TMI Blog2023 (12) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellants (APO 30 31 of 2022) :- Ms. Urmila Chakraborty, Adv For the ARCIL :- Mr. Ratnanko Banerji, Sr. Adv. Ms. Srishti Barman Roy, Mr. Avishek Guha, Ms. Akansha Chopra, Adv. For the O.L (APO 30 33 of 2022) :- Ms. Smita Das De, Adv. For the O.L (APO 31 of 2022) :- Ms. Manju Bhuteria Ms. Shreya Choudhary For the Purchaser :- Mr. Sakya Sen, Mr. Kaushik Banerjee JUDGMENT I. P. MUKERJI, J.:- The company Fortune Furnitech Pvt. Ltd. was ordered to be wound of by this court during the operation of the Companies Act, 1956. The procedure and proceedings for its liquidation started in that period. Thereafter, the Companies Act, 2013 was enacted by Parliament repealing the 1956 Act and replacing it by a wholly new Act. The Insolvency and Bankruptcy Code, 2016 was enacted on 28th May, 2016. Section 434 of the Companies Act, 2013 was substituted by a new Section 434 with effect from 15th November, 2016. The proviso to Section 434(1)(c) provided that pending winding up proceedings, at a particular stage as may be prescribed by the Central government, were to be transferred to the tribunal. The Central government prescribed that those wind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the company in liquidation were parcels of land measuring 16.02 bighas, 17.045 bighas and 6.99 bighas aggregating to 40.46 bighas in Mouza Dirghanga, District Hooghly, West Bengal. The company had two secured creditors namely the applicant and ARCIL. Both of them had a combined claim of about Rs. 110 crores from the company. It was also averred in that application that these two secured creditors had negotiated with a company Square Four Logistics Park Pvt. Ltd. of 238A, A.J.C. Bose Road, Kolkata 700020 which had agreed to purchase the above property for Rs. 18,13,26,547/-. If the said property was sold to this intending purchaser, these two secured creditors ASREC and ARCIL would divide up the net sale proceeds in the ratio of 72 : 28 respectively representing the value of their respective loans to the company. It was also stated in the application that the value offered by the intending purchaser was over Rs. 12 crores which was the market value of the said property. By this application, the applicant seek confirmation from the court for sale of the said property to the said intending purchaser upon their making payment of Rs. 16,73,26,544/-. It may be mentioned here tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (ACO 3 of 2023) connected with the appeal APO 30 of 2022 ASG Business (India) Pvt. Ltd. asked for setting aside of the order dated 12th July, 2023 by a division bench of this court which directed payment to Shiva Shakti Security Services and the valuer. There was also a prayer for the applicant to be added as a party in the appeal and also for return of the cheque dated 26th April, 2019 drawn by them on Kotak Mahindra Bank, Dhanbad. The questions which need consideration in this appeal are as follows: a) What are the types of winding up proceedings which are to be retained by the High Court and not transferred to the tribunal? b) While dealing with the transfer of proceedings from the High Court to the tribunal what consideration is to be made by the Court of the fact that a sizable number of company paid staff are working in the Official Liquidator s offices attached to 22 High Courts in the country whose pay and allowances are met out of the fund generated by the Official Liquidator on sale of the assets of the companies in liquidation? c) If during liquidation the Official Liquidator attached to the High Court has incurred expenses to protect the assets of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bject sought to be achieved by the IBC, it is clear that only where a company in winding up is near corporate death that no transfer of the winding up proceeding would then take place to NCLT to be tried as a proceeding under the IBC. Short of an irresistible conclusion that corporate death is inevitable, every effort should be made to resuscitate the corporate debtor in the larger public interest, which includes not only the workmen of the corporate debtor, but also its creditors and the goods it produces in the larger interest of the economy of the country .. This was the dictum of the Supreme Court in Navinchandra Steels Pvt. Ltd. vs. Srei Equipment Finance Ltd. and Ors. reported in (2021) 4 SCC 435. The question which now arises is whether this court in exercise of its jurisdiction under the said proviso to Section 434(1)(c) of the Companies Act should transfer the winding up application to the NCLT? As far as this company is concerned, the winding up order was passed more than one decade ago. No creditor or contributory of the company has come forward to revive it or present a scheme to the court, for payment to the secured creditors and other creditors of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company, the matter was to be transferred to the tribunal. As we have said, in our opinion, whether to transfer a pending winding up proceeding to the tribunal has to be decided on the facts and circumstances of each case. The categories of cases which can be so referred have not been closed by the above decisions of the Supreme Court. Instances of such cases as is the case with this company may be as follows:- a) The winding up proceedings have been pending for years. The promoters of the company and its principal shareholders and directors at the time of its winding up have all disappeared or do not show any interest in the revival of the company. b) The secured creditors also do not show any interest in its revival. c) Workers who have been thrown out of employment are in great financial hardship for years. Their wages for working in the company remain outstanding and unpaid. d) After the winding up order has been made the official liquidator has taken steps for protection of the assets of the company and for this purpose has employed security personnel to guard those assets against pilferage and damage. This arrangement is made with the sanction of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Judgment delivered by my Learned Brother and have agreed to the grounds cited and final order made therein. However I add the following grounds. In the judgment my Learned Brother has discussed about the decisions of the Hon ble Supreme Court with regard to transfer of the Liquidation Proceedings pending before High Court to Tribunals. Upon perusing the decisions of the Hon ble Supreme Court as discussed above and upon considering the proviso of Section 434(1)(c) of the Companies Act 2013 it is clear that Company Court has discretion to transfer proceedings to NCLT in accordance with the provisions of the Code, considering the facts and circumstances of each case. Further it is also observed by the Hon ble Apex Court in Para 39 of the Judgment in Kaledonia Jute and Fibres (P) Ltd (Supra) that the right to invoke the 5th proviso is specifically conferred only upon the parties to the proceedings. Therefore on a literal interpretation such a right should be held to be confined only to the parties to the proceedings. Thus it will be clear from the observations of the Hon ble Apex Court in the decisions mentioned above that the suo-moto power of transfer which may be followed ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
