Winding up petition transferred to NCLT as company failed to pay debts in ordinary business course

Delhi HC transferred a winding up petition against a company to the National Company Law Tribunal (NCLT). The petition sought company liquidation due to failure to pay debts in ordinary business course. The court found the petition was at a nascent stage with no Provisional or Official Liquidator appointed. Following Supreme Court precedent in Action Ispat case, HC held that early-stage winding up proceedings should be transferred to NCLT under the Insolvency and Bankruptcy Code, 2016 and Companies Act, 2013. The petition was disposed of and listed before NCLT.

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Issues involved:
The issues involved in this case include the non-payment of an outstanding principal amount by the respondent company, default in rent payments, legal proceedings initiated by the petitioner, and the transfer of the case to the National Company Law Tribunal (NCLT) under relevant sections of the Companies Act.

Issue 1: Non-payment of outstanding rent and winding up petition
The petitioner filed a company petition u/s 433(e) and (f) of the Companies Act seeking winding up of the respondent company due to non-payment of an outstanding principal amount arising from arrears of rent for a specified period. The lease agreement between the parties stipulated a monthly rental amount, but the respondent company defaulted on payments, leading to legal notices and proceedings under the Negotiable Instruments Act and the Punjab Rent Control Act. Despite repeated reminders and legal notices, the respondent failed to discharge its liability, prompting the petitioner to file the winding-up petition.

Issue 2: Transfer of proceedings to NCLT
The High Court considered the enactment of the Insolvency and Bankruptcy Code, 2016, and the Companies Act, 2013, during the pendency of the case. Citing Section 434 of the Companies Act, 2013, the court opined that the petition should be transferred to the NCLT. Referring to a Supreme Court decision, it was emphasized that winding up proceedings at a nascent stage should be transferred to the NCLT for resolution under the Code. Relying on previous judgments, the court decided to transfer the instant petition to the NCLT and directed the electronic record to be transmitted accordingly. The case was listed before the NCLT for further proceedings.

This summary provides a detailed overview of the legal judgment, highlighting the key issues involved and the court's decision to transfer the case to the NCLT based on relevant legal provisions and precedents.

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