NCLT Asks IBBI To Incorporate Provisions In CIRP Regulations For Treating Transferred Winding-Up Cases

The National Company Law Tribunal (NCLT) Principle Bench of Ramalingam Sudhakar (President) and Avinash K. Srivastava (Technical Member) has asked the Insolvency and Bankruptcy Board of India (IBBI) to amend the Corporate Insolvency Resolution Process (CIRP) regulations.

This directive was issued by NCLT to address the handling of cases involving the winding up of companies that have been transferred to the NCLT under Section 433(1) of the Companies Act, 2013.

The NCLT stated that these cases should be treated as applications for the initiation of CIRP under the Insolvency and Bankruptcy Code (IBC), 2016.

The bench stated:

“For the purpose, the Regulations may stipulate that the applicant shall file appropriate Forms i.e. Form– 1 in the case of Financial Creditor under Section 7 of the IBC, 2016, Form – 5 in the case of Operational Creditor under Section 9 of the IBC, 2016 and Form – 6 in the case of Corporate Applicant under Section 10 as prescribed in the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016.”

Section 433(1) of the Companies Act, 2013, pertains to the transfer of certain winding-up proceedings to the NCLT. This section is actually an adaptation from the older Companies Act, 1956, which dealt with the circumstances under which a company could be wound up by the court. Section 433(1) states the transfer of certain winding-up proceedings that were previously handled by High Courts or other courts under the Companies Act, 1956, to the NCLT, which is now the designated adjudicating authority for such matters under the Companies Act, 2013.

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