Pending Company Winding-Up Cases Before HC Transferable To NCLT Unless At Irreversible Stage: Calcutta HC

The Calcutta High Court has held that pending company winding-up petitions before High Courts can be transferred to the National Company Law Tribunal even after admission, a winding-up order, and appointment of an Official Liquidator, so long as the proceedings have not reached an irreversible stage.

Relying on Supreme Court rulings on transfer of winding-up proceedings, a Division Bench of Justice Debangsu Basak and Justice Shabbar Rashidi observed:

“Post admission of a winding up petition, post order of winding up, as also post appointment of the official liquidator, a Company Court, retains the discretion to transfer a winding up petition to the NCLT.”

The Court added:

“As long as sale of the immovable or movable properties of the company liquidation did not take place and nothing irreversible was done which would warrant a Company Court staying his hands on an application for transfer, a winding up petition ought to be transferred to the NCLT. A winding up petition need not be transferred by the Company Court where, the winding up proceedings reached a stage making impossible to set the clock back.”

The case arose from winding-up proceedings concerning Martina Boi Genics Pvt Ltd, which was ordered to be wound up in 2016. The Official Liquidator was directed to take possession of the company's assets and appointed Shiva Shakti Security Services to protect and preserve them.

Shiva Shakti challenged orders transferring the winding-up proceedings to the NCLT, arguing that its unpaid dues for security services ought to be cleared first and that its claim could be pursued before the Company Court.

Rejecting the contention, the High Court held that pendency or alleged non-payment of the appellant's claim did not amount to an irreversible stage that would justify halting transfer.

“Section 529 of the Companies Act, 1956 does not assist the appellant. Appellant can make its claim before the NCLT. Pendency of the claim of the appellant, or its alleged non-payment does not qualify to hold that, the company petition attend a irreversible stage warranting the Company Court not to transfer the winding up petition to the NCLT.”

The court dismissed both appeals.