Content Provider | Supreme Court of India |
---|---|
e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | s.434(1)(c) 2013 fifth proviso Companies Act Transfer of winding up proceedings from Company Court to NCLT |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Act(s) Referred | Companies Act, 2013 (18 of 2013) |
Case(s) Referred | Referred Case 0 Referred Case 1 |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Dismissed |
Headnote | Companies Act, 2013: s.434(1)(c), fifth proviso; s.290 –Transfer of winding up proceedings from Company Court to NCLT– Permissibility of, at the stage of post admission of winding uppetition – Held: In a winding up proceeding where the petition hasnot been served in terms of r.26 of the Rules, 1959 at a pre-admissionstage, given the beneficial result of the application of the Code,such winding up proceeding is compulsorily transferable to theNCLT to be resolved under the Code – Even post issue of noticeand pre admission, the same result would ensue – However, postadmission of a winding up petition and after the assets of thecompany sought to be wound up become in custodia legis and aretaken over by the Company Liquidator, s.290 of the Act, 2013 wouldindicate that the Company Liquidator may carry on the business ofthe company, so far as may be necessary, for the beneficial windingup of the company, and may even sell the company as a goingconcern – So long as no actual sales of the immovable or movableproperties have taken place, nothing irreversible is done whichwould warrant a Company Court staying its hands on a transferapplication made to it by a creditor or any party to the proceedings– It is only where the winding up proceedings have reached a stagewhere it would be irreversible, making it impossible to set the clockback that the Company Court must proceed with the winding up,instead of transferring the proceedings to the NCLT to now bedecided in accordance with the provisions of the Code – In theinstant case, the concurrent finding of the Company Judge and theDivision Bench is that despite the fact that the liquidator has takenpossession and control of the registered office of the appellantcompany and its factory premises and records and books, noirreversible steps towards winding up of the appellant company haveotherwise taken place – This being so, Company Court correctlyexercised discretion vested in it by the 5th proviso to s.434(1)(c)and transferred the winding up petition to NCLT – Companies(Transfer of Pending Proceedings) Rules, 2016 – Insolvency andBankruptcy Code, 2016 – s.7 – Company (Court) Rules, 1959 –r.26. |
Judge | Hon'ble Mr. Justice R.F. Nariman |
Neutral Citation | 2020 INSC 699 |
Petitioner | Action Ispat And Power Pvt. Ltd. |
Respondent | Shyam Metalics And Energy Ltd. |
SCR | [2020] 13 S.C.R. 783 |
Judgement Date | 2020-12-15 |
Case Number | 4041 |
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