Pending NCLAT Appeals Bar Relocation Under Companies Rules: Calcutta High Court

The Calcutta High Court has ruled that a company undergoing resolution under the Insolvency and Bankruptcy Code (IBC) cannot shift its registered office to another State when appeals against the approved resolution plan remain pending before appellate forums. The bench of Justice Shampa Sarkar and Justice Ajay Kumar Gupta set aside the approach adopted by the Regional Director and held that the statutory restriction contained in Rule 30(9) of the Companies (Incorporation) Rules, 2014 must be strictly enforced. The dispute arose after HNGIL entered Corporate Insolvency Resolution Process (CIRP) in October 2021. Jeel Kandla Service claimed to be a post-CIRP creditor that had supplied transportation services during the insolvency process and sought payment of dues. During the insolvency proceedings, a resolution plan submitted by Independent Sugar Corporation Limited was approved by the National Company Law Tribunal (NCLT). Multiple parties challenged that approval before the National Company Law Appellate Tribunal (NCLAT), and several appeals remained pending. While those appeals were pending, the successful resolution applicant sought approval from the Regional Director under the Ministry of Corporate Affairs to shift HNGIL's registered office from West Bengal to Mumbai. Initially, the Regional Director kept the matter pending due to the pendency of appeals before NCLAT. Subsequently, however, permission for shifting was granted, subject to several conditions and safeguards. The appellants argued that such approval directly violated the second proviso to Rule 30(9) of the Companies (Incorporation) Rules, 2014. They contended that the provision specifically permits shifting of a registered office after approval of a resolution plan only where no appeal against the resolution plan is pending before any court or tribunal. According to them, once multiple appeals challenging the plan were already before NCLAT, the Regional Director had no authority to permit the relocation. The respondents, however, contended that implementation of the approved resolution plan should receive primacy under the IBC. It was argued that the company had already moved into a “clean slate” phase under the approved plan and that operational restructuring, including shifting of the registered office, was necessary for business efficiency and revival of the company. They also argued that absence of any stay on the resolution plan meant that implementation could continue despite pending appeals. The High Court rejected this approach and held that there was no conflict between the IBC and the Companies Rules requiring invocation of Section 238 of the IBC, which gives overriding effect to the Code. The Court observed that the issue before the Regional Director was not implementation of the resolution plan but exercise of statutory power under the Companies Act and Rules governing change of registered office. The Bench held that the second proviso to Rule 30(9), inserted through a 2023 amendment, creates a specific statutory restriction and cannot be bypassed. The Court explained that the provision was introduced to preserve judicial supervision and prevent complications arising from shifting a company's registered office while challenges to the resolution plan remain unresolved. The Court made an important interpretative observation while reading the proviso. It held that the word “and” appearing in the provision should be read as “or”, thereby creating two separate categories where shifting would be prohibited. Accordingly, if an appeal against the resolution plan is pending, or if inquiry, inspection or investigation proceedings are pending, the shifting of the registered office cannot be permitted. The Bench observed that permitting interstate shifting during pendency of appeals could create complications concerning jurisdiction, regulatory supervision, creditors' remedies and even possible reversal of the resolution plan itself. It stated that the pendency of an appeal before NCLAT or the Supreme Court constituted an independent threshold restriction that required strict application. The Court further held that the Regional Director wrongly imported Section 238 of the IBC to circumvent a restriction specifically imposed by delegated legislation under the Companies Act. According to the Court, the Regional Director was exercising statutory powers under Section 13(4) of the Companies Act and had no authority to dilute mandatory procedural restrictions. Case Details Case Title: M/s. Jeel Kandla Service & Anr. vs. Union of India and Ors. Citation: JURISHOUR-1336-HC-2026(CAL) Case No.: M.A.T 444 of 2026 Date: 15.05.2026 Counsel For Petitioner: Anindya Kumar Mitra, Sr. Adv. Counsel For Respondent: Dhiraj Trivedi, D.S.G. Click Here To Read Order Read More: Punjab & Haryana HC Grants Bail in Rs. 66.60 Crore Fake ITC Case

Pending NCLAT Appeals Bar Relocation Under Companies Rules: Calcutta High Court

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