2024 (1) TMI 1060 - HC - Companies Law

Transfer of pending application for winding up of the respondent company to the NCLT under IBC - non-payment of dues arising out of a contract for services entered into between the parties - Section 433(e) read with Sections 434 and 439(1)(b) of the Companies Act, 1956 - HELD THAT - Reliance may be placed 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. It is the opinion of this Court, that since no substantive proceedings have been undertaken towards winding up of the company, the present petition does not deserve to be continued before this Court. The present company petition is at a very nascent stage and no effective orders as such have been passed towards the winding up of the company. Before parting with this matter, it would be suffice to state that the three decisions WEST HILLS REALTY PRIVATE LTD. RAVI GHAI AND ANOTHER VERSUS NEELKAMAL REALTORS TOWER PVT. LTD. 2016 (12) TMI 1253 - BOMBAY HIGH COURT , COMMISSIONER OF INCOME TAX-8, MUMBAI VERSUS REGISTRAR OF COMPANIES, MUMBAI, MR. KESAVAN VARADARAJAN DIRECTOR, MOTECH SOFTWARE PVT. LTD., MR KAUSHIK VRAJDAS VED 2017 (5) TMI 315 - BOMBAY HIGH COURT , THE JAYABHARAT CREDIT LIMITED VERSUS JALGAON RE-ROLLING INDUSTRIES LTD. 1996 (10) TMI 527 - BOMBAY HIGH COURT have no bearing on the matters in issue in view of categorical directions of the Supreme Court in the above noted case of Action Ispat and Power Limited. The instant petitions are transferred to the NCLT. Parties to appear before the NCLT on 01.04.2024. The interim orders passed by this Court in these petitions, if any, shall continue till the said date. Petition disposed off.

Summary

Issues involved:
The issues involved in this case include the petitioner seeking winding up of the respondent company under Section 433(e) read with Sections 434 and 439(1)(b) of the Companies Act, 1956 due to non-payment of dues amounting to Rs. 67,70,984 arising from a contract for services.

Factual Background:
The petitioner company provided manpower services to the respondent company under a contract dated 01.11.2008, which was renewed multiple times. Despite regular payments until 2012, the respondent company failed to clear outstanding dues of Rs. 67.7 lacs, as acknowledged in an email. After serving a legal notice, a winding-up petition was filed.

Submissions:
The respondent argued that the petition should be transferred to the National Company Law Tribunal (NCLT) as per the Companies (Transfer of Pending Proceedings) Rules, 2016. They also contended that the claims by the petitioner were barred by limitation due to a civil suit and arbitration proceedings not being initiated.

Analysis & Decision:
The court noted that the proceedings were at a nascent stage with no substantive orders passed. Considering the Insolvency and Bankruptcy Code, 2016 and Companies Act, 2013, the court decided to transfer the case to the NCLT as per Section 434 of the Companies Act, 2013. Citing the Supreme Court decision in Action Ispat and Power Limited v. Shyam Metalics and Energy Limited, the court emphasized that cases not progressed to an advanced stage should be transferred to the NCLT. The court concluded that since no substantive proceedings had taken place, the petition did not merit continuation before the High Court and ordered the transfer to the NCLT.

Judgment Outcome:
The court disposed of the company petition and directed the transfer to the NCLT, with parties to appear before the NCLT on a specified date. The interim orders passed by the High Court were to continue until the transfer date, and the NCLT was tasked with considering the matter and passing appropriate orders in accordance with the law. The electronic record of the petitions was to be transmitted to the NCLT within a week for further proceedings.