The Companies Act, 2013
Sections 212, 219
The Constitution of India
Article 226
It is well settled that while laying down a particular procedure if no negative or adverse consequences are contemplated for non-adherence to such procedure, the relevant provision is normally not taken to be mandatory and is considered to be purely directory. This Court in Neeharika Infrastructure Pvt. Ltd. Vs State of Maharashtra and Others cautioned the High Courts against passing blanket interim orders directing no coercive steps to be taken by the investigating authorities as that might hamper the investigation at an early stage. Having due regard to the material which has been placed on record, it cannot be said that the Union Government had not indicated reasons for the exercise of its jurisdiction under Section 212 and Section 219. At this stage, the Union Government was only ordering an investigation and it would be inappropriate to place a burden of recording elaborate reasons when the purpose of the investigation is to ensure that a full enquiry into the affairs of the companies is carried out. The third reason which weighed with the High Court is hence specious. Supreme Court is of the view that the High Court was not justified in staying the investigation and in passing the consequential directions which have been passed in the impugned orders at the interlocutory stage. .....Serious Fraud Investigation Office =VS= Sahara Housing Investment Corporation Ltd. , (Civil), 2022(1) [12 LM (SC) 1] ....View Full Judgment

The Companies Act, 2013
Section 434 r/w
The Insolvency & Bankruptcy Code, 2016
Section 9
Transfer the winding up proceeding–
A winding up petition, being No. 42 of 2014, was filed by the present appellant before the High Court of Delhi on 10.01.2014, against Respondent No. 2-Company, alleging (under Section 433(e) of the Companies Act) inability to pay dues. Notice in this petition had been served, as is recorded by an order dated 20.01.2014 of the High Court of Delhi.
Further orders which have been pointed out to us by learned counsel for the appellant, have gone on to state that there is a debt or liability which is, in fact, admitted.
Respondent No. 1, being a financial creditor of the selfsame corporate debtor, moved the National Company Law Tribunal (NCLT) in an insolvency petition filed under Section 7 of the Code sometime in May/June 2017. This petition was admitted on 07.08.2017. Against the aforesaid order, an appeal was filed by the appellant herein which was dismissed by the Appellate Tribunal, in which Section 11 of the Code was referred to, and it was held by the Appellate Tribunal that since there was no winding up order by the High Court, the financial creditor’s petition would be maintainable, as a result of which the appellant’s appeal has been dismissed.
This Section is of limited application and only bars a corporate debtor from initiating a petition under Section 10 of the Code in respect of whom a liquidation order has been made. From a reading of this Section, it does not follow that until a liquidation order has been made against the corporate debtor, an Insolvency Petition may be filed under Section 7 or Section 9 as the case may be, as has been held by the Appellate Tribunal. Hence, any reference to Section 11 in the context of the problem before us is wholly irrelevant. However, we decline to interfere with the ultimate order passed by the Appellate Tribunal because it is clear that the financial creditor’s application which has been admitted by the Tribunal is clearly an independent proceeding which must be decided in accordance with the provisions of the Code.
We are not interfering with the Appellate Tribunal’s order dismissing the appeal, we grant liberty to the appellant before us to apply under the proviso to Section 434 of the Companies Act (added in 2018), to transfer the winding up proceeding pending before the High Court of Delhi to the NCLT, which can then be treated as a proceeding under Section 9 of the Code. ...Forech India Ltd. =VS= Edelweiss Assets Recons. Co. Ltd., (Civil), 2019 (1) [6 LM (SC) 11] ....View Full Judgment