M/S Sphinx Security Services Pvr. Ltd v. Haryana City Gas Distribution Ltd
$~C14 * IN THE HIGH COURT OF DELHI AT NEW DELHI + CO.PET. 478/2014 & CO.APPL. 1693/2014 M/S SPHINX SECURITY SERVICES PVT. LTD ..... Petitioner Through:
Mr. Manish Srivastav and Mr.
Rahul Gupta, Advocates.
versus HARYANA CITY GAS DISTRIBUTION LTD ..... Respondent Through:
Ms. Shalini Nair, Advocate.
CORAM:
HON'BLE MR. JUSTICE DHARMESH SHARMA
O R D E R
% 15.02.2024 1.
This petition has been instituted under Section 433(e), 434 and 439 of the Companies Act, 1956 seeking winding up of the respondent company - Haryana City Gas Distribution Ltd., on the ground that the respondent company has failed to pay its outstanding dues amounting to Rs. 14,41,162/-.
2.
Briefly stated, the petitioner company is engaged in the business of providing various security related services and entered into several agreements dated 27.08.2012, 08.11.2022 and 15.03.2013, for providing man power and security to the respondent company. It is stated that the respondent company made timely payments till February 2013 and thereafter stopped making payments. Despite repeated reminders, the respondent company failed/neglected to make payments for the services provided by the petitioner company and an The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.
amount of Rs. 14,41,162/- is outstanding against the respondent company. Thus, the petitioner was constrained to serve a legal notice dated 15.10.2013 to the respondent calling upon them to make payment of the outstanding dues, along with interest @ 12% per annum from the date the amount became due till realization. 3.
Evidently, the respondent company has failed to pay its debt in the normal and ordinary course of its business, hence, the present petition has been filed. However, from a perusal of the record, it appears that neither a Provisional Liquidator nor an Official Liquidator has been appointed in the present petition and as such, this winding up petition has been a non-starter.
4.
It is apposite to note that during the pendency of these proceedings, the Insolvency and Bankruptcy Code, 2016 as well as the Companies Act, 2013, have since been enacted. In view of this, it is the opinion of the court that the present petition does not deserve to continue before the court, and it would be appropriate for the same to be transferred to the National Company Law Tribunal4. In this regard, it is relevant to consider Section 434 of the Companies Act, 2013 which provides for the transfer of proceedings relating to winding up, pending before High Courts, to the NCLT, and reads as under: "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 4 NCLT The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.
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 (b)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.
Provided further 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 also 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.]
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 subsection (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 provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959."
5.
It is also expedient to consider the decision of the Supreme Court in the case titled Action Ispat and Power Private Limited v. Shyam Metalics and Energy Limited5 the relevant extract of which is reproduced hereunder:
"22. 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, 5 (2021) 2 SCC 641 The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.
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 preadmission stage, given the beneficial result of the application of the Code, such winding up proceeding is compulsorily transferable to the 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 the 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." 6.
The above noted decision of the Supreme Court has been relied upon by this court in Citicorp International Limited v. Shiv-Vani Oil & Gas Exploration Services Limited6 wherein it was held that winding up proceedings pending before High Courts, which are at a nascent stage and have not progressed to an advanced stage, ought to be transferred to the NCLT. In view of the above, the present company petition as well as pending applications, if any, are disposed of.
7.
Hence, the instant petition is transferred to the NCLT. Parties to appear before the NCLT on 01.04.2024. The interim orders passed by this Court in these petitions, if any, shall continue till the said date. 8.
It is left to the NCLT to consider the matter and pass appropriate orders in accordance with law.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.
9.
The electronic record of the instant petitions be transmitted to the NCLT within a period of one week by the Registry. List before the NCLT on 01.04.2024.
DHARMESH SHARMA, J.
FEBRUARY 15, 2024/sm 6 CO.PET. 446/2013 The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.