The discretionary power of the court to transfer proceedings to NCLT under section 434(1)(c) of the Companies Act, 2013 and the lack of jurisdiction of the Company Court to stay the proceedings before the NCLT in respect of revival or resolution issue.

Jayant Nath, J.

CA 1025/2018

1. This application is filed by Mr. Chandra Shekhar who is said to have booked a commercial space in one of the projects of the respondent company seeking appropriate orders for transferring of the present petition to NCLT. The applicant states that he has also moved an application under section 7 of the Insolvency and Bankruptcy Code, 2016 before NCLT on which NCLT on 25.5.2018 has passed orders appointing IRP (Interim Resolution Professional). Hence, it is prayed that this petition be transferred to NCLT.

2. The petitioner has filed her reply in court. The same is taken on record and is sent to the Registry for scanning.

3. Learned counsel for the applicant has relied upon judgment of the Division Bench of the Bombay High Court in Jotun India Private Limited vs. PSL Limited, 2018 SCC Online Bom 1952 to contend that the Insolvency Code would have precedence over the Companies Act, 1956 and that as per the said judgment, where revival/resolution proceedings are initiated, NCLT would have precedence. However, he submits that to avoid any conflict it would be in the interest of justice that this court may in exercise of powers under proviso to section 434 of the Companies Act, 2013 transfer the present petition to NCLT.

4. Learned counsel appearing for the OL and for the petitioner have opposed the present application. It has been pointed out that the petition was admitted and the OL was appointed as the Provisional Liquidator way back on 11.1.2017. Thereafter the entire assets of the respondent company have been sealed and taken into custody by the OL and the process of valuation of the assets is going on. In the meantime, on 29.5.2018 noticing that the Ex. Directors were guilty of siphoning off money this Court had directed SFIO to investigate into the affairs of the company. It was also noticed that against most of the Ex. Directors FIRs have been registered and they continue to be in judicial custody.

5. Section 434 of the Companies Act, 2013 reads as follows:-

“[434. (1) On such date as may be notified by the Central Government in this behalf,-

(a) all matters, proceedings or cases pending before the Board of Company Law Administration (herein in this section referred to as the Company Law Board) constituted under sub-section (1) of section 10E of the Companies Act, 1956 (1 of 1956), immediately before such date shall stand transferred to the Tribunal and the Tribunal shall dispose of such matters, proceedings or cases in accordance with the provisions of this Act;

(b) any person aggrieved by any decision or order of the Company Law Board made before such date may file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Company Law Board to him on any question of law arising out of such order:

Provided that the High Court may if it is satisfied that the appellant was prevented by sufficient cause from filing an appeal within the said period, allow it to be filed within a further period not exceeding sixty days; and

(c) all proceedings under the Companies Act, 1956 (1 of 1956), including proceedings relating to arbitration, compromise, arrangements and 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 stage 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.

Provided further that any party or parties to any proceedings relating 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 and the Court may by order transfer such proceedings to the Tribunal and the proce