Transfer of winding-up petition to NCLT w.r.t. matter under IBCode: BHC

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Transfer of winding-up petition to NCLT w.r.t. matter under IBCode
Bombay HC allows transfer of winding-up petition u/s 434 of the Companies Act, 2013, to the NCLT, in view of the amendment made to Sec.434 w.e.f. June 6, 2018;

Notes that Oriental Bank of Commerce (‘Applicant’) is a consortium leader of 11 banks which have lent Rs.1,100 Cr. to Mittal Corporation Ltd. (‘the Company’), but since the latter failed to repay dues, the Applicant filed a petition u/s 7 of the Insolvency and Bankruptcy Code, 2016 (‘the Code’), seeking initiation of insolvency process, which is still pending; Takes note of Applicant’s contention that if the petition is admitted, moratorium period will start and the Resolution Professional will be appointed, who shall in consultation with the Committee of Creditors, file a report and opine as to whether the Company can be resurrected or has to be liquidated; Upholds Applicant’s contention that under the Code, there is a possibility of the Company being resurrected, whereas under the provisions of the Companies Act, 1956, the only route is to liquidate the Company; Thus concurs with the Applicant that transfer of the petition will cause no prejudice:Bombay HC
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 Transfer of Certain Pending Proceedings.

1["434. (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 appeal to the High Court within sixty days from the date of communication of the decision or order of the Company Law Board to him on any question of law arising out of such order:

Provided that the High Court may if it is satisfied that the appellant was prevented by sufficient cause from filing an appeal within the said period, allow it to be filed within a further period not exceeding sixty days; and

*(c) all proceedings under the Companies Act, 1956 (1 of 1956), including proceedings relating to arbitration, compromise, arrangements and reconstruction and winding up of companies, pending immediately before such date before any District Court or High Court, shall stand transferred to the Tribunal and the Tribunal may proceed to deal with such proceedings from the stage before their transfer:

Provided that only such proceedings relating to the winding up of companies shall be transferred to the Tribunal that are at a stage as may be prescribed by the Central Government.

2[“3[Provided also that] only such proceedings relating to cases other than winding-up, for which orders for allowing or otherwise of the proceedings are not reserved by the High Courts shall be transferred to the Tribunal: Provided further that – (i) all proceedings under the Companies Act, 1956 other than the cases relating to winding up of companies that are reserved for orders for allowing or otherwise such proceedings; or (ii) the proceedings relating to winding up of companies which have not been transferred from the High Courts; shall be dealt with in accordance with provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959”]

4["Provided also that proceedings relating to cases of voluntary winding up of a company where notice of the resolution by advertisement has been given under sub-section (1) of section 485 of the Companies Act, 1956 but the company has not been dissolved before the 1st April, 2017 shall continue to be dealt with in accordance with orovisions of the Comoanies Act. 1956 and the Companies (Court) Rules, 1959."]

 

(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."]

 * Clause (c) of sub-section (1) of section 434 has been notified as on 07/12/2016 and is effective from 15/12/2016. 

 

Amendment

 (a) Substituted by Insolvency and Bankruptcy Code, 2016 Dated 15th November, 2016 - Original Content

    (b) The MCA Notification No. F.O. 3453(E) Dated 15th November, 2016, enforcing the related sections of Insolvency and Bankruptcy Code, 2016.

2. Inserted as per the Order Dated 7th December 2016. 

 3.Substituted by the Companies(Removal of Difficulties) Order, 2017 Dated 29th June, 2017 

In the third proviso for "Provided further that" the following shall be substituted, namely:- "Provided also that"

4. Inserted by Companies(Removal of Difficulties) Order, 2017 Dated 29th June, 2017 .

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