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2021 (7) TMI 1111 - HC - Companies LawWinding up petition - proceedings transferred to NCLT - Section 434(1)(c) of The Companies Act, 2013 - HELD THAT - The exercise of extraordinary jurisdiction under Article 226 of the Constitution of India, in such cases of complex facts, financial statements claims will be inappropriate and such question of facts may not be properly adjudicated at all under Article 226 of the Constitution of India. Such fact finding exercise necessarily should be undertaken by the appropriate fact finding Tribunal and Authorities. The winding up proceedings pending before the learned Company Judge are not at the advance stage of the winding up of the Company and the said proceedings are pending for long period since 1986 without much of the progress and that may be apparently because the Assets of the Company were sold in favour of M/s. Shree Industries Limited (SIL), and thereafter,there nothing much was left with the Company in Liquidation -M/s. Ganpati Pulp to square up the dues of the other Secured and Unsecured Creditors and also the workmen. It is requested all the learned Counsels appearing the present matter today before us or who have already put in their appearance in this matter to file a brief two page Note either agreeing to the aforesaid proposed order of the Court or if they wish to make a submission against the aforesaid proposed order, they may do so with reason and case law, if any.
Issues Involved:
1. Transfer of winding-up proceedings to the National Company Law Tribunal (NCLT). 2. Status of winding-up proceedings and the sale of assets. 3. Settlement of dues with secured creditors. 4. Continuation and modification of interim status quo orders. 5. Jurisdiction and appropriateness of adjudication under Article 226 of the Constitution of India. Issue-wise Detailed Analysis: 1. Transfer of winding-up proceedings to the National Company Law Tribunal (NCLT): The court considered the possibility of transferring the winding-up proceedings to the NCLT under the Insolvency and Bankruptcy Code, 2016. The judgment referenced the Supreme Court case of Action Ispat and Power Pvt. Ltd. V. Shyam Metalics and Energy Ltd., which concluded that winding-up proceedings can be transferred to the NCLT unless they are at an irreversible stage. The court noted that the winding-up proceedings of M/s. Ganpati Pulp and Paper Mills Ltd. were not at such an advanced stage, thus allowing for the potential transfer to the NCLT. 2. Status of winding-up proceedings and the sale of assets: The court reviewed the status of the winding-up petition (Company Petition No. 139 of 1985) where a winding-up order was passed on 12.03.1986. The Official Liquidator submitted that the assets of the defaulting company were sold by the Gujarat State Financial Corporation without the permission of the Company Court. The court directed the Official Liquidator to produce the latest status report of the winding-up proceedings to ascertain the stage of the proceedings and decide on the transfer to the NCLT. 3. Settlement of dues with secured creditors: The court directed Respondent No.5 (Shree Industries Ltd.) and Respondent No.9 (ASREC (India) Ltd.) to undertake negotiations for the settlement of dues with secured creditors. The court modified the interim status quo order to facilitate these negotiations. Despite several meetings, no fruitful settlement was reached. The court emphasized the need for further negotiations and directed the parties to report on their efforts. 4. Continuation and modification of interim status quo orders: The court noted that the interim status quo order had been in place for over ten years, preventing any productive resolution or use of assets. To address this, the court modified the status quo order, allowing for negotiations and potential settlements between the parties. The court directed the parties to report on the outcome of these negotiations. 5. Jurisdiction and appropriateness of adjudication under Article 226 of the Constitution of India: The court expressed the opinion that the complex facts and financial claims involved in the case were not suitable for adjudication under Article 226 of the Constitution of India. Instead, such matters should be handled by the NCLT, which is the appropriate fact-finding body for insolvency and bankruptcy issues. The court proposed to dispose of the Letters Patent Appeal by requesting the Company Judge to consider transferring the winding-up proceedings to the NCLT. Proposed Order: The court proposed to dispose of the Letters Patent Appeal by requesting the Company Judge to consider transferring the pending winding-up proceedings to the NCLT, Ahmedabad. The NCLT would then handle the proceedings, including deciding on claims, counterclaims, and respective defenses. The court invited the learned counsels to submit their agreement or objections to the proposed order, with reasons and case law if any, before finalizing the order.
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