When a proceeding of Winding up has reached an advanced stage and immovable properties have already been handed over to Official Liquidator, the winding up petition can’t be transferred to NCLT- Delhi HC
Title- Deutsche Trustee Company Ltd v. Tulip Telecom Ltd.
Decided on: 3rd October, 2023
+ CO.PET. 329/2013 and CO.APPL. 973/2018, 322/2019, 1104/2019
Introduction
The present case is a clubbed hearing of several appeals against the Respondents.
The Delhi High Court by relying on the Judgement given in, upheld that when a proceeding of Winding up has reached an advanced stage and immovable properties have already been handed over to the Official Liquidator, the winding up petition can’t be transferred to NCLT.
Facts of the case
CO. APPL. 1104/2019 is filed on behalf of STCI Finance Limited, seeking Relief to give directions to the Official Liquidator to remove the goods of Tulip. Telecom Ltd. Lying at 5, Paschimi Marg, Vasant Vihar, New Delhi- 11057.
Earlier the court had ordered the OL to sell those movable assets after the valuation report had been received by circulating handbills. And ordered Ex- Directors to be present when the goods would be sold.
Copy of the handbills had to be given to the applicant, SICI Finance Ltd as well as Ex-Directors of Tulip Telecom Ltd, and this process had to be completed within 15 days and a report of the same had to be filed in the court by the next hearing.
Then after application bearing no. Co. Appl. 349/2020 was filed, seeking the same prayer.
Another appeal, CO. APPL. 322/2019 is an application filed by Punjab National Bank, Requesting the Court to transfer Petition to NCLT under Section 434(1)(c) of the Companies Act, 1956, which talks about, ‘Company when deemed unable to pay Debt”
They also relied on the judgment given in Forech India Ltd. Vs Edelweiss Asset Reconstruction Co. Ltd [ Civil Appeal No. 818 of 2018, Judgement dated 22nd January 2019].
No one appeared for Punjab National Bank and Counsel for Tulip Telecom Ltd. Contended that the petition should not be transferred to NCLT.
Earlier in this petition, an Official Liquidator was appointed, and final winding-up order was already passed.
Court Judgement and Analysis
Court in CO. APPL. 1104/2019 and Co. Appl. 349/2020 observed that the OL is stated to have removed the said goods in January 2022, under orders passed. Accordingly, the said application had become infructuous and they disposed of it.
For CO. APPL. 322/2019, the court relied on the Judgement given in Action Ispat and Power Limited v. Shyam Metalics and Energy Limited (2021) 2 SCC 641, that as long as there have been no actual sales of the assets (immovable or movable), there is no irreversible action taken that would compel the Company Court to stop a transfer application made by a creditor or any party involved. Only when the winding-up proceedings have advanced to a point where reversing the process is no longer feasible, should the Company Court proceed with the winding-up, rather than transferring the proceedings to the NCLT for resolution under the provisions of the IB. The Hon’ble court analyzed that in the present case, it was recorded that the company was not in a position to repay its debts, as no scheme was forthcoming from the Ex-management. Therefore, the Court earlier directed the Provisional Liquidator to take over the charge of the books of account and the assets of the company. It was also taken into consideration that vide OLR 30 of 2020, OL has already taken possession of certain immovable assets and properties of the company in liquidation.
Therefore, looking at the present stage of proceedings in the petition, Court upheld that the proceedings have reached an advanced stage and hence the present petition does not deserve to be transferred to the NCLT.
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Written by- Aditi