Upon Transfer of Winding up Petition from HC to NCLT, NCLT Shall Deal With it as an Application for Initiation of CIRP | HC

Case Details: Ultratech Cement Ltd. v. Maxout Infrastructures (P.) Ltd. - [2023] 153 taxmann.com 240 (Delhi)

Judiciary and Counsel Details

• • Prathiba M. Singh, J.
  • Ms Deepa Sharma, Adv. for the Petitioner.
  • Siddharth Mullick, Adv. for the Respondent.

Facts of the Case

In the instant case, a Winding up petition had been filed by the petitioner against Respondent company in respect of the unpaid dues. Same had been admitted to instant High Court earlier, and provisional liquidator was appointed.

However, said order was kept in abeyance, subject to deposit of Rs. 5 lakhs by respondent with registrar council of instant High Court. Consequently, the Respondent deposited said amount and subsequently, instant court transferred petition to NCLT.

Later, the NCLT directed petitioner to seek a clarification from instant court as to whether resolution ought to be explored by NCLT or company should have been taken directly into liquidation.

High Court Held

The High Court held that as per the second proviso to section 434(1)(c) of the Companies Act, 2013 and law laid down in Forech India Ltd. v. Edelweiss Assets Reconstruction Co. Ltd. [2019] 101 taxmann.com 451/152 SCL 145 (SC), once an application for transfer of winding up proceedings is filed, court must transfer such proceedings to NCLT which will deal it as an application for initiation of Corporate Insolvency Resolution Process (CIRP).

Thus, it has been clarified that the NCLT would have to strictly proceed in accordance with the said provision and treat the petition as an initiation of CIRP process.

List of Cases Reviewed

• • Forech India Ltd. v. Edelweiss Assets Reconstruction Co. Ltd. [2019] 101 taxmann.com 451/152 SCL 145 (SC) (para 11) followed.

List of Cases Referred to

• • Action Ispat & Power (P.) Ltd. v. Shyam Metalics & Energy Ltd. [2020] 122 taxmann.com 147/[2021] 164 SCL 375 (SC) (para 6)
  • Forech India Ltd. v. Edelweiss Assets Reconstruction Co. Ltd. [2019] 101 taxmann.com 451/152 SCL 145 (SC) (para 6).