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TMI Blog2024 (6) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... ces dated 2nd November 2017 to all concerned authorities and also issued notices under Sections 454, 468 of the Companies Act, 1956 and notice under Rule 130 of the Companies (Court) Rules 1959 (the "said Rules") to all ex-directors of the company in liquidation. That, the Official Liquidator had fixed a meeting on 9th November 2017 with all the ex-directors for personal interview under Rule 130 of the said Rules and another meeting for discussion with all concerned parties regarding the disclosure of the details of the properties owned by the company in liquidation and to decide the modalities for taking possession of the movable and immovable assets along with books of accounts and records of the company in liquidation. However, only one ex-director came for the said meeting. It is submitted that in the said meeting, Mr.Kumar Bhansali (ex-director), Rushabh Thacker, Advocate for Kumar Bhansali and Dinesh Bhatia, Advocate for Edelweiss Asset Reconstruction Company Limited instructed by Manilal Kher Ambalal and Company, Shashwat Singh (senior manager) for Invent Assets Securitization and Reconstruction Private Limited, Mr.Manin Lalwani (Chartered Accountant) for ex-director, Mr.Sur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration of issues and that further proceedings before the NCLT allows for the creditors to be active and final determinants of how the insolvency resolution process would take place. Learned Counsel would submit that since the power to transfer is discretionary under Section 434 of the Companies Act, this Court may pass appropriate orders. 7. In the case of A. Navinchandra Steels Private Limited vs. SREI Euipment Finance Ltd. & Others (supra) the Hon'ble Supreme Court relying upon the decision in the case of Kaledonia Jute & Fibres (P) Ltd. vs. Axis Nirman & Industries Ltd. [(2021) 2 SCC 403] and Action Ispat and Power Private Limited vs. Shyam Metalics and Energy Limited [(2021 2 Supreme Court Cases 641] observed that even post admission of the winding up petition, and even after the Official Liquidator has become custodia legis and taken over the company's assets, but so long as no actual sales of the immovable or movable properties have taken place, nothing irreversible is done which would warrant a Company Court staying its hands on a transfer application and that it is only where the winding up proceedings have reached a stage where it would be irreversible making it impos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned, the Code began tentatively by leaving proceedings relating to winding up of companies to be transferred to NCLT at a stage as may be prescribed by the Central Government. 14.2 This was done by the Transfer Rules, 2016 [Companies (Transfer of Pending Proceedings) Rules, 2016] which came into force with effect from 15.12.2016. Rules 5 and 6 referred to three types of proceedings. Only those proceedings which are at the stage of pre-service of notice of the winding up petition stand compulsorily transferred to the NCLT. 14.3 The result therefore was that post notice and preadmission of winding up petitions, parallel proceedings would continue under both statutes, leading to a most unsatisfactory state of affairs. This led to the introduction of the 5th proviso to section 434(1)(c) which, as has been correctly pointed out in Kaledonia [Kaledonia Jute & Fibres Pvt. Ltd. v. Axis Nirman & Industries Ltd., 2020 SCC OnLine SC 943], is not restricted to any particular stage of a winding up proceeding. 14.4 Therefore, what follows as a matter of law is that even post admission of a winding up petition, and after the appointment of a Company Liquidator to take over the assets of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is observed from the affidavit filed on behalf of the Official Liquidator and the submissions made by the learned Counsel that the Official Liquidator had handed over possession of the registered office of the company, which was the only property of which the Official Liquidator had taken possession, to Edelweiss Asset Reconstruction Company Limited, pursuant to order dated 23rd January 2018 passed in Company Application Lodging No. 606 of 2017, and that, as on the date of this application, is not in possession of any of the properties of the company and the properties of the company are in possession of the Applicant-creditor, who, statedly, is an assignee of Edelweiss Asset Reconstruction Company Limited. That, no notice inviting claims of creditors/workers etc. under Rule 148 of the said Rules has been published. That, in the facts, no steps have been taken by the Official Liquidator which can be said to be irreversible, such that the winding up proceedings have to be proceeded with by this Court. It is only where the winding up proceedings have reached the stage where it would be irreversible, making it impossible to set the clock back, that the Company Court must proceed w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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