M/S MAA TARINI MINERALS  Vs M/S TECHNICAST ENGINEERS LTD. -Judgment by Delhi High Court

* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on : 14 December 2023
Judgment pronounced on : 30 January 2024
+ CO.PET. 340/2010
M/S MAA TARINI MINERALS ….. Petitioner
Through: Mr. Arunav Patnaik and Mr.
Nirbhay Nitya Nanda, Advs.
versus
M/S TECHNICAST ENGINEERS LTD. ….. Respondent
Through: Mr. Anil Sapra, Mr. P. K.
Bansal and Mr. Adhish Sharma,
Advs.
CORAM:
HON’BLE MR. JUSTICE DHARMESH SHARMA
J U D G M E N T

1. This petition has been moved under Sections 433(e), 434 and
439 of The Companies Act, 1956 by the petitioner company, seeking
winding up of the respondent company, namely Technicast
Engineers Pvt. Ltd., predicated on the non-payment of an amount of
Rs. 1,01,61,225/- by the respondent, which is due to the petitioner
company.
2. Briefly stated, the petitioner company is engaged in the business
of mining and raising lumpy Iron Ore at Inganijaharan Mines, Joda.
While on the other hand, the respondent company is involved in
various activities related to Ferrous and Non-ferrous casting, forgings,
fabrication and engineering assembly of machinery and equipment as
well as spare parts in all kinds of engineering industries.

BRIEF FACTS:

3. The broad conspectus of the factual matrix is that the
respondent company entered into an agreement with one M/s. Bhanja

Minerals Private Limited, the original lease holder of the mines, as a
contractor for raising iron ore and further for deploying necessary
personnel and machinery for the purpose of such raising. Thereafter,
the respondent company entered into an agreement dated 20.06.2003
with the petitioner company engaging them as a sub-contractor for a
period of three months, w.e.f. 01.07.2003. The agreement was further
extended vide letter dated 30.10.2003 for a period of three years,
w.e.f. 01.10.2003.
4. The agreement as well as the letter dated 30.10.2003 set out the
relevant terms and conditions for payments to be made by the
respondent company to the petitioner in accordance with the quantities
of ore raised at different prices. Furthermore, in order to fulfil its
obligations under the agreement, the petitioner deployed men and
machineries at the site and raised monthly weigh bills in keeping with
the weigh reports from the weigh bridge, which the respondent
company was to settle within 15 days of submission.
5. The long and short of the matter is that the petitioner carried out
its obligations till 05.05.2006, when unexpectedly and without reason,
vide a letter of the same date, the respondent cancelled the work order
of the petitioner. At that point, even after several representations by
the petitioner, the respondent company failed to pay the dues owed to
the petitioner, and withheld payment of Rs. 1,01,61,225/-. It has been
stated that various representations were made by the petitioner on
04.05.2006, 22.05.2006 and 06.06.2006. Thereafter, a settlement was
also arrived at before the Deputy Director of Mines (DDM), Joda
Circle, Joda, Keonjhar in a meeting held on 31.05.2006, and the same

was recorded vide the petitioner�s letter dated 14.06.2006. Subsequent
to this, the petitioner also sent letters dated 09.07.2006 and 04.08.2006
to the respondent, however the dues remained unpaid.
6. Given that the status quo remained unchanged, the petitioner
was pressed to send a statutory notice to the respondent and pursuant
to the same, legal notice dated 13.12.2006 was sent to the respondent
through registered post, to clear the outstanding dues of Rs.
1,01,61,225/- along with interest @ 18% p.a. within a period of three
weeks from the receipt of the notice. Despite the legal notice, the
respondent company failed to repay its debts, and drawing an
inference of its inability to pay the amount due to the petitioner, the
present winding up petition was moved against the respondent
company.
7. It may be appropriate to note that submissions have been made
by the respondent company, challenging the maintainability of the
present winding up on various grounds. The ground of challenge taken
by the respondent company is primarily that the petitioner herein is
neither a creditor of the respondent company nor is there any privity
of contract between the parties, therefore the petitioner has no locus
standi to move such a winding up petition. It is stated that the work
order and agreement dated 20.06.2003, entered into by the respondent
company, was with the sole proprietorship of Mr. B.N. Rana and not
the partnership firm, that is the petitioner herein. It has further been
contended that the ledger of accounts placed on record by the
petitioner are not supported by any bills or invoices, and neither has it
been stated when such bills arose and became payable, thus it cannot

be ascertained as to on what date the cause of action arose in favour of
the petitioner. It is further the case of the respondent company that
even on a perusal of the ledger accounts placed on the record, the
claims made by the petitioner for any period prior to 07.12.2005 are
barred by limitation as the petition was only moved on 08.12.2008.
These submissions, amongst others, are also reflected in the reply to
the petition, filed by the respondent on 30.11.2011.
8. In rejoinder, the petitioner alludes to the fact that the amount
due had been shown in the books of accounts of the respondent
company till April, 2010, which acknowledgement of debt extends the
period of limitation under Section 18 of The Limitation Act, 1963. It
is further submitted that though initially Mr. B.N. Rana was the sole
proprietor but later on he constituted a partnership concern with his
four sons and the same firm rendered services to the respondent
company and it is pointed out that TDS for the financial year 2005 to
2006 was in fact deposited to the PAN Account of the petitioner
partnership firm by the respondent company.

ANALYSIS & DECISION:

9. A perusal of the record shows that the present winding up
petition has been a complete non-starter, such that neither a
Provisional Liquidator nor an Official Liquidator has been appointed
to the company. Furthermore, the petition is still at a nascent stage and
substantive orders are yet to be passed pursuant to the winding up
proceedings.
10. Considering that The Insolvency and Bankruptcy Code, 2016
has since been enacted, along with The Companies Act, 2013, it

would be expedient to examine the provisions which envisage the
transfer of winding up petitions pending before the High Courts to the
National Company Law Tribunal1, specifically Section 434 of the
Companies Act, 2013, which reads as under:-

1 NCLT

�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 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 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 winding up of companies that are reserved for
orders for allowing or otherwise such proceedings; or

(ii) the proceedings relating to winding up of companies which
have not been transferred from the High Courts; shall be dealt with

in accordance with provisions of the Companies Act, 1956 and the
Companies (Court) Rules, 1959.]
Provided also that proceedings relating to cases of voluntary
winding up of a company where notice of the resolution by
advertisement has been given under subsection (1) of section 485
of the Companies Act, 1956 but the Company has not been
dissolved before the 1st April, 2017 shall continue to be dealt with
in accordance with provisions of the Companies Act, 1956 and the
Companies (Court) Rules, 1959.�

11. At this stage, it is apposite to cite and rely on the decision of the
Supreme Court in Action Ispat and Power Private Limited v.
Shyam Metalics and Energy Limited2, wherein it was held as
under:-

2 (2021) 2 SCC 641

�25. Given the aforesaid scheme of winding up under Chapter XX
of the Companies Act, 2013, it is clear that several stages are
contemplated, with the Tribunal retaining the power to control the
proceedings in a winding up petition even after it is admitted. Thus,
in a winding up proceeding where the petition has not been served
in terms of Rule 26 of the Companies (Court) Rules, 1959 at a
preadmission stage, given the beneficial result of the application of
the Code, such winding up proceeding is compulsorily transferable
to the NCLT to be resolved under the Code. Even post issue of
notice and pre admission, the same result would ensue. However,
post admission of a winding up petition and after the assets of the
company sought to be wound up become in custodia legis and are
taken over by the Company Liquidator, section 290 of the
Companies Act, 2013 would indicate that the Company Liquidator
may carry on the business of the company, so far as may be
necessary, for the beneficial winding up of the company, and may
even sell the company as a going concern. So long as no actual
sales of the immovable or movable properties have taken place,
nothing irreversible is done which would warrant a Company Court
staying its hands on a transfer application made to it by a creditor
or any party to the proceedings. It is only where the winding up
proceedings have reached a stage where it would be irreversible,
making it impossible to set the clock back that the Company Court
must proceed with the winding up, instead of transferring the

proceedings to the NCLT to now be decided in accordance with the
provisions of the Code. Whether this stage is reached would
depend upon the facts and circumstances of each case.�

12. Furthermore, with regards to the pending winding up petitions
before this court which ought to be transferred to the NCLT, this court
in its judgement dated 25.07.2023, titled Citicorp International
Limited v. Shiv-Vani Oil & Gas Exploration Services Limited3
considered the prevailing legal position as well and held that those
petitions which have not reached an advanced stage of proceedings
shall be transferred to the NCLT.
13. Therefore, in the opinion of this Court, given the inceptive
nature of the proceedings and the absence of any definitive orders
pertaining to the winding up of the company, it is hereby determined
that this petition shall be forthwith transferred to the NCLT.
14. The issues raised by the respondent company about the claim
being barred by limitation and/or want of privity of contract between
the parties are left open. It is left to the domain of the NCLT to
consider the matter and pass appropriate orders in accordance with
law.
15. The electronic record of this petition be transmitted to the
NCLT within a period of one week by the Registry. List before the
NCLT on 06.02.2024.

3 2023:DHC:5206

DHARMESH SHARMA, J.
JANUARY 30, 2024
Sadique