2024 (5) TMI 426 - HC - Companies Law

Seeking winding up of the respondent company - failure to pay debt in the normal and ordinary course of its business - HELD THAT - From a perusal of the record, it is borne out that the present company petition is a complete non-starter, in so far then neither a Provisional Liquidator nor an Official Liquidator has yet been appointed in the present petition. In view of the fact that the Insolvency and Bankruptcy Code, 2016 as well as the Companies Act, 2013, have since been enacted during the pendency of these proceedings, it is the opinion of this court that the present petition does not deserve to continue before this Court, and it would be appropriate for the same to be transferred to the National Company Law Tribunal. It would also be expedient to place reliance on the decision of the Supreme Court in the case titled ACTION ISPAT AND POWER PVT. LTD. VERSUS SHYAM METALICS AND ENERGY LTD. 2020 (12) TMI 535 - SUPREME COURT , whereby it was held that those winding up proceedings pending before High Courts, which have not progressed to an advanced stage, ought to be transferred to the NCLT. This above noted decision of the Supreme Court has been relied upon by this court in Citicorp International Limited v. Shiv Vani Oil Gas Exploration Services Limited 2023 (7) TMI 1188 - DELHI HIGH COURT , wherein it was held that winding up proceedings pending before High Courts, which are at a nascent stage and have not progressed to an advanced stage, ought to be transferred to the NCLT. Hence, the instant petition is transferred to the NCLT. In view of the same, the present company petition as well as pending applications, if any, are accordingly disposed of - List before the NCLT on 08.07.2024.

Summary

Issues involved:
The issues involved in this case include the non-payment of an outstanding principal amount by the respondent company, default in rent payments, legal proceedings initiated by the petitioner, and the transfer of the case to the National Company Law Tribunal (NCLT) under relevant sections of the Companies Act.

Issue 1: Non-payment of outstanding rent and winding up petition
The petitioner filed a company petition u/s 433(e) and (f) of the Companies Act seeking winding up of the respondent company due to non-payment of an outstanding principal amount arising from arrears of rent for a specified period. The lease agreement between the parties stipulated a monthly rental amount, but the respondent company defaulted on payments, leading to legal notices and proceedings under the Negotiable Instruments Act and the Punjab Rent Control Act. Despite repeated reminders and legal notices, the respondent failed to discharge its liability, prompting the petitioner to file the winding-up petition.

Issue 2: Transfer of proceedings to NCLT
The High Court considered the enactment of the Insolvency and Bankruptcy Code, 2016, and the Companies Act, 2013, during the pendency of the case. Citing Section 434 of the Companies Act, 2013, the court opined that the petition should be transferred to the NCLT. Referring to a Supreme Court decision, it was emphasized that winding up proceedings at a nascent stage should be transferred to the NCLT for resolution under the Code. Relying on previous judgments, the court decided to transfer the instant petition to the NCLT and directed the electronic record to be transmitted accordingly. The case was listed before the NCLT for further proceedings.

This summary provides a detailed overview of the legal judgment, highlighting the key issues involved and the court's decision to transfer the case to the NCLT based on relevant legal provisions and precedents.