Company winding up application transferred to NCLT under IBC for non-payment of contractual dues

Delhi HC transferred pending winding up application against respondent company to NCLT under IBC for non-payment of contractual dues. Court relied on Action Ispat and Power Pvt. Ltd. v. Shyam Metalics SC decision mandating transfer of winding up proceedings at nascent stages to NCLT. Since no substantive winding up proceedings had commenced and petition was at preliminary stage with no effective orders passed, HC found continuation inappropriate. Petition transferred to NCLT with parties directed to appear on specified date, interim orders to continue until transfer.

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Issues involved:
The issues involved in this case include the petitioner seeking winding up of the respondent company under Section 433(e) read with Sections 434 and 439(1)(b) of the Companies Act, 1956 due to non-payment of dues amounting to Rs. 67,70,984 arising from a contract for services.

Factual Background:
The petitioner company provided manpower services to the respondent company under a contract dated 01.11.2008, which was renewed multiple times. Despite regular payments until 2012, the respondent company failed to clear outstanding dues of Rs. 67.7 lacs, as acknowledged in an email. After serving a legal notice, a winding-up petition was filed.

Submissions:
The respondent argued that the petition should be transferred to the National Company Law Tribunal (NCLT) as per the Companies (Transfer of Pending Proceedings) Rules, 2016. They also contended that the claims by the petitioner were barred by limitation due to a civil suit and arbitration proceedings not being initiated.

Analysis & Decision:
The court noted that the proceedings were at a nascent stage with no substantive orders passed. Considering the Insolvency and Bankruptcy Code, 2016 and Companies Act, 2013, the court decided to transfer the case to the NCLT as per Section 434 of the Companies Act, 2013. Citing the Supreme Court decision in Action Ispat and Power Limited v. Shyam Metalics and Energy Limited, the court emphasized that cases not progressed to an advanced stage should be transferred to the NCLT. The court concluded that since no substantive proceedings had taken place, the petition did not merit continuation before the High Court and ordered the transfer to the NCLT.

Judgment Outcome:
The court disposed of the company petition and directed the transfer to the NCLT, with parties to appear before the NCLT on a specified date. The interim orders passed by the High Court were to continue until the transfer date, and the NCLT was tasked with considering the matter and passing appropriate orders in accordance with the law. The electronic record of the petitions was to be transmitted to the NCLT within a week for further proceedings.

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