Discretionary transfer of winding-up proceedings and absence of a bona fide defence sustained the admission order.

Transfer of a pending winding-up petition under the second proviso to Section 434(1)(c) of the Companies Act, 2013 is discretionary and should not be ordered merely because a parallel insolvency application has been filed; the Court indicated that transfer is ordinarily appropriate only once insolvency proceedings are actually admitted, so refusal of transfer was upheld. The winding-up admission was also sustained because the creditor's claim for goods sold and delivered was met with no reply to the statutory demand, the company's earlier quality objections were treated as abandoned, and no bona fide defence or triable issue was shown to justify interference.

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Issues: (i) Whether a creditor's winding-up petition pending before the Company Court should be transferred to the adjudicating authority merely because a petition under the Insolvency and Bankruptcy Code, 2016 has been filed in respect of the same company. (ii) Whether the order admitting the creditor's winding-up petition was liable to be interfered with on the ground that the company had disclosed a defence to the claim.

Issue (i): Whether a creditor's winding-up petition pending before the Company Court should be transferred to the adjudicating authority merely because a petition under the Insolvency and Bankruptcy Code, 2016 has been filed in respect of the same company.

Analysis: The second proviso to Section 434(1)(c) of the Companies Act, 2013 permits transfer of pending winding-up proceedings at the instance of parties to such proceedings, but the power is discretionary and must be exercised on a case-by-case basis. Mere filing of a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 does not, by itself, require automatic transfer of a pending winding-up petition, particularly when the creditor opposing transfer has validly approached the Company Court and the insolvency proceedings have not yet been admitted. The Court held that transfer should ordinarily be ordered only when insolvency proceedings are firmly in place, and not merely on the basis of a pending, pre-admission insolvency application.

Conclusion: The request for transfer was rightly refused and the refusal was upheld.

Issue (ii): Whether the order admitting the creditor's winding-up petition was liable to be interfered with on the ground that the company had disclosed a defence to the claim.

Analysis: The creditor's claim arose from price of goods sold and delivered, and a statutory notice had been issued without any reply from the company. The Company Court found the explanation for non-response unacceptable and held that the earlier reservations regarding quality of goods stood abandoned in the absence of any reply to the notice. On that basis, the Court found that no legitimate or bona fide defence had been shown and that there was no triable issue warranting relegation of the claim to a suit or requiring security.

Conclusion: The order admitting the winding-up petition was justified and was upheld.

Final Conclusion: Both appeals failed. The impugned orders refusing transfer and admitting the winding-up petition were affirmed, and the proceedings stood dismissed without any order as to costs.

Ratio Decidendi: Under the second proviso to Section 434(1)(c) of the Companies Act, 2013, transfer of pending winding-up proceedings is discretionary and should ordinarily await admission of the parallel insolvency proceedings, and a winding-up admission will stand where the company fails to show a bona fide defence to the statutory demand.

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