Abhijeet Projects Ltd. Vs Yogesh Khanna (Calcutta High Court)
The Calcutta High Court considered a batch of appeals involving a common legal issue: whether a Company Court can transfer a winding-up proceeding to the National Company Law Tribunal (NCLT) on its own motion or whether such transfer can only be made upon an application by a party. The appellants contended that the last proviso to Section 434(1)(c) of the Companies Act, 2013, read with the Companies (Transfer of Pending Proceedings) Rules, 2016, permits transfer only upon an application by a party and does not authorize a suo motu transfer by the Company Court. They argued that the Company Court retains jurisdiction over pending winding-up proceedings and that the Supreme Court decisions relied upon by the Single Judge involved cases where transfer applications and parallel insolvency proceedings were already pending.
The secured creditor supporting the transfer submitted that the Company Court retains discretion to transfer pending winding-up proceedings where no irreversible stage has been reached and that the object of the Companies Act and the Insolvency and Bankruptcy Code (IBC) is to facilitate revival of financially distressed companies while avoiding parallel proceedings. It argued that filing a transfer application is merely procedural where the Court otherwise has discretion to transfer the matter.
