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M/S PIONEER AQUA vs M/S TOP LINE BUILD-TECH (P) LTD

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$~ C23
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 30th November, 2023
+ CO.PET. 49/2014
M/S PIONEER AQUA ….. Petitioner
Through: Mr. Vikas Kumar, Proxy
Counsel for Mr. Dhiraj K.
Sammi, Adv.
versus
M/S TOP LINE BUILD-TECH (P) LTD ….. Respondent
Through: Mr. Arvind K. Gupta and Mr.
A. Gupta, Advs.
CORAM:
HON’BLE MR. JUSTICE DHARMESH SHARMA
DHARMESH SHARMA, J. (ORAL)
FACTUAL BACKGROUND:

1. Learned counsel appearing for the legal representatives of the
deceased petitioner requests for an accommodation stating that the
main counsel is not available today.
2. However, learned counsel appearing for the respondent submits
that in this case the claim of the petitioner is admitted. However, the
company has stopped running its operation and there are practically no
assets remaining with the company so as to pay the debts of the
secured or unsecured creditors.
3. This is a winding up petition under Section 433 (1) (e) and 434
Companies Act, 20131 moved on behalf of the petitioner company

1 Act

against the respondent company. In a nutshell, it is the case of the
petitioner that it specialises in waterproofing in multi-storey
residential and commercial spaces and supplies its own manpower,
labour etc. The petitioner firm entered into an agreement with the
respondent to provide its services on certain projects of the respondent
company and the petitioner company has been submitting running
bills and also has a running account. It was the case of the petitioner
firm that there accrued a sum of Rs.25, 59,282/-, which were not paid
by the respondent firm despite several reminders, requests and
personal visits. Eventually, a statutory notice dated 17.06.2013 was
served upon the respondent, but in vain; and hence this petition was
filed.

FINAL ORDER/DIRECTIONS:

4. It is borne out from the record that no provisional liquidator as
yet has been appointed and the winding up a petition has been a
complete non-starter.
5. The present petition is a non-starter, as it is still at the initial
stage and as yet no Provisional Liquidator has been appointed in this
matter. Section 434 of the Act envisages the transfer of proceedings
relating to the winding up that are pending before High Courts to the
National Company Law Tribunal2, the said provision reads as under:

2 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.”

6. It would also be apposite to cite the decision of the Supreme
Court in Action Ispat and Power Limited v. Shyam Metalics and

Energy Limited3 wherein it was held as under:

3 (2021) 2 SCC 641

“22. 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.”

7. Hence, 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.
8. It is left in the domain of the NCLT to consider the matter and
pass appropriate orders in accordance with law.

9. 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.

DHARMESH SHARMA, J.
NOVEMBER 30, 2023
pkv