TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 936
X X X X Extracts X X X X
X X X X Extracts X X X X
....43/2024, CO. APPL. 744/2024, CO. APPL. 921/2024, CO. APPL. 922/2024, CO. APPL. 1059/2024, CO. APPL. 1060/2024, CO. APPL. 1067/2024, CO. APPL. 97/2025, CO. APPL. 110/2025, CO. APPL. 176/2025, CO. APPL. 178/2025, CO. APPL. 277/2025, CO. APPL. 278/2025, CO. APPL. 279/2025, CO. APPL. 281/2025, CO. APPL. 282/2025, CO. APPL. 283/2025, CO. APPL. 284/2025, CO. APPL. 285/2025, CO. APPL. 286/2025, CO. APPL. 287/2025, CO. APPL. 288/2025, CO. APPL. 289/2025, CO. APPL. 290/2025, CO. APPL. 295/2025, CO. APPL. 296/2025, CO. APPL. 320/2025, CO. APPL. 335/2025, CO. APPL. 428/2025, CO. APPL. 429/2025, CO. APPL. 498/2025, CO. APPL. 525/2025, CO. APPL. 526/2025, CO. APPL. 527/2025, CO. APPL. 528/2025, CO. APPL. 529/2025, CO. APPL. 530/2025, CO. APPL. 531/2025, CO. APPL. 532/2025, CO. APPL. 533/2025, CO. APPL. 571/2025, CO. APPL. 572/2025, CO. APPL. 573/2025, CO. APPL. 574/2025. For the Petitioners Through: None. For the Respondents Through: Ms. Anannya Ghosh, Ms. Mrinalini Mishra & Ms. Kashish Chhabra, Adv. for R-2/Mr. Sunil Dahiya. Mr. Shashank Bajpai, CGSC & Mr. Shriram Tiwary, Government Pleader for R/SFIO/Union of India Mr. Sumit K. Batra, SC for OL. Mr. Robin Ratnakar Davis & Ms. Neiting Kh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....urt had by its order dated 18.08.2025 had passed a direction to complete pleadings in this Application, since the parties had contended that they have no objection to the transfer of these proceedings, given the possibility of a revival of the Respondent Company, for the benefit of the public at large. 4. The short question that falls for consideration before this Court is whether this Petition is at a stage where no irreversible steps have been taken towards liquidation, and should be transferred to the NCLT. BRIEF FACTS 5. Briefly the facts are that the winding up Petition was admitted by the Court against the Respondent Company - Vigneshwara Developwell Pvt. Ltd., on 22.07.2016 at the instance of several allottees, who are also financial creditors in terms of the Insolvency and Bankruptcy Code, 2016 [hereinafter referred to as the "IBC"]. Pursuant thereto, on 27.01.2020, a scheme for revival of the Company was approved by this Court Subsequently, and in view of no concrete proposals coming forth and non-infusion of the requisite funds by the propounders of the Scheme, the Scheme was set aside by an order passed by this Court on 04.01.2023. On that date, Official Liquida....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r Sections 43 to 51 of the IBC and Section 66 of the IBC before the NCLT. In view thereof, it is urged that the objections sought to be raised by the promoters of the Respondent Company are liable to be rejected. 7.4 Learned Counsel for the Applicants lastly submits that this is a fit case for transfer of proceedings to the NCLT since the properties of the Applicants and hundreds of other similar investors, who have been deprived of their hard-earned money by the Respondent Company, would be benefitted. In addition, the scheme of arrangement that was proposed by the Ex-Director/Promoter before this Court was rejected and thus it is expedient that the matters be adjudicated by the NCLT. ARGUMENTS BY THE OFFICIAL LIQUIDATOR 8. Learned Counsel for the Official Liquidator has filed a detailed Reply to this Application, wherein it has been clarified that the Official Liquidator is in custody of certain properties and assets of the Respondent Company/Company in liquidation. It has also been stated therein that the Official Liquidator has had these properties valued and has attached the valuation report thereto. Learned Counsel has contended that the official valuer has submitted....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Liquidator has also submitted that Serious Fraud Investigation Office [SFIO] has been conducting an extensive investigation in the matter of the Respondent Company and 16 other group companies on account of wrong doings and diversion of funds and assets of the companies for the personal benefits of its Ex-Directors. ARGUMENTS BY THE EX-DIRECTORS 9. Learned Counsel for Ex-Directors oppose this Application. It is contended that the IBC is primarily intended to secure revival of the corporate debtor, however, in the present case, the winding up process has irreversibly transitioned from revival to liquidation under the 1956 Act. It is contended that once there are irreversible steps in law, the High Court contains the jurisdiction to continue with the proceedings. 9.1 Reliance in this behalf is placed by learned Counsel on the judgement of a Coordinate Bench of this Court in the case of Deutsche Trustee Company Ltd. v. Tulip Telecom Ltd. 2023 SCC OnLine Del 6185 to submit that in similar circumstances, the Coordinate Bench has held that where the Official Liquidator had taken possession of certain moveable assets and properties of the company, the proceedings have reached an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he judgement dated 27.01.2020 passed by this Court, as follows: "38. Keeping in view the facts of this case, in my opinion, the Scheme as a whole is just, fair and reasonable. There is no violation of any statutory provisions. It is in the interest of justice that the Scheme is approved subject to supervision of this court through a retired Judge of this Court. 39. The Scheme is accordingly approved subject to the following:- (i) Mr. Justice Vinod Goel (Retd.) (Mobile No.9910384637) is appointed as the Court Appointed Supervisor to supervise implementation of the Scheme/ The Propounders would be entitled to implement the Scheme, as above, under supervision of the Court Appointed Supervisor. (ii) The Court Appointed Supervisor will ensure that the initial task as stipulated in the Scheme are completed expeditiously in a time bound manner. The OL will permit the promoters to implement the Scheme, as stated above, under the supervision of the Court Appointed Supervisor. (iii) The propounders of the Scheme will be permitted to open a separate escrow account where all revenues received pursuant to the revival scheme would be deposited. The es....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of dues. 13.2 In view of these submissions, this Court by its order dated 04.01.2023 directed that the Respondent Company as well as Vigneshwara Developers Private Limited [VDPL] be wound up and that the Official Liquidator be appointed as the liquidator of the Company. The Court further directed that all stakeholders would file their claims before the Liquidator. It is apposite to extract the relevant part of the order below: "3. The Scheme provides that the Propounders i.e., ex-Management of Companies (in Liqn), will clear dues of statutory authorities, which includes HSIIDC and OTCP, as well as outstanding dues towards landowners, after which, the allotted area under the Projects in question, was to be handedover to the concerned Associations/allottees on "as-is-where-is" basis. This fundamental step has not been taken till date. Ms. Reena Choudhary, counsel for ex-Management/Propounders of the Scheme, cites a HSIIDC circular dated 27th September, 2021, which, inter-alia, allows part-payment to be made for the purpose of reviving the iValley Project. This reliance is misplaced as the circular is not contemplated under the Scheme. The Court finds no reason to make a m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tor. xxx xxx xxx 9. Now that the Liquidator has been appointed, all stakeholders are permitted to file their claims before the Liquidator, within a period of four weeks from today, who shall consider the same, in accordance with law." [Emphasis Supplied] 14. At this stage, it is apposite to set out the Section 434 of the 2013 Act which provides for the transfer of proceedings relating to winding up, pending before the High Courts, to the NCLT, which is extracted below: "434. Transfer of certain pending proceedings.-(1) On such date as may be notified by the Central Government in this behalf,- (a) all matters, proceedings or cases pending before the Board of Company Law Administration (herein in this section referred to as the Company Law Board) constituted under sub-section (1) of section 10E of the Companies Act, 1956 (1 of 1956), immediately before such date shall stand transferred to the Tribunal and the Tribunal shall dispose of such matters, proceedings or cases in accordance with the provisions of this Act; (b) any person aggrieved by any decision or order of the Company Law Board made before such date may file an appea....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the court may by order transfer such proceedings to the Tribunal and the proceedings so transferred shall be dealt with by the Tribunal as an application for initiation of corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016 (31 of 2016). (2) The Central Government may make rules consistent with the provisions of this Act to ensure timely transfer of all matters, proceedings or cases pending before the Company Law Board or the courts, to the Tribunal under this section." [Emphasis Supplied] 15. It is no longer res-integra that unless irreversible steps, such as the sale of assets have occurred, pending winding up proceedings ought to be transferred to the NCLT in terms of the 5th proviso to Section 434(1)(c) of the 2013 Act. 16. The Supreme Court in Action Ispat case has held that where winding up petition pending before the High Court has not progressed to an advanced stage, it ought to be transferred to the NCLT. The Supreme Court has held that even post-admission of a winding up Petition, and after the appointment of a liquidator, the discretion is vested in the Company Court to transfer such Petition to the NCLT. It was....
X X X X Extracts X X X X
X X X X Extracts X X X X
....winding-up petition even after it is admitted. Thus, in a winding-up proceeding where the petition has not been served in terms of Rule 26 of the Companies (Court) Rules, 1959 at a pre-admission stage, given the beneficial result of the application of the Code, such winding-up proceeding is compulsorily transferable to NCLT to be resolved under the Code. Even post issue of notice and pre-admission, the same result would ensue. However, post admission of a winding-up petition and after the assets of the company sought to be wound up become in custodia legis and are taken over by the Company Liquidator, Section 290 of the Companies Act, 2013 would indicate that the Company Liquidator may carry on the business of the company, so far as may be necessary, for the beneficial winding up of the company, and may even sell the company as a going concern. So long as no actual sales of the immovable or movable properties have taken place, nothing irreversible is done which would warrant a Company Court staying its hands on a transfer application made to it by a creditor or any party to the proceedings. It is only where the winding-up proceedings have reached a stage where it would be irreversi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Proceedings) Rules, 2016 relating to the stage at which a transfer could be ordered, has no application to the case of a transfer covered by the 5th proviso to clause (c) of sub-section (1) of Section 434. Therefore, the impugned order [Girdhar Trading Co. v. Axis Nirman & Industries Ltd., 2020 SCC OnLine All 1401] of the High Court rejecting the petition for transfer on the basis of Rule 26 of the Companies (Court) Rules, 1959 is flawed." [Emphasis Supplied] 18. In addition, the Supreme Court in the A. Navinchandra case has held that the pendency of admitted winding up proceedings is not a bar to proceedings under Section 7 or Section 9 of the IBC. It was held that Section 7 of the IBC is an independent proceeding, which has to be tried on its own merits and that stands by itself. It was further held that the discretionary provision under the 5th proviso to Section 434(1)(c) of the 2013 Act cannot prevail over the jurisdiction of the NCLT under the IBC, once the parameters of Section 7 of the IBC and the other provisions of the IBC have been met. The relevant extract of the A. Navinchandra case is below: "29. Dr Singhvi and Shri Ranjit Kumar have veh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....roposed under the Scheme were not taken by the Ex-Director/promoter. In addition, the order also reflects that there was no appearance on behalf of the applicant at the time of arguments and thus the Application was not pressed by the Applicant. The Coordinate Bench, in the given facts, did not transfer the matter. The relevant extract of the Deutsche Trustee Company case is set out below: "CO. APPL. 322/2019 (seeking transfer) 10. This is an application by Punjab National Bank seeking transfer of the present company petition to the NCLT under Section 434 of the Companies Act, 1956. The Applicant-bank relies on the proviso to Section 434(1)(c) of the Companies Act, 1956, and the judgment in Forech India Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. [Civil Appeal No. 818 of 2018, Judgment dated 22nd January 2019] to request for transfer of the current petition to the NCLT. 11. None appears for Punjab National Bank. Ld. Counsel Ms. Shankari Mishra on the other hand opposes the transfer of this petition. xxx xxx xxx "16. Vide OLR 30 of 2020, it is stated that the OL has already taken possession of certain immovable assets and properties o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....also not be handed over since the Propounders of the Scheme were in judicial custody. Since the Scheme had become unworkable, the Scheme was set aside by this Court on 04.01.2023. 24. Although the Official Liquidator has taken over the assets of the Company, it has confirmed in its Reply that no other irretrievable steps such as sale of the assets have been taken by the office of the Official Liquidator. The Official Liquidator has also averred that the Petition which was previously filed before the NCLT as a company Petition being C.P.(IB)-1076(ND)/2019 captioned Lavkash Verma v. Vigneshwara Developers Private Limited can be revived. 25. The IBC is a self-contained creditor driven framework, where the costs of the corporate insolvency resolution process are defrayed from recoveries, and in terms of Section 12 of the IBC. The entire process is mandatory and to be undertaken in a time bound manner to ensure preservation of assets as well as that the creditors are paid in a defined framework. The IBC also contains a framework for effective powers to deal with fraudulent transactions. 26. Undisputedly, no actual sale of properties has taken place and as such no irreversible s....