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TMI Blog2021 (7) TMI 1111X X X X Extracts X X X X X X X X Extracts X X X X ..... for the Respondent No.10 Mr. A.S. VAKIL for the Respondent (s) No.11-13, 14 Mr. ABHIJIT P. JOSHI for the Respondent No.16 Mr. NANADISH Y. CHUDGAR For the Respondent No.1 Mr. ASHISH H. SHAH for the respondent No.7 Mr. DIPEN C. SHAH for the respondent No.6 CIVIL APPLICATION NO.1/2010 MR. DEVANG TRIVEDI For the Appellant Mr. SOAHM JOSHI, AGP FOR THE RESPONDENT Mr. G.M. JOSHI for the Respondent Mr. K.M. PARIKH for the Respondent Mr. A.S. VAKIL for the Respondent Mr. NANDISH Y. CHUDGAR for the Respondent Mr. ASHISH H. SHAH for the Respondent ORAL ORDER (PER : HONOURABLE DR. JUSTICE VINEET KOTHARI) In this case, a detailed order was passed by Coordinate Bench of this Court of which one of us was party (Justice Vineet Kothari) on 17.02.2021, which is quoted below: "1. We have heard this matter at length on 04.02.2021, 09.02.2021 and today, 17.02.2021. All the learned counsels have made detailed submissions about the possibility of transfer of proceedings to the National Company Law Tribunal (NCLT) under the provisions of the Insolvency and Bankruptcy Code, 2016 and the latest judgment of the Hon'ble Supreme Court in the case of Action Ispat and Power Pvt. Ltd. V. Shy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and are taken over by the Company Liquidator, section 290 of the Companies Act, 2013 would indicate that the Company Liquidator may carry on the business of the company, so far as may be necessary, for the beneficial winding up of the company, and may even sell the company as a going concern. So long as no actual sales of the immovable or movable properties have taken place, nothing irreversible is done which would warrant a Company Court staying its hands on a transfer application made to it by a creditor or any party to the proceedings. It is only where the winding up proceedings have reached a stage where it would be irreversible, making it impossible to set the clock back that the Company Court must proceed with the winding up, instead of transferring the proceedings to the NCLT to now be decided in accordance with the provisions of the Code. Whether this stage is reached would depend upon the facts and circumstances of each case. 23. In the facts of the present case, the concurrent finding of the Company Judge and the Division Bench is that despite the fact that the liquidator has taken possession and control of the registered office of the appellant company and its factor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 003, can be transferred to the NCLT, at this stage. 7. We have also summoned the record of the winding-up petition, namely, Company Petition No.139 of 1985, M/s. Shethna Enterprises V. M/s. Ganpati Pulp and Paper Mills Ltd., in which a winding-up order was passed by a learned Single Judge as Company Court on 12.03.1986. The Office may place the record of the said winding-up petition before us on the next date. 8. Mr. Abhijit Joshi, learned counsel appearing for the Official Liquidator, also submits that a Status Report was filed in this Letters Patent Appeal in March 2011, along with the copy of the winding-up order dated 12.03.1986. He submitted that the Secured Creditor, Gujarat State Financial Corporation, had sold the Assets of the said defaulting Company, Respondent No.6 - M/s. Ganpathi Pulp and Paper Mills Ltd., under Section 29 of the State Financial Corporation Act, 1951, without the permission of the Company Court. 9. However, this submission was disputed Mr. Devang Trivedi, learned counsel appearing for Respondent No.1 - Gujarat State Financial Corporation and Mr. Nandish Chudgar, learned counsel appearing for Respondent No.5 - M/s. Shree Industries Ltd., the Auctio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and again on 13.12.2010 headed by the Hon'ble Chief Justice at that relevant time and in view of that interim order, which is continuing even now, the said Assignee of Respondent No. 3 - ASREC (India) Ltd., which steps into the shoes of the Secured Creditor - Bank of Baroda, is unable to even negotiate or settle with the said Respondent No.5 - Shree Industries Ltd. and in the interest of justice, the said blanket Status Quo order deserves to be modified and at least these parties should be directed to undertake the negotiations for Settlement of the dispute of the said Secured Creditor, the Assignee of Bank of Baroda - M/s. ASREC (India) Ltd. and such other Secured Creditors who are waiting for recovery even through such Settlement and have not yet given their 'No Dues Certificate' in favour of Respondent No.5 - Shree Industries Ltd. 12. This submission was opposed, initially, by Mr. A.S. Vakil, learned counsel for the Appellants, who are the Guarantors for the loan of Borrower - Ganpati Pulp and Paper Mills Ltd., now in liquidation. He submits that since this interim order, in the form of Status Quo order, is continuing since last about ten years, let the present Let ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foresaid modification of the Status Quo order shall remain subject to the final decision of this Letters Patent Appeal and such further orders as this Court deems appropriate to be passed later on. 14. The learned counsel for the Official Liquidator has already been directed to produce before us the latest Status Report of the winding-up proceedings taken with regard to the Company in liquidation, namely, M/s. Ganpati Pulp and Paper Mills Ltd. 15. The record of the winding-up petition being Company Petition No.139 of 1985, M/s. Shethna Enterprises V. Ganpati Pulp and Paper Mills Ltd. and other related Interim Applications, if any, filed in that winding-up petition, along with the Court orders passed therein, may also be placed before us along with the record of this Letters Patent Appeal on the next date of hearing. 16. All the learned counsels appearing in the present case before us are requested to file their Brief Note of Submissions, along with the copies of the relevant Court orders and the judgments / citations, which they want to rely by the next date of hearing, in hard-copies, after exchanging copies with the other learned opposite counsels appearing in this matter. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... larly, Respondent No.5 and Respondent No.9 shall make it a point to convene and hold such meeting and proceed further in appropriate manner in the letter and spirit of the earlier directions of this Court and undertake the process of settlement of the dues as indicated in the said Order dated 17.2.2021. Let the Report of such meeting be filed by both these parties and be placed before this Court on the next date of hearing. 4. List the matter again on 1.7.2021. 5. A copy of the Report to be submitted to this Court shall be supplied to all the other learned Counsels appearing in the matter." In pursuance of the order dated 07.06.2021, it seems that the Respondent No. 9- M/s. ASREC (India) Limited and M/s. Shree Industries Limited (SIL) have held the Meetings on 25.06.2021 and 26.06.2021 as directed by this Court, but it appears that no fruitful settlement could be arrived at in the said Meetings vide the compilation of Mails and Minutes of Meetings filed by Mr. S. H. Bhagat, learned Counsel appearing for the M/s. ASREC (India) Limited with the correspondence ranging from 14th June to Meeting dated 26.06.2021. Learned Counsel for M/s. Shree Industries Limited (SIL) Mr. Na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , had not yet been settled & paid off. They may be either Secured or Unsecured Creditors claiming their recovery rights against the Assets of the defaulter Unit M/s. Ganpati Pulp in the present case. There may be valid or unsustainable defences on the part of the purchaser and others and the original defaulter Unit and its Promoters, Directors, etc. All these aspects, therefore, need to be looked into and appreciated by the NCLT, the appropriate fact finding body in such circumstances. Further, a winding up petition was also filed under the provisions of Companies Act, 1956 namely Company Petition No. 139 of 1985 - M/s. Shethna Enterprises V. M/s. Ganpati Pulp and Paper Mills Limited and the winding up proceedings are still pending before the learned Single Judge, as the Hon'ble Company Judge, under the winding up order dated 12.03.1986 passed against the Respondent-Company. We have noticed in the above quoted order dated 17.02.2021, the judgment of the Hon'ble Supreme Court of India in the case of M/s. Action Ispat and Power Pvt. Ltd. V. Shyam Metalics and Energy Ltd. reported in (2021) 224 Com Cases 35 (SC), of which, para no. 22 was quoted in our order dated 17.02.20021. 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