Winding up transfer to NCLT upheld where the Official Liquidator was a party and creditors' interests favored resolution.

Pending winding up proceedings could be transferred to the NCLT under Section 434(1)(c) where the Official Liquidator was already a party and the transfer application served the creditors' collective interest. The objection that the secured creditor was not the original winding up petitioner was treated as only technical and did not defeat maintainability. On the facts, the long-pending proceedings had produced no effective recovery, the assets were already with secured creditors or otherwise inadequate, and the Tribunal route offered a better prospect of resolution. The High Court therefore upheld the transfer order and the revocation of the provisional liquidator.

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Issues: (i) Whether the application seeking transfer of the pending winding up proceedings to the NCLT was maintainable despite the objection that the secured creditor was not the original party to the winding up petition; (ii) Whether, on the facts, the Company Court was justified in transferring the proceedings to the NCLT and revoking the appointment of the provisional liquidator.

Issue (i): Whether the application seeking transfer of the pending winding up proceedings to the NCLT was maintainable despite the objection that the secured creditor was not the original party to the winding up petition.

Analysis: The proviso to Section 434(1)(c) of the Companies Act, 2013 permits transfer of pending winding up proceedings to the Tribunal on an application by a party to those proceedings. Although the secured creditor was not the original petitioner, the Official Liquidator was already a party to the winding up proceedings and had initially not opposed the transfer. The objection was therefore only technical and did not prevent the Company Court from exercising its discretion.

Conclusion: The transfer application was maintainable, and the objection to locus did not defeat it.

Issue (ii): Whether, on the facts, the Company Court was justified in transferring the proceedings to the NCLT and revoking the appointment of the provisional liquidator.

Analysis: The proceedings had remained pending for years without any effective recovery for the creditors. The available assets were already under the control of secured creditors or otherwise insufficient to yield meaningful recovery in the company court proceedings. In those circumstances, the Tribunal route offered a better prospect for resolution and recovery, and the Company Court was entitled to act in the interest of all creditors. No reason was shown to interfere with the order revoking the provisional liquidator and transferring the matter.

Conclusion: The transfer to the NCLT and the revocation of the provisional liquidator were upheld.

Final Conclusion: The appeal failed, and the impugned transfer order was sustained as a proper exercise of discretion in the collective interest of the creditors.

Ratio Decidendi: Where winding up proceedings are pending and the Official Liquidator is a party, the Company Court may transfer the matter to the NCLT under Section 434(1)(c) of the Companies Act, 2013 if the transfer serves the best interest of creditors, even if the transfer applicant is not the original winding up petitioner.

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