The main legal point established in the judgment is the interpretation and application of the provisions of Section 434 of the Companies Act, 2013, and the Companies [Transfer of Pending Proceedings] Rules, 2016, in the context of transferring pending proceedings to the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code, 2016.

JUDGMENT :

S.Sujatha, J.

This company application is filed by the applicant/petitioner seeking transfer of the Company Petition No.125/2014 to the Hon’ble National Company Law Tribunal, Bengaluru ['NCLT' for short] in terms of the proviso inserted to Section 434[1][c] of the Companies Act, 2013 ['Act 2013' for short].

2. Company Petition No.125/2014 has been filed by the applicant against the respondent company Opto Infrastructure Limited under the provisions of Section 433[e] of the Companies Act, 1956 ['Act 1956' for short] which is currently pending before this Court for hearing admission of the petition.

3. The applicant has chosen and elected to pursue the remedies available under the Insolvency and Bankruptcy Code, 2016 ['Code' for short] and has filed this application.

4. Learned counsel for the respondent company submits that the applicant has already filed C.P.No.236/2018 before the NCLT invoking the provisions of the Code. Hence, transfer of the present petition would not arise at this stage.

5. Heard the learned counsel for the respective parties and perused the material on record.

6. Section 434 of the Act, 2013 deals with transfer of certain pending proceedings. Clause [c] of Sub-section [1] of Section 434 and the proviso enforceable with effect from 15.12.2016 reads thus:

"[c] all proceedings under the Companies Act, 1956, including reconstruction and winding up of companies, pending immediately before such date before any District Court or High Court, shall stand transferred to the Tribunal and the Tribunal may proceed to deal with such proceedings from the state before their transfer:

PROVIDED that only such proceedings relating to the winding up of companies shall be transferred to the Tribunal that are at a stage as may be prescribed by the Central Government."

7. In pursuant to the said provision, Ministry of Corporate Affairs, Central Government has issued a notification dated 07.12.2016, framing the Companies [Transfer of Pending Proceedings] Rules, 2016. Rule 5 of the said Rules, 2016 contemplates that:

"5. Transfer of pending proceedings of Winding up on the ground of Inability to pay debts. [1] All petitions relating to winding up under clause [e] of section 433 of the Act on the ground of inability to pay its debts pending before a High Court, and where the petition has not been served on the respondent as required under rule 26 of the Companies [Court] Rules, 1959 shall be transferred to the Bench of the Tribunal established under sub-section [4] of section 419 of the Act, exercising territorial jurisdiction and such petitions shall be treated as applications under sections 7, 8 or 9 of the Code, as the case may be, and dealt with in accordance with Part II of the Code: Provided that the petitioner shall submit all information, other than information forming part of the records transferred in accordance with Rule 7, required for admission of the petition under sections, 7, 8 or 9 of the Code, as the case may be, including details of the proposed insolvency professional to the Tribunal within sixty days from the date of this notification, failing which the petition shall abate.

[2] All cases where opinion has been forwarded by Board for Industrial and Financial Reconstruction, for winding up of a company to a High Court and where no appeal is pending, the proceedings for winding up initiated under the Act, pursuant to section 20 of the Sick Industrial Companies [Special Provisions] Act, 1985 shall continue to be dealt with by such High Court in accordance with the provisions of the Act."

8. Second proviso to Section 434 [1] [c] inserted by the Code [Second Amendment Act, 2018] with retrospective effect from 06.06.2018 reads thus:

"PROVIDED FURTHER that any party or parties to any proceedings relating to the winding up of companies pending before any Court immediately before the commencement of the Insolvency and Bankruptcy Code [Amendment] Ordinance, 2018, may file an application for transfer of such proceedings a