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TMI Blog2024 (6) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... solvency and Bankruptcy Code, 2016. Since the Official Liquidator has not invited any claims from the creditors or workers of the company in liquidation, the transfer of proceedings to the NCLT would ensure speedier resolution of the corporate insolvency resolution process while also allowing for a more technical consideration of issues and that further proceedings before the NCLT allows for the creditors to be active and final determinants of how the insolvency resolution process would take place. This Court had also expressed apprehensions in respect of the claims of the workmen as the Official Liquidator had not invited any claims in respect of the creditors/workmen as per the requirement of Rule 148 of the said Rules. Mr.Khan for the Official Liquidator and Ms.Cheema for the Applicant have clarified that Section 53(1)(b) read with Section 15(1)(c) read with Regulations 6(2)(c) and 12(1) of the Insolvency and Bankruptcy Code, 2016 (the IBC ) would take care of the same. Therefore, in my view, exercise of power under the 5th proviso to Section 434(1)(c) would be appropriate. The Company Petition shall be treated by the NCLT as an application for initiation of the Corporate Insolv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich Mr.Khan, learned Counsel for the Official Liquidator submits has been handed over to Edelweiss Asset Reconstruction Company Limited pursuant to order dated 23rd January 2018 passed in Company Application Lodging No. 606 of 2017. 3. Mr.Khan, learned Counsel for the Official Liquidator would submit that possession of the other properties referred to in the affidavit have already been taken over by Edelweiss Asset Reconstruction Company Limited, as a secured creditor, pursuant to Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI) proceedings and that, at present, the Official Liquidator is not in possession of any of the properties of the company. 4. Mr.Khan would submit that the Official Liquidator has not invited any claims from the creditors or workers as per the requirement of Rule 148 of the said Rules. Mr.Khan refers to the affidavit in reply and submits that in view of the decision of the Hon ble Supreme Court in the case of A. Navinchandra Steels Private Limited vs. SREI Euipment Finance Ltd. Others [Civil Appeal Nos.4230-4234 of 2020 decided on 1st March 2021] the power of this Court to transfer the petitions pending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at as long as nothing irreversible is done which would warrant a Company Court staying its hand on a transfer application made to it by a creditor or any other party to the proceeding, the Company Court can go ahead and transfer the said proceedings to the NCLT. Paragraphs 23 and 24 of the decision in the case of A. Navinchandra Steels Private Limited vs. SREI Euipment Finance Ltd. Others (supra) usefully quoted as under: 23. In Kaledonia Jute and Fibres Pvt. Ltd. v. Axis Nirman and Industries Ltd., 2020 SCC OnLine SC 943 [ Kaledonia ], this Court decided as to whether a winding up proceeding in the Company Court could be transferred despite the fact that the winding up order had been passed and then been kept in abeyance. This Court, in paragraph 25 held: (SCC p.413) 25. Apart from providing for the transfer of certain types of winding up proceedings by operation of law, Section 434(1)(c) also gives a choice to the parties to those proceedings to seek a transfer of such proceedings to the NCLT. This is under the fifth proviso to Clause (c). The Court then went on to hold that in a winding up proceeding that has been admitted, since all creditors would be parties to such proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Given the aforesaid scheme of winding up under Chapter XX of the Companies Act, 2013, it is clear that several stages are contemplated, with the Tribunal retaining the power to control the proceedings in a winding up petition even after it is admitted. Thus, in a winding up proceeding where the petition has not been served in terms of Rule 26 of the Companies (Court) Rules, 1959 at a pre-admission stage, given the beneficial result of the application of the Code, such winding up proceeding is compulsorily transferable to the NCLT to be resolved under the Code. Even post issue of notice and pre-admission, the same result would ensue. However, post admission of a winding up petition and after the assets of the company sought to be wound up become in custodia legis 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of any such irreversible stage having reached. Moreover, as submitted by Mr.Siwach for the Petitioner in the winding up petition, that since the Official Liquidator has not invited any claims from the creditors or workers of the company in liquidation, the transfer of proceedings to the NCLT would ensure speedier resolution of the corporate insolvency resolution process while also allowing for a more technical consideration of issues and that further proceedings before the NCLT allows for the creditors to be active and final determinants of how the insolvency resolution process would take place. This Court had also expressed apprehensions in respect of the claims of the workmen as the Official Liquidator had not invited any claims in respect of the creditors/workmen as per the requirement of Rule 148 of the said Rules. Mr.Khan for the Official Liquidator and Ms.Cheema for the Applicant have clarified that Section 53(1)(b) read with Section 15(1)(c) read with Regulations 6(2)(c) and 12(1) of the Insolvency and Bankruptcy Code, 2016 (the IBC ) would take care of the same. Therefore, in my view, exercise of power under the 5th proviso to Section 434(1)(c) would be appropriate. 9. Mr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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