Transfer of winding-up proceedings to NCLT preferred where liquidation is not irreversible and factual issues need tribunal scrutiny.

Pending winding-up proceedings may be transferred to the NCLT where the matter remains at a reversible stage and requires fact-intensive scrutiny better suited to the tribunal. The governing principles under the Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016 distinguish cases that are still amenable to transfer from those that have reached an irreversible stage of liquidation. Where issues such as claims, counterclaims, secured creditors, and sale of assets must be examined, writ jurisdiction under Article 226 is generally considered unsuitable. On the facts noted, the proceedings were not treated as advanced, and transfer was regarded as appropriate in principle.

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Issues: Whether the pending winding-up proceedings should be transferred to the National Company Law Tribunal in view of the stage of the winding up, and whether exercise of jurisdiction under Article 226 of the Constitution of India would be inappropriate in the circumstances.

Analysis: The order records reliance on the governing principles for transfer of winding-up proceedings under the Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016, including the distinction between proceedings at a reversible stage and those that have reached an irreversible stage. It also notes that complex questions relating to claims, counterclaims, secured creditors, sale of assets, and the stage of liquidation require fact-finding better suited to the NCLT rather than resolution in writ jurisdiction. On the facts then available, the winding-up proceedings were considered not to be at an advanced stage and the matter had remained pending for a long period.

Conclusion: The order indicates that transfer of the winding-up proceedings to the NCLT was considered appropriate in principle, and that the matter should be placed for final orders after receiving further submissions.

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