TaxTMI 
TaxTMI 
2023 (12) TMI 322
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....1956 Act and replacing it by a wholly new Act. The Insolvency and Bankruptcy Code, 2016 was enacted on 28th May, 2016. Section 434 of the Companies Act, 2013 was substituted by a new Section 434 with effect from 15th November, 2016. The proviso to Section 434(1)(c) provided that pending winding up proceedings, at a particular stage as may be prescribed by the Central government, were to be transferred to the tribunal. The Central government prescribed that those winding up applications of which notice had not been served on the respondent would be transferred to the tribunal. Another proviso was added with effect from 6th June, 2018 to the effect that in any proceedings relating to the winding up of companies pending before the court immediately before the commencement of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 an application may be filed for transfer of such proceedings. The court on such application may transfer the proceedings to the tribunal. In that case the proceeding would be dealt with by the tribunal as an application for initiation of corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016. The appeal (APO 33 of 2....
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....atio of 72 : 28 respectively representing the value of their respective loans to the company. It was also stated in the application that the value offered by the intending purchaser was over Rs. 12 crores which was the market value of the said property. By this application, the applicant seek confirmation from the court for sale of the said property to the said intending purchaser upon their making payment of Rs. 16,73,26,544/-. It may be mentioned here that at the time of negotiation, the intending purchaser had, according to the statement made in the petition paid Rs. 1,40,00,000/- to the applicant. We have taken note of the view expressed by the official liquidator. It has some merit. The normal procedure for effecting the sale of the assets of a company in liquidation should not be so easily bypassed by making a private treaty with an intending purchaser to purchase the said immovable property belonging to the company, now in liquidation. It is true that offers were invited by the Official Liquidator but no offer anywhere near the said offer by the intending purchaser introduced by the secured creditors was received. However, we are minded to give another chance to the offic....
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....on is to be made by the Court of the fact that a sizable number of company paid staff are working in the Official Liquidator's offices attached to 22 High Courts in the country whose pay and allowances are met out of the fund generated by the Official Liquidator on sale of the assets of the companies in liquidation? c) If during liquidation the Official Liquidator attached to the High Court has incurred expenses to protect the assets of the company to what extent should those expenses be paid out of orders passed by the High Court? d) Whether the learned judge adopted the correct approach in not considering the applications on merits and instead making an order of transfer of the proceedings to NCLT, when this was nobody's prayer? CASES:- In Kaledonia Jute and Fibres Pvt. Ltd. vs. Axis Nirman and Industries Ltd. and Ors. reported in (2021) 2 SCC 403, the Supreme Court noted that initially under the Companies Act, 2013 only winding up applications of which notice had not been served on the Company under Rule 26 of the Companies (Court) Rules, 1959 could be transferred. By subsequent insertion of a proviso by amendment on 6th June, 2018 to Section 434(1)(c), a party to a windin....
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....rcise of its jurisdiction under the said proviso to Section 434(1)(c) of the Companies Act should transfer the winding up application to the NCLT? As far as this company is concerned, the winding up order was passed more than one decade ago. No creditor or contributory of the company has come forward to revive it or present a scheme to the court, for payment to the secured creditors and other creditors of the company, which include its workers. From time to time the court has passed orders to safeguard the assets of the company, by employment of security agencies on terms and conditions set by it. These agencies have provided protection to the assets and are claiming amounts on account of their fees and charges. The court which passed orders authorizing their engagement has a duty to ensure that they are paid. It also has a similar duty towards the valuer who is also engaged by the court in assessing the value of the property of the company-in-liquidation. As such, the chance of revival of the company is practically nil. The secured creditors have also introduced an intending purchaser to the court who are willing to buy the assets of the company through which the claim of the s....
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....great financial hardship for years. Their wages for working in the company remain outstanding and unpaid. d) After the winding up order has been made the official liquidator has taken steps for protection of the assets of the company and for this purpose has employed security personnel to guard those assets against pilferage and damage. This arrangement is made with the sanction of the company Court. It becomes the solemn duty of that court to ensure that these security providers are paid out of sale of the assets of the company or by the secured creditors whose assets are protected by them. When such is the obligation incurred by the court, it is desirable that the winding up proceedings are retained by court to enable the court to pass appropriate orders for payment of these service providers. These service providers might also include surveyors and valuers with the official liquidator with the sanction of the Court to survey and value the assets of the company. There is a body of employees called the company paid staff who are special employees in the office of the official liquidator and under directions of the company court, spanning several decades have been paid out of th....