Explore a recent legal case where the Delhi High Court addressed the transfer of winding up proceedings to NCLT in the matter of M/s. Greka Drilling (India) Limited. Learn about the implications of this decision and stay updated for the upcoming proceedings on 09.07.2024.
Facts
- The respondent company, M/s. Greka Drilling (India) Limited, is a Foreign Company engaged in providing drilling services for the oil and gas sector.
- The petitioner supplied goods to the respondent company as per purchase orders and raised invoices totaling US$ 818,496.58.
- Winding up petition filed under Section 433 (e) and (f) read with Sections 434 and 439 of the Companies Act of 1956, seeking payment of outstanding dues of US$ 723,193.03 along with interest.
- Further invoices for delay in payments amounting to US$ 66,957.34 were raised by the petitioner.
- No substantive orders have been passed in the winding up proceedings, with no significant progress made apart from the appointment of a Liquidator.
- The total outstanding dues stand at US$ 199,466.50.
Analysis
- Section 583 of the Companies Act, 1956, allows for the winding up of unregistered companies.
- The circumstances under which an unregistered company may be wound up are specified in sub-clause (4) of Section 583.
- If an unregistered company is unable to pay its debts, winding up proceedings against the company are maintainable.
- Section 582 of the Companies Act, 1956, defines an ‘unregistered company’ for the purposes of winding up proceedings.
- The winding up of a company incorporated outside India can be carried out in various countries where it conducted business.
- Section 434 of the Companies Act, 2013 provides for the transfer of winding up proceedings from High Courts to the NCLT.
- The courts can deal with assets within their jurisdiction and not with assets outside their jurisdiction.
- Branch offices in India are not deemed as branches of an independent unregistered company.
- Winding up proceedings can be transferred to the NCLT if the petition has not been served at a preadmission stage.
- Assets of a company under winding up can be managed by the Company Liquidator post-admission, including selling the company as a going concern.
- Creditors and contributories of a company incorporated outside India have similar rights in winding up proceedings as those in India.
- Even an unregistered company can be subject to winding up under Part-II of the Companies Act, 2013.
- Proceedings under the Companies Act, 1956 not related to winding up are to be dealt with under the old Act rules.
- The Company Court must proceed with winding up if proceedings have reached an irreversible stage.
- Ancillary winding up in a country other than where the company was incorporated is common practice.
- The Calcutta High Court shared a similar view in Deutsche Dampshiffshrts Gessellschaft ‘Hansa’ Bremen v. Bharat Aluminium Co. Ltd.
- Reference was made to the Supreme Court decision in Rajah of Vizianagram v. Official Receiver and Official Liquidator to discuss Sections 270 and 271 of the Companies Act, 1930.
- The determination of whether a stage for winding up is reached depends on the specific facts and circumstances of each case.
- The Supreme Court’s decision in Action Ispat was cited in the Citicorp International Limited v. Shiv-Vani Oil & Gas Exploration Services Limited case by this court.
Decision
- Winding up proceedings pending before High Courts at a nascent stage should be transferred to the NCLT.
- The present company petition has not reached an advanced stage with no substantive orders passed for winding up.
- Therefore, the present winding up proceedings are transferred to the NCLT.
- Parties are directed to appear before the NCLT on 09.07.2024.
- Electronic records of the Court will be transmitted to the NCLT.
Case Title: ARABIAN OILFIELD SUPPLIERS & SERVICES Vs. GREKA DRILLING (INDIA) LIMITED (2024:DHC:4012)
Case Number: CO.PET.-88/2016
