TaxTMI 
TaxTMI 
2026 (2) TMI 478
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.... Companies Act"). Submissions on behalf of the Applicant: 2. Mr. Behramkamdin, Learned Senior Counsel appearing on behalf of the Applicant, at the outset submitted that the Applicant had acquired various debts of the Company in liquidation from the erstwhile financial creditors and now represented more than 50% of the total financial debt owed by the Company in liquidation. He thus submitted that the Applicant had the requisite locus to file the present Application, for transfer of the proceedings to the NCLT u/s. 434(1)(c) of the Companies Act. 3. Mr. Behramkamdin then submitted that the object underlying the proposed transfer was to facilitate the resolution and revival of the Company in liquidation under the provisions of the Insolvency and Bankruptcy Code of 2016 ("IBC"), in a time-bound manner within the rehabilitative framework for resolution provided for under the IBC. He submitted that the IBC, being a later and special enactment, consolidates and amends the law relating to corporate insolvency resolution with the object of maximising value, ensuring equitable treatment of stakeholders, and preserving employment. 4. Mr. Behramkamdin placed reliance upon the deci....
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....ld outside the winding-up proceedings; and (iii) certain other assets of the Company in liquidation located at Pune and Gujarat were presently in the possession of the Official Liquidator. 7. Mr. Behramkamdin submitted that the Official Liquidator, in the Additional Affidavit, had also disclosed that a plot of land situated at Pune was sold to one Ashtech Toolings & Stampings Pvt. Ltd. for Rs. 23,58,00,000/-, which amount constituted an asset of the Company in liquidation. He further pointed out that the Life Insurance Corporation of India had deposited a sum of Rs. 2,19,11,333/- with the Official Liquidator towards payments to workmen under Group Gratuity Scheme No. GGCA-83179. He submitted that the Official Liquidator had also received approximately 476 claims from workmen and creditors and had appointed a Chartered Accountant for the purpose of verification, which process was still ongoing. 8. Basis the above Mr. Behramkamdin submitted that the record clearly demonstrated that the Official Liquidator had taken very limited steps in the winding-up proceedings and had sold only one property of the Company. He fairly conceded that while certain actions had been taken....
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.... Operative Housing Society Ltd, Flat No 702, Building No.11, Vipulgiri, Off VasantVihar, Pokharan Road No2, Thane (West), Pin - 400610 Possession is with DRT Receiver iii Thane Office: Siddhanchal - Phase - II Co - Operative Housing Society Ltd, Flat No 702, Building, No12, Kailashgiri, Off VasantVihar, Pokharan Road No. 2, Thane (West), Pin - 400610 Possession is with DRT Receiver iv Thane Office: Siddhanchal - Phase - I Co - Operative Housing Society Ltd, Flat No 303, Building No 2-A, Rajgiri, Off. Pokharan Road No 2, Thane (West), Pin - 400610 Possession is with DRT Receiver v Thane Office: Siddhanchal - Phase - I Co - Operative Housing Society Ltd., Flat No 404, Building No 2-B, Rajgiri, Off. Pokharan Road No 2, Thane (West), Pin - 400610 Possession is with DRT Receiver vi At Bangalore: Flat No A - 1, Chandan Apartment, (Area) 2503 sq. ft. + car parking & Private terrace of 154 sq. ft, Banglore, Karnataka State Possession is with DRT Receiver vii At Pune: 250A, Boat Club Road, Sangamwadi, Pune - 411 001 Possession is with DRT Receiver viii At Tamil Nadu: Wind Mill Project situated at Village - Karungulam & admeasuring to 6.9....
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....rkmen would not be entitled to interest on their dues. 15. Mr. Carvalho submitted that, in the event this Court was so inclined to transfer the Company Petition to the NCLT, then in that case, the NCLT ought to be directed to take into account the workmen's claims at the stage at which they presently stand. He submitted that such a direction would be fair and equitable and would prevent undue prejudice to the workmen and would be consistent with both the scope and the underlying intent of Section 434(1)(c) of the Companies Act. Submissions on behalf of IFCI: 16. Mr. Samantaray, Learned Counsel appearing on behalf of IFCI Limited, a secured creditor of the Company in liquidation, submitted that the Applicant has approached this Court with unclean hands by suppressing material facts that are crucial for deciding the captioned Company Application. 17. He submitted that the Company Application was filed sometime in June 2018 seeking transfer of Company Petition No. 65 of 1999, along with all connected proceedings, to the NCLT under the proviso to Section 434(1)(c) of the Companies Act, purportedly to rehabilitate the Respondent Company in a time-bound manner under the IBC. ....
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....nt was also bound by the pleadings and findings recorded in proceedings before the Board for Industrial and Financial Reconstruction ("BIFR"). He pointed out that the Managing Director of the Respondent Company, one Paramjit Singh Patheja, had filed Miscellaneous Application No. 392 of 2015 in Case No. 292 of 1998 before the BIFR seeking revival under the Sick Industrial Companies (Special Provisions) Act, 1985 ("SICA"). He submitted that a perusal of the said Application disclosed the following: i. The net worth of the Company in liquidation had been completely eroded as on 30th September 1997, and subsequently the Company in liquidation had been declared a sick industrial company by the BIFR on 24th March 1999; ii. On 5th April 2002, the BIFR formed an opinion under Section 20 of the SICA that the Company in Liquidation ought to be wound up, which opinion was affirmed by the Appellate Authority on 28th February 2003; iii. A Techno-Economic Viability Assessment dated 30th September 2015 proposed revival by setting up a plant at Chakan, Pune, requiring an investment of Rs. 215 lakhs. 23. Mr. Samantaray further pointed out that the BIFR had, by its orde....
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....y after taxes, cesses and company dues. He, however, pointed out that as per Section 53 of the IBC, workmen's dues, though limited to twenty-four months preceding commencement of the liquidation date, ranked pari passu with the dues of secured creditors, who had relinquished their security. He submitted that this recalibration of priorities was a deliberate legislative choice, reflecting Parliament's balancing of distributive justice with the objective of corporate revival. Consequently, he submitted that any perceived reduction in payout to workmen under the regime of the IBC cannot be relied upon to oppose the transfer to the NCLT. 30. He then pointed out that the question of the workmen being prejudiced under the IBC was now a moot point since the Hon'ble Supreme Court had, in the case of Moser Baer Karamchari Union v. Union of India (2023) 9 SCC 499., categorically held that the revised waterfall under the IBC was a matter of legislative policy and that the legislature is entitled to reorder priorities in furtherance of revival and value maximisation. He pointed out that the Hon'ble Supreme Court had expressly observed that, although the IBC's scheme differs from the earlier....
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..... Mr. Behramkamdin reiterated that, in the present case, the Official Liquidator had taken no substantive steps towards liquidation for over 15 years, and therefore the question of any irreversible or irretrievable stage having been reached simply does not arise. He submitted that reliance on the BIFR proceedings was also wholly misplaced, as the BIFR regime itself stood repealed and replaced by the IBC, which provides a fundamentally different and rehabilitation-centric framework. 34. Mr. Behramkamdin, in dealing with the contention that the Applicant had approached this Court with unclean hands and had suppressed the proceedings pending before the DRT, pointed out from the Application that such contention was plainly untenable since the Application specifically sets out the DRT proceedings. He further submitted that no rejoinder had been filed since the Affidavits filed by the Official Liquidator, IFCI and the secured creditor Omkara ARC did not merit any response since what had been stated therein did not in any manner detract from the Applicant's case for transfer of the proceedings to the NCLT. Reasons and Conclusions: 35. After having heard learned counsel for the pa....
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....from workmen and creditors. The process of verification of claims is admittedly still ongoing. As observed by the Supreme Court in Action Ispat, such steps do not amount to irreversible progress of winding-up proceedings. Thus, clearly, the Official Liquidator has not taken any irreversible steps in the course of winding up. E. Though certain assets of the Company in liquidation have been sold and/or otherwise dealt with by secured creditors, it is not in dispute that the Official Liquidator continues to remain in possession of some assets of the Company, in addition to substantial funds. In these circumstances, it is impossible for me to conclude with certainty that there is not even the slightest possibility of revival or resolution of the Company in liquidation, as bleak as they may appear to be. Further, the determination of whether resolution is ultimately possible or not lies squarely within the exclusive domain of the NCLT and must be undertaken in accordance with the statutory framework of the IBC. Also, the fact that revival under SICA did not materialise is not a factor that, by itself, would assume revival under the scheme of the IBC would fail. F. The ....