# In the matter of Action Ispat & Power Pvt. Ltd. Vs. Shyam Metallics & Energy Limited & Ors. Co. App 11-2019 & C.M. No. 31047-2019, C.M. No. 34726-2019

> HC judgment dated 2019-10-10. Citation: TCN-2019-HC-00009. The case involves an appeal against an order passed by the Company Judge, who allowed an…

- **Court:** HC
- **Order date:** 10 Oct 2019
- **Citation:** TCN-2019-HC-00009
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-chandigarh-bench/action-ispat-power-pvt-ltd-vs-shyam-metallics-energy-limited-ors-co-app-11-2019-f86a8f63

## Summary

### Background

The case involves an appeal against an order passed by the Company Judge, who allowed an application by SBI (Respondent No. 2) to transfer a winding-up petition against Action Ispat & Power Pvt. Ltd. (Appellant) to the National Company Law Tribunal (NCLT). The Company Judge also revoked an earlier order admitting the winding-up petition and appointing an Official Liquidator (OL). The winding-up petition was initially filed by Shyam Metalics & Energy Ltd. (Respondent No. 1) due to the appellant's inability to pay its debts. SBI, a secured creditor, then initiated Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code (IBC) before the NCLT, leading to the application for transfer.

## Facts

Shyam Metalics & Energy Ltd. filed a winding-up petition against Action Ispat & Power Pvt. Ltd. under Sections 433(e) and 433(f) of the Companies Act, 1956, citing the latter's inability to pay debts. Notice of the petition was served on Action Ispat on 2016-08-22. The matter was adjourned to 2016-11-07, and attempts were made to settle the issue through mediation, which failed on 2018-02-26. On 2018-08-27, the winding-up petition was admitted, and an Official Liquidator (OL) was appointed to take over the assets and records of Action Ispat. Prior to this winding up order, the Insolvency and Bankruptcy Code (IBC) was notified on 2016-12-01. SBI, a secured creditor of Action Ispat, filed an application under Section 7 of the IBC before the NCLT, seeking

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## Issues and analysis

### Issue 1: Whether the Company Judge had the power to transfer the winding-up proceedings to the NCLT after a …

**Ratio:** Section 434(1)(c) of the Companies Act, 2013, as amended, and the fifth proviso to that

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**Reasoning:** The court reasoned that the power to transfer is discretionary and not limited to cases

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**Interpretation:** The court interpreted Section 434(1)(c) and related rules to mean that the

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**Application:** The court applied this interpretation to the facts of the case, noting that the

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## Parties

- **Judges:** VIPIN S…; Sanjeev N…
- **Respondents:** Action Ispat and…; Shyam Metalics…
- **Advocates:** Maneesha…; Varsha Ba…; +10 more

## Timeline

- **2016-08-22 — Notice of Winding Up…**: Notice of the winding-up petition filed by Shyam Metalics & Energy Ltd. was served on…
- **2016-11-07 — Adjournment o…**: The winding-up petition…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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