Transfer of winding up proceedings to NCLT allowed where liquidation had not reached an irreversible stage.

The fifth proviso to section 434(1)(c) of the Companies Act, 2013 permits transfer of a pending winding up petition to the NCLT where the liquidation process has not reached an irreversible stage. On the facts, the Official Liquidator had not taken possession of the company's assets, the registered office had been handed over to the secured creditor, and no notice inviting claims from creditors or workmen had been issued. The Court treated these circumstances as showing that no irreversible step had been taken and accepted that the insolvency framework would protect creditor and workmen claims. The transfer was therefore warranted, subject to deposit of costs.

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Issues: Whether the winding up proceedings pending before the Company Court ought to be transferred to the National Company Law Tribunal under the fifth proviso to section 434(1)(c) of the Companies Act, 2013 in the facts where the Official Liquidator had not taken irreversible steps and no claims had been invited from creditors or workmen.

Analysis: The transfer power under the fifth proviso to section 434(1)(c) is discretionary and can be exercised even after admission of the winding up petition, provided the proceedings have not reached an irreversible stage where the clock cannot be set back. The material showed that the Official Liquidator was not in possession of the company's properties, the registered office had already been handed over to the secured creditor, and no notice inviting claims of creditors or workmen under the relevant rules had been published. In these circumstances, no irreversible step had been taken in the winding up process. The Court also accepted that the statutory framework under the Insolvency and Bankruptcy Code would protect creditor and workmen claims in the insolvency process.

Conclusion: The transfer to the NCLT was warranted and the application was allowed, subject to deposit of costs.

Ratio Decidendi: A winding up petition may be transferred to the NCLT under the fifth proviso to section 434(1)(c) when no irreversible step has occurred in the liquidation process and the matter can still be effectively dealt with under the Insolvency and Bankruptcy Code.

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