Companies (Transfer of Pending Proceedings) Rules, 2016




The Ministry of Corporate Affairs vide notification dated 7 December 2016 has  notified the Companies (Transfer of Pending Proceedings) Rules, 2016. A brief summary of these Rules are provided below:

Sl. No.
Particulars
Explanation
Effective Date
1
Transfer of pending proceedings relating to cases other than winding up
All proceedings under the Companies Act, 1956 (“CA 1956”) including proceedings relating to arbitration, compromise, arrangements and reconstruction, shall stand transferred to the Benches of the National Company Law Tribunal (NCLT) exercising respective territorial jurisdiction.

However, proceedings which are reserved for order shall not be transferred to NCLT.

15 December 2016
2
Pending proceeding relating to voluntary winding up
All applications and petitions relating to voluntary winding up of companies under CA 1956 pending before a High Court on the date of commencement of this rule, shall continue with and dealt with by the High Court till 1 April 2017 and by the NCLT post 1 April 2017.

1 April 2017
3
Transfer of pending proceedings of winding up on the ground of inability to pay debts
Where the petition has not been served on to the Respondent under Rule 26 of the Companies (Court) Rules, 1959

Petitions relating to winding up under clause (e) of section 433 (if the company is unable to pay debts) of the CA 1956 pending before a High Court shall stand transferred to the Benches of the NCLT exercising respective territorial jurisdiction and such petitions shall be treated as applications under sections 7, 8 or 9 of the Insolvency and Bankruptcy Code, 2016 (“I&B Code”).

Further petitioner shall also submit information forming part of the records transferred, required for admission of the petition under sections 7, 8 or 9 of the I&B Code including details of the proposed insolvency professional to the NCLT within sixty days from date of this notification (7th December 2016), failing which the petition shall abate.

Where Board for Industrial and Financial Reconstruction (BIFR) has forwarded an opinion for Winding Up of company under Section 20 of the Sick Industrial Companies (Special Provisions) Act, 1985 to High Court and where no appeal is pending, the same shall be dealt by High Court and will not be transferred to NCLT.

15 December 2016
4
Transfer of pending proceedings of winding up matters on the grounds other than inability to pay debts
Where the petition has not been served on to the Respondent under Rule 26 of the Companies (Court) Rules, 1959

All petitions filed under clauses (a) and (f) of section 433 of the CA 1956 pending before a High Court, shall be transferred to the Bench of the Tribunal exercising territorial jurisdiction and such petitions shall be treated as petitions under the provisions of the CA 2013.

15 December 2016
5
Transfer of Records
Relevant records pursuant to the transfer of cases shall also be transferred by the respective High Courts to the National Company Law Tribunal Benches having jurisdiction forthwith over the cases so transferred.

15 December 2016
6
Fees not to be paid
Notwithstanding anything contained in the National Company Law Tribunal Rules, 2016, no fee shall be payable in respect of any proceedings transferred to the Tribunal in accordance with these rules.

15 December 2016
7
Companies (Removal of Difficulties) Fourth Order, 2016
The Ministry of Corporate Affairs vide Companies (Removal of Difficulties) Fourth Order, 2016 has inserted a second proviso in Section 434 (1) (c) of the CA 2013 to provide the following:

·         Proceedings relating to cases other than winding up shall be transferred to Tribunal;
·         Proceedings relating to the cases other than winding up that are reserved for orders shall be dealt in accordance with provisions of the CA 1956 by High Court;
·         Proceedings related to winding up of companies which have not been transferred from High Court shall be dealt in accordance with provisions of the CA 1956 and Companies (Court) Rules, 1959

Thus, through this Order, a new proviso is inserted to clarify the difficulties arising with the cases which are to be dealt by High Court.
15 December 2016

To read the rule, please click the below links:
Companies (Transfer of Pending Proceedings) Rules, 2016 Companies (Transfer of Pending Proceedings) Rules, 2016 Reviewed by Adarsh Madrecha on 18:54:00 Rating: 5

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