The Delhi High Court has made it clear that once a final winding up order has been passed against a Company and the Official Liquidator has taken charge, the Company Court is not required to come to the aid of guarantors so as to shield them from recovery proceedings initiated by creditors.
A division bench of Justices Anil Kshetarpal and Harish Vaidyanathan Shankar observed,
“The purpose of the Company Court under the Companies Act, 1956, is limited and well-defined. Its jurisdiction is to supervise the winding up of a company, ensure the realisation of its assets, adjudicate claims of creditors, and oversee the distribution of proceeds. The Company Court is not a forum for shielding guarantors from recovery proceedings once the…