MR SANTOSH UMAKANT JAWADAR vs OFFICIAL LIQUIDATOR OF BROADCAST INFRATEL INDIA PRIVATE LIMITED (IN LIQ)
- Court
- Karnataka High Court
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®
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
RD
DATED THIS THE 23 DAY OF JUNE, 2026
BEFORE
THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
COMPANY APPLICATION NO. 39 OF 2025
IN
COMPANY PETITION NO. 236 OF 2026
BETWEEN
MR SANTOSH UMAKANT JAWADAR
AGED ABOUT 55 YEARS
S/O MR. UMAKANT GANPATRAO JAWADWAR
RESIDING AT NO. C-2/7, HIMALAYA PRIDE TECH
ZONE IV, GREATER NOIDA
GAUTAM BUDDHA NAGAR
UTTAR PRADESH 201308
CONTACT 9740133639
E-MAIL [email protected]
... APPLICANT
(BY SRI. ANIRUDH SURESH., ADVOCATE)
AND
OFFICIAL LIQUIDATOR OF BROADCAST INFRATEL INDIA
PRIVATE LIMITED (IN LIQ)
ATTACHED TO HIGH COURT OF KARNATAKA,
CORPORATE BHAVAN NO. 26-27, 12 FLOOR,
RAHEJA TOWERS, MG ROAD,
BANGALORE 560001.
…. RESPONDENT
(BY SMT. KRUTIKA RAGHAVAN., ADVOCATE FOR O.L)
Digitally signed
by SHWETHA
RAGHAVENDRA
Location: HIGH
COURT OF
KARNATAKA
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THIS COMPANY APPLICATION IS FILED UNDER SECTION 434
OF THE COMPANIES ACT, 2013 PRAYING TO PLEASE TO TRANSFER
THE COMPANY PETITION NO. 236/2010 PENDING ON THE FILE OF
THIS HON’BLE NATIONAL COMPANY LAW TRIBUNAL, BENGALURU IN
THE INTEREST OF JUSTICE AND EQUITY.
THIS COMPANY APPLICATION COMING ON FOR ORDERS AND
HAVING BEEN RESERVED FOR ORDERS ON 20.02.2026, THIS DAY,
THE COURT PRONOUNCED THE FOLLOWING:
CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
CAV ORDER
1. Company Petition No.236/2010 has been filed
seeking for the following reliefs.
Please to transfer the Company Petition No.236/2010
pending on the file of this Hon’ble Court to the Hon’ble
National Company Law Tribunal, Bengaluru in the interest
of justice and equity.
2. The allegation in the Company Petition is that the
Respondent failed to discharge its admitted debts
owed to the Petitioner. It is on this basis that the
present Company Petition came to be instituted in
the year 2010, seeking an order for the winding up of
the Respondent Company.
3. By order dated 11.11.2011, the Company Petition
was admitted, and the Petitioner was permitted to
publish an advertisement in The Hindu, an English
daily newspaper. Thereafter, by order dated
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09.01.2012, the petition was allowed, and the
Respondent Company was ordered to be wound up.
The Official Liquidator was directed to take charge of
the assets and liabilities of the Respondent Company,
and publication of the winding-up order was directed
in The Hindu (English daily) and Vijaya Karnataka
(Kannada daily).
4. This Court recorded a finding that a sum of
₹32,65,401/- was due and payable by the
Respondent to the Petitioner and that the said
amount had remained unpaid. Pursuant to the
aforesaid order, the Petitioner also deposited a sum
of ₹10,000/- with the Official Liquidator.
5. Subsequently, on 13.11.2014, time was sought on
behalf of the Respondent Company to ascertain
whether the dispute could be amicably settled.
Despite several adjournments being granted for this
purpose, no settlement was reported. In the
meantime, the Official Liquidator submitted various
reports under Rule 300 of the Companies (Court)
Rules, 1959.
6. Thereafter, the Respondent filed applications seeking
the recall of the winding-up order. By order dated
15.11.2017, this Court, while considering the said
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applications, directed learned counsel for the
Respondent to obtain instructions regarding the
deposit to be made as a precondition for
consideration of the request for recall. Ultimately,
Company Application Nos. 2579/2013 and
2580/2013 came to be dismissed by order dated
03.01.2018 on the ground that the Respondent had
failed to establish bona fides warranting
consideration of the relief sought.
7. Subsequent thereto, further reports submitted by the
Official Liquidator under Rule 300 of the Companies
(Court) Rules, 1959, were taken on record. It is at
this stage that Company Application No. 39/2025
came to be filed under Section 434 of the Companies
Act, 2013 seeking transfer of the Company Petition
to the National Company Law Tribunal (NCLT), inter
alia contending that although the Company Petition
had been admitted and a winding-up order had been
passed, no irreversible steps had yet been taken in
the course of the liquidation proceedings.
8. In this regard, reliance is placed on the decision of
the Hon’ble Supreme Court in the case of Action
Ispat and Power Private Limited vs. Shyam
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1
Metalics and Energy Limited is applicable. The
said application has been objected to by the Official
Liquidator by filing his objections on 19.12.2025.
9. The submissions of Sri Aniruddh Suresh, learned
counsel appearing on behalf of the applicant in CA
No.39/2025, are as follows:
9.1. Learned counsel contends that, although the
Company Petition was admitted and an order of
winding up came to be passed on 09.01.2012,
no irreversible steps have been taken in the
course of the liquidation proceedings. It is
therefore submitted that the Company Petition
is liable to be transferred to the National
Company Law Tribunal (NCLT) in exercise of the
powers conferred under Section 434 of the
Companies Act, 2013.
9.2. In this regard, he relies upon the decision
Action Ispat and Power Private Limited vs.
1
Shyam Metalics and Energy Limited’s case,
more particularly Para 10, 12, 13, 14 and 25
thereof, which are reproduced hereunder for
easy reference:
10. The Court therefore finally held:
1
(2021) 2 SCC 641
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“20. … We are of the view that NCLT was absolutely correct
in applying Section 238 of the Code to an independent
proceeding instituted by a secured financial creditor,
namely, the Alchemist Asset Reconstruction Company Ltd.
This being the case, it is difficult to comprehend how the
High Court could have held that the proceedings before
NCLT were without jurisdiction. On this score, therefore,
the High Court judgment has to be set aside. NCLT
proceedings will now continue from the stage at which
they have been left off. Obviously, the company petition
pending before the High Court cannot be proceeded with
further in view of Section 238 of the Code. The writ petitions
that are pending before the High Court have also to be
disposed of in light of the fact that proceedings under the
Code must run their entire course. We, therefore, allow the
appeal and set aside the High Court's judgment
12. Resultantly, the Court thereafter held:
“22. This Section is of limited application and only bars a
corporate debtor from initiating a petition under Section 10
of the Code in respect of whom a liquidation order has been
made. From a reading of this Section, it does not follow
that until a liquidation order has been made against the
corporate debtor, an Insolvency Petition may be filed under
Section 7 or Section 9 as the case may be, as has been held
by the Appellate Tribunal. Hence, any reference to Section
11 in the context of the problem before us is wholly
irrelevant. However, we decline to interfere with the
ultimate order passed by the Appellate Tribunal because it
is clear that the financial creditor's application which has
been admitted by the Tribunal is clearly an independent
proceeding which must be decided in accordance with the
provisions of the Code.
23. Though, we are not interfering with the Appellate
Tribunal's order dismissing the appeal, we grant liberty to
the appellant before us to apply under the proviso to
Section 434 of the Companies Act (added in 2018), to
transfer the winding up proceeding pending before the High
Court of Delhi to the NCLT, which can then be treated as a
proceeding under Section 9 of the Code.”
13. In Kaledonia (supra), the question which arose before
the Court arose after a winding up order had been passed,
but which had been kept in abeyance by the Company
Court. The vexed question before the Court was whether
the expression “any person could apply for transfer …”
contained in paragraph 17 of the judgment of this Court in
Forech (supra) would refer to persons who are not parties
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to the proceeding. This Court, after setting out section 278
of the Companies Act, 2013, then held:
“42. Thus, the proceedings for winding up of a company
are actually proceedings in rem to which the entire body of
creditors is a party. The proceeding might have been
initiated by one or more creditors, but by a deeming fiction
the petition is treated as a joint petition. The official
liquidator acts for and on behalf of the entire body of
creditors. Therefore, the word “party” appearing in the 5th
proviso to Clause (c) of Sub-section (1) of section 434
cannot be construed to mean only the single petitioning
creditor or the company or the official liquidator. The words
“party or parties” appearing in the 5th proviso to Clause (c)
of Sub-section (1) of Section 434 would take within its fold
any creditor of the company in liquidation.
43. The above conclusion can be reached through another
method of deductive logic also. If any creditor is aggrieved
by any decision of the official liquidator, he is entitled under
the 1956 Act to challenge the same before the Company
Court. Once he does that, he becomes a party to the
proceeding, even by the plain language of the section.
Instead of asking a party to adopt such a circuitous route
and then take recourse to the 5 th proviso to section
434(1)(c) , it would be better to recognise the right of such a
party to seek transfer directly.
44. As observed by this Court in Forech India Limited
(supra), the object of IBC will be stultified if parallel
proceedings are allowed to go on in different fora. If the
Allahabad High Court is allowed to proceed with the
winding up and NCLT is allowed to proceed with an enquiry
into the application under Section 7 IBC, the entire object of
IBC will be thrown to the winds.
45. Therefore, we are of the considered view that the
petitioner-herein will come within the definition of the
expression “party” appearing in the 5th proviso to Clause
(c) of Sub-section (1) of Section 434 of the Companies Act,
2013 and that the Petitioner is entitled to seek a transfer of
the pending winding up proceedings against the first
Respondent, to the NCLT. It is important to note that the
restriction under Rules 5 and 6 of the Companies (Transfer
of Pending Proceedings) Rules, 2016 relating to the stage
at which a transfer could be ordered, has no application to
the case of a transfer covered by the 5th proviso to Clause
(c) of sub-section (1) of Section 434 . Therefore, the
impugned order of the High Court rejecting the petition for
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transfer on the basis of Rule 26 of the Companies (Court)
Rules, 1959 is flawed.” (emphasis in original)
14. What becomes clear upon a reading of the three
judgments of this Court is the following:
14.1 . So far as transfer of winding up proceedings is
concerned, the Code began tentatively by leaving
proceedings relating to winding up of companies to be
transferred to NCLT at a stage as may be prescribed by the
Central Government.
14.2. This was done by the Transfer Rules, 2016 (supra)
which came into force with effect from 15.12.2016. Rules 5
and 6 referred to three types of proceedings. Only those
proceedings which are at the stage of pre-service of notice
of the winding up petition stand compulsorily transferred to
the NCLT.
14.3. The result therefore was that post notice and pre
admission of winding up petitions, parallel proceedings
would continue under both statutes, leading to a most
unsatisfactory state of affairs. This led to the introduction
of the 5th proviso to section 434(1)(c) which, as has been
correctly pointed out in Kaledonia (supra), is not restricted
to any particular stage of a winding up proceeding.
14.4. Therefore, what follows as a matter of law is that
even post admission of a winding up petition, and after the
appointment of a Company Liquidator to take over the
assets of a company sought to be wound up, discretion is
vested in the Company Court to transfer such petition to
the NCLT. The question that arises before us in this case is
how is such discretion to be exercised?
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 pre- admission
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
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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
9.3. By relying on Action Ispat and Power
Private Limited vs. Shyam Metalics and
1
Energy Limited’s case, his submission is that
the Hon'ble Supreme Court has clarified that
the fifth proviso to Section 434(1)(c) of the
Companies Act, 2013 is not confined to any
particular stage of the winding-up proceedings.
The discretion to transfer a winding-up
proceeding to the NCLT continues to vest in the
Company Court even after admission of the
winding-up petition and even after appointment
of the Company Liquidator.
9.4. It is further submitted that the Hon'ble
Supreme Court has held that, so long as no
irreversible steps have been taken in the
liquidation process, particularly where no sale
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of the movable or immovable assets of the
company in liquidation has taken place, the
Company Court may exercise its discretion in
favour of transfer of the proceedings to the
NCLT.
9.5. Proceeding on the basis of the aforesaid
principles laid down in Action Ispat and
Power Private Limited vs. Shyam Metalics
1
and Energy Limited’s case , learned counsel
submits that, after the coming into force of the
Insolvency and Bankruptcy Code, 2016, the
legislative intent has been to consolidate
insolvency and liquidation proceedings before
the NCLT so as to avoid parallel proceedings
before different fora. It is therefore contended
that, in cases where winding-up proceedings
are pending before the Company Court and
have not reached a stage where the clock
cannot be turned back, such proceedings ought
to be transferred to the NCLT for consideration
under the framework of the Insolvency and
Bankruptcy Code. According to him, the facts of
the present case clearly demonstrate that no
such irreversible stage has been reached and,
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consequently, the present Company Petition
deserves to be transferred to the NCLT.
9.6. In this regard, he relies on the Transfer Rules,
2016. In this regard, he relies on Section 434
of the Companies Act, 2013, which is
reproduced hereunder for easy reference:
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;
(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.
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(d)any appeal preferred to the Appellate Authority for
Industrial and Financial Reconstruction or any reference
made or inquiry pending to or before the Board of Industrial
and Financial Reconstruction or any proceeding of whatever
nature pending before the Appellate Authority for Industrial
and Financial Reconstruction or the Board for Industrial and
Financial Reconstruction under the Sick Industrial
Companies (Special Provisions) Act, 1985 (1 of 1986)
immediately before the commencement of this Act shall
stand abated:
Provided that a company in respect of which such appeal or
reference or inquiry stands abated under this Clause may
make a reference to the Tribunal under this Act within one
hundred and eighty days from the commencement of this
Act in accordance with the provisions of this Act:
Provided further that no fees shall be payable for making
such reference under this Act by a company whose appeal
or reference or inquiry stands abated under this Clause.
(2)The Central Government may make rules consistent with
the provisions of this Act to ensure timely transfer of all
matters, proceedings or cases pending before the Company
Law Board or the courts, to the Tribunal under this section.
9.7. In further support of the application, learned
counsel places reliance on the Companies
(Transfer of Pending Proceedings) Rules, 2016,
as well as Section 434 of the Companies Act,
2013. Particular emphasis is placed on Section
434(1)(c), which provides for the transfer of
proceedings pending before the High Courts
and other courts to the National Company Law
Tribunal.
9.8. Elaborating upon the said provision, learned
counsel submits that, in terms of Section 434 of
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the Companies Act, 2013, proceedings pending
before the Company Court are liable to be
transferred to the NCLT, which is thereafter
required to proceed with and dispose of the
matter from the stage at which it stood
transferred. It is contended that the power to
transfer is not extinguished merely because a
winding-up order has been passed. On the
contrary, even after the passing of a winding-up
order, the Company Court retains the discretion
to transfer the proceedings to the NCLT.
9.9. Learned counsel further submits that the
parameters governing the exercise of such
discretion have been authoritatively laid down
by the Hon'ble Supreme Court in Action Ispat
and Power Pvt. Ltd. v. Shyam Metalics and
1
Energy Ltd . According to him, the Hon’ble
Supreme Court has held that the discretion
ought ordinarily to be exercised in favour of
transfer so long as no actual sale of the
movable or immovable assets of the company
in liquidation has taken place and no
irreversible steps have been undertaken in the
liquidation process. It is only when the winding-
up proceedings have progressed to a stage
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where it is impossible to restore the status quo
ante that the Company Court would be justified
in declining transfer and continuing with the
winding-up proceedings.
9.10. Applying the aforesaid principles to the facts of
the present case, learned counsel submits that,
although an Official Liquidator has been
appointed and reports have been submitted
from time to time under Rule 300 of the
Companies (Court) Rules, 1959, no steps have
been taken towards the sale of the assets of the
company in liquidation. It is submitted that
neither any advertisement inviting bids for the
sale of the movable or immovable properties of
the company has been issued, nor has any sale
been effected. Thus, according to him, the
proceedings have not progressed beyond the
stage of the winding-up order, and no
irreversible consequence has ensued. On this
basis, it is contended that the present Company
Petition is liable to be transferred to the NCLT
for consideration in accordance with the
provisions of the Insolvency and Bankruptcy
Code, 2016.
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9.11. He relies on the decision of the Hon’ble
Supreme Court in the case of State Bank of
2
India vs Shakti Bhog Foods Limited , more
particularly, Para 1 of the said order, which is
reproduced hereunder for easy reference:-
1. Leave granted. Pursuant to our order dated 08.12.2020
a Status Report has been furnished to this Court on
31.12.2019. The Report makes it clear that only
possession of one office has been taken by the Liquidator.
All other units are in physical possession with other
parties. Obviously, nothing irreversible has taken place. As
a result we set aside the order of the learned Single Judge
and allow the appeals in terms of our judgment in Action
Ispat & Power Pvt. Ltd. v. Shyam Metalics and Energy Ltd.
2020 SCC OnLine SC 1025, more particularly, at paras 31
& 32.
9.12. By relying on State Bank of India vs Shakti
2
Bhog Foods Limited ’s case, his submission is
that the Hon'ble Supreme Court, after taking
note of the status report submitted by the
Liquidator, observed that only one office
premises had been taken into possession by the
Liquidator and that the remaining units
continued to remain in the physical possession
of other parties. On that basis, the Hon'ble
Supreme Court concluded that nothing
irreversible had taken place and consequently
set aside the order of the learned Single Judge,
allowing the appeals in terms of the principles
2
(2021) 18 SCC 294
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laid down in Action Ispat & Power Pvt. Ltd.
1
v. Shyam Metalics and Energy Ltd .
9.13. Relying upon the aforesaid decision, learned
counsel submits that the mere taking over of
possession of certain assets by the Official
Liquidator would not, by itself, constitute an
irreversible stage in the winding-up
proceedings. According to him, what is material
is whether the assets of the company in
liquidation have been brought to sale or
whether any irreversible steps affecting the
rights of stakeholders have been undertaken. It
is contended that, as held by the Hon'ble
Supreme Court in State Bank of India v.
2
Shakti Bhog Foods Limited , even where the
Liquidator has taken possession of certain
properties, the principles enunciated in Action
Ispat and Power Private Limited vs. Shyam
1
Metalics and Energy Limited’s case would
continue to apply so long as the liquidation
proceedings have not progressed to the stage
of sale or any other irreversible consequence.
9.14. Applying the said principle to the present case,
learned counsel submits that although the
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Official Liquidator has been appointed and has
filed reports before this Court, no sale of any
movable or immovable property of the company
in liquidation has been undertaken. Hence,
according to him, the proceedings have not
reached an irreversible stage and the present
Company Petition is liable to be transferred to
the NCLT in exercise of the powers conferred
under Section 434 of the Companies Act, 2013.
9.15. He relies on the decision of the Hon’ble Delhi
High Court in the case of Cowi India Private
3
Limited vs Pinnacle Air Private Limited ,
more particularly, Paras 6, 7, 8, 9, 13, 14 and
16 thereof, which are reproduced hereunder for
easy reference:
6. He submits that the present petition ought to be
transferred to NCLT in view of Section 434(c) of the
Companies Act. He submits that the present case is
squarely covered by the decision in the case of Gurbakhsh
Singh BA, Builders P. Ltd. v. Fortis Hospital Ltd. : 2024
SCC OnLine Del 3480, wherein a Coordinate Bench of this
Court clarified that even post- admission, a winding-up
petition can be transferred if no irreversible steps have
been taken.
7. He states that as far as the requirement of moving a
formal application for transfer of proceedings is concerned,
the relevant provision of the statute itself uses the word
'may', therefore, there arises no need for an application to
be moved for the same.
3
Manu/DE/0948/2025
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8. He submits that no Official Liquidator has been
appointed, no orders have been passed for the sale of
assets, and no irreversible steps have been undertaken in
the present case. He argues that this is precisely the kind
of matter that should be transferred to the NCLT under
Section 434 of the Companies Act, 2013, which mandates
such transfers.
9. The short question that falls for consideration before
this Court is whether a winding up petition filed under the
Companies Act, 1956, at a stage where no irreversible
steps have been taken towards liquidation, can and should
be transferred to the NCLT at the instance of the
Respondent.
13. The aforesaid provision has been interpreted by the
Hon'ble Apex Court in the case titled Action Ispat and
Power D MANU/SC/0942/2020: 2020:INSC: 699 (2021) 2
SCC 641, wherein it was held tha P. Ltd. v. Shyam
Metalics and Energy Ltd. those winding up proceedings
pending before the High Courts, which have not
progressed to an advanced stage, ought to be transferred
to the NCLT. The relevant extract of the said decision is as
follows:
"Given the aforesaid scheme of winding up under Chapter
XX of the Companies 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 with the Tribunal been served in terms of
rule 26 of the Companies (Court) Rules, 1959 at a
nreadmission stage, given the beneficial result of the
application of the Code. up proceeding is 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
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to set the clock back that the company court must proceed
with the winding up, instead of transferring the
proceedings to the National Company Law Tribunal 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."
14. In the opinion of this Court, the present matter is
squarely covered by the decision in Gurbakhsh Singh BA,
Builders (P) Ltd. v. Fortis Hospital Ltd. , (supra), where this
Court extensively considered the applicability of Section
434 of the Companies Act, and the transfer of pending
winding-up petitions to the NCL. It was held as under :
"13. Thus, what follows is that the entire statutory scheme
in respect of winding up of companies, as also a catena of
judgments has been considered by the Supreme Court in
holding that even post admission, such a petition may be
transferred by the High Court to the National Company
Law Tribunal, as long as no irreversible steps have been
taken pursuant to the winding up of the company
concerned. Further, the submission of learned counsel for
the Petitioner the National Company Law Tribunal has
been moved, cannot be countenanced. A decision to
transfer the matter to the National Company Law Tribunal
is a matter of jurisdiction of the Court, which transfer can
be effected suo motu by this Court and mere moving or
non-moving of an application by any of the parties seeking
such transfer, will not be decisive.
14. In view of the foregoing discussion, it is the opinion of
this Court, that since no substantive proceedings have
been undertaken towards winding up of the company, the
present petitions cannot be allowed to be continued before
this Court. Hence, the instant petitions are transferred to
the National Company Law Tribunal. It is left to the
National Company Law Tribunal to consider these matters
on merits and pass appropriate orders in accordance with
law."
16. In the present case, the Respondent has submitted
written submissions explicitly requesting the transfer of
the winding-up petition to the NCLT. In view of the
Respondent's express request for transfer and the legal
precedents affirming that a formal application is not
indispensable, this Court finds no impediment in treating
the written submissions as an application for transfer of
the present petition to the NCLT. The Court is not bound
to insist on a separate application when the intent of the
party seeking transfer is evident from the record.
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9.16. By relying on Cowi India Private Limited vs
3
Pinnacle Air Private Limited’s case, he
submits that the Hon’ble Delhi High Court, after
considering the provisions of Section 434 of the
Companies Act, 2013 and the law laid down by
the Hon'ble Supreme Court in Action Ispat
and Power Private Limited vs. Shyam
1
Metalics and Energy Limited’s case
reiterated that even post-admission of a
winding-up petition, the proceedings may be
transferred to the NCLT, provided no irreversible
steps have been taken towards liquidation of
the company.
9.17. Learned counsel further points out that the
Hon’ble Delhi High Court, while following its
earlier decision in Gurbakhsh Singh BA
4
Builders (P) Ltd. v. Fortis Hospital Ltd.,
held that the question of transfer is essentially
one relating to the jurisdiction of the Court and
that the power of transfer can be exercised by
the Court even suo motu. It was further held
that the mere absence of a formal application
seeking transfer would not preclude the Court
from directing such transfer if the intention of
4
2024 SCC OnLine Del 3480
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the party seeking transfer is otherwise evident
from the record.
9.18. Placing reliance on the aforesaid decision,
learned counsel submits that a separate and
formal application seeking transfer is not an
indispensable requirement under Section 434 of
the Companies Act, 2013. According to him,
once the intention of a party to seek transfer is
brought to the notice of the Court, the Court is
empowered to exercise its jurisdiction and
direct transfer of the proceedings to the NCLT.
9.19. Learned counsel contends that the present case
stands on a stronger footing than the facts
considered in Cowi India Private Limited vs
3
Pinnacle Air Private Limited’s case,
inasmuch as the Respondent has not merely
expressed its intention to seek transfer but has
filed a specific application in Company
Application No.39/2025 seeking transfer of the
winding-up proceedings to the NCLT. It is
therefore submitted that, having regard to the
principles laid down in Action Ispat and
Power Private Limited vs. Shyam Metalics
1
and Energy Limited’s , Gurbakhsh Singh BA
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4
Builders (P) Ltd. v. Fortis Hospital Ltd.,
and Cowi India Private Limited vs Pinnacle
3
Air Private Limited , this Court ought to
exercise its discretion in favour of transfer and
direct that the present Company Petition be
transferred to the NCLT for consideration in
accordance with law.
9.20. He relies upon the decision of a Coordinate
Bench of this Court in the case of Magnifico
Minerals Private Limited vs Saravana
5
Alloys Steels Private Limited , more
particularly, Paras 3, 11, 12, 16, 17 and 19
thereof which are reproduced hereunder for
easy reference:
3. Learned Senior counsel Sri. B.K.Sampath Kumar, appearing
for the applicant would contend that 5th proviso to Section
434(1)(c) of Companies Act 2013(for short 'Act of 2013')
enables any party to the winding up petition to seek transfer
of the Company Petition to the National Company Law
Tribunal. It is also urged that the Company Petition is not yet
admitted and there is no progress in the petition which
compels the Court to retain the petition before this Court.
Reliance is placed on the judgment of the Hon'ble Apex Court
in ACTION ISPAT AND POWER PRIVATE LIMITED VS. SHYAM
METALICS AND ENERGY LIMITED, (AIR 2021 SC 309).
Referring to paragraph No.22 of the said judgment, the
learned senior counsel would urge that the application seeking
transfer of the Company Petition has to be allowed
notwithstanding the fact that the notice before admission is
already served on the Respondent in the Company Petition. He
would also submit that co-ordinate bench of this Court in COP
No.21/2014 as well as in COP No.119/2014 has transferred
the petitions to the National Company Law Tribunal for
5
Manu/KA/1125/2024)
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disposal in accordance with law despite service of notice to the
respondents in those petitions.
th
11. 5 proviso to Section 434(1)(c) of the Act of 2013
provides for an application seeking transfer of the pending
company petition to the National Company Law Tribunal. The
plain reading of the said provision, particularly the use of the
word "may" at two places in the provision, would clearly
demonstrate that the party has the option to seek transfer and
the Company Court may transfer the petition to the National
Company Law Tribunal. To put it differently, 5th proviso to
Section 434(1)(c) of the Act of 2013 confers the discretion on
the Company Court either to retain the Company Petition or to
transfer the Company Petition subject to inherent limitations in
law on exercise of discretionary jurisdiction.
12. Thus, the transfer of the petition is not mandatory on the
application by any of the parties to the proceeding. An
element of discretion lies with the Court. Else there was no
need to introduce the 5th proviso in the manner in which it is
couched. Whenever a discretionary power is conferred to the
Court, then the person who seeks such discretionary power to
be exercised in his favour has to make out a valid ground for
the exercise of such power.
16. The co-ordinate bench of this Court in NITESH HOTELS
supra has also considered the effect of the judgment of the
Apex Court in ACTION ISPAT supra. The co-ordinate bench of
this Court has taken a view that the ACTION ISPAT supra,
judgment has to be understood in the context in which the
judgment was delivered. The co-ordinate bench of this Court
has taken a view that ACTION ISPAT supra, does not mandate
the automatic transfer of the Company Petition on an
application by one of the parties to the proceeding to the
National Company Law Tribunal.
17. It is true that in ACTION ISPAT supra, the Apex Court has
also taken a view that the transfer of the Company Petition to
the National Company Law Tribunal is permissible even post-
admission of the Company Petition in a situation where no
irreversible transactions have taken place pursuant to the
court order which would desist the Company Court from
transferring the petition to the National Company Law
Tribunal. It is also true that the Company Petition is not yet
admitted and no transactions have taken place pursuant to the
Court order which can be termed as 'irreversible transactions'.
Nevertheless, the power of the Company Court to retain the
petition under certain circumstances post service of notice
under Rule 26 of Rules, 1959 and before admission is evident
from the language employed in 5th proviso to Section
434(1)(c) of the Act of 2013.
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19. Applying the aforementioned well-established principles,
this Court is of the view that 5th proviso to Section 434(1)(c)
of the Act of 2013 does not mandate the transfer of a
Company Petition to the National Company Law Tribunal on an
application filed by the parties. However the Court has to
consider whether a case is made out to exercise the discretion.
The party who seeks the discretion to be exercised in his
favour must make out a valid ground for the exercise of the
discretion in his favour. 5th proviso to Section 434(1) (c) of
the Act of 2013 is not an exception to such Rule. On perusal of
the application it is evident that except citing the judgment in
ACTION ISPAT (which has no application to this case) the
applicant has not made out a case to exercise the discretion in
his favour.
9.21. By relying on Magnifico Minerals Private
Limited vs Saravana Alloys Steels Private
5
Limited he again submits that the Coordinate
Bench examined the scope of the fifth proviso
to Section 434(1)(c) of the Companies Act,
2013 and the principles laid down by the
Hon'ble Supreme Court in Action Ispat and
Power Pvt. Ltd. v. Shyam Metalics and
1
Energy Ltd.
9.22. Learned counsel submits that the Coordinate
Bench recognized that the fifth proviso to
Section 434(1)(c) confers a discretion upon the
Company Court either to retain a winding-up
petition or to transfer it to the NCLT. The
judgment further clarifies that transfer is not
automatic merely because an application
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seeking transfer has been filed and that the
applicant must establish grounds warranting
the exercise of such discretion. The Coordinate
Bench also took note of the observations in
Action Ispat and Power Private Limited vs.
1
Shyam Metalics and Energy Limited that
even after admission of a winding-up petition,
transfer to the NCLT remains permissible
provided no irreversible steps have been taken
in the winding-up proceedings.
9.23. Relying upon the aforesaid decision, learned
counsel submits that the Coordinate Bench of
this Court has expressly applied the principles
laid down in Action Ispat and Power Private
Limited vs. Shyam Metalics and Energy
1
Limited while considering applications under
the fifth proviso to Section 434(1)(c) of the
Companies Act, 2013. According to him, the
decision reinforces the proposition that the
Company Court retains the jurisdiction to
transfer a winding-up proceeding even after
admission of the petition and after the passing
of a winding-up order, so long as the
proceedings have not reached an irreversible
stage.
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9.24. It is therefore contended that the facts of the
present case squarely satisfy the test
formulated in Action Ispat. Learned counsel
submits that no sale of the assets of the
company in liquidation has taken place, no
irreversible transaction has been effected, and
the liquidation proceedings have not advanced
to a stage where the clock cannot be set back.
Consequently, it is argued that the discretion
vested in this Court under the fifth proviso to
Section 434(1)(c) ought to be exercised in
favour of transfer of the present Company
Petition to the NCLT.
9.25. Learned counsel also places reliance upon a
screenshot purportedly containing the results of
research relating to decisions of the Hon'ble
Supreme Court and various Hon’ble High Courts
wherein applications for transfer of winding-up
proceedings to the NCLT have been allowed. On
the basis of the said material, it is contended
that Courts have, in several instances,
exercised their discretion in favour of transfer
under Section 434 of the Companies Act, 2013.
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9.26. However, a perusal of the said screenshot
merely discloses a list of case titles and
references. The factual matrix of those cases,
the issues that arose for consideration, and the
reasons which weighed with the respective
Courts while directing transfer are not
discernible therefrom. Moreover, the decisions
themselves have not been produced before this
Court. In the absence of the judgments being
placed on record, this Court is unable to
examine the ratio decidendi thereof or
determine their applicability to the facts of the
present case. Consequently, no reliance can be
placed on the said screenshot.
9.27. Learned counsel further relies upon an
authority-check report generated through
Manupatra with reference to the decision of the
Hon'ble Supreme Court in Action Ispat and
Power Pvt. Ltd. v. Shyam Metalics and
1
Energy Ltd. It is submitted that the report
demonstrates that the principles laid down in
Action Ispat and Power Pvt. Ltd. v. Shyam
1
Metalics and Energy Ltd., have been
followed and applied by several Courts and
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Tribunals and, therefore, the same ought to be
applied in the present case as well.
9.28. This Court, however, finds that the authority-
check report merely indicates instances where
Action Ispat and Power Pvt. Ltd. v. Shyam
1
Metalics and Energy Ltd., has been cited,
referred to, followed, distinguished, or
otherwise considered. The report does not
furnish the factual background of those cases,
the issues involved, or the reasoning adopted
by the respective Courts while applying the
decision. In the absence of the underlying
judgments being placed on record, it is not
possible to ascertain whether the cases referred
to therein bear any factual or legal similarity to
the present matter. Hence, the authority-check
report, by itself, cannot constitute a substantive
basis for determining the issues arising for
consideration in the present proceedings.
9.29. He relies on Rule 5 of the Companies (Transfer
of Pending Proceedings) Rules, 2016, which is
reproduced hereunder for easy reference:
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5. Transfer of pending proceedings of Winding up on
the ground of inability to pay debts.-
(1) All petitions relating to winding up of a company under
Clause (e) of section 433 of the Act on the grour@ inability
to pay its debts pending before a High Court, and, where
the petition has not been served on the Respondent under
rule 26 of the Companies (Court) Rules, 1959 shall be
transferred to the Bench of the Tribunal established under
sub-section (4) of section 419 of the Companies Act, 2013
exercising territorial jurisdiction to be dealt with in
accordance with Part II of the Code:
Provided that the Petitioner shall submit all information,
other than information forming part of the records
transferred in accordance with rule 7, required for
admission of the petition under sections 7, 8 or 9 of the
Code, as the case may be, including details of the proposed
insolvency professional to the Tribunal upto 15th day of
July, 2017, failing which the petition shall stand abated:
Provided further that any party or parties to the petitions
shall, after the 15th day of July, 2017, be eligible to file
fresh applications under sections 7 or 8 or 9 of the Code, as
the case may be, in accordance with the provisions of the
Code:
Provided also that where a petition relating to winding up of
a company is not transferred to the Tribunal under this.
rule and remains in the High Court and where there is
another petition under Clause (e) of section 433 of the Act
for winding up against the same company pending as on
15th December, 2016, such other petition shall not be
transferred to the Tribunal, even if the petition has not
been served on the Respondent.
9.30. Rule 5 deals with the transfer of pending
winding-up proceedings instituted on the
ground of inability to pay debts under Clause
(e) of Section 433 of the Companies Act, 1956.
The said Rule provides that winding-up
petitions pending before a High Court, in which
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notice has not been served on the Respondent
in terms of Rule 26 of the Companies (Court)
Rules, 1959, shall stand transferred to the
jurisdictional Bench of the NCLT for being dealt
with in accordance with Part II of the
Insolvency and Bankruptcy Code, 2016.
9.31. Relying upon the aforesaid Rule 5, learned
counsel submits that the legislative scheme
governing the transfer of pending winding-up
proceedings clearly manifests an intention to
shift insolvency-related proceedings from the
Company Courts to the NCLT. According to him,
Rule 5 contemplates automatic transfer of
winding-up petitions in cases where notice
under Rule 26 of the Companies (Court) Rules,
1959 had not been served upon the respondent
company as on the relevant date.
9.32. It is further submitted that Rule 5, when read in
conjunction with Section 434 of the Companies
Act, 2013 and the principles laid down by the
Hon'ble Supreme Court in Action Ispat and
Power Private Limited vs. Shyam Metalics
1
and Energy Limited demonstrates a clear
legislative preference for adjudication of
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insolvency matters by the NCLT. Learned
counsel therefore contends that, where the
proceedings have not attained an irreversible
stage, the Company Court ought to exercise its
discretion in favour of transfer so as to further
the object underlying the Insolvency and
Bankruptcy Code, 2016.
9.33. He relies on Rule 6 of the Companies (Transfer
of Pending Proceedings) Rules, 2016, which is
reproduced hereunder for easy reference:
6. Transfer of pending proceedings of Winding up
matters on the grounds other than inability to pay
debts. -All petitions filed under clauses (a) and (f) of
section 433 of the Companies Act, 1956 pending before a
High Court and where the petition has not been served on
the Respondent as required under rule 26 of the Companies
(Court) Rules, 1959 shall be transferred to the Bench of the
Tribunal exercising territorial jurisdiction and such petitions
shall be treated as petitions under the provisions of the
Companies Act, 2013 (18 of 2013).
9.34. He submits that Rule 6 deals with the transfer
of winding-up petitions filed on grounds other
than inability to pay debts, namely under
clauses (a) and (f) of Section 433 of the
Companies Act, 1956. The Rule provides that all
such petitions pending before a High Court,
where notice has not been served on the
respondent in accordance with Rule 26 of the
Companies (Court) Rules, 1959, shall stand
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transferred to the jurisdictional Bench of the
NCLT and shall thereafter be treated as
petitions under the provisions of the Companies
Act, 2013. The provision is extracted
hereinabove for ready reference.
9.35. Placing reliance on the aforesaid Rule 6, learned
counsel reiterates that the statutory framework
governing transfer of pending company
proceedings contemplates transfer to the NCLT
in cases where service of notice under Rule 26
of the Companies (Court) Rules, 1959 has not
been effected upon the respondent company.
According to him, Rules 5 and 6 of the
Companies (Transfer of Pending Proceedings)
Rules, 2016 demonstrate the legislative intent
that company matters pending before the High
Courts should, wherever permissible, be
adjudicated by the NCLT.
9.36. It is therefore submitted that the principles
underlying the Transfer Rules, when read
together with Section 434 of the Companies
Act, 2013 and the law declared by the Hon'ble
Supreme Court in Action Ispat and Power
Private Limited vs. Shyam Metalics and
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1
Energy Limtied support the transfer of
pending winding-up proceedings to the NCLT,
particularly in cases where the proceedings
have not progressed to an irreversible stage.
Learned counsel accordingly submits that the
present Company Petition is also liable to be
transferred to the NCLT.
9.37. He relies on Rule 26 of the Company (Court)
Rules, 1959 is reproduced hereunder for easy
reference:
26. Service of petition - Every petition shall be
served on the Respondent, if any, named in the
petition and on such other persons as the Act or
these rules may require or as the Judge or the
Registrar may direct. Unless otherwise ordered, a
copy of the petition shall be served along with the
notice of the petition.
9.38. Learned counsel further places reliance upon
Rule 26 of the Companies (Court) Rules, 1959,
which prescribes the manner of service of a
company petition. The Rule mandates that
every petition shall be served on the
respondent named therein and on such other
persons as may be required under the Act or
the Rules, or as may be directed by the
Company Court. The Rule further provides that,
unless otherwise ordered, a copy of the petition
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shall accompany the notice served upon the
respondent.
9.39. Referring to Rule 26, learned counsel submits
that the Companies (Transfer of Pending
Proceedings) Rules, 2016 make service of
notice under Rule 26 the determinative factor
for deciding whether a winding-up petition is
liable to be transferred automatically to the
NCLT. According to him, the distinction drawn
under Rules 5 and 6 of the Transfer Rules is
between petitions in which service under Rule
26 has been effected and those in which such
service has not been effected.
9.40. It is therefore contended that the scheme of
the Transfer Rules recognises service under
Rule 26 as a significant procedural milestone in
winding-up proceedings. Learned counsel
submits that the principles underlying Rule 26,
when read with Section 434 of the Companies
Act, 2013 and the judgments relied upon by
him, support the proposition that pending
winding-up proceedings should ordinarily be
transferred to the NCLT unless the proceedings
have advanced to a stage where irreversible
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consequences have ensued. Consequently,
according to him, the present Company Petition
is liable to be transferred to the NCLT.
9.41. He relies on the decision of the Hon'ble Calcutta
High Court in Prasanta Kumar Mitra and
6
ors., vs. V.S.Indian Steam Laundry more
particularly at Paragraphs 37 to 49 and 59 to
62, which are reproduced hereunder for easy
reference:
37 . The third issue that has been argued extensively
before this Court is with regard to the true and correct
interpretation of Section 434(1)(c) of the 2013 Act. It is
the appellant's case that the term "all" and "including"
used in the section have to be given a restrictive
meaning. In furtherance of their arguments with respect
to the word "all" they had placed reliance on Jairam
Narayan Raje (supra) and All India Indian Overseas Bank SC
and ST Employees' Welfare Association and Others (supra)
wherein the courts had held that in certain situations the
word "all" may be interpreted in a restrictive manner
depending on the context and subject in which the word
has been used keeping in mind the object of the
provisions enacted. In the present case one may examine
the present provision once again that reads as follows:
"Section 434(1)(c): all proceedings under the Companies
(1/1956) including proceedings relating to
Act, 1956
arbitration, compromise, arrangements and
reconstruction and winding up of companies pending
immediately before such date before any District Court or
High Court....."
38. One has to understand the true intent of the
legislature and put a proper construction to the same. I
ask myself this question as to why the legislature would
qualify the term proceedings with the word "all". If the
legislature did not intend to include everything under the
6
Manu/WB/0821/2018
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Companies Act, 1956 , there was no need to use the word
"all" before the word "proceedings". However, one must
keep in mind the words that follow and qualify the above
sentence which is "including proceedings relating to
arbitration, compromise, arrangement and reconstruction
and winding up of companies....". The second part of the
sentence that follows the first clearly would lead to a
different meaning if the term "including proceedings" was
absent. In such a situation, all proceedings relating to
only arbitration, compromise, arrangement and
reconstruction and winding up of companies would have
stood transferred. Therefore, what follows suit is that the
interpretation of the term "including" in the second
sentence becomes paramount.
39. In relation to the meaning to be given to the word
"including", the appellants have cited various judgments
that need to be examined in greater detail. In South
Gujarat Roofing Tiles Manufacturing Association and
Another (supra), the Apex Court examined the
explanation to entry 22 to part I of the Schedule to the
Minimum Wages Act, 1948 . The explanation to entry 22
stated that for the purpose of this entry potteries industry
"includes" the manufacture of the nine articles of pottery
specified therein. The Apex Court on an examination of
the said provision held that the word "include" has been
used in the explanation in an exhaustive and restrictive
manner. Paragraphs 3 to 5 are delineated below for a
proper understanding:
"3. The question turns on a true construction of the
Explanation to entry 22 which says that for the purpose
of this entry potteries industry "includes" the
manufacture of the nine "articles of pottery" specified
therein. Pottery in a wide sense will take in all objects
that are made from clay and hardened by fire, from crude
earthen pots to delicate porcelain. Mr. Patel appearing for
the Respondent, State of Gujarat, contends that the
explanation indicates that potteries industry in entry 22 is
intended to cover all possible articles of pottery including
Mangalore pattern roofing tiles. Referring to the well-
known use of the word 'includes' in interpretation clauses
to extend the meaning of words and phrases occurring in
the body of the statute. Mr. Patel submits that the
Explanation, when it says that potteries industry
'includes' the nine named objects, what is mean is that it
includes not only these objects but other articles of
pottery as well. It is true that 'includes' is generally used
as a word of extension, but the meaning of a word or
phrase is extended when it is said to include things that
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would not properly fall within its ordinary connotation. We
may refer to the often-quoted observation of Lord Watson
in Dilworth v. Commr. Of Stamps, (1899) AC 99 at pp.
105-106 that when the word 'include' is used in
interpretation clauses to enlarge the meaning of words or
phrases in the statute "these words or phrases must be
construed as comprehending, not only such things as
they signify according to their natural import but also
those things which the interpretation clause declares that
they shall include." Thus where 'includes' has an
extending force, it adds to the word or phrase a meaning
which does not naturally belong to it. It is difficult to
agree that 'includes' as used in the Explanation to entry
22 has that extending force. The explanation says that for
the purpose of entry 22 potteries industry includes the
manufacture of the nine "articles of pottery" specified in
the Explanation. If the objects specified are also "articles
of pottery", then these objects are already comprised in
the expression "potteries industry." It hardly makes any
sense to say that potteries industry includes the
manufacture of articles of pottery, if the intention was to
enlarge the meaning of potteries industry in any way.
4. We are also unable to agree with Mr. Patel that the
articles specified in the Explanation may have been
mentioned out of abundant caution to emphasise the
comprehensive character of the entry, to indicate that all
varieties of pottery are included therein. This argument,
though more plausible, does not also seem acceptable. It
is possible that one might have doubts whether things
like refractories or electrical or textile accessories would
pass under the description pottery as that word is used in
common parlance, but the explanation also mentions
crockery and toys regarding which there could be hardly
any doubt. The inclusion in the list of objects which are
well-recognised articles of pottery makes it plain that the
Explanation was added to the entry not by way of
abundant caution.
5. The contention of Mr. Tarkunde for the appellants is
that the articles mentioned in the Explanation were
intended to be exhaustive of the objects covered by entry
22. According to Mr. Tarkunde if the legislature wanted to
bring within the entry all possible articles of pottery, then
there was hardly any point in mentioning only a few of
them by way of Explanation. To this Mr. patel's reply is
that it is well-known that where the legislature wants to
exhaust the significance of the term defined, it uses the
word 'means' or the expression 'means and includes' and
that if the intention was to make the list exhaustive, the
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legislature would not have used the word 'includes' only.
We do not think there could be any inflexible rule that the
word 'include' should be read always as a word of
extension without reference to the context. Take for
instance entry 19 in the schedule which also has an
Explanation containing the word 'includes'. Entry 19 is as
follows:
"Employment is any tobacco processing establishment,
not covered under entry No. 3.
Explanation. - For the purpose of this entry the
expression "processing"
includes packing or unpacking, breaking up, sieving,
threshing, mixing, grading, drying, curing or otherwise
treating the tobacco (including tobacco leaves and stems)
in any manner."
Entry 3 to which entry 19 refers reads:
"Employment is any tobacco (including bidi-making)
manufactory." It is clear from the Explanation to Entry 19
that there could be no other way or manner of
"processing" besides what is stated as included in that
expression. Though 'include' is generally used in
interpretation clauses as a word of enlargement, in some
cases the context might suggest a different intention.
Pottery is an expression of very wide import, embracing
all objects made of clay and hardened by heat. If it had
been the legislature's intention to bring within the entry
all possible articles of pottery, it was quite unnecessary to
add an Explanation. We have found that the Explanation
could not possibly have been introduced to extend the
meaning of potteries industry or the articles listed therein
added ex abundant cautela. It seems to us therefore that
the legislature did not intend everything that the
potteries industry turns out to be covered by the entry.
What then could be the purpose of the Explanation? The
Explanation says that, for the purpose of entry 22,
potteries industry 'includes' manufacture of the nine
articles of pottery named therein. It seems to us that the
word 'includes' has been used herein the sense of
'means'; this is the only construction that the word can
bear in the context. In that sense it is not a word of
extension, but limitation; it is exhaustive of the meaning
which must be given to potteries industry for the purpose
of entry 22. The use of the word 'includes' in the
restrictive sense is not unknown. The observation of Lord
Watson in Dilworth v. Commr. Of Stamps, 1899 AC 99
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which is usually referred to on the use of 'include' as a
word of extension is followed by these lines: "But the
word 'includes' is susceptible of another construction,
which may become imperative, if the context of the Act is
sufficient to show that it was not merely employed for the
purpose of adding to the natural significance of the words
or expressions defined. It may be equivalent to 'mean
and include' and in that case it may afford an exhaustive
explanation of the meaning which for the purpose of the
Act, must invariably be attached to these words or
expressions." It must therefore be held that the
manufacture of Mangalore pattern roofing tiles is outside
the purview of entry 22."
40. Next we need to examine the judgment of the Andhra
Pradesh High Court in Hakim and Co. (supra) wherein it
was held that the definition of forest produce though uses
the term "includes", it is to be read as "means" or
"includes and means". The Andhra Pradesh High Court
held that the expression "includes" was used in an
exhaustive manner. The relevant paragraph is delineated
below:
"14. We have already reproduced above the definition of
"forest produce". It is true that the definition uses the
word "includes" as opposed to the expression "means" or
as opposed to the expression "means and includes". But
the submission of the learned counsel for the appellant is
that the expression really is not used as a word of
extension and in the context and the reference such
expression is used in the sense of "means", and in that
sense it is not a word of extension but of limitation; it is
exhaustive of the meaning which must be given to the
expression "forest produce" used in the aforesaid sub-
section i.e., 2(g). In support of this contention the
learned counsel relies on a decision of the Supreme Court
in South Gujarat Roofing Tiles Manufacturers Association v. State
of Gujarat , AIR 1977 SC 90.
Before we refer to the decision it is useful to analyse the
definition with which we are concerned, viz., S. 2(g) of the
Act. Though the definition "forest produce" refers to the
expression "includes", it is divided into three board
categories:-
(i) Whether found in, or brought from a forest or not
(sub-clause (1)),
(ii) When found in or brought from a forest (sub-clause
(2)), and
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(iii) Such other produce as may be prescribed (sub-clause
(3)).
The 1st category mentions various articles including
wood, rubber, charcoal, wood-oil, resin, natural varnish,
bar, ....rousa grass ..... In the 2nd category not merely
trees but also "such leaves, flowers and fruits as may be
prescribed and all other parts or produce not hereinbefore
mentioned of trees" are mentioned. The second part of
this category also includes plants which are not trees.
Part (III) of sub-clause (2) of S. 2(9) includes wild
animals, wild birds, skins, etc., and part (iv) of sub-clause
(2) includes even surface soil, rock and minerals, etc. The
last category mentions such other produce as may be
prescribed. It can thus be noticed that the definition
includes not only such produce which is normally referred
to as forest produce, but also various products which are
not normally referred to as forest produce. Added to that
is the power given to the State Government to prescribe
such produce by way of rules. Even those articles
specified by way of rules can also come under the
definition of 'forest produce'. It appears to us that in this
context the definition of "forest produce" though it uses
the expression "includes", is exhaustive. It is the common
case that the item in dispute is not covered by sub-clause
(2) or sub-clause (3) of S. 2(g) of the Act, that is to say, it
is not covered by the 2nd and 3rd categories."
41. N.D.P. Namboodripad (Dead) By Lrs. (supra) was
referred to by both the parties to interpret the meaning of
the word "includes". The proposition of law discussed
therein in paragraphs 18 to 20 are delineated below:
"18. The word "includes" has different meanings in
different contexts. Standard dictionaries assign more than
one meaning to the word "include".
Webster's Dictionary defines the word "include" as
synonymous with "comprise" or "contain". Illustrated
Oxford Dictionary defines the word "include" as: (i)
comprise or reckon in as a part of a whole; (ii) treat or
regard as so included. Collins Dictionary of English
Language defines the word "includes" as: (i) to have as
contents or part of the contents; be made up of or
contain; (ii) to add as part of something else; put in as
part of a set, group or a category; (iii) to contain as a
secondary or minor ingredient or element. It is no doubt
true that generally when the word "include" is used in a
definition clause, -it is used as a word of enlargement,
that is to make the definition extensive and not
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restrictive. But word "includes" is also used to connote a
specific meaning, that is, as "means and includes" or
"comprises or "consists of".
19. Justice G. P. Singh in his treatise Principles of
Statutory Interpretation (10th Edn., 2006), has noticed
that where a word defined is declared to "include" such
and such, the definition is prima facie extensive, but the
word "include" when used while defining a word or
expression, may also be construed as equivalent to
"mean and include" in which event, it will afford an
exhaustive explanation of the meaning which for the
purposes of the Act must invariably be attached to the
word or expression [vide pp. 173 and 175 referring to
and relying on the decisions of this Court in Municipal
Council, Raipur v. State of M. P. , South Gujarat Roofing Tiles
Manufacturers Assn. v. State of Gujarat , Hindustan Aluminium
Corpn. v. State of U. P. and Reserve Bank of India v.
peerless General Finance & Investment Co. Ltd. It is,
therefore, evident that the word "includes" can be used in
interpretation clauses either generally in order to enlarge
the meaning of any word or phrase occurring in the body
of a statute, or in the normal standard sense, to mean
"comprises" or "consists of" or "means and includes"
depending on the context.
20. If the words "and includes" were intended to rope in
certain items which would not be part of the meaning, but
for the definition, then Rule 62 would have specified only
"dearness pay" as the item to be included but not "pay".
If pay, dearness allowance and other allowances were
already included in "emolument" with reference to its
general or normal meaning, as contended by the
appellant, there was no reason to specifically again
include "pay" in rule 62. Inclusion of "pay" and "dearness
Pay" and non-inclusion of "dearness allowance or other
allowances" in the definition of "emolument" is significant.
The definition in Rule 62 is intended to clarify that only
pay and dearness pay would be considered as
"emolument" for purposes of calculating pension. The
words "and includes" have been used in Rule 62, as
meaning "comprises" or "consists of."
42. For a proper comprehension of the term "includes"
and "including", one should also examine the view taken
by courts in different jurisdictions. In Thompson West's,
Words and Phrases, Permanent Edition, Vol 20A, the
different ways the phrase "includes" has been interpreted
by the courts in the United States of America has been
provided. Some of the illustrations are provided below:
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"Ill. 2007. Pursuant to statutory definition of the words
"includes" or "including," either of these words, when
followed by a listing of items, means that the preceding
general term encompasses the listed items, but the list is
not exhaustive; the preceding general term is to be
construed as a general description of the listed items and
other similar items. S.H.A. 720 ILCS 5/2-
10.-People v. Perry, 309 Ill.Dec. 330, 864 N.E.2d 196,
224 Ill.2d 312.-Statut 194, 199.
Ill.App. 2 Dist. 1943. The word "includes" as used in
Policemen's Minimum Wage Act defining policemen to
mean any member of a regularly constituted police
department of a city and to "include" the chief of police,
assistant chief of police, chief of detectives, and others,
meant "comprises" and the statute manifested as intent
to create a fixed class excluding from the definition all
those not specifically named. S.H.A. ch. 24, §§ 860a,
860b; S.H.A. ch. 24, §§ 11-1, 11-2.-Patteson v. City of
Peoria, 47 N.E.2d 867, 318 Ill.App. 245, reversed 54
N.E.2d 445, 386 Ill. 460.- Labor & Emp 2242.
La.App. 2 Cir, 1966. Omnibus Clause of automobile
liability policy by its title and use of the word "includes",
denotes extensiveness and comprehensiveness and its
evident intent to refer to any and all persons entitled to
protection under the policy. -Commercial Union Ins. Co.
of New York v. Hardcastle, 188 So.2d 698, appeal after
remand 197 So.2d 335, writ refused 199 So.2d 916, 250
La. 900.-Insurance 2660.
Mich.App. 2003. Word "includes," in phrase defining
"verdict" in Rule assessing mediation sanctions against a
party rejecting a mediation evaluation unless the verdict
was more favourable to the rejecting party, was
exclusive, rather than leaving to the courts' future
interpretation as to what would constitute a "verdict," and
thus only the three things listed after such word, a jury
verdict, a judgment by the Court after a nonjury trial, and
a judgment entered as a result of a ruling on a motion
filed after mediation, qualified as verdicts for purposes of
the Rule. MCR 2,403(O)(2).- Jerico Const., Inc. V.
Quadrants, Inc., 666 N.W.2d 310, 257 Mich.App. 22,
appeal denied 675 N.W.2d 37, 469 Mich. 1010.-Costs 2."
43. As per Stroud's Judicial Dictionary of Words And
Phrases, 4th Edition, Vol 3, 1334, the word "including"
interpreted in English courts has been delineated as
follows:
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"INCLUDING. (1) "Including" is generally used to enlarge
the meaning of the preceding word (Reynolds v. Income
Tax Commissioner for Trinidad and Tobago [1966] 1
W.L.R. 19).
(2) Rent "including rates and taxes": see Bradshaw v.
M'Mullan [1920] 2 I.R. (3) A bequest of "my personal
effects in my room including pictures, roll-top desk and
chiffonier complete with their contents" was held to be
confined to chattels of the nature of personal effects and
not to include securities forming part of the contents of
the desk (Joseph v. Phillips [1934] A.C. 348).
(4) A provision for investment in property "including the
purchase of freehold property in England or Wales"
means for the income to be obtained and not for the
occupation by the trustee or his nominee ( Re Powers'
Will Trusts [1947] Ch. 572).
(5) "Including fruit Juices" (Purchase Tax Act 1963 (c. 9),
Sched. 1, Pt. 1, Group 35 (a)). These words are to be
construed in the context of the words preceding them
("manufactured beverages"), and do not include non-
manufactured fruit juice (Customs and Excise
Commissioners v. Savoy Hotel [1966] 1 W.L.R.
948)."
44. Finally, one should well remember the potent and
vivid words of Justice Oliver Wendell Holmes Jr., in Towne
vs. Eisner, 245 U. S. 418 : -
"A word is not a crystal, transparent and unchanging, it is
the skin of a living thought and may vary greatly in color
and content according to the circumstances and the time
in which it is used."
45. On a careful analysis of the above judgments and the
authorities on interpretation of statues, it is clear that
where a word defined is declared to "include" such and
such, the definition is prima facie extensive but the word
"include" when used while defining a word or expression,
may also be construed as equivalent to "mean and
include" in which event it will afford an exhaustive
explanation of the meaning. As held in N.D.P.
Namboodripad (Dead) By Lrs. (supra) the term "includes"
in its normal sense is extensive in nature and should be
read as such unless the context otherwise requires the
same to be read in an exhaustive manner. In the case of
South Gujarat Roofing Tiles (supra) and in the case of Hakim
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and Co. (supra) the courts interpreted the word "includes"
to be exhaustive as in both cases it was used in a
definitional capacity. In the present case the word
"including" has been used in a sentence preceded by the
term "all proceedings". In the event the legislature
wanted to only refer to proceedings relating to
arbitration, compromise, arrangement and reconstruction
and winding up of companies, there was no need to add
the word "including proceedings". The very fact that the
legislature chose to add these words means that the
legislature was aware of the other proceedings that were
pending in the High Court and accordingly intended to
transfer even those proceedings to the NCLT.
46. The contention of the appellant that Section 434(1)(c)
should be read by neglecting these two words being
"including proceedings" cannot and must not be done. If I
were to do so I would be changing the intention of the
legislature. The role of the Court in statutory
interpretation has been lucidly discussed in the Halsbury's
Laws of England, 4th Edn., Reissue, Vol 4 at paragraph
1369 as follows:
"1369. Role of Court in interpretation. The Court has the
function of authoritatively construing legislation, that is,
determining its legal meaning so far as is necessary to a
case before it, This function is exclusive to the Court, and
a meaning found by any other person, for example an
authorising agency, an investigation agency, an executing
agency, a prosecuting agency, or even parliament itself,
except when intending to declare or amend the law, is
always subject to the determination of the Court.
It is usually said that the making of law, as opposed to its
interpretation, is a matter for the legislator, not for the
courts, but, in so far as parliament does not convey its
intention clearly, expressly and completely, it is taken to
require the Court to spell out that intention where
necessary. This may be done either by finding and
declaring implications in words used by the legislator, or
by regarding the breadth or other obscurity of the
express language as conferring a delegated legislative
power to elaborate its meaning in accordance with the
public policy (including legal policy) and the purpose of
legislation. Whichever course is adopted, in accordance
with the doctrine of precedent the Court's operation
influences the future legal of the enactment by producing
what may be called sub-rules, which are implied or
expressed in the Court's judgement."
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47. In view of the above, only when the Parliament does
not convey its intention clearly, expressly and completely
in a statute can the courts embark on a mission to spell
out the intention of the Parliament, and not in any other
situation. In the present case, I see no such predicament
before me as the word "including" has been used
specifically to connote the meaning it normally does. The
fact that the word "including" has not been used to define
a word, leads me to the conclusion that the same has
been used in an expansive and extensive manner.
Furthermore, as pointed above the very fact that the
legislature added the words "including proceedings"
following the words "all proceedings under the
Companies
Act, 2013 " was to ensure that any other proceedings apart
from the one's mentioned in the provision shall also be
transferred to the newly constituted Tribunal.
48. One may argue, as noticed in the Custom and Excise
Commissioner v. Savoy Hotel [1966], W.L.R. 948, that
the words following "including" has to be construed in the
context of the words preceding them. In the case above,
"including fruit juices" was preceded by "manufactured
beverages" and accordingly a restrictive meaning was
assigned by the Court as not to include "non-
manufactured fruit juices". Applying this logic also, the
appellants have no case, as the words used in Section 434
(1)(c) , preceding the word "including", are "all proceedings
under the Companies Act, 1956 ". Hence, the axiomatic
conclusion has to be that anything and everything under
the Companies Act, 1956 is intended to be included.
Reading the words in an exhaustive sense would also lead
to an interpretation that proceedings under Sec. 397 to
405 of the 1956 Act would come within the fold of "all
proceedings under the Companies Act, 1956 " used in Section
434(1)(c) of the 2013 Act.
49. In the light of the discussion above, I come to the
irrefutable conclusion that "including" in Section 434 (1)(c)
is extensive and expansive and not restrictive in nature.
Ergo, Section 434(1)(c) of the 2013 Act that states "all
proceedings under the Companies Act 2013 including
proceedings relating to...." would include all matters,
without any exception, pending before the District Courts
and High Court and all such matters would have to be
transferred to the NCLT.
59. In summary, the four main issues are answered as
follows:
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(a) Whether the ouster of the jurisdiction of the High
Court in relation to company matters needs to be express
or the same may be ousted by implication?
The jurisdiction of the High Court in company matters
being a special jurisdiction conferred by the 1956 Act,
and not being a civil jurisdiction under the Code of Civil
Procedure ,1908, the same can always be ousted by the
amendment of the enactment that conferred the said
jurisdiction. Hence, no express repealing is required and
the same can be repealed by implication.
(b) Whether parties to a lis can insist on continuing their
dispute in the forum the same was initiated or have to
bow down to the wishes to the legislature for transfer of
the said jurisdiction to another forum? Change of forum is
not a choice of parties, but is the choice of the
legislature. The parties cannot contend that they have a
vested right to continue in the forum the lis was initiated.
The legislature can always change the forum. Forum is a
matter of procedure and change of the same does not
result in change of substantive rights of parties.
(c) Whether the term "all" and "including" in Section
434(1)(c) of the 2013 Act are expansive in nature or the
same is to be read in a restrictive manner?
The term 'including' in Section 434(1)(c) of the 2013 Act is
extensive and expansive and not restrictive in nature.
Accordingly, Section 434(1)(c) of the 2013 Act that states
"all proceedings under the Companies Act 2013 including
proceedings relating to...." would include all matters,
without any exception, pending before the District Courts
and High Court and all such matters would have to be
transferred to the NCLT.
(d) Whether Section 68 of the Amendment Act, 1988
continues to subsist regardless of the coming into force of
Section 434(1)(c) of the 2013 Act in relation to matters that
were filed in the High Court prior to coming into force of
the Amendment Act, 1988 ?
The moment a new enactment comes into the statutory
books, dealing with the same subject matter and
specifically dealing with the same issue, and the
transitional provision becomes inconsistent with the new
enactment, the transitional provision has to go due to
repugnancy. As held in (c) above, Section 434(1)(c) deals
with all proceedings under the 1956 Act. Therefore, there
is a clear inconsistency between the said provision and
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Section 68 of the Amendment Act, 1988. Consequentially,
since the transitional provision is inconsistent with the
new provision, it is impliedly repealed.
60. In view of the above findings of this Court, I see no
reason to interfere with the unexceptional judgment of
the Hon'ble Single Judge and accordingly uphold the
same with the additional reasons given herein.
61. The appeal is disposed of. No order as to costs.
62. Urgent photostat certified copy of this judgment, if
applied for, be given to the parties, on priority basis.
9.42. By relying on Prasanta Kumar Mitra and
6
ors., vs. V.S.Indian Steam Laundry his
submission is that the Hon’ble Calcutta High
Court undertook an elaborate examination of
the scope and interpretation of Section
434(1)(c) of the Companies Act, 2013, with
particular reference to the expressions “all
proceedings” and “including” occurring therein.
9.43. It is submitted that the Hon’ble Calcutta High
Court rejected the contention that the said
expressions ought to be construed restrictively
and held that the use of the word “including” in
Section 434(1)(c) is expansive and not
exhaustive in nature. According to learned
counsel, the Court held that the Legislature, by
employing the expression “all proceedings
under the Companies Act, 1956 including
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proceedings relating to arbitration,
compromise, arrangements and reconstruction
and winding up of companies”, intended to
encompass every category of proceeding
pending under the Companies Act, 1956 and
not merely those specifically enumerated in the
provision.
9.44. Learned counsel further submits that the
Hon’ble Calcutta High Court held that a change
of forum is a matter of legislative policy and
procedure and that parties do not possess a
vested right to insist that their disputes
continue before the forum in which they were
originally instituted. It was consequently held
that proceedings pending before the High
Courts and District Courts could be transferred
to the NCLT in terms of the legislative scheme
embodied in Section 434 of the Companies Act,
2013.
9.45. Relying upon Prasanta Kumar Mitra and
6
ors., vs. V.S.Indian Steam Laundry , learned
counsel submits that Section 434(1)(c) of the
Companies Act, 2013 must receive a broad and
purposive construction. According to him, the
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expressions “all proceedings” and “including”
employed therein are indicative of the
legislative intent to bring within the fold of the
NCLT every proceeding arising under the
Companies Act, 1956 that remains pending
before the High Courts.
9.46. It is therefore contended that the jurisdiction
vested in the Company Courts under the
Companies Act, 1956 has substantially been
shifted to the NCLT and that the legislative
policy underlying the Companies Act, 2013 and
the Insolvency and Bankruptcy Code, 2016
favours adjudication of such matters by the
specialised Tribunal. Learned counsel submits
that, viewed in the light of the principles
enunciated in Prasanta Kumar Mitra and
6
ors., vs. V.S.Indian Steam Laundry , the
present winding-up proceedings also fall within
the ambit of Section 434(1)(c) and are
therefore liable to be transferred to the NCLT.
On the aforesaid grounds, he submits that
Company Application No.39/2025 deserves to
be allowed and the Company Petition be
transferred to the NCLT for further proceedings
in accordance with law.
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10. Ms. Krutika Raghavan, learned counsel for the official
liquidator objects to the said transfer and submits as
under follows:
10.1. Learned counsel submits that the present
application is not maintainable at the instance
of the applicant. According to her, though the
application purports to have been filed on
behalf of the Respondent Company, a perusal of
the cause title would indicate that it has in fact
been filed by Mr. Santosh Umakanth Jawadwar,
who is stated to be a former Director of the
Respondent Company.
10.2. It is contended that, upon the passing of the
winding-up order, the powers of the Board of
Directors cease and the management and
control of the affairs of the company vest in the
Official Liquidator. Consequently, the directors
are divested of their authority to represent or
act on behalf of the company in liquidation.
Once the Official Liquidator has been appointed
and has taken charge pursuant to the winding-
up order, it is the Official Liquidator alone who
is empowered to deal with the assets, affairs
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and business of the company under the
supervision of the Company Court.
10.3. On that basis, learned counsel submits that a
former Director of the company in liquidation
has no authority to maintain an application on
behalf of the company and, consequently, lacks
the requisite locus standi to invoke the
jurisdiction of this Court under the fifth proviso
to Section 434(1)(c) of the Companies Act,
2013 seeking transfer of the winding-up
proceedings to the National Company Law
Tribunal. It is therefore submitted that
Company Application No.39/2025 is liable to be
dismissed on this ground alone.
10.4. She relies upon the decision of the Hon’ble
Supreme Court in the case of Kaledonia Jute
and Fibres Private Limited vs. Axis Nirman
7
and Industries Limited and others more
particularly Para 12, 19, 20, 21, 24, 42 and 43
which are reproduced hereunder for easy
reference:
12. The main issues that arise for consideration in this
appeal are:
7
(2021) 2 SCC 403
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(i) what are the circumstances under which a winding up
proceeding pending on the file of a High court could be
transferred to the NCLT and
(ii) at whose instance, such transfer could be ordered.
19 . Be that as it may, clause (c) of Subsection (1) is the
provision that actually provides for the transfer of all the
proceedings under the Companies Act, 1956 pending before
any District Court or High Court, to the Tribunal. Broadly
Clause (c) makes a mention about proceedings relating to
arbitration, compromise, arrangements and reconstruction
and winding up. But Clause (c) is not limited in its
application to proceedings relating to arbitration,
compromise, arrangements and reconstruction and winding
up. This is due to the usage of the words “All
proceedings......including” in Clause (c).
20 . However, the first proviso to Clause (c) which was not
there in the original Section 434 , but which was inserted
only under IBC Act of 2016 when Section 434 was
substituted, circumscribes what is contained in the main
part of Clause (c). The first proviso to Clause (c) restricts
the transferability of proceedings for winding up from the
High Court to the Tribunal, by stipulating that only such
proceedings for winding up which are at a stage as may be
prescribed by the Central Government, be transferred to
the Tribunal.
21. Subsection (2) of Section 434 empowers the Central
Government to make Rules consistent with the provisions
of the Act, to ensure timely transfer of all matters pending
before the Company Law Board or the Courts, to the
Tribunal. Therefore, in exercise of the power conferred by
Subsection (2) of Section 434 of the Companies Act, 2013
read with Subsection (1) of Section 239 of the IBC, 2016,
the Central Government issued a set of Rules known as
‘The Companies (Transfer of Pending Proceedings) Rules,
2016.
24. The transferability, by operation of law, of winding up
proceedings, other than those covered by the 4 the
Proviso, depends upon the stage at which they are pending
before the Company Court. But this is left by the law
makers to be determined through subordinate legislation,
in the form of Rules.
42. Thus, the proceedings for winding up of a company are
actually proceedings in rem to which the entire body of
creditors is a party. The proceeding might have been
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initiated by one or more creditors, but by a deeming fiction
the petition is treated as a joint petition. The official
liquidator acts for and on behalf of the entire body of
creditors. Therefore, the word “party” appearing in the 5th
proviso to Clause (c) of Subsection (1) of section 434
cannot be construed to mean only the single petitioning
creditor or the company or the official liquidator. The words
“party or parties” appearing in the 5th proviso to Clause (c)
of Subsection (1) of Section 434 would take within its fold
any creditor of the company in liquidation.
43 . The above conclusion can be reached through another
method of deductive logic also. If any creditor is aggrieved
by any decision of the official liquidator, he is entitled under
the 1956 Act to challenge the same before the Company
Court. Once he does that, he becomes a party to the
proceeding, even by the plain language of the section.
Instead of asking a party to adopt such a circuitous route
and then take recourse to the 5 the proviso to section
434(1)(c) , it would be better to recognise the right of such
a party to seek transfer directly.
10.5. Referring to Kaledonia Jute and Fibres
Private Limited vs. Axis Nirman and
7
Industries Limited and others , learned
counsel submits that the Hon'ble Supreme
Court examined, inter alia, the circumstances in
which winding-up proceedings pending before a
High Court could be transferred to the NCLT and
the category of persons at whose instance such
transfer could be sought. The Hon'ble Supreme
Court, while interpreting Section 434(1)(c) of
the Companies Act, 2013, held that though the
provision is couched in broad language and
encompasses all proceedings under the
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Companies Act, 1956, the transferability of
winding-up proceedings is nevertheless
regulated by the statutory framework and the
Companies (Transfer of Pending Proceedings)
Rules, 2016 framed thereunder.
10.6. Learned counsel further submits that the
Hon'ble Supreme Court recognised that
winding-up proceedings are proceedings in rem
and that the Official Liquidator acts on behalf of
the entire body of creditors. It was in that
context that the Court held that the expression
“party or parties” occurring in the fifth proviso
to Section 434(1)(c) ought not to receive a
narrow construction and would include creditors
of the company in liquidation, thereby enabling
such creditors to seek transfer of the
proceedings to the NCLT.
10.7. Learned counsel submits that the ratio of
Kaledonia Jute and Fibres Private Limited
vs. Axis Nirman and Industries Limited and
7
others cannot be construed as conferring an
unrestricted right upon every person claiming
an interest in the company to seek transfer
under the fifth proviso to Section 434(1)(c).
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According to her, the observations of the
Hon'ble Supreme Court regarding the
maintainability of a transfer application were
rendered in the context of applications filed by
creditors of the company in liquidation, who, by
virtue of the nature of winding-up proceedings,
are treated as parties to the proceedings.
10.8. It is therefore contended that the decision
cannot be extended to recognise a similar right
in favour of a former Director of a company
that has already been ordered to be wound up.
Learned counsel submits that once a winding-
up order has been passed and the Official
Liquidator has assumed charge of the affairs of
the company, the erstwhile directors cease to
represent the company and cannot maintain
proceedings on its behalf. Hence, according to
her, the applicant, being a former Director of
the company in liquidation, lacks the necessary
locus standi to invoke the fifth proviso to
Section 434(1)(c) and seek transfer of the
present proceedings to the NCLT. Consequently,
the application is liable to be rejected on the
ground of maintainability itself.
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10.9. Learned counsel further submits that the
present application suffers from gross and
unexplained delay and is liable to be rejected
on that ground alone. She points out that the
winding-up order in the present case was
passed on 09.01.2012 and that the Official
Liquidator has been functioning pursuant
thereto for more than a decade. Despite being
fully aware of the winding-up proceedings and
the consequential actions initiated by the
Official Liquidator, the applicant has chosen to
invoke the jurisdiction of this Court under the
fifth proviso to Section 434(1)(c) only in the
year 2025, after nearly thirteen years from the
date of the winding-up order.
10.10. According to her, the applicant has not
furnished any explanation whatsoever for such
extraordinary delay. The applicant neither
sought transfer when the Insolvency and
Bankruptcy Code, 2016 came into force nor at
any point during the subsequent years when
the liquidation proceedings were actively
progressing before this Court. The conduct of
the applicant, according to learned counsel,
clearly demonstrates acquiescence in the
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winding-up proceedings and acceptance of the
jurisdiction of this Court. Having remained
silent for over a decade, the applicant cannot
now seek to reopen settled proceedings and
seek transfer at a stage when multiple
proceedings connected with the liquidation are
pending consideration before this Court.
10.11. Learned counsel therefore submits that the
application is liable to be dismissed on the
principles of delay, laches and acquiescence,
apart from the other objections raised by the
Official Liquidator.
10.12. Learned counsel further submits that the entire
foundation of the applicant's case proceeds on
an erroneous assumption that transfer under
Section 434 of the Companies Act, 2013 is
automatic. According to her, neither the
statutory provision nor the judgments relied
upon by the applicant support such a
proposition.
10.13. Referring to the language employed in the fifth
proviso to Section 434(1)(c), learned counsel
submits that the Legislature has consciously
used the expression that the Company Court
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"may" transfer the proceedings to the Tribunal.
The use of the word "may" is indicative of a
discretionary jurisdiction and not a mandatory
obligation. Thus, even if an application for
transfer is maintainable, the Court is required
to independently examine whether the facts
and circumstances of the particular case
warrant the exercise of such discretion.
10.14. She submits that the decisions in Action Ispat
and Power Private Limited vs. Shyam
1
Metalics and Energy Limited , Kaledonia
Jute and Fibres Private Limited vs. Axis
7
Nirman and Industries Limited and others
and Magnifico Minerals Private Limited vs
5
Saravana Alloys Steels Private Limited
uniformly recognise the existence of such
discretion. What those decisions emphasise is
not automatic transfer but a judicial evaluation
of whether the winding-up proceedings have
reached a stage where transfer would be
appropriate. Thus, according to her, the
existence of a transfer application does not
create any vested right in favour of the
applicant.
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10.15. Learned counsel further submits that the
discretion vested in the Company Court is
required to be exercised keeping in view the
interests of creditors, contributories and the
liquidation process as a whole. Such discretion
cannot be exercised in favour of a person who
lacks authority to represent the company and
whose conduct throughout the liquidation
proceedings has been non-cooperative.
10.16. It is therefore contended that even assuming
that the applicant possesses the requisite locus,
which is denied, the facts of the present case
do not warrant exercise of discretionary
jurisdiction in favour of transfer.
10.17. Learned counsel further submits that the
conduct of the erstwhile Directors of the
company in liquidation demonstrates persistent
non-compliance with statutory obligations
imposed upon them under the Companies Act,
1956.
10.18. She submits that after the passing of the
winding-up order, notices were issued under
Section 454 of the Companies Act, 1956
requiring the former Directors to submit the
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Statement of Affairs of the company. The
submission of a Statement of Affairs is a
statutory obligation intended to enable the
Official Liquidator and the Company Court to
ascertain the true financial position of the
company, identify its assets and liabilities, and
facilitate an orderly liquidation process.
10.19. Despite the issuance of notices, the former
Directors failed to submit the Statement of
Affairs. Such failure compelled the Official
Liquidator to initiate appropriate proceedings
before this Court. Consequently, Company
Application No.944/2012 came to be filed and
criminal proceedings arising therefrom are
presently pending consideration.
10.20. Learned counsel submits that the applicant has,
therefore, not approached this Court with clean
hands. Rather than complying with statutory
obligations cast upon him as a former Director,
he has consistently resisted the liquidation
process and has failed to extend cooperation to
the Official Liquidator.
10.21. She further points out that the applicant had
earlier approached the appellate forum by filing
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OSA No.3/2025 seeking substantially similar
relief. The said appeal came to be disposed of
on the ground that the issue was already under
consideration before this Court. Thus, according
to her, the applicant has unsuccessfully
attempted to secure the same relief through
different proceedings.
10.22. Learned counsel submits that the timing of the
present application is particularly significant.
The application has been filed only after several
proceedings initiated by the Official Liquidator
have reached advanced stages. This
circumstance, according to her, clearly indicates
that the object of the application is not to
secure any legitimate insolvency resolution but
to avoid the consequences flowing from the
defaults allegedly committed by the former
Directors.
10.23. She further submits that the Official Liquidator
has also instituted Company Application
No.945/2012 seeking delivery of possession of
the assets and properties of the company in
liquidation. Those proceedings continue to
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remain pending due to non-cooperation on the
part of the former management.
10.24. In addition thereto, Company Application
No.3/2018 has been instituted under Section
543(1) of the Companies Act, 1956 read with
Rule 260 of the Companies (Court) Rules, 1959
alleging misfeasance, breach of trust and abuse
of fiduciary position by the former Directors. In
the said proceedings, the Official Liquidator has
sought recovery of losses quantified at
₹1,75,55,188/- from the erstwhile Directors,
who are alleged to be jointly and severally
liable.
10.25. Learned counsel submits that all these
proceedings are directly connected with the
liquidation process and arise out of the conduct
of the former Directors. The applicant cannot
now seek transfer of the winding-up
proceedings in a manner that would jeopardise
or undermine those pending proceedings.
10.26. Building upon the aforesaid submissions,
learned counsel contends that the proceedings
already initiated under Sections 454, 468 and
543 of the Companies Act constitute substantial
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and irreversible steps taken in the winding-up
process. According to her, the expression
"irreversible steps" occurring in Action Ispat
and Power Private Limited vs. Shyam
1
Metalics and Energy Limited cannot be
confined merely to sale of immovable or
movable properties. The concept has to be
understood in the broader context of the
liquidation proceedings as a whole. Once
statutory proceedings have been initiated
against former Directors, criminal complaints
have been lodged, applications seeking
recovery of losses have been instituted, and
multiple proceedings concerning the
administration of the liquidation estate are
pending adjudication, the liquidation process
cannot be said to be at a nascent stage.
10.27. Learned counsel submits that permitting
transfer at this stage would seriously prejudice
the liquidation proceedings and disrupt the
statutory mechanism that has been functioning
under the supervision of this Court for more
than thirteen years.
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10.28. She further contends that the Companies Act,
1956 contains specific provisions such as
Sections 454, 468 and 543 which empower the
Company Court and the Official Liquidator to
investigate the conduct of former management,
compel disclosure of assets and information,
and recover losses caused to the company.
These proceedings have already been invoked
and are pending before this Court. According to
her, the NCLT, while exercising jurisdiction
under the Insolvency and Bankruptcy Code,
does not function within the same statutory
framework as a Company Court conducting
winding-up proceedings under the Companies
Act, 1956. Consequently, transfer at this stage
may result in serious procedural complications
and may even render the pending proceedings
ineffective.
10.29. Learned counsel therefore submits that the
present application has not been filed with the
object of facilitating any genuine insolvency
resolution. Rather, it has been filed as a tactical
device to delay the liquidation process, obstruct
the proceedings initiated by the Official
Liquidator and avoid potential civil and criminal
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consequences arising from the applicant's
alleged non-compliance with statutory
obligations. She accordingly submits that the
application is a clear abuse of the process of
Court and deserves to be rejected with costs.
10.30. Learned counsel further submits that there
exists a fundamental distinction between the
objectives of proceedings under the Insolvency
and Bankruptcy Code, 2016 and those
governing winding-up proceedings under the
Companies Act, 1956. According to her, the
primary objective of the Insolvency and
Bankruptcy Code is resolution and revival of a
corporate debtor. The Code is founded upon the
principle that a financially distressed but
potentially viable corporate entity should be
afforded an opportunity to be revived as a
going concern. Liquidation under the IBC is
intended only as a measure of last resort when
all attempts at resolution fail.
10.31. In contrast, the present proceedings have long
crossed the stage where any possibility of
revival can realistically be contemplated. The
company has admittedly not carried on any
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business since the year 2010. The winding-up
petition was admitted on 11.11.2011 and a final
winding-up order was passed on 09.01.2012.
More than thirteen years have elapsed
thereafter.
10.32. Learned counsel submits that there is
absolutely no material on record to indicate
that the company possesses any operational
business, workforce, commercial activity or
viable enterprise capable of revival. No
resolution plan has been proposed. No
prospective resolution applicant has expressed
interest in reviving the company. No material
has been placed on record to demonstrate that
revival is commercially feasible.
10.33. According to her, in such circumstances,
transfer of the proceedings to the NCLT would
serve no meaningful purpose and would merely
result in further delay in concluding the
liquidation process.
10.34. Learned counsel finally submits that the present
application is fundamentally flawed because it
has not been filed by any creditor, contributory
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or stakeholder whose interests are directly
affected by the liquidation proceedings.
10.35. The applicant is merely a former Director whose
authority to represent the company is itself
disputed. No creditor has come forward seeking
transfer. No contributory has supported the
application. No stakeholder has suggested that
transfer would be beneficial to the liquidation
estate.
10.36. On the contrary, learned counsel submits that
transfer at this stage may seriously prejudice
the interests of creditors whose claims are
required to be adjudicated and satisfied through
the ongoing liquidation proceedings. The
creditors and contributories, who constitute the
real beneficiaries of the winding-up process,
have not even been impleaded as parties to the
present application.
10.37. It is therefore submitted that the applicant
seeks a discretionary relief while ignoring the
interests of those whose rights are directly
affected by the outcome of the proceedings.
Such an application, according to learned
counsel, cannot be entertained.
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10.38. For all the aforesaid reasons, learned counsel
submits that Company Application No.39/2025
is wholly misconceived, suffers from lack of
locus standi, is vitiated by delay and ulterior
motives, seeks to disrupt long-pending
liquidation proceedings, and therefore deserves
to be dismissed with exemplary costs.
11. Heard Sri.Anirudh Suresh, learned counsel for the
applicant and Smt.Krutika Raghavan, learned counsel
for Official Liquidator and perused papers.
12. The points that would arise for determination are:
i. Whether the applicant, being an erstwhile
Director of the company ordered to be
wound up, has the requisite locus standi to
maintain an application under the fifth
proviso to Section 434(1)(c) of the
Companies Act, 2013 seeking transfer of
the present winding-up proceedings to the
National Company Law Tribunal?
ii. Whether the application filed in the year
2025 seeking transfer of the winding-up
proceedings, after the winding-up order
dated 09.01.2012 and after substantial
liquidation proceedings have been
undertaken, is liable to be rejected on the
ground of delay, laches, acquiescence and
want of bona fides?
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iii. Whether the provisions of Section 434 of
the Companies Act, 2013, read with the
Companies (Transfer of Pending
Proceedings) Rules, 2016, mandate
transfer of the present winding-up
proceedings to the NCLT, or whether the
power of transfer is purely discretionary in
nature?
iv. Whether, in the facts and circumstances of
the present case, the winding-up
proceedings have reached a stage where
irreversible steps have been taken,
thereby disentitling the applicant from
seeking transfer of the proceedings to the
NCLT?
v. Whether the pendency of proceedings
initiated by the Official Liquidator under
Sections 454, 468 and 543 of the
Companies Act, 1956, together with other
consequential proceedings arising out of
the winding-up order, constitute
circumstances warranting retention of the
proceedings before this Court?
vi. Whether any case has been made out for
exercise of the discretionary jurisdiction
vested in this Court under the fifth proviso
to Section 434(1)(c) of the Companies Act,
2013 for transfer of Company Petition
No.236/2010 to the National Company
Law Tribunal?
vii. What order?
13. This Court answers the above points as follows:
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14. Answer to Point No. (i): Whether the applicant,
being an erstwhile Director of the company
ordered to be wound up, has the requisite locus
standi to maintain an application under the fifth
proviso to Section 434(1)(c) of the Companies
Act, 2013 seeking transfer of the present
winding-up proceedings to the National
Company Law Tribunal?
14.1. Sri Anirudh Suresh submits that the transfer
power under the fifth proviso to Section
434(1)(c) is available at the instance of a party
to the winding-up proceedings and that the
expression is not to be read narrowly. He relies
principally upon Action Ispat and Power Pvt.
1
Ltd. v. Shyam Metalics and Energy Ltd.,
(Para 25); State Bank of India v. Shakti
2
Bhog Foods Ltd., (Para 1 relies on Para 25 of
Action Ispat); Cowi India Private Limited v.
3
Pinnacle Air Private Limited , (Para 13 relies
on Para 25 of Action Ispat); Magnifico
Minerals Private Limited v. Saravana
5
Alloys Steels Private Limited (Para 17);
and Prasanta Kumar Mitra v. V.S. Indian
6
Steam Laundry (Para 49) to submit that the
law after insertion of the proviso favours
transfer of pending winding-up matters
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wherever the proceedings have not passed into
an irreversible stage.
14.2. The submission of learned counsel is that the
applicant, though described as an erstwhile
Director, has a sufficient nexus with the
company ordered to be wound up and is
therefore competent to move an application
requesting change of forum. According to him,
the application does not seek restoration of
management to the former Director, nor does it
ask this Court to revive the company by judicial
fiat; it only requests that the matter continue
before the Hon’ble NCLT, which is now the
specialised forum for insolvency matters.
14.3. He further submits that the authorities he relied
on recognise the broad nature of the transfer
provision and discourage the technical rejection
of requests that seek to avoid fragmentation of
proceedings. On that basis, he contends that
the applicant cannot be denied a hearing
merely because he was formerly on the Board
when the winding-up order came to be passed.
14.4. Smt. Krutika Raghavan submits that the
present application is not maintainable at the
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instance of the applicant. According to her, once
the winding-up order was passed and the
Official Liquidator was directed to take charge,
the powers of the Board of Directors ceased,
and the management and control of the
company's affairs vested in the Official
Liquidator under the supervision of the
Company Court.
14.5. It is her specific submission that a former
Director cannot maintain proceedings on behalf
of the company after winding up, nor can they
claim to represent the company in liquidation.
She relies upon Kaledonia Jute and Fibres
Private Limited v. Axis Nirman and
7
Industries Limited and others (Para 42) to
submit that the broad construction adopted by
the Hon’ble Supreme Court regarding the
expression “party” was in the context of
creditors in a proceeding in rem and not in the
context of former Directors seeking to re-enter
the proceedings after the company had passed
into liquidation control.
14.6. Learned counsel further submits that the real
persons affected by the liquidation are
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creditors, contributories and the liquidation
estate itself, and none of them has sought
transfer. She therefore contends that the
applicant seeks a discretionary order without
demonstrating either authority to represent the
company or a legally protected stakeholder
interest of the kind recognised in the
authorities relied upon.
14.7. The first question is not whether the applicant
is likely to succeed on the transfer request, but
whether the application is liable to be rejected
at the threshold for total absence of standing.
That distinction is necessary because
maintainability and entitlement to discretionary
relief, though related, are not identical
enquiries.
14.8. The fifth proviso to Section 434(1)(c), enables
any party or parties to any proceedings relating
to winding up to file an application for transfer
and provides that the Court may, by order,
transfer such proceedings to the Tribunal. The
provision itself does not define the expression
“party” exhaustively.
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14.9. The applicant relies on Action Ispat and
Power Pvt. Ltd. v. Shyam Metalics and
1
Energy Ltd. (Para 25) to show that the
proviso is not confined to any one stage of the
winding-up proceedings and that even after
admission and appointment of the Company
Liquidator, transfer jurisdiction survives. That
proposition is well borne out by the passages
extracted above, particularly the discussion that
discretion remains with the Company Court
even post-admission and after assets come into
custodia legis, subject to the stage of
proceedings and the possibility of setting the
clock back.
14.10. The applicant also draws support from the
discussion in Action Ispat and Power Pvt.
1
Ltd. v. Shyam Metalics and Energy Ltd
(Para 13) regarding Kaledonia Jute and
Fibres Private Limited v. Axis Nirman and
7
Industries Limited and others . The
extracted passages show that the Hon’ble
Supreme Court described winding-up
proceedings as proceedings in rem, noted that
the Official Liquidator acts for and on behalf of
the entire body of creditors, and held that the
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expression “party” in the fifth proviso cannot be
confined only to the single petitioning creditor,
the company or the Official Liquidator.
14.11. However, the Court must also note the
limitation in the respondent’s submission. The
discussion in Kaledonia Jute and Fibres
Private Limited vs. Axis Nirman and
7
Industries Limited and others (Paras 42,
43) was directed to show that a creditor of a
company in liquidation could seek transfer even
if he was not the original petitioning creditor.
The principle established there is that the
expression “party” must receive a broad,
practical and purposive construction in the
context of winding-up as a proceeding in rem;
the principle is not that every person once
associated with the company automatically
acquires an unqualified right to seek transfer.
14.12. The reliance placed by the applicant on Cowi
India Private Limited v. Pinnacle Air
3
Private Limited (Para 16) also requires
consideration. That judgment recognises that
the Court may exercise transfer jurisdiction
even where a separate formal application is not
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insisted upon, provided the intention to seek
transfer is clear from the record. It therefore
weakens purely technical objections regarding
form, but it does not dispense with the judicial
duty to examine whether the person invoking
the power has a sufficient and legitimate
connection with the proceedings.
14.13. Magnifico Minerals Private Limited v.
5
Saravana Alloys Steels Private Limited
(Para 19) is also relevant. Though cited by the
applicant on the question of post-admission
transfer, the passages extracted from that
judgment clearly state that the fifth proviso
confers discretion and that the party seeking
exercise of discretion must make out a valid
ground. That principle equally bears upon the
present issue because a former Director cannot
be placed in the same position as a creditor
whose legal and financial stake in liquidation is
direct and immediate.
14.14. The respondent is, therefore, right in
submitting that after a winding-up order the
former Board does not continue to manage the
company as of right. Once liquidation is ordered
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and the Official Liquidator takes charge, the
company’s affairs are no longer under the
control of former Directors in the ordinary
sense.
14.15. Yet, the materials placed on record do not
justify an absolute proposition that an erstwhile
Director can never maintain any application
touching the winding-up proceedings. The
broader language noticed in Action Ispat and
Power Private Limited vs. Shyam Metalics
1
and Energy Limited (Para 13 relies on Para
42 of Kaledonia) and Kaledonia Jute and
Fibres Private Limited vs. Axis Nirman and
7
Industries Limited and others (Para 42)
persuades this Court that the safer course is
not to non-suit the applicant solely on a rigid
technical objection, but to test the request on a
strict merits-and-discretion standard.
14.16. This approach is also consistent with judicial
discipline in writ-like supervisory scrutiny.
Where the application can be dismissed on
clear discretionary grounds after full
consideration of the cited law, it is neither
necessary nor desirable to adopt the broadest
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possible threshold bar unless the statute or
binding precedent compels it.
14.17. Accordingly, this Court answers point No.(i) by
holding that the applicant cannot claim an
affirmative right to represent the company
merely because he is an erstwhile Director. At
the same time, the application is not rejected
solely on the footing of absolute lack of locus;
instead, his standing is treated as limited and
precarious, and the request is examined on the
stricter questions of delay, bona fides, prejudice
to creditors, stage of liquidation, and whether
any case for discretion is made out.
15. Answer to Point No. (ii): Whether the
application filed in the year 2025 seeking
transfer of the winding-up proceedings, after
the winding-up order dated 09.01.2012 and
after substantial liquidation proceedings have
been undertaken, is liable to be rejected on the
ground of delay, laches, acquiescence and want
of bona fides?
15.1. Sri Anirudh Suresh submits that the decisive
test is not mere passage of time but whether
any irreversible step has been taken in the
liquidation process. He contends that Action
Ispat and Power Pvt. Ltd. v. Shyam
1
Metalics and Energy Ltd. (Para 25) and
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State Bank of India v. Shakti Bhog Foods
2
Ltd . (Para 1 relies on Para 25 of Action Ispat)
show that even after admission of the winding-
up petition and even after possession by the
Liquidator, transfer remains permissible so long
as no sale of assets or other irreversible event
has taken place.
15.2. He further submits that after the coming into
force of the Insolvency and Bankruptcy Code,
2016, the legislative object has been to
consolidate insolvency and liquidation
proceedings before the Hon’ble NCLT. According
to him, if the matter has not gone beyond the
stage at which the clock can be turned back,
delay by itself cannot defeat the statutory
policy behind the transfer.
15.3. Smt. Krutika Raghavan submits that the
application is vitiated by gross, unexplained
and deliberate delay. She points out that the
winding-up order was passed on 09.01.2012,
the Official Liquidator has been functioning for
more than a decade, and yet the applicant
moved the present application only in the year
2025.
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15.4. She further submits that the applicant neither
sought transfer when the Insolvency and
Bankruptcy Code, 2016 came into force nor at
any reasonable time thereafter, though the
liquidation proceedings were actively continuing
before this Court. According to her, this
prolonged silence amounts to acquiescence in
the continuation of the winding-up proceedings
before this Court.
15.5. Learned counsel also relies on the applicant's
surrounding conduct and the former
management. She points out that notices under
Section 454 were allegedly not complied with,
Company Application No.944/2012 and criminal
proceedings have arisen therefrom, Company
Application No.945/2012 has been filed for
delivery of possession of assets, earlier
attempts were made through recall proceedings
and also OSA No.3/2025, and the present
application has been moved only after several
proceedings initiated by the Official Liquidator
have reached advanced stages.
15.6. On that basis, she submits that the application
is not a bona fide attempt at insolvency
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resolution but a tactical device to delay
liquidation, obstruct the Official Liquidator and
avoid the consequences flowing from the
defaults of the former Directors.
15.7. This Point goes to the heart of the present
application. Even where transfer is legally
permissible, the Court is not bound to ignore
conduct, delay and acquiescence, especially
when the relief sought is discretionary.
15.8. The factual chronology, is significant. The
company petition was admitted by order dated
11.11.2011; a final winding-up order was
passed on 09.01.2012; the Official Liquidator
was directed to take charge of the assets and
liabilities; publication of the winding-up order
was directed; Rule 300 reports were submitted;
settlement efforts did not fructify; recall
applications were later filed and ultimately
dismissed on 03.01.2018 for failure to establish
bona fides; and the present application under
Section 434 came to be filed only in 2025.
15.9. Thus, the present request is not one made in
proximity to the statutory transition brought
about by the Code and the Transfer Rules. It is
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a request made after the winding-up order has
remained in force for many years and after this
Court and the Official Liquidator have spent
substantial time and institutional effort in
administering the liquidation.
15.10. The applicant’s answer to this difficulty is that
no sale of assets has taken place and therefore
no irreversible consequence has occurred. This
submission cannot be accepted in the absolute
terms in which it is presented.
15.11. Action Ispat and Power Pvt. Ltd. v. Shyam
1
Metalics and Energy Ltd . (Para 25) indeed
treats absence of actual sale as a major
indicator while considering whether the clock
can be turned back. But the extracted passages
from that judgment do not state that delay,
acquiescence and prejudice become irrelevant
merely because no auction sale has yet taken
place.
15.12. The applicant also relies on State Bank of
2
India v. Shakti Bhog Foods Ltd., (Para 1)
where the Hon’ble Supreme Court, on the basis
of the Status Report before it, observed that
only one office had been taken into possession
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by the Liquidator and that all other units
remained in the physical possession of other
parties, and on that basis held that nothing
irreversible had taken place. That order turned
on the particular factual report placed before
the Hon’ble Supreme Court and cannot be
understood as laying down a universal
proposition that any liquidation without sale
must be transferred regardless of the conduct
of the applicant.
15.13. On the contrary, Magnifico Minerals Private
Limited v. Saravana Alloys Steels Private
5
Limited (Paras 11, 12, 16, 17 and 19) makes
it clear that the fifth proviso does not create
automatic transfer and that the party seeking
transfer must establish grounds warranting the
exercise of discretion. The judgment in
Magnifico also records that mere citation of
Action Ispat and Power Private Limited vs.
1
Shyam Metalics and Energy Limited (Paras
16, 17 and 19) is not enough where the
applicant fails to make out a case for discretion.
15.14. This Court finds that principle directly
applicable here. The present applicant does not
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explain why, if transfer was truly sought to
advance insolvency resolution, no such request
was made at a reasonable point after the
statutory changes took effect or even after the
dismissal of earlier recall efforts.
15.15. There is another important feature. The
respondent has specifically asserted that the
former management did not comply with the
statutory duty to submit the Statement of
Affairs under Section 454, that proceedings
were initiated on that account, that possession-
related proceedings have also been instituted,
and that the timing of the present application
suggests a desire to derail those proceedings.
These assertions are not peripheral; they bear
directly on bona fides.
15.16. When a former Director, after years of silence,
seeks transfer at a stage when proceedings
initiated by the Official Liquidator may have
civil or criminal consequences for former
management, the Court cannot assess the
application in isolation from that background.
Delay in such a context is not merely
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procedural delay; it becomes a factor indicating
the purpose for which discretion is sought.
15.17. This Court is also unable to ignore the dismissal
of the earlier recall applications on the ground
that the respondent had failed to establish bona
fides warranting the relief sought. Though that
finding was rendered in another procedural
setting, it remains part of the relevant litigation
history of this very winding-up and strengthens
the need for strict scrutiny of the present
request.
15.18. Accordingly, this Court answers point no. (ii) by
holding that the application suffers from
extraordinary delay and laches. The delay is
unexplained in any meaningful sense, the
applicant’s conduct shows acquiescence in the
continuation of the winding-up proceedings
before this Court, and the surrounding
circumstances support the respondent’s
objection that the application lacks bona fides
and has been moved at a strategically chosen
stage rather than at a genuinely appropriate
one.
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16. Answer to Point No. (iii): Whether the
provisions of Section 434 of the Companies Act,
2013, read with the Companies (Transfer of
Pending Proceedings) Rules, 2016, mandate
transfer of the present winding-up proceedings
to the NCLT, or whether the power of transfer is
purely discretionary in nature?
16.1. Sri Anirudh Suresh relies upon Section 434 of
the Companies Act, 2013, Rule 5 and Rule 6 of
the Companies Transfer of Pending Proceedings
Rules, 2016, and Rule 26 of the Companies
Court Rules, 1959. He submits that the
statutory framework shows a legislative
preference for shifting company matters and
insolvency-related proceedings from the
Company Courts to the NCLT.
16.2. He further relies on Action Ispat and Power
Pvt. Ltd. v. Shyam Metalics and Energy
1
Ltd. (Para 25) and Prasanta Kumar Mitra v.
6
V.S. Indian Steam Laundry (Paras 45, 47,
48, 49 and 50) to submit that Section
434(1)(c) must receive a broad and purposive
interpretation. According to him, the
expressions “all proceedings” and “including”
indicate that the transfer scheme is meant to
be extensive and that the Company Court
should ordinarily transfer pending winding-up
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matters unless the case has progressed to a
truly irreversible stage.
16.3. He also relies on Cowi India Private Limited
3
v. Pinnacle Air Private Limited (Paras 7, 9
and 14 relies on Paras 13 of Gurbakhsh) to
submit that the question is one of jurisdiction,
that excessive formalism should be avoided,
and that the Court ought to advance the object
of avoiding parallel fora.
16.4. Smt. Krutika Raghavan submits that the
applicant proceeds on an erroneous assumption
that a transfer is automatic. Referring to the
language of the fifth proviso to Section
434(1)(c), she submits that the Legislature has
consciously used the word “may”, which shows
that the power is discretionary and not
mandatory.
16.5. She further submits that the Transfer Rules
create automatic transfer only in limited
categories, particularly where the petition had
not been served under Rule 26 on the relevant
date. Since the present winding-up petition had
long since been admitted and a winding-up
order had already been passed, learned counsel
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submits that the present case does not fall
within any category of compulsory transfer
under Rules 5 or 6.
16.6. She also relies on Action Ispat and Power
Private Limited vs. Shyam Metalics and
1
Energy Limited (Para 25) and Magnifico
Minerals Private Limited vs Saravana
5
Alloys Steels Private Limited (Paras 11, 12
and 19) to submit that all these decisions
recognise judicial discretion and not automatic
transfer.
16.7. This Point concerns the legal character of the
transfer power. Since the applicant’s entire case
substantially proceeds on the proposition that
absence of irreversibility should ordinarily lead
to transfer, it is necessary to identify with
precision whether the statute mandates
transfer or merely permits it in a proper case.
16.8. Section 434(1)(c), as extracted, states that all
proceedings under the Companies Act, 1956
including proceedings relating to winding up
pending before the High Court or District Court
shall stand transferred to the Tribunal and that
the Tribunal may proceed from the stage before
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transfer. The fifth proviso, separately
contemplates that any party or parties to any
proceedings relating to winding up may file an
application for transfer and that the Court may
by order transfer such proceedings to the
Tribunal.
16.9. The statutory scheme must be read as a whole.
The main clause states the broad transfer
principle, while the provisos and the Transfer
Rules regulate how and to what extent that
principle operates in the special context of
pending winding-up proceedings.
16.10. Rule 5, as reproduced above, provides for the
transfer of pending winding-up petitions on the
ground of inability to pay debts where the
petition had not been served on the respondent
under Rule 26 of the Companies Court Rules,
1959. Rule 6 similarly deals with certain
petitions on other grounds where service had
not been effected under Rule 26.
16.11. Rule 26 itself, also extracted above, shows that
service of the petition is a significant procedural
milestone. These rules, therefore, identify
limited classes in which transfer operates
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automatically by force of the statutory
framework.
16.12. The present case does not fall within those
automatic categories. The petition had not only
been served; it had been admitted on
11.11.2011 and finally allowed on 09.01.2012,
whereupon a winding-up order was passed, and
the Official Liquidator was directed to take
charge.
16.13. The applicant, therefore, necessarily moves
beyond the sphere of automatic transfer and
invokes the fifth proviso. Once that happens,
the language of the proviso becomes decisive.
16.14. The word employed in the proviso is “may”.
That word cannot be ignored or treated as
surplusage. Where the Legislature intended
automatic transfer, it provided a specific
scheme through the Rules tied to the stage of
service under Rule 26; where it intended post-
stage transfer upon application, it used
language of permission and judicial choice.
16.15. This understanding is confirmed by Action
Ispat and Power Pvt. Ltd. v. Shyam
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1
Metalics and Energy Ltd . (Para 25). Far
from holding that all post-admission matters
must be transferred, the Hon’ble Supreme
Court expressly framed the question as one of
how discretion is to be exercised and then
stated that whether the irreversible stage has
been reached depends upon the facts and
circumstances of each case.
16.16. Magnifico Minerals Private Limited v.
5
Saravana Alloys Steels Private Limited
(Paras 11, 12, 16, 17 and 19) is even more
direct. The Coordinate Bench held that the fifth
proviso confers discretion on the Company
Court either to retain the petition or to transfer
it and that the person seeking discretion must
make out a valid ground for its exercise. The
judgment also states that transfer is not
mandatory on the filing of an application.
16.17. The applicant’s reliance on Prasanta Kumar
6
Mitra v. V.S. Indian Steam Laundry [Paras
45, 47, 49, 59(b) and 59(c)] does not change
this conclusion. That decision, as extracted
above, undertakes an elaborate discussion on
the meaning of the words “all proceedings” and
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“including”, and holds that the transfer
language is broad and expansive. It also states
that a change of forum is a matter of legislative
policy.
16.18. This Court respectfully accepts those
propositions for the limited purpose for which
they are relevant here. They support a broad
understanding of the sweep of Section
434(1)(c). But a broad understanding of the
class of proceedings that may fall within the
transfer scheme does not eliminate the distinct
question whether, in a given post-admission,
post-winding-up case, transfer is automatic or
discretionary.
16.19. Indeed, the respondent rightly points out that
Kaledonia Jute and Fibres Private Limited
vs. Axis Nirman and Industries Limited
7
and others (Paras 20, 21 and 24) itself notes
that the transferability of winding-up
proceedings is regulated by the statutory
framework and the Transfer Rules. Therefore,
the Court cannot read the main part of Section
434(1)(c) in a manner that erases the limiting
role of the provisos and Rules.
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16.20. For all these reasons, this Court answers Point
No. (iii) by holding that the present proceedings
are not subject to compulsory transfer under
Rules 5 or 6. The only source of possible
transfer in the facts of this case is the fifth
proviso to Section 434(1)(c), and the power
under that proviso is plainly discretionary.
17. Answer to Point No. (iv): Whether, in the facts
and circumstances of the present case, the
winding-up proceedings have reached a stage
where irreversible steps have been taken,
thereby disentitling the applicant from seeking
transfer of the proceedings to the NCLT?
17.1. Sri Anirudh Suresh submits that the test
framed in Action Ispat and Power Pvt. Ltd.
1
v. Shyam Metalics and Energy Ltd . (Para
25) is whether the actual sale of movable or
immovable assets has taken place. According to
him, no advertisement has been issued, no bids
have been invited, and no sale has been
effected in respect of the assets of the
company in liquidation.
17.2. He also relies upon State Bank of India v.
2
Shakti Bhog Foods Ltd. (Para 1) to submit
that even where the Liquidator has taken
possession of some assets, that fact alone does
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not amount to irreversibility. His argument is
that the proceedings have not gone beyond the
stage where the status quo ante can be
restored and that the matter should therefore
be transferred to the Hon’ble NCLT.
17.3. Smt. Krutika Raghavan submits that the
applicant wrongly reduces the concept of
irreversibility to a single factual event, namely,
the sale of assets. She contends that the
winding-up order has remained in force since
09.01.2012, that the company has not carried
on business since the year 2010, that the
Official Liquidator has been acting under orders
of this Court for more than a decade, and that
multiple consequential proceedings have arisen
out of the winding-up order.
17.4. She further submits that there is no material on
record to indicate that the company has an
operational business, workforce, commercial
activity, proposed resolution plan or any
realistic prospect of revival. According to her,
transfer would serve no meaningful purpose
and would only defer the completion of
liquidation.
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17.5. The Court now turns to the meaning of the
expression “irreversible steps” in the context of
the present case. This expression must be
understood in the light of the authorities cited
by the parties and not in abstraction.
17.6. The leading authority relied upon by both sides
is Action Ispat and Power Pvt. Ltd. v.
1
Shyam Metalics and Energy Ltd., (Para 25)
the extracted passages show that the Hon’ble
Supreme Court held that, even post-admission
and after the assets of the company have come
into custodia legis, discretion remains with the
Company Court to transfer the matter so long
as no actual sale of the movable or immovable
properties has taken place, because only where
the winding-up has reached a stage where it
would be irreversible, making it impossible to
set the clock back, must the Company Court
continue with winding up.
17.7. Two features of that principle require emphasis.
First, the absence of actual sales is a very
important indicator. Secondly, and equally
importantly, the Hon’ble Supreme Court
concluded the discussion by observing that
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whether this stage is reached depends upon the
facts and circumstances of each case.
17.8. Therefore, Action Ispat and Power Private
Limited vs. Shyam Metalics and Energy
1
Limited (Para 25) does not create a single-
factor rule under which the Court is bound to
transfer every matter where no auction sale
has yet occurred. If that were the law, the
concluding words “facts and circumstances of
each case” would become meaningless.
17.9. State Bank of India v. Shakti Bhog Foods
2
Ltd . (Para 1) also does not justify such a
narrow reading. In that matter, the Hon’ble
Supreme Court considered a Status Report
which showed that only one office had been
taken into possession by the Liquidator and
that the remaining units were in physical
possession of others, and on that particular
factual basis, concluded that nothing
irreversible had taken place. The ratio of that
order is therefore fact-sensitive.
17.10. The present case stands on materially different
facts. Here, the company petition was admitted
in 2011; a final winding-up order was passed in
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2012; the company has admittedly not carried
on business since 2010; the Official Liquidator
has been functioning for more than thirteen
years; repeated reports have been submitted;
earlier recall proceedings failed; proceedings
under Sections 454, 468 and 543 and other
connected matters are pending; and there is no
material indicating operational revival, investor
interest, business continuity or a realistic route
to resolution.
17.11. In that factual situation, the applicant’s
emphasis on the absence of sale is too narrow.
Irreversibility in law is not always identical with
physical alienation of an asset. It may also
arise when a court-supervised liquidation has
matured into a structured process involving
possession, investigation, statutory defaults,
recovery steps, compliance proceedings and
stakeholder positions that cannot be rolled back
without disorder, duplication or prejudice.
17.12. This understanding does not contradict Action
Ispat and Power Private Limited vs. Shyam
1
Metalics and Energy Limited (Para 25);
rather, it gives full meaning to its direction that
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the matter depends on all facts and
circumstances. The Court must therefore ask
whether transfer at this stage would, in
practical and legal effect, simply shift the
forum, or whether it would unsettle a long-
standing liquidation structure already built
under the supervision of this Court.
17.13. In the opinion of this Court, the latter is true.
The liquidation here is not at a nascent stage
awaiting first action; it is a long-standing
proceeding in which the Court has already
passed the final winding-up order, the Official
Liquidator has undertaken duties under that
order, and several further proceedings have
emerged from the obligations of former
management and the needs of the liquidation
process.
17.14. There is also force in the respondent’s
submission that no material is placed on record
to show that the transfer would serve any real
insolvency purpose. No resolution applicant is
shown, no business continuity is shown, no
workforce or operations are shown, and no
factual basis is demonstrated for thinking that
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the NCLT process would revive a business that
has not operated since 2010.
17.15. The applicant’s case is thus reduced to a legal
abstraction: that transfer is desirable because
transfer is legally permissible and because the
sale has not taken place. In the facts of this
case, that is insufficient.
17.16. Accordingly, this Court answers point No. (iv)
by holding that the winding-up proceedings
have crossed the stage where a transfer can be
treated as a simple, consequence-free forum
change. Even if there has been no completed
sale of assets, the proceedings have
progressed, both in time and in substance, to a
stage where transfer would unsettle a mature
liquidation process and is therefore not
warranted.
18. Answer to Point No. (v): Whether the pendency
of proceedings initiated by the Official
Liquidator under Sections 454, 468 and 543 of
the Companies Act, 1956, together with other
consequential proceedings arising out of the
winding-up order, constitute circumstances
warranting retention of the proceedings before
this Court?
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18.1. Sri Anirudh Suresh submits in substance that
the pendency of proceedings by the Official
Liquidator does not, by itself, bar transfer if the
overall liquidation has not become irreversible.
His broader argument is that the legislative
policy behind Section 434 and the IBC should
prevail and that fragmentation between the
Company Court and the Hon’ble NCLT ought to
be avoided wherever possible.
18.2. Smt. Krutika Raghavan submits that the
proceedings under Sections 454, 468 and 543
are direct consequences of the winding-up
order and of the statutory duties cast on the
former management. She points out that
notices under Section 454 requiring the
Statement of Affairs were allegedly not
complied with, which compelled the Official
Liquidator to institute Company Application
No.944/2012 and criminal proceedings arising
therefrom, and that Company Application
No.945/2012 has also been filed seeking
delivery of possession of the assets and
properties of the company in liquidation.
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18.3. She further submits that these proceedings
show that the liquidation process is active, not
dormant. According to her, a transfer at this
stage would create serious procedural
complications because the framework of a
Company Court winding-up under the
Companies Act, 1956, and that of proceedings
under the IBC are not identical in object or
machinery.
18.4. Section 454 of the Companies Act, 1956, casts
a statutory obligation upon former Directors
and officers to submit the Statement of Affairs
after the winding-up order. The object of the
provision, as rightly pointed out by learned
counsel for the Official Liquidator, is to enable
the Official Liquidator and the Company Court
to ascertain the company’s assets, liabilities,
books, affairs and financial position so that
liquidation can proceed in an orderly and
informed manner.
18.5. The record shows the respondent’s specific
contention that notices under Section 454 were
issued, that the former Directors failed to
comply, and that Company Application
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No.944/2012 and criminal proceedings have
arisen in consequence. If that be so, the
provision is not merely formal or incidental; it
lies at the centre of the Company Court’s
capacity to supervise liquidation effectively.
18.6. The respondent also relies on Sections 468 and
543 of the Companies Act, 1956, which have
been invoked as part of the statutory
machinery by which the Company Court and
the Official Liquidator may investigate conduct,
compel compliance, and pursue steps necessary
to protect the estate of the company in
liquidation.
18.7. The Court is not required here to finally
adjudicate the merits of those proceedings.
What matters for present purposes is that such
proceedings are said to have already been
initiated and are pending before this Court as a
consequence of the winding-up order.
18.8. This factual position materially distinguishes the
present case from cases where the company
petition remained substantially at a pre-
admission or early stage. Once multiple
liquidation-linked proceedings are pending, the
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question is no longer only about where the
main petition should lie, but whether the
existing supervisory framework should be
displaced after several statutory branches of
the liquidation have already spread out under
this Court’s control.
18.9. The respondent’s contention that the IBC
process has a different core orientation from
the old Companies Act winding-up also
deserves notice. She submits that the primary
object of the IBC is resolution and revival, with
liquidation being a last resort, whereas the
present proceedings are already deep within a
court-controlled winding-up under the
Companies Act, 1956. That submission cannot
by itself bar transfer in every case, because
Action Ispat and Power Private Limited vs.
1
Shyam Metalics and Energy Limited (Para
25) recognises that even post-admission
transfer can be ordered.
18.10. Nevertheless, in the present factual setting, the
distinction in procedural context has practical
force. The applicant has shown neither how the
pending proceedings under Sections 454, 468
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and 543 would be seamlessly accommodated
nor how transfer would avoid duplication,
jurisdictional confusion, or delay.
18.11. The Court must also bear in mind that the
interests of creditors and contributories are
central in winding up. The respondent has
specifically submitted that no creditor or
contributory has supported the application and
that transfer at this stage may prejudice their
interests. In the absence of material showing
corresponding benefit to the liquidation estate,
it would be unsafe to displace the present
framework merely on the request of a former
Director whose own compliance is in question.
18.12. Accordingly, this Court answers point No. (v) by
holding that the pendency of proceedings under
Sections 454, 468 and 543, together with
connected proceedings such as those for
possession and compliance, is a weighty and
independent factor justifying retention of the
matter before this Court.
19. Answer to Point No. (vi): Whether any case has
been made out for exercise of the discretionary
jurisdiction vested in this Court under the fifth
proviso to Section 434(1)(c) of the Companies
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Act, 2013 for transfer of Company Petition
No.236/2010 to the National Company Law
Tribunal?
19.1. Sri Anirudh Suresh submits that the cumulative
effect of Action Ispat and Power Pvt. Ltd. v.
1
Shyam Metalics and Energy Ltd., (Para 25);
State Bank of India v. Shakti Bhog Foods
2
Ltd., (Para 1 relies on Para 25 of Action Ispat);
Cowi India Private Limited v. Pinnacle Air
3
Private Limited (Para 16); and Prasanta
6
Kumar Mitra v. V.S. Indian Steam Laundry
[Paras 45, 47, 48, 49, 59(b) and 59 (c)] is that
this Court ought to exercise discretion in favour
of transfer because no sale has taken place and
the statutory policy prefers adjudication before
the Hon’ble NCLT. He also relies on Section 434,
Rules 5 and 6, and Rule 26 to submit that the
present case falls within the spirit of the
transfer scheme.
19.2. Smt. Krutika Raghavan submits that no case for
exercise of discretion is made out because the
applicant lacks equitable standing, has
approached after an extraordinary delay, has
not shown bona fides, seeks to disturb a long-
standing liquidation after earlier unsuccessful
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attempts, and ignores the interests of creditors
and the integrity of ongoing proceedings. She
emphasises that the judgments relied upon by
the applicant themselves preserve judicial
discretion and do not create a right to transfer.
19.3. This Point is the culmination of the preceding
issues. Once it is found that the power is
discretionary, the Court must determine
whether the applicant has brought the case
within the zone where that discretion should be
exercised.
19.4. The answer must be in the negative. The
reasons are several, and are as follows:
19.5. First, as held under Point No. i, the applicant is
only an erstwhile Director and cannot claim a
vested or representative right to dictate the
future forum of the liquidation. At best, he may
invite the Court to exercise discretion, but the
burden on him is correspondingly high.
19.6. Secondly, as held under Point No. ii, the
application is marked by extraordinary delay,
laches, acquiescence and want of satisfactory
explanation. A discretionary power, particularly
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one capable of unsettling a long-standing
winding-up, cannot ordinarily be exercised in
favour of a person who has slept over his rights
and then approached at a stage suggestive of
strategic timing.
19.7. Thirdly, as held under Point No. iii, the statutory
framework does not mandate transfer in the
present case. The applicant, therefore, cannot
succeed by showing only that transfer is legally
conceivable; he must show why this is a fit case
for transfer.
19.8. Fourthly, as held under Point No. iv, the
proceedings have passed beyond the stage
where absence of sale alone can justify a forum
shift. The long life of the liquidation, the failure
of earlier recall attempts, the absence of any
material indicating real revival potential, and
the presence of active liquidation-linked
proceedings together show that transfer would
not advance the interests of justice.
19.9. Fifthly, as held under Point No. v, there are
pending proceedings under Sections 454, 468
and 543 and related proceedings arising from
non-compliance and possession issues. The
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applicant has not shown that the transfer would
preserve those proceedings without
complication or prejudice.
19.10. Action Ispat and Power Pvt. Ltd. v. Shyam
1
Metalics and Energy Ltd . (Para 25) supports
the proposition that post-admission transfer is
legally permissible and that the Court must
examine whether the proceedings have become
irreversible. Applying that very judgment to the
present facts, this Court finds that the matter
has progressed too far, in time and in
substance, for transfer to be judicially
appropriate.
19.11. State Bank of India v. Shakti Bhog Foods
2
Ltd . (Para 1) turned on a Status Report which
showed a much narrower degree of liquidator
action and led the Hon’ble Supreme Court to
conclude that nothing irreversible had taken
place. The present case, involving more than a
decade of liquidation and several consequential
proceedings, is factually distinguishable.
19.12. Cowi India Private Limited v. Pinnacle Air
3
Private Limited (Paras 7, 9 and 16) assists
the applicant only on the point that a formal
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transfer request need not be viewed narrowly
and that post-admission transfer is legally
possible where no irreversible steps have been
taken. However, that judgment does not compel
transfer where the factual matrix is materially
different and where the balance of justice
points to retention.
19.13. Magnifico Minerals Private Limited v.
5
Saravana Alloys Steels Private Limited ,
(Para 19); in fact, supports the respondent to
the extent that it stresses discretion and the
applicant’s burden to justify its exercise. On the
present facts, that burden remains
undischarged.
19.14. Prasanta Kumar Mitra v. V.S. Indian Steam
6
Laundry [Paras 45, 47, 48, 49 and 59(b)]
supports a broad construction of Section
434(1)(c) and the proposition that forum
change is a matter of legislative policy. Yet even
that broad construction cannot be used to
neutralise the express discretionary structure of
the fifth proviso or to override the factual
circumstances that make transfer inappropriate
here.
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19.15. The Court must also deal with two further
matters referred to. The applicant relied on a
screenshot of research results and on an
authority-check report from Manupatra in
relation to Action Ispat and Power Private
Limited vs. Shyam Metalics and Energy
1
Limited . These materials do not disclose the
factual matrix, issues or reasoning of the
supposed cases and that the underlying
judgments have not been placed before the
Court. Therefore, no substantive reliance can
be placed upon those materials.
19.16. For all these reasons, this Court answers point
no. (vi) by holding that this Court is satisfied
that no case has been made out for the
exercise of discretionary jurisdiction in favour of
the applicant. On the contrary, the facts
demonstrate that transfer would be more likely
to delay, fragment or complicate the existing
liquidation rather than serve any genuine
insolvency purpose.
20. Answer to Point No. (vii): What order?
20.1. In view of the findings recorded on Point Nos. i
to vi, Company Application No.39/2025 seeking
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transfer of Company Petition No.236/2010 to
the Hon’ble National Company Law Tribunal,
does not merit acceptance. The application fails
both on the discretionary plane and on the
cumulative evaluation of delay, bona fides,
stage of liquidation, pending consequential
proceedings, and absence of demonstrated
benefit to the creditors or the liquidation estate.
20.2. In the above background, this court passes the
following:
ORDER
i. Company Application No.39/2025 stands
dismissed .
ii. Company Petition No.236/2010 and all
consequential proceedings shall continue
before this Court in accordance with law.
Sd/-
(SURAJ GOVINDARAJ)
JUDGE
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