Delhi High Court
M/S Trigo Imagement Slovakia vs Madhusudan Auto Limited on 10 July, 2025
$~CO.5
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 10.07.2025
+ CO.PET. 725/2014
M/S TRIGO IMAGEMENT SLOVAKIA .....Petitioner
Through: Mr. Viraat Tripathi, Adv.
versus
MADHUSUDAN AUTO LIMITED .....Respondent
Through: Mr. Pradeep Aggarwal, Mr. Aman
Kumar, Advs.
CORAM:
HON'BLE MS. JUSTICE TARA VITASTA GANJU
TARA VITASTA GANJU, J.: (Oral)
1. The present Petition has been filed under Section 433(1)(e) of the
Companies Act, 1956 for winding up of the Respondent Company.
2. Learned Counsel for the Respondent submits that in terms of the
judgment of the Supreme Court in Action Ispat and Power Pvt. Ltd. vs
Shyam Metalics and Energy Limited1 and Notification G.S.R. 1119(E)
dated 07.12.2016 issued by the Ministry of Corporate Affairs, the matter is
to be transferred to the National Company Law Tribunal for adjudication.
3. Learned Counsel for the Petitioner concurs with this contention.
4. A review of the record shows that the winding up petition although
pending for some time before this Court is at a preliminary stage. The
petition has not been admitted and thus the Professional Liquidator or
Official Liquidator has not been appointed. In fact, no substantive orders
have been passed in this petition for several years.
(2021) 2 SCC 641
5. 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 National Company Law Tribunal. 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. The relevant extract
of the Action Ispat case is set out below:
"14. What becomes clear upon a reading of the three judgments of this
Court is the following:
14.1. So far as transfer of winding-up proceedings is concerned, the
Code began tentatively by leaving proceedings relating to winding up of
companies to be transferred to NCLT at a stage as may be prescribed by
the Central Government.
14.2. This was done by the Transfer Rules, 2016 (supra) which came into
force with effect from 15-12-2016. Rules 5 and 6 referred to three types
of proceedings. Only those proceedings which are at the stage of pre-
service of notice of the winding-up petition stand compulsorily
transferred to NCLT.
14.3. The result therefore was that post notice and pre-admission of
winding-up petitions, parallel proceedings would continue under both
statutes, leading to a most unsatisfactory state of affairs. This led to the
introduction of the 5th proviso to Section 434(1)(c) which, as has been
correctly pointed out in Kaledonia [Kaledonia Jute & Fibres (P)
Ltd. v. Axis Nirman & Industries Ltd., (2021) 2 SCC 403], is not
restricted to any particular stage of a winding-up proceeding.
14.4. Therefore, what follows as a matter of law is that even post
admission of a winding-up petition, and after the appointment of a
Company Liquidator to take over the assets of a company sought to be
wound up, discretion is vested in the Company Court to transfer such
petition to NCLT. The question that arises before us in this case is how is
such discretion to be exercised?
xxx xxx xxx
25. Given the aforesaid scheme of winding up under Chapter XX of the
Companies Act, 2013, it is clear that several stages are contemplated,
with the Tribunal retaining the power to control the proceedings in a
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
irreversible, making it impossible to set the clock back that the Company
Court must proceed with the winding up, instead of transferring the
proceedings to NCLT to now be decided in accordance with the
provisions of the Code. Whether this stage is reached would depend upon
the facts and circumstances of each case."
[Emphasis supplied]
6. Accordingly, the Petition is transferred to the National Company Law
Tribunal. The Petitioner is at liberty to take appropriate steps in accordance
with law for further proceedings before the National Company Law
Tribunal.
7. The Petition is disposed of in the afregoing terms.
8. The parties shall act based on the digitally signed copy of the order.
TARA VITASTA GANJU, J
JULY 10, 2025/jn/r
