The main legal point established in the judgment is the obligation to transfer winding-up proceedings to the NCLT in the absence of irreversible or exceptional circumstances, as per the amended Section 434(1)(c) of the Companies Act, 2013.

JUDGMENT

Ravi Krishan Kapur, J. - This application has been filed by a secured creditor (Edelweiss Asset Reconstruction Company Ltd.) of Jessop & Company Ltd, the company (in liquidation) seeking transfer of CP No. 387 of 2014 alongwith all connected applications to the National Company Law Tribunal, Kolkatta Bench (NCLT). The application has been filed under the 5th proviso of the newly amended Section 434 (1) (c) of the Companies Act, 2013 (the Act). The section in its new avatar contemplates a party applying to the Court, to seek transfer of proceedings relating to winding-up of a company to the NCLT.

2. It is submitted on behalf of the applicant that by a Deed of Assignment dated 28th March, 2014, the applicant had become a secured creditor of the company (in liquidation). The current dues of the applicant are approximately Rs. 424 crores. The order of winding-up was passed on 6th March, 2017. Thereafter, one of the contributories of the company (in liquidation) had filed an application, inter alia, for framing a scheme of repayment. By an order dated 18th May, 2017, the contributory was permitted to take physical possession of the assets of the company (in liquidation) and the Official Liquidator was directed to be in symbolic possession. The order also provided that the expenses incurred for providing security guards in respect of the assets of the company (in liquidation) shall be borne by the contributory. By an order dated 17th August, 2017, the contributory was also directed to bring a scheme for payment of the dues of the creditors of the company (in liquidation). However, admittedly till date, no scheme has been framed. Significantly, the applicant had also filed an application being CA 172 of 2019 seeking appropriate directions for the Official Liquidator to handover the possession of the mortgaged properties of the company (in liquidation) to the applicant.

3. It is contended on behalf of the applicant that, in view of the amended Section 434 (1) (c) of the Act and the 5th proviso, the applicant is entitled to apply to this Court for transfer of the winding-up proceedings to the NCLT. The applicant is a 'party' defined under Section 434 (1) (c) of the Act. It is also contended that a secured creditor may stand outside the winding-up proceeding and still realise its security dehors the winding-up proceedings. In this connection, reliance is placed on M.K. Ranganathan Vs. State of Madras (AIR 1955 Supreme Court 604), Food Controller Vs. Cork (1923 AC 647). Moreover, the Official Liquidator has also not taken any steps whatsoever to sell any of the assets of the company (in liquidation) for more than five years. There has also been no money paid to any of the creditors. In this connection, reliance is placed on the decisions in Action Ispat & Power (P) Ltd. Vs. Shyam Metalics & Energy Ltd. (2021) 2 SCC 641, A. Navinchandra Steels (P) Ltd. Vs. SREI Equipment Finance Ltd. (2021) 4 SCC 435, Sicom Limited vs. Hanung Toys and Textiles Ltd. (2019) 264 DLT 400 and Alfavision Overseas Ltd. Vs. Kanak Tairdeal (India) Pvt. Ltd. (2019) SCC Online MP 5012. It is further submitted that there are no other circumstances which warrant this Court retaining the winding-up proceedings. On the contrary, it would only enure to the benefit of all parties involved that the proceedings be transferred to NCLT and be brought to their logical conclusion.

4. On behalf of one of the contributories, namely Indo Wagon Engineering Ltd., it is submitted that the petitioner is not a party to the winding-up proceedings and hence is not entitled to seek transfer of proceedings to the NCLT. It is further alleged that in the absence of any application pending under the Insolvency Code before the NCLT, there is no question of transferring of these proceedings to the NCLT. It is further submitted that there is no power vested in the NCLT to consider an application for framing of a scheme for repayment of the creditors of the company (in liquidation). It is al