SHIVA SHAKTI SECURITY SERVICES vs OFFICIAL LIQUIDATOR

OD-4 & 6
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
ORIGINAL SIDE


APOT/79/2026
IA NO: ACO/1/2026

SHIVA SHAKTI SECURITY SERVICES
VS
OFFICIAL LIQUIDATOR

AND

APOT/316/2023
WITH CP/49/2016
IA NO: ACO/1/2024

SHIVA SHAKTI SECURITY SERVICES
VS
OFFICIAL LIQUIDATOR

BEFORE:
The Hon’ble JUSTICE DEBANGSU BASAK
-AND-
The Hon’ble JUSTICE MD. SHABBAR RASHIDI


For the Appellant : Mr. Surajit Nath Mitra, Sr. Adv.
Ms. Nilanjana Adhya, Adv. (VC)
Mr. Arindam Paul, Adv.
Ms. Debarati Das, Adv.
Ms. Sohini Choudhury, Adv.
Mr. Sujato P. Ghosh, Adv.
Ms. Eshika Nandy, Adv.

For the Official
Liquidator : Mr. Ranajit Chowdhury, Adv.
Mr. Sudipto Chowdhury, Adv.
Ms. Sampoorna Saha, Adv.

HEARD ON : 11.05.2026
DELIVERED ON : 11.05.2026

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DEBANGSU BASAK, J.:-


1. Two appeals are taken up for analogous hearing as both the
appeals are at the behest of the same appellant. Same issues are
involved in the two appeals.

2. APOT/316/2023 (hereinafter referred to as the first appeal,
for the sake of convenience) is at the behest of the appellant assailing
an order dated January 18, 2023 passed in IA No. CA/1/2021,
CP/49/2016.

3. By the order impugned in the first appeal, learned Company
Court, directed transfer of CP/49/2016 to the National Company Law
Tribunal, Kolkata (NCLT). Learned Company Court also transferred
all connected applications to NCLT. Such order was passed in view of
the order dated September 26, 2022 passed in CP/347/2015.
4. APOT/79/2026 is an appeal at the behest of the appellant
and directed against an order dated September 26, 2022 passed in
CP/347/2015 (hereinafter referred to as the second appeal, for the
sake of convenience). By such order, learned Company Court, took
note of (2021) 2 SCC 641 (Action Ispat and Power Private Limited
Vs. Shyam Metalics and Energy Limited) and (2021) 4 SCC 435
(A. Navinchandra Steels Private Limited Vs. SREI Equipment
Finance Limited and Others) and transferred the winding up
petition along with connected applications to the NCLT.
5. Learned Senior Advocate appearing for the appellant submits
that, the appellant was appointed by the Official Liquidator to protect
and preserve the assets of the company (in liquidation). He submits

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that, the appellant provided security guards. Appellant raised on and
submitted bills with the Official Liquidator for the services rendered.
Such bills remained unpaid till date. He submits on instructions that,
the appellant is still continuing to protect the assets of the company
(in liquidation).
6. Learned Senior Advocate appearing for the appellant submits
that, the company (in liquidation) and all stakeholders particularly,
the secured creditors stand benefitted out of the protection and
preservation of the assets of the company (in liquidation) done by the
appellant. He submits that, the Official Liquidator never alleged that,
the appellant failed and neglected to discharge its duties and
responsibilities.
7. Learned Senior Advocate appearing for the appellant refers to
Action Ispat and Power Private Limited (supra) . He submits that,
Action Ispat and Power Private Limited (supra) was rendered in a
particular factual context. He refers to the factual context. He
submits that, the Company Court, therein, noted that, the Official
Liquidator incurred heavy expenses in protecting the factory premises
of the company (in liquidation). It also noted the assurance given by
the secured creditor to reimburse the expenses of the Official
Liquidator. It is in such factual matrix that, Action Ispat and Power
Private Limited (supra) should be read. Essentially, the expenses
that the Official Liquidator borne should come out prior to the
transfer of the winding up petition to the NCLT.
8. Referring to A. Navinchandra Steels Private Limited
(supra) , learned Senior Advocate appearing for the appellant draws

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the attention of the Court to the factual matrix therein. He submits
that, there also, the Company Court directed transfer of the winding
up petition conditionally upon the expenses of the Official Liquidator
being paid. He refers to the orders of the Company Court which are
reported in 2019 SCC Online Bom 10495 (Action Barter Private
Limited Vs. Shree Ram Urban Infrastructure Limited and Others)
and 2020 SCC Online Bom 2264 [Action Barter Private Limited
Vs. Shree Ram Urban Infrastructure (In Liqn)] . He submits that A.
Navinchandra Steels Private Limited (supra) should be read in
such context.

9. Learned Senior Advocate appearing for the appellant draws
the attention of the Court to the judgment and order dated November
13, 2025 passed by this Bench, in APO/36/2022 [M/S M.S. Glass
Industries Limited (In Liqn) & RMC Readymix (India) Vs. The
O/L] . He submits that, the essential factual matrix of Action Ispat
and Power Private Limited (supra) and A. Navinchandra Steels
Private Limited (supra) was not brought to the attention of the
Court when, it rendered M/S M.S. Glass Industries Limited (In
Liqn) (supra) .
10. Learned Senior Advocate appearing for the appellant submits
that, in the event, the winding up petition is transferred to the NCLT,
as directed by the impugned order, then, the expenses that the
appellant incurred in protecting and preserving the assets of the
company (in liquidation) will not be treated as expenses in the
Corporate Insolvency and Restructuring Process and therefore, the
entirety of the claim of the appellant for protecting and preserving the

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assets of the company (in liquidation) will be at stake. He submits
that the appellant should not be made to suffer due to the action
taken by the Official Liquidator particularly when, such action was
led to be taken by the Company Court. He draws the attention of the
Court to the principle of custodia legis . He submits that, the action of
the Court should not prejudice any party.

11. Learned Senior Advocate appearing for the appellant refers to
Section 529(2) of the Companies Act, 1956 and submits that the
appellant would be able to prove its claim before the Company Court.
12. Official Liquidator is represented. None appears for the
secured creditor, despite notice.
13. CP/49/2026 is pending in this High Court. The company
involved is Martina Boi Genics Pvt. Ltd. (in liquidation). The company
namely, Martina Boi Genics Pvt. Ltd. suffered an order of winding up
on November 21, 2016.
14. Official Liquidator was directed to take possession of the
assets and properties of the company (in liquidation) including books,
records and documents by the order dated November 21, 2016.
Official Liquidator appointed the appellant as the security guard to
protect and preserve the assets of the company (in liquidation).
15. Appellant functioned under the Official Liquidator as the
security guards of the company (in liquidation). According to the
appellant, bills raised for such purposes are yet to be paid by the
Official Liquidator. Official Liquidator claims that, the secured
creditor did not pay and therefore, the bills of the appellant could not
be paid.

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16. During the pendency of the winding up petition before this
Hon’ble Court, provisions of Section 434 of the Companies Act, 2013
came into effect. The issue of transfer of pending winding up petition
upon coming into effect of the Companies Act, 2013, was considered
by the Supreme Court in Action Ispat and Power Private Limited
(supra) and A. Navinchandra Steels Private Limited (supra) .

17. In Action Ispat and Power Private Limited (supra) , the
Supreme Court held as follows:-
“14. What becomes clear upon a reading of the three
judgments of this Court is the following:
14.1. So far as transfer of winding-up proceedings is
concerned, the Code began tentatively by leaving
proceedings relating to winding up of companies to be
transferred to NCLT at a stage as may be prescribed by
the Central Government.
14.2. This was done by the Transfer Rules, 2016 (supra)
which came into force with effect from 15-12-2016. Rules
5 and 6 referred to three types of proceedings. Only those
proceedings which are at the stage of pre-service of notice
of the winding-up petition stand compulsorily transferred
to NCLT.
14.3. The result therefore was that post notice and pre-
admission of winding-up petitions, parallel proceedings
would continue under both statutes, leading to a most
unsatisfactory state of affairs. This led to the introduction
of the 5th proviso to Section 434(1)(c) which, as has been
correctly pointed out in Kaledoniaz, is not restricted to any
particular stage of a winding-up proceeding.
14.4. Therefore, what follows as a matter of law is that
even post admission of a winding-up petition, and after
the appointment of a Company Liquidator to take over the

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assets of a company sought to be wound up, discretion is
vested in the Company Court to transfer such petition to
NCLT. The question that arises before us in this case is
how is such discretion to be exercised?”
18. Supreme Court in Action Ispat and Power Private Limited
(supra) , answered the question raised in paragraph 14.4 in
paragraph 25 thereof, as follows:-
“25.Given the aforesaid scheme of winding up under
Chapter XX of the Companies Act, 2013, it is clear that
several stages are contemplated, with the Tribunal
retaining the power to control the proceedings in a
winding-up petition even after it is admitted. Thus, in a
winding-up proceeding where the petition has not been
served in terms of Rule 26 of the Companies (Court) Rules,
1959 at a pre-admission stage, given the beneficial result
of the application of the Code, such winding-up proceeding
is compulsorily transferable to NCLT to be resolved under
the Code. Even post issue of notice and pre-admission, the
same result would ensue. However, post admission of a
winding-up petition and after the assets of the company
sought to be wound up become in custodia legis and are
taken over by the Company Liquidator, Section 290 of the
Companies Act, 2013 would indicate that the Company
Liquidator may carry on the business of the company, so
far as may be necessary, for the beneficial winding up of
the company, and may even sell the company as a going
concern. So long as no actual sales of the immovable or
movable properties have taken place, nothing irreversible
is done which would warrant a Company Court staying its
hands on a transfer application made to it by a creditor or
any party to the proceedings. It is only where the winding-
up proceedings have reached a stage where it would be
irreversible, making it impossible to set the clock back that

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the Company Court must proceed with the winding up,
instead of transferring the proceedings to NCLT to now be
decided in accordance with the provisions of the Code.
Whether this stage is reached would depend upon the
facts and circumstances of each case.”
19. Action Ispat and Power Private Limited (supra) was
considered in A. Navinchandra Steels Private Limited (supra) or
where, it was held that, transfer of pending admitted winding up
petition to the NCLT under the Insolvency and Bankruptcy Code,
2016 are subject only to the test irreversible/irretrievable act(s)/stage
as laid down in Action Ispat and Power Private Limited (supra) or
where a company in winding up is near corporate death.
20. In Action Ispat and Power Private Limited (supra) , the
Company Court, while allowing an application for transfer of the
winding up petition from the Company Court to the NCLT, noted that,
the Official Liquidator incurred heavy expenses for protecting the
factory premises as also the statement of the secured creditor that it
would reimburse the expenses of the Official Liquidator. The
Company Court directed the secured creditor to bear the costs and
expenses.
21. In Action Ispat and Power Private Limited (supra) , there
was an application filed by the secured creditor stating that an
application under Section 7 of the Board of 2016 was pending before
the NCLT. It is in such context that such direction was issued by the
Company Court. In our understanding, notwithstanding such
direction being issued by the Company Court on appraisal of the
authorities and the provisions cited before it, Supreme Court in

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Action Ispat and Power Private Limited (supra) laid down the test
as enumerated in paragraphs 14 and 25 thereof. Therefore, Supreme
Court did not hold that, payment of expenses incurred by the Official
Liquidator is a sine qua non prior to transfer of the proceedings
pending before the Company Court to the NCLT. Rather, it directed
transfer of winding up proceedings from the Company Court to the
NCLT provided that, no irreversible/irretrievable stage or act occurred
in the winding up proceeding.
22. The view of A. Navinchandra Steels Private Limited (supra)
is same. In fact, it noticed Action Ispat and Power Private Limited
(supra) and proceeded to hold that, the test of irreversible
irretrievable act/stage is to be applied as one of the grounds for
transfer and the other ground is where the company in winding up is
near corporate death.
23. A. Navinchandra Steels Private Limited (supra) reached the
Supreme Court from orders passed by the Company Court of the
Bombay High Court. The two orders of the Company Court of the
High Court of Bombay referred to by the learned Senior Advocate
appearing for the appellant, does not assist the appellant. In the facts
and circumstances of A. Navinchandra Steels Private Limited
(supra) , a secured creditor went out of the winding up proceedings
and sought to sell the assets of the company (in liquidation).
Nonetheless, the two tests as noted above, were applied to decide
whether or not a company petition is required to be transferred to the
NCLT.

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24. In M/S M.S. Glass Industries Limited (In Liqn) (supra) , we
transferred the winding up petition to the NCLT after noticing Action
Ispat and Power Private Limited (supra) .
25. The tests laid down in Action Ispat and Power Private
Limited (supra) and A. Navinchandra Steels Private Limited
(supra) are required to be applied on the issue as to transfer of a
winding up petition from the Company Court to the NCLT on Section
434 of the Act of 2013 coming into effect. 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. 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.
Whether such a stage is reached would depend upon the facts and
circumstances of each case.
26. So far as the instant case is concerned, the issue is whether
or not the irreversible/irretrievable act(s) or stage occurred during the
pendency of the winding up petition before the Company Court. Our
attention is not drawn to any fact which can be construed as an
act(s) or stage which is irreversible/irretrievable vis a vis the company
(in liquidation) or the winding up petition.

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27. 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.

28. ACO 1 of 2026 in the Second Appeal is an application for
condonation of delay and leave to prefer the Second Appeal.
29. For the ends of justice, the causes shown in the application in
the Second Appeal are accepted as sufficient. Delay is condoned.
Leave is granted to the appellant to prefer the appeal since, the
appellant contends that its valuable right stands affected by reason of
the decision rendered by the impugned order in the Second Appeal.
30. In the facts and circumstances of the present case, we find no
error in the order impugned passed by the learned Company Court in
any of the two appeals.
31. APOT/316/2023 and APOT/79/2026 are dismissed along
with all connected applications, without any order as to costs.

(DEBANGSU BASAK, J.)
32. I agree.

(MD. SHABBAR RASHIDI, J.)





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