Mandatory transfer of winding-up proceedings to NCLT applies unless liquidation has reached an irreversible stage

Pending winding-up proceedings under the Companies Act transfer to the NCLT as a mandatory rule, unless the matter has reached an irreversible stage where restoring the pre-transfer position is impossible. The controlling test is whether assets have actually been sold or the liquidation process has advanced beyond reversal. A prior co-ordinate bench decision was treated as fact-specific and not as a general exception to the Supreme Court's transfer framework. On the admitted facts, no sale of assets had taken place and a transfer application was already on record, so transfer to the Tribunal was required; the separate claim was left open for pursuit before the appropriate authority.

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Issues: Whether the winding-up proceedings pending before the High Court were liable to be transferred to the National Company Law Tribunal in the facts of the case.

Analysis: The transfer framework under the Companies Act, 2013 as amended by the insolvency legislation and the related transfer rules required pending winding-up matters to move to the Tribunal, save where the proceeding had reached an irreversible stage. The controlling test was whether any actual sale of assets had taken place or whether the process had advanced so far that it would be impossible to set the clock back. The earlier co-ordinate bench decision was confined to its own facts and did not lay down a general exception overriding the Supreme Court's ratio. On the admitted facts, a transfer application was on record and the assets of the company in liquidation had not yet been sold, so no irreversible step had been shown.

Conclusion: The winding-up proceedings were required to be transferred to the National Company Law Tribunal. The appellant's separate claim was left open to be pursued before the appropriate authority in accordance with law.

Ratio Decidendi: Pending winding-up proceedings are mandatorily transferable to the Tribunal unless the matter has progressed to an irreversible stage, such as an actual sale of assets, where restoring the pre-transfer position would be impossible.

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