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TMI Blog2024 (2) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... the contemnor, the contemnor cannot be punished. The plea canvassed on behalf of the respondent is sound in so far that it has been urged that the disobedience was not wilful or intentional and this court finds the same to be sustainable in law. There has never been any wilful disobedience to violate the directions of this Court. It is but evident that efforts have been made to repay the outstanding amount as also towards revival of the company through infusion of funds. The fact that winding up proceedings were underway and thereafter proceedings under the IBC have been initiated in the interim, affords a valid and sustainable defence to the contemnor in these proceedings. The present contempt petition is dismissed. - HON'BLE MR. JUSTICE DHARMESH SHARMA For the Petitioner Through: Mr. Nikhil Palli Mr. Kshitij Pal, Advocates, Mr. Shikhil Suri, Ms. Madhu Suri, Ms. Jyoti Suri and Ms. Mahima Aggarwal, Advocates. For the Respondent Through: Mr. Anil Nag, Adv. JUDGMENT 1. The present Company Petitions have been moved under Sections 433(e) (f), 434 and 439 of the Companies Act, 1956, read with Rules 6 and 9 of the Companies (Court) Rules, 1959, seek ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices/bills raised by the petitioner company, and has deliberately neglected to make payment of an amount of Rs. 30,25,397/- arising out of invoices raised for the period from 01.01.2013 to 24.02.2015. It is further stated that the respondent company is also liable to pay interest @ 24% per annum on the delayed payments. 8. The respondent company failed to discharge its liability and neglected to pay the outstanding amount despite several reminders. Consequently, the petitioner company was constrained to serve a statutory legal notice upon the respondent company on 31.07.2015, as provided for under Section 433 and 434 of the Companies Act, 1956. Although the notice was served to the site office, directors and the corporate office of the respondent company, the same was not replied to and neither was the outstanding amount paid. 9. This court issued notice of the company petition to the respondent company on 16.02.2016. SUBMISSIONS : 10. It has been submitted on behalf of the petitioner in CO. PET. 981/2015 that the present company petition stands to be admitted by this court. A two-fold argument has been put forth in this regard. Firstly , it has been submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the appeal for instituting the Corporate Insolvency Resolution Process [CIRP] is underway before the learned NCLAT, it is the opinion of this court that these winding up petitions stand to be transferred to the NCLT so as to prevent duplicity of proceedings and ensure judicial propriety and consistency. 15. During the pendency of these proceedings, the Insolvency and Bankruptcy Code, 2016 [IBC] has since been enacted, along with the introduction of Companies Act, 2013 [The Act]. In particular, Section 434 of the said Act has to be considered, which provides for the transfer of proceedings relating to winding up, pending before High Courts, to the National Company Law Tribunal [NCLT], and reads as under: 434. Transfer of certain pending proceedings (1) On such date as may be notified by the Central Government in this behalf,- (a) all matters, proceedings or cases pending before the Board of Company Law Administration (herein in this section referred to as the Company Law Board) constituted under sub-section (1) of section 10E of the Companies Act, 1956 (1 of 1956), immediately before such date shall stand transferred to the Tribunal and the Tribunal s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication of the Ministry of Corporate Affairs, dated 07.12.2016 [G.S.R. 1119 (E) dated 07.12.2016, Ministry of Corporate Affairs], whereby the Companies (Transfer of Pending Proceedings) Rules, 2016 were enacted, Rule 5 of which is relevant and reads as under: 5. Transfer of pending proceedings of Winding up on the ground of inability to pay debts. (1) All petitions relating to winding up under clause (e) of section 433 of the Act on the ground of inability to pay its debts pending before a High Court, and where the petition has not been served on the respondent as required under rule 26 of the Companies (Court) Rules, 1959 shall be transferred to the Bench of the Tribunal established under sub-section (4) of section 419 of the Act, exercising territorial jurisdiction and such petitions shall be treated as applications under sections 7, 8 or 9 of the Code, as the case may be, and dealt with in accordance with Part II of the Code: Provided that the petitioner shall submit all information, other than information forming part of the records transferred in accordance with Rule 7, required for admission of the petition under sections 7, 8 or 9 of the Code, as the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Courts, which are at a nascent stage and have not progressed to an advanced stage, ought to be transferred to the NCLT. It is but evident that both the present company petitions have not yet reached an advanced stage and no substantive orders have been passed towards the winding up of the respondent company. 19. In light of the foregoing discussion and in light of the fact that the NCLT has already admitted an application for initiating CIRP against the respondent company vide order dated 22.12.2022, albeit the appeal against the same is still pending before the learned NCLAT. It is the view of this court that such proceedings cannot simultaneously proceed between the two fora and these winding up proceedings deserve to be transferred to the NCLT accordingly. 20. At this juncture and in this regard, reliance may be placed on the decision of the Supreme Court in K.N. Rajakumar v. V. Nagarajan C.A. No. 1792/2021, date of decision 15.09.2021, wherein it was held that the primary objective of the Insolvency and Bankruptcy Code, 2016 is the revival of the corporate debtor and liquidation has to be resorted to only as a last resort. The relevant portion of the said judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to settle the matter as well as to make payments towards the outstanding amount. It is also borne out from the record that the respondent undertook to make the payments by 31.03.2020, and the same came to be recorded in the order dated 30.08.2019 in CO. EPT. 981/2015 and thereafter in the present contempt petition vide order dated 02.09.2019. Per the Affidavit of Undertaking, the respondent had stated that the company was in the process of arranging funds through an Asset Reconstruction Company and that an infusion of funds was expected in the month of March 2020. 29. It has also been brought to the notice of this court, as stated above, that during the pendency of these proceedings, an application seeking to move an Insolvency Petition came to be moved against the Respondent Company at the behest of Punjab National Bank, before the NCLT, which was admitted vide order of the NCLT dated 22.12.2022, and the appeal pertaining to the matter is currently pending before the learned NCLAT. SUBMISSIONS 30. It has been submitted on behalf the petitioner that the respondent is in violation of the order of this court dated 12.02.2016, and has wilfully disobeyed to make good the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned NCLAT, whereby the constitution Committee of Creditors has been put in abeyance. However, it is submitted that the company is presently under the control of the Interim Resolution Professional. Further, it has been submitted that an affidavit has been placed on the record pursuant to directions dated 01.11.2022, wherein it is categorically stated that none of the assets of the company have been transferred in any for to any third party, since 12.02.2016. 34. In view of the above, it has been submitted that the inability to pay the outstanding amount is a consequence of business failure and for reasons outside the control of the respondent. Reliance has been placed on the judgement of this court in Ved Prakash Abbot v. Kishore K. Avarsekar Ors Contempt Case (Civil) No. 579/2017, wherein it has been held that inability to pay in terms of an undertaking would not amount to wilful disobedience, specially when insolvency proceedings are pending against the company and the control of the management has been vested with the Interim Resolution Professional. Furthermore, reliance has also been placed on the judgement of this court in Vijay Kumar Bhatia v. Som Datt Ente ..... 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