2024 (6) TMI 632 - HC - Companies Law

Company winding up petition dismissed as non-starter, matter transferred to NCLT for proper proceedings

ESTER INDUSTRIES LTD Versus INDUS POLYFILMS SPECIALISTS PVT LTD.

The Delhi HC disposed of a winding up petition filed against a company for non-payment of outstanding dues. Despite finding that the respondent company ... Seeking winding up of the respondent company - non-payment of outstanding dues - HELD THAT:- Evidently, the respondent company has failed to pay its debt in the normal and ordinary course of its business, hence, the present petition has been filed. However, on a perusal of the record, it is borne out that this winding up petition has been a complete non-starter, and as of yet, no substantial orders have been passed in furtherance of the liquidation of the respondent company. The instant petition is transferred to the NCLT. Parties to appear before the NCLT on 27.05.2024. The interim orders passed by this Court in these petitions, if any, shall continue till the said date. Petition disposed off. Issues involved: Company petition u/s 433(e), 434, and 439 of the Companies Act, 1956 seeking winding up of respondent company due to non-payment of outstanding dues.The petitioner company sought winding up of the respondent company, M/s. Indus Poly films Specialists Pvt. Ltd., due to non-payment of outstanding dues amounting to Rs. 31,78,615/- along with interest @ 18% per annum. The respondent company had issued cheques which were dishonored due to insufficient funds, leading to legal notices under Section 138 of the Negotiable Instruments Act of 1881 and Section 434 of the Companies Act, 1956. Despite the legal notices, the respondent failed to repay the outstanding amount, prompting the institution of the winding up petition (paragraphs 1-5).A Provisional Liquidator was appointed to the respondent company, but subsequent applications were made seeking recall of the appointment. The winding up petition did not progress substantially, and the High Court noted the enactment of the Insolvency and Bankruptcy Code, 2016, and the Companies Act, 2013. Considering the new legislation, the Court opined that the matter should be transferred to the National Company Law Tribunal (NCLT) as per Section 434 of the Companies Act, 2013 (paragraphs 6-8).Referring to a Supreme Court decision, the High Court emphasized that winding up proceedings at a nascent stage should be transferred to the NCLT. Relying on this precedent, the High Court transferred the instant petition to the NCLT, directing the parties to appear before the NCLT on a specified date. The NCLT was tasked with considering the matter and passing appropriate orders in accordance with the law, with the electronic record of the petitions to be transmitted to the NCLT (paragraphs 9-14).