CAV JUDGMENT

(PER: HON'BLE MR. JUSTICE D K SINGH)

The appellant has preferred the present appeal being aggrieved by the order dated 02.04.2024 passed by the learned Company Judge on Company Application No.31/2024 in Company Petition No.42/2016 whereby, the application filed by the appellant under Section 434(1)(c) of the Companies Act, 2013 seeking transfer of the proceedings in Company Petition No.42/2016 pending before this Court for initiation of winding up proceedings against the appellant to the National Company Law Tribunal (for short 'the NCLT'), Bengaluru Bench for adjudication, has been rejected.

2. The respondent-Company Magnifico Minerals Pvt. Ltd. had filed a petition in the year 2016 under Sections 433 and 434 of the Companies Act, 1956 against the appellant-Company namely, Saravana Alloys Steels Private Limited seeking an order of winding up of the appellant-Company for alleged default of Rs.4,57,61,691.31/- including interest of Rs.83,36,154/- as on 14.12.2015 due and payable by the appellant - Company towards the purported supply of goods and materials by the respondent to the appellant - Company.

3. The respondent's argument on admission of the Company Petition was concluded on 31.01.2024 before the learned Company Judge and on that day, there was no appearance on behalf of the appellant-Company. The learned Company Court adjourned the matter to 09.02.2024 to hear the appellant/respondent. On 09.02.2024, the counsel for the appellant/respondent Company sought a short accommodation and the case was adjourned to 16.02.2024 and thereafter, it was adjourned to 21.02.2024. On 21.02.2024, the learned Senior Counsel appearing for the appellant/respondent Company sought short accommodation on the premise that the respondent would apply for transfer of pending company petition to the NCLT, Bengaluru. The Company Petition was not admitted when the company application under the 5^th proviso to Section 434(1)(c) of the Companies Act, 2013 came to be filed seeking transfer of the Company Petition to the NCLT, Bengaluru.

4. The questions which fall for consideration in this appeal is that:

i. Whether admittedly, when no irreversible action has been taken pursuant to an order passed by the learned Company Judge in/of the pending company petition, can the Company Court still refuse the transfer of pending company petition to the NCLT on the ground that the company petition was filed in the year 2016 and the 5^th proviso to Section 434(1)(c) of the Companies Act, 2013 was introduced in the year 2018;

ii. Whether the pendency of the parallel proceedings in the NCLT is a condition precedent for transferring a pending company petition to the NCLT on an application by the creditor or a party to the company petition.

5. Section 434(1)(c) of the Companies Act, 2013, which is relevant, is extracted hereunder:

"434. Transfer of certain pending proceedings.— (1) On such date as may be notified by the Central Government in this behalf,— (a) xxxxx (b) xxxxx (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 only such proceedings relating to cases other than winding-up, for which orders for allowing or otherwise of the proceedings are not reserved by the High Courts shall be transferred to the Tribunal:

Provided also that --

(i) all proceedings under the Companies Act, 1956 other than the cases relating to the winding up of companies that are reserved for orders for allowing or otherwise such proceedings; or

(ii)