable.2. Whether the winding-up petitions should be transferred to the National Company Law Tribunal (NCLT) as per the provisions of Section 434 of the Companies Act, 2013.Issue-wise detailed analysis:Issue 1:The petitioner company filed winding-up petitions against the respondent company for non-payment of outstanding dues. The petitioner completed the work as per the work orders issued by the respondent and raised bills for the same. Despite reminders and legal notices, the respondent failed to release the payment, citing internal adjustments under a Memorandum of Understanding (MoU) as the reason for non-payment.The Court considered the submissions of both parties and examined the relevant legal framework under the Companies Act, 1956 and 2013. The Court noted that the winding-up petitions were at a nascent stage with no substantive orders passed. The Court called upon the petitioner to make submissions on transferring the petitions to the NCLT.Issue 2:The main contention revolved around the interpretation of Section 434 of the Companies Act, 2013, which provides for the transfer of winding-up proceedings from High Courts to the NCLT. The petitioner argued that since no application seeking transfer had been filed, the matter should continue before the High Court. The respondent, on the other hand, relied on the Supreme Court decision in Action Ispat case, which allowed for the transfer of winding-up petitions to the NCLT even post-admission.The Court analyzed the statutory provisions and the Supreme Court judgment in the Action Ispat case. The Court emphasized that the transfer to the NCLT is a matter of jurisdiction and can be done suo moto by the Court. It held that since no irreversible steps had been taken towards winding up the company, the petitions should be transferred to the NCLT for further consideration.Significant holdings:The Court held that the winding-up petitions were not maintainable before the High Court and ordered their transfer to the NCLT. The Court emphasized that the transfer can be effected by the Court even without a formal application from the parties. The NCLT was directed to consider the matters on merits and pass appropriate orders in accordance with the law.In conclusion, the Court transferred the winding-up petitions to the NCLT and directed the parties to appear before the NCLT on a specified date. The interim orders passed by the High Court would continue until the NCLT hearing. The judgment disposed of the company petitions and pending applications accordingly.