# In the matter of Kaledonia Jute and Fibres Pvt. Ltd. Vs. Axis Nirman and Industries Ltd. & Ors. Civil Appeal No. 3735 of 2020

> SC judgment dated 2020-11-19. Citation: TCN-2020-SC-00010. The case involves an appeal against an order by the Company Court (High Court of Allahabad)…

- **Court:** SC
- **Order date:** 19 Nov 2020
- **Citation:** TCN-2020-SC-00010
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/kaledonia-jute-and-fibres-pvt-ltd-vs-axis-nirman-and-industries-ltd-ors-civil-ap-02dbf143

## Summary

### Background

The case involves an appeal against an order by the Company Court (High Court of Allahabad) refusing to transfer a winding-up petition to the National Company Law Tribunal (NCLT). A financial creditor, M/S Kaledonia Jute and Fibres Pvt. Ltd., filed this appeal. The winding-up petition was originally filed in 2015 before the High Court of Allahabad under Section 433 of the Companies Act, 1956, due to the inability of M/S Axis Nirman and Industries Ltd. to pay its debts. The Company Court ordered notice, but the respondent failed to appear. Subsequently, the Company Court admitted the petition and directed publication. The Company Court later directed the winding up of the respondent company in 2016. The respondent then applied for recalling the winding-up order and paid

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## Facts

M/S Kaledonia Jute and Fibres Pvt. Ltd. (the appellant) is a financial creditor of M/S Axis Nirman and Industries Ltd. (the first respondent). In 2015, a petition was filed in the High Court of Allahabad for winding up the first respondent under Section 433 of the Companies Act, 1956, due to its inability to pay debts. The Company Court ordered notice, but the first respondent failed to appear. The Company Court admitted the petition and directed publication. On 10.03.2016, the Company Court directed the winding up of the first respondent. The first respondent applied for recalling the winding-up order and paid the petitioning creditor. The official liquidator opposed the recall, citing outstanding debts to other creditors amounting to Rs.27 Crores. The Company Court

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## Issues and analysis

### Issue 1: Whether a winding up proceeding pending on the file of a High court could be transferred to the …

**Ratio:** Section 434 of the Companies Act, 2013, as amended by the IBC, 2016, and the Companies

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**Reasoning:** The court analyzed the legislative history and the various provisos of Section 434. It

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**Interpretation:** The court interpreted Section 434 to mean that winding-up proceedings can be

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**Application:** The court applied this ratio to the present case, stating that the winding-up

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## Parties

- **Judges:** V. RAMASUBR…; S. A. B…; +1 more
- **Appellants:** M/S KALEDONIA…
- **Respondents:** M/S AXIS NIRMAN…
- **Advocates:** Huzefa A…; A.N.S. Na…; +1 more

## Timeline

- **2015-01-01 — Filing of Winding Up…**: M/s Girdhar Trading Co. filed a petition in Company Petition No.24 of 2015 before the…
- **2016-01-08 — Admission of Company…**: The Company Court ordered the admission of the Company Petition and also directed…

## 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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