TMI Blog2021 (7) TMI 1111X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is requested all the learned Counsels appearing the present matter today before us or who have already put in their appearance in this matter to file a brief two page Note either agreeing to the aforesaid proposed order of the Court or if they wish to make a submission against the aforesaid proposed order, they may do so with reason and case law, if any. - R/LETTERS PATENT APPEAL NO. 2480 of 2010 In R/SPECIAL CIVIL APPLICATION NO. 12979 of 2009 With R/SPECIAL CIVIL APPLICATION NO. 11116 of 2008 With CIVIL APPLICATION (FOR ORDERS) NO. 1 of 2010 In R/SPECIAL CIVIL APPLICATION NO. 11116 of 2008 - - - Dated:- 1-7-2021 - HONOURABLE DR. JUSTICE VINEET KOTHARI AND HONOURABLE MR. JUSTICE B.N. KARIA APPEARANCE IN LPA NO. 2480 OF 2010: MR AS VAKIL(962) for the Appellant(s) No. 1,1.1,1.2,2,3 MR BH BHAGAT(153) for the Respondent(s) No. 3,9 MR RD DAVE(264) for the Respondent(s) No. 2 MR DEVANG D TRIVEDI(2503) for the Respondent(s) No. 1 MR NANDISH Y CHUDGAR(2011) for the Respondent(s) No. 5 MR PRANAV G DESAI(290) for the Respondent(s) No. 4 APPEARANCE IN SPECIAL CIVIL APPLICATION NO.11116 OF 2008 Mr. DEVANG TRIVEDI For the Appellant ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 434(1)(c) of The Companies Act, 2013, unless the winding-up proceedings pending before the High Court in respect of the Company is at an irreversible stage of winding-up and the High Court finds that it would amount to setting the clock back at that stage. If the proceedings are pending in the High Court at such an advanced stage, the Company Court must proceed with the winding-up instead of transferring the proceedings to the NCLT to be decided in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016. Whether such a stage is reached or not would depend upon the facts and circumstances of each case. 3. Paragraph-22 of the aforesaid judgment is quoted below for ready reference:- 22. 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 windi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of:- (i) Judgment rendered by the Delhi High Court in the case of Rajni Anand V. Cosmic Structures Limited, C.P. No.152 of 2016, decided on 27.09.2018 reported in [2018] 150 SCL 530 (Delhi). (ii) Jaipur Metals Electricals Employees Organization V. Jaipur Metals Electricals Ltd. reported in (2019) 4 SCC 227. (iii) Forech India Ltd. v. Edelweiss Assets Reconstruction Co. Ltd. reported in 2019 (18) SCC 549. (iv) M/s. Kaledonia Jute Fibres Pvt. Ltd. V. M/s. Axis Nirman Industries Ltd. reported in AIR 2021 SC 32. (v) Swiss Ribbons Pvt. Ltd. and Anr. V. Union of India others reported in (2019) 4 SCC 17. (vi) Innoventive Industries Ltd. V. ICICI Bank reported in (2018) 1 SCC 407. (vii) Arcelor Mittal (India) (P) Ltd. V. Satish Kumar Gupta reported in (2019) 2 SCC 1. 5. After referring to the aforesaid judgments, the Hon'ble Supreme Court laid down the legal position as given in paragraph- 22 quoted above. 6. We have sought the assistance of learned counsels Mr. A.S. Vakil, Mr. B.H. Bhagat, Mr. Abhijit Joshi, Mr. Nandish Chudgar and Mr. Devang D. Trivedi appearing in the present case before us for the respective parties on the issue whether the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers Patent Appeal either by remitting the matter to the NCLT or otherwise. 11. It was also submitted before us by Mr. B.H. Bhagat, learned counsel appearing for Respondent No.9 M/s. ASREC (India) Ltd., i.e. the Assignee of another Secured Creditor Bank of Baroda, Respondent No.3 before us, that while the dues of other Secured Creditors or Banks, GIIC, etc. were settled by Respondent No.5 Shree Industries Ltd. after the said Auction Purchaser also defaulted in repayment of the loan of Respondent No.1 Gujarat State Financial Corporation, as the purchase price under section 29 of the State Financial Corporation Act, 1951 was converted into a Term Loan to Respondent No.5 M/s. Shree Industries Ltd., but the dues of the Assignee of Bank of Baroda, Respondent No.3 and some other Secured Creditors were not settled. He also referred to some proceedings before the Delhi High Court and the purported Settlement between said Bank of Baroda / Assignee M/s. ASREC (India) Ltd. with M/s. Shree Industries Ltd. by referring to the order of the Division Bench of the Delhi High Court and submitted that even that Settlement did not fructify and M/s. Shree Industries Ltd. did not pay up ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sets of the Company are going junk because of disuse and no effective resolution of the matter is happening, either by payment to the Secured Creditors and other Creditors nor the Secured Creditors are allowed to take further recovery measures, subject to the rights and contentions of the various parties involved in the matter, therefore, as an interim measure at this stage, we feel it appropriate to modify the aforesaid blanket Status Quo order in the following manner:- (I) We direct the Respondent No.5 Shree Industries Ltd. and the Respondent No.9 ASREC (India) Ltd., the Assignee of Bank of Baroda and other Secured Creditors, who have not yet been finally settled and paid off by the Respondent No.5 Shree Industries Ltd., to undertake the negotiation process for Settlement of the dues of such Secured Creditors and try to settle the dues of such Secured Creditors in the interregnum period. If the Settlement can be arrived at, let such Settlement Document be produced before this Court. If, however, such Settlement is not possible, at least the details of the efforts made for that purpose and the reasons for not arriving at the Settlement, may also be produced in the form of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that due to Covid situation the earlier directions of this Court in the Order dated 17.2.2021 for making sincere efforts for settlement of the dues of Respondent No.9 - M/s. ASREC (India) Ltd., the Assignee of Bank of Baroda and other secured creditors who have not yet been finally settled and paid off by the Respondent No.5 Shree Industries Ltd., such efforts could not be made. He submits that the Respondent No.5 Shree Industries Ltd. has genuine intention to make these settlement efforts, but for the Covid situation which had severe travel restrictions therefore, such steps could not be taken though certain mails have been exchanged between these parties. He, therefore, prays for some more time to comply with these directions and produce the Report of such settlement/efforts made for the same on the next date of hearing by both the parties. 2. Learned counsel appearing for the said Respondent No.9 Mr.B.H Bhagat however submitted that the meeting with Time, Date and Venue fixed may be fixed by the Court today, so that further steps for the said intention expressed by Respondent No.5 Shree Industries Ltd., can be given concrete shape. 3. In view of these subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loan of M/s. Ganpati Pulp and Paper Mills Limited (In liquidation) of GNFC and 7 Others, this Court had indicated that in the circumstances of the later development of law during the pendency of this litigation here in the form of enactment of Insolvency and Bankruptcy Code 2016 and the National Company Law Tribunal (NCLT), being the adjudicatory body under that law to decide such disputes of Insolvent Corporate Bodies, their Rehabilitation, Claims of the Secured and Unsecured Creditors and Others etc., is the appropriate Forum for deciding such Claims and Counter Claims, respective Defences and other relevant aspects of the matter. We are therefore of the considered opinion that the exercise of extraordinary jurisdiction under Article 226 of the Constitution of India, in such cases of complex facts, financial statements claims will be inappropriate and such question of facts may not be properly adjudicated at all under Article 226 of the Constitution of India. Such fact finding exercise necessarily should be undertaken by the appropriate fact finding Tribunal and Authorities. We had also noticed in the previous proceedings in the present Letter Patent Appeal that after th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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