1. Facts of the Case
Martina Boi Genics Pvt. Ltd. was ordered to be wound up in November 2016.
The Official Liquidator was appointed to take possession of the company assets, books
and records.
The Official Liquidator appointed Shiva Shakti Security Services to provide security
guards for protecting the company's assets.
Shiva Shakti provided the security services but its bills were not paid.
The Official Liquidator said that the secured creditor had not paid the expenses, so Shiva
Shakti's bills remained unpaid.
2. What happened next?
While the winding-up case was pending before the High Court, Section 434 of the Companies
Act, 2013 came into effect. Under this provision, pending winding-up proceedings could be transferred to NCLT. The Company Court therefore ordered that the winding-up proceedings be transferred to NCLT, Kolkata.
3. Why did Shiva Shakti object?
Shiva Shakti said: Our bills are already pending and have not been paid. If the case is transferred to NCLT, our claim may be affected. They therefore argued that their expenses should be paid before transferring the case to NCLT.
4. Issue Before the Court
The main question was:
Can a winding-up case be transferred from the High Court to NCLT even after a winding-up
order has been passed and the Official Liquidator has been appointed?
And:
Does an unpaid claim of the security agency prevent such transfer?
5. Court's Decision
The Calcutta High Court said YES, the case can be transferred to NCLT.
The Court explained that even after:
admission of the winding-up petition,
passing of the winding-up order, and
appointment of the Official Liquidator,
the Company Court can still transfer the matter to NCLT.
But there is one important condition:
If the winding-up process has reached an irreversible/irretrievable stage, then it should not be transferred.
For example, if the company's assets have already been sold it is practically impossible to go back to the earlier stage.
6. What about Shiva Shakti's unpaid money?
The Court said:
Unpaid bills do NOT make the winding-up process irreversible.
Therefore, Shiva Shakti can make its claim before NCLT.
Its pending payment was not a sufficient reason to stop the transfer.
7. Final Order
The High Court found no error in the Company Court's decision to transfer the winding-up
proceedings to NCLT.
Therefore, the appeals filed by Shiva Shakti were dismissed
8. Important Learning
The most important point is:
A pending winding-up case can be transferred to NCLT unless the proceedings have reached
an irreversible or irretrievable stage.
Mere non-payment of the Official Liquidator's expenses or pending claims does not prevent
transfer to NCLT.