Company's winding-up petition granted due to debt default, Official Liquidator appointed for immediate wind-up process.

The company petition for winding up the respondent company was allowed as the respondent failed to redeem debentures and repay the debt, establishing its inability to pay. The court rejected impleading applications by third parties and ordered the winding up of the company with immediate effect. The Official Liquidator was appointed as the Liquidator, and the petitioner was instructed to file the order with the Registrar of Companies, publish it in newspapers, and deposit a sum for implementation. All pending company applications were dismissed.

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Issues Involved:
1. Failure of the respondent to redeem debentures and repay the debt.
2. Maintainability of the Company Petition for winding up on the ground of inability to pay debt.
3. Applicability and impact of the Insolvency and Bankruptcy Code, 2016 on the winding up proceedings.
4. Transfer of proceedings to the National Company Law Tribunal (NCLT).
5. Impleading applications filed by third parties.

Detailed Analysis:

1. Failure of the respondent to redeem debentures and repay the debt:
The petitioner, Milestone Real Estate Fund, invested Rs. 30 Crores in the respondent company, Prisha Properties India Private Limited, through secured redeemable optionally fully convertible debentures as per an Investment Agreement dated 23.02.2013. The respondent failed to redeem the debentures within the stipulated time despite multiple reminders and a statutory legal notice dated 14.07.2016 demanding Rs. 41,29,71,205/-. The respondent admitted its inability to repay due to unfavorable market conditions and sought an extension, which led to the filing of the present petition.

2. Maintainability of the Company Petition for winding up on the ground of inability to pay debt:
The petitioner argued that the respondent's failure to repay the admitted debt despite court-provided opportunities establishes its inability to pay. The respondent admitted to the debt and its inability to pay in its reply dated 05.08.2016. The court noted that despite multiple opportunities and directions, including an order to deposit Rs. 5 Crores, the respondent failed to show any substantial proof of its ability to pay.

3. Applicability and impact of the Insolvency and Bankruptcy Code, 2016 on the winding up proceedings:
The impleading applicant argued that the Insolvency and Bankruptcy Code, 2016 (IBC) supersedes the Companies Act, 1956, and mandates the transfer of winding up proceedings to NCLT. However, the court held that the first amendment to Section 434 of the Companies Act, 2013, effective from 01.12.2016, allowed automatic transfer only for cases where no notice under Rule 26 of the Companies (Court) Rules was served. Subsequent amendments required an application by any party for transfer. The court found that no such application was made by either the petitioner or the respondent, and the applicant's impleading application was not maintainable.

4. Transfer of proceedings to the National Company Law Tribunal (NCLT):
The court analyzed Section 434 of the Companies Act, 2013, and related rules, concluding that the transfer of pending proceedings to NCLT is not automatic and requires an application. Since no such application was made, the court decided to proceed with the winding up under the Companies Act, 1956.

5. Impleading applications filed by third parties:
The court rejected the impleading applications filed by third parties, including CA No.357/2017 and CA No.274/2018, on the grounds that they were not maintainable under the Companies (Court) Rules, 1959. The court emphasized that any person intending to oppose or support the winding up petition must follow the prescribed procedure, which the applicants failed to do.

Order:
1. The company petition is allowed, and the respondent company is ordered to be wound up with immediate effect.
2. The Official Liquidator attached to the court is appointed as the Liquidator of the company.
3. The petitioner is directed to file a copy of the order with the Registrar of Companies within 30 days.
4. The petitioner shall publish the order in 'TIMES OF INDIA' and 'VIJAYA KARNATAKA' newspapers within 14 days.
5. The petitioner shall deposit Rs. 40,000/- with the Official Liquidator for the implementation of the order.
6. All pending company applications, including CA Nos.357/2017, 36/2018, and 274/2018, are dismissed.

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