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2023 Supreme(Del) 3325
IN THE HIGH COURT OF DELHI AT NEW DELHI
Prathiba M. Singh, J.
Ultratech Cement Ltd. – Appellant
Versus
Maxout Infrastructures Pvt. Ltd. – Respondent
CO.PET. 384 of 2016 & CO.APPL. 480 of 2023
Decided On : 10-07-2023
Ms. Deepa Sharma, Advocate, for the Petitioner.
Mr. Siddharth Mullick, Advocate for OL.
The main legal point established in the judgment is that matters transferred to the NCLT under Section 434 of the Companies Act, 2013 should be dealt with as an application for initiation of Corporate Insolvency Resolution Process (CIRP) process under the IBC, 2016.
Headnote:
NCLT Transfer - Winding Up Petition - Companies Act, 2013, Section 434
Fact of the Case:
The court addressed an application seeking clarification in view of the NCLT order transferring a winding up petition to the NCLT under Section 434 of the Companies Act, 2013. The NCLT sought clarification on whether the resolution process should be explored first or the company should be taken to liquidation.
Finding of the Court:
The court clarified that any matter transferred to the NCLT under Section 434(1)(c) should be dealt with as an application for initiation of Corporate Insolvency Resolution Process (CIRP) process under the IBC, 2016.
Issues: The main issue was whether the NCLT should explore the resolution process or proceed with the liquidation of the company.
Ratio Decidendi: The court relied on the provisions of Section 434 of the Companies Act, 2013 and the interpretation provided by the Supreme Court in Forech India Ltd. v. Edelweiss Assets Reconstruction Co. Ltd. to clarify the procedure for matters transferred to the NCLT.
Final Decision: The court ordered the NCLT to strictly proceed in accordance with the provisions of Section 434(1)(c) and treat the petition as an initiation of CIRP process. The application was disposed of.
JUDGMENT
Prathiba M. Singh, J. (Oral)
1. This hearing has been done through hybrid mode.
CO.APPL.480/2023 (seeking clarification) in CO.PET. 384/2016
2. The present application has been moved seeking clarification in view of the NCLT order dated 1st May, 2023 passed in TP (Co. Act.)- 10(PB)/2022 Old CP No.-386/2016 titled Ultratech Cement Ltd. v. Maxout Infrastructure Pvt. Ltd.
3. Ld. counsel for the Official Liquidator (OL) has appeared and submits that the main counsel is in another Court. Let a copy of the application be served upon ld. Counsel for the OL.
4. A perusal of the record would show that the present winding up petition has been filed by Petitioner - M/s Ultratech Cement Limited against the Respondent in respect of dues which were to be paid by the Respondent.
5. This Court vide order dated 20th December, 2017 had admitted the present petition and the OL attached to this Court was appointed as the Provisional Liquidator in the present proceedings. However, subsequently, on an application moved by the Respondent vide order dated 20th April, 2018, the said order dated 20th December, 2017 was kept in abeyance, subject to deposit of Rs.5 lakhs with the Registrar General of this Court.
6. The amount of Rs.5 lakhs had been deposited in this Court in the form of FDR. It was in this background that this Court had, considering the decisions of the Hon'ble Supreme Court in Action Ispat and Power Limited v. Shyam Metalics and Energy Limited ( 2021) 2 SCC 641 and Forech India Limited v. Edelweiss Assets Reconstruction Company Limited and Another (2019) 18 SCC 549 transferred the present petition, to the NCLT vide order dated 25th May, 2022. In the said order, it is clearly recorded that the winding up petition was at a very early stage.
7. Thereafter, the NCLT in its order dated 1st May, 2023 seeks the following clarification.
"Heard the submissions made by Ld. Counsel for the Petitioner. These are the proceedings which are transferred from the Hon'ble High Court. Petitioner is now seeking remedy within the provisions of IBC. Therefore, Petitioner has prayed for grant of time for seeking clarification from the Hon'ble High Court as to from what stage the matter has to be entertained by the Tribunal. More particularly whether the resolution process has to be exhausted first or not as IBC envisages resolution process and maximization of value of the assets of the Corporate Debtor. Whereas resolution and maximization of value of the assets will not be available for the liquidation as liquidation is nothing but to liquidate the assets of the Corporate Debtor at the price at which the purchasers may take the property. List the matter on 30.05.2023."
8. Thus, the NCLT ordered the Petitioner to seek a clarification from this Court as to whether Resolution ought to be explored by it first or the company should straightaway be taken to liquidation. Hence the Petitioner has moved the present application.
9. The provision governing transfer of petitions from this Court to the NCLT is Section 434 of the Companies Act, 2013. The said provision reads as under:
"434. Transfer of certain pending proceedings
(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 satisfi
