Supreme Court: In an appeal arising out of Calcutta High Court’s judgment dated 11 May 2026, wherein Company Court’s order transferring pending winding-up proceedings concerning Martina Bio Genics Pvt. Ltd. (in liquidation) from High Court to the National Company Law Tribunal, Kolkata Bench (NCLT) was upheld, the Division Bench of S.V.N. Bhatti and Atul S. Chandurkar, JJ., issue noticed to the respondents.
Also Read: Winding Up v. The Insolvency and Bankruptcy Code, 2016
Factual Matrix
The appeals arose out of proceedings relating to a company in liquidation, namely, Martina Bio Genics Pvt. Ltd. A winding-up order had been passed against the company on 21 November 2016. Consequent upon the winding-up order, the respondent-Official Liquidator was directed to take possession of all assets, properties, books, records and documents of the company. For safeguarding and preserving the assets of the company in liquidation, the Official Liquidator engaged appellant, Shiva Shakti Security Services, as a security agency. The appellant accordingly deployed security personnel and continuously rendered services for protection and preservation of the company’s assets.
According to the appellant, bills were regularly raised and submitted to the Official Liquidator for the services rendered. However, despite the continued discharge of duties, the bills remained unpaid. The appellant asserted that it was still continuing to protect the assets of the company in liquidation. The Official Liquidator did not dispute the rendering of services but contended that payment could not be released because the secured creditor had not reimbursed the necessary amounts.
While the winding-up proceedings were pending before the High Court, Section 434, Companies Act, 2013 (Companies Act) came into operation, giving rise to issues concerning transfer of pending winding-up proceedings to the NCLT. The Company Court transferred the winding-up proceedings and connected applications to the NCLT.
The appellant, apprehending that its claim for unpaid security charges would be jeopardised after transfer, challenged the transferring orders before the High Court.
High Court’s Judgment
The High Court examined the Supreme Court’s observations in Action Ispat and Power (P) Ltd. v. Shyam Metalics and Energy Ltd., (2021) 2 SCC 641, explaining the evolution of the transfer mechanism under Section 434, Companies Act and the Transfer Rules, 2016. The Supreme Court had recognised that even after admission of a winding-up petition and appointment of a Company Liquidator, discretion remained vested in the Company Court to transfer the proceedings to the NCLT. The transfer should ordinarily occur so long as no irreversible event had taken place. The decisive consideration was whether the winding-up process had progressed to a point where “it would be impossible to set the clock back”. The Supreme Court had specifically indicated that until actual sale of movable or immovable assets had occurred, nothing irreversible had ordinarily been done.
The High Court further noted that the Supreme Court in A. Navinchandra Steels (P) Ltd. v. SREI Equipment Finance Ltd., (2021) 4 SCC 435, reaffirmed the same principle and held that transfer of pending winding-up proceedings depends upon the test of irreversible or irretrievable acts or whether the company had reached a stage of “near corporate death”.
Applying these principles, the High Court found that no material had been brought before it demonstrating the occurrence of any irreversible or irretrievable act in relation to the company or the winding-up proceedings. No sale of assets or comparable irreversible step had been shown. Consequently, the statutory and judicially recognised grounds for refusing transfer were absent.
The Court also held that Section 529, Companies Act, 1956 did not assist the appellant. The appellant remained free to pursue and establish its claim before the NCLT. The mere pendency of the appellant’s claim or the fact of non-payment could not convert the winding-up proceedings into an irreversible stage warranting retention of jurisdiction by the Company Court.
Consequently, the High Court held that, since no irreversible or irretrievable stage had been reached and the appellant’s unpaid claim could still be pursued before the NCLT, interference was unwarranted. Accordingly, both appeals were dismissed along with all connected applications.
Supreme Court’s Decision
Aggrieved, the petitioner challenged the High Court judgment before the Supreme Court. The Supreme Court issued notice to the respondents, returnable on 14 July 2026, and permitted service through personal notice in addition to regular service.
[Shiva Shakti Security Services v. Official Liquidator, Special Leave to Appeal (C) No(s). 21527-21528/2026, decided on 16-6-2026]
Advocates who appeared in this case:
Mr. Swarnendu Chatterjee, AOR with Ms. Urmila Chakraborty, Mr. Arindam Pal, Ms. Debarati Das, and Ms. Deepakshi Garg, Advs., Counsel for the Petitioner
