# In the matter of Jaipur Metals & Electricals Employees Organisation Vs. Jaipur Metals & Electricals Ltd. Civil Appeal No. 12023-2018

> SC judgment dated 2018-12-12. Citation: TCN-2018-SC-00003. The case involves an appeal against a High Court judgment regarding the transfer of winding-up…

- **Court:** SC
- **Order date:** 12 Dec 2018
- **Citation:** TCN-2018-SC-00003
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/jaipur-metals-electricals-employees-organisation-vs-jaipur-metals-electricals-lt-873d3643

## Summary

### Background

The case involves an appeal against a High Court judgment regarding the transfer of winding-up proceedings to the National Company Law Tribunal (NCLT). The High Court had refused to transfer the winding-up proceedings and set aside an NCLT order that had admitted a financial creditor's petition under Section 7 of the Insolvency and Bankruptcy Code (IBC). The case has a complex history, including a reference to the Board for Industrial and Financial Reconstruction (BIFR) and subsequent winding-up proceedings initiated in the High Court. A Section 7 application was filed before the NCLT, which was admitted, leading to a stay by the High Court and the present appeal.

## Facts

Jaipur Metals & Electricals Employees Organization, through its General Secretary Mr. Tej Ram Meena, filed an appeal challenging a judgment by the High Court of Judicature for Rajasthan dated 01.06.2018. The High Court had refused to transfer winding-up proceedings pending before it to the National Company Law Tribunal (NCLT) and had set aside an order dated 13.04.2018, by which the NCLT had admitted a financial creditor's petition under Section 7 of the Insolvency and Bankruptcy Code, 2016. The account of Jaipur Metals & Electricals Ltd. (Respondent No. 1) had become a non-performing asset on 30.09.1997, leading to a reference to the Board for Industrial and Financial Reconstruction (BIFR). On 26.09.2002, the BIFR opined that the company ought to be wound up,

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## Issues and analysis

### Issue 1: Whether the High Court was correct in refusing to …

**Ratio:** Section 434 of the Companies Act, 2013, as amended by the Eleventh Schedule of the

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**Reasoning:** The Supreme Court reasoned that under Section 434 and Rule 5, all proceedings under

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**Interpretation:** The interpretation of Section 434 and Rule 5 clarifies the process for

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**Application:** The ratio and reasoning were applied to the specific facts of the case, leading

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## Parties

- **Judges:** ROHINTON FALI…; M.R.…
- **Appellants:** Jaipur Metals &…
- **Respondents:** Jaipur Metals &…
- **Other parties:** Affir…

## Timeline

- **1997-09-30 — Account Beco…**: The account of Jaipur Metals &…
- **2002-09-26 — BIFR Opi…**: The BIFR was of the prima facie opinion…

## 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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