Trigo Imagement Slovakia Vs Madhusudan Auto Limited (Delhi High Court)
In a recent ruling, the Delhi High Court transferred a winding-up petition, filed by Trigo Imagement Slovakia against Madhusudan Auto Limited, to the National Company Law Tribunal (NCLT). The decision follows a trend of judicial deference to the NCLT for such matters, particularly in cases that are still in a preliminary stage.
The petition, filed under Section 433(1)(e) of the Companies Act, 1956, had been pending before the High Court but had not progressed to an advanced stage. The court noted that no substantive orders had been passed, and a liquidator had not been appointed. Both the petitioner and the respondent agreed that the matter should be transferred to the NCLT for adjudication, in line with established legal principles.
The court’s decision is based on a Supreme Court judgment in Action Ispat and Power Pvt. Ltd. vs. Shyam Metalics and Energy Limited (2021). This landmark ruling clarified the procedural framework for transferring winding-up petitions from High Courts to the NCLT. The Supreme Court held that petitions that have not reached an “advanced stage” should be transferred to the NCLT.
Crucially, the Supreme Court’s judgment grants the Company Court discretion to transfer a petition to the NCLT even after a liquidator has been appointed. However, this discretion is to be exercised cautiously. The court’s ruling specified that a transfer should not occur if the winding-up proceedings have reached an “irreversible” stage, such as after the sale of a company’s assets. As long as no irreversible steps have been taken, the transfer to NCLT is a viable option. The court’s rationale is to promote the resolution of insolvency matters under the Insolvency and Bankruptcy Code (IBC), which is administered by the NCLT.
