Simultaneous Winding-up Petitions Can’t Proceed in 2 Forums Transfer to NCLT is Justified as IBC, Aims to Encourage Company Revival | HC

Case Details: Uma Sharma v. Octagon Builders & Promoters - [2023] 156 taxmann.com 438 (Delhi)

Judiciary and Counsel Details

• • Prathiba M. Singh, J.
  • Jai Bansal, Adv. for the Petitioner.
  • Ms Ruchi Sindhwani, Sr. Standing Counsel, Ms Megha Bharara, Rajat Bhatia, Ms Alka Nupur Singh, Karan Ahuja & Ms Ekta Mudgil, Advs. for the Respondent.

Facts of the Case

In the instant case, a petition was filed under section 433 of the Companies Act, 1956 by the petitioner/creditor against the company ‘O’ seeking its winding up. The said petition was admitted. Consequently, an Official Liquidator (OL) was appointed and, a liberty was given to the petitioner to file its claim before OL.

Meanwhile, another company filed a petition to initiate a Corporate Insolvency Resolution Process (CIRP) against the company ‘O’ before NCLT. During the pendency of a petition filed by another company, the Insolvency and Bankruptcy Code, 2016 (IBC) was enacted and pending proceedings under section 271 of the Companies Act, 2013 were to be transferred to NCLT.

Also, it was noted that in a petition filed by another company, an Interim Resolution Professional was appointed and in instant case winding up proceeding was at a nascent stage as only initial publication was done in newspapers by OL.

High Court Held

The High Court observed that since the instant matter could not be proceeded before two fora and IBC being a statute meant to encourage the revival of a company, it was deemed appropriate to transfer the instant petition to the NCLT. The High Court held that instant petition was to be transferred to NCLT and petitioner was free to pursue its claim before NCLT.

List of Cases Referred to

• • Citicorp International Ltd. v. Shiv-Vani Oil & Gas Exploration Services Ltd. [2017] 85 taxmann.com 95 (Delhi) (para 9)
  • Action Ispat & Power (P.) Ltd. v. Shyam Metalics and Energy Ltd. [2020] 122 taxmann.com 147/[2021] 164 SCL 375 (SC) (para 10)
  • K. N. Rajakumar v. V. Nagarajan [2021] 130 taxmann.com 254 (SC) (para 13).