Calcutta High Court blocks interstate shifting of company’s registered office during pendency of IBC appeals

The Calcutta High Court, in Jeel Kandla Service & Anr. Vs Union of India and Ors., has authoritatively clarified that a company whose management has changed pursuant to an approved resolution plan under the Insolvency and Bankruptcy Code, 2016 cannot shift its registered office from one State to another if any appeal challenging that resolution plan is still pending.

At the centre of the dispute was the interaction between:

  • Section 13(4) and Section 13(5) of the Companies Act, 2013,
  • Rule 30(8) and Rule 30(9) (including the second proviso to Rule 30(9)) of the Companies (Incorporation) Rules, 2014, and
  • Section 31, Section 60(5) and Section 238 of the **Insolvency and Bankruptcy Code, 2016`.

The Division Bench set aside the order of the Regional Director (Eastern Region), Ministry of Corporate Affairs, as well as the Single Judge’s order upholding that decision, holding that the statutory bar in the second proviso to Rule 30(9) was violated.

Background: CIRP, resolution plan and subsequent litigation

Corporate insolvency and claims of the appellants

  • The respondent company entered CIRP on 21 October 2021.
  • The appellants claimed to be post-CIRP creditors with preferential entitlement to transportation dues. They alleged that transportation services provided during CIRP remained unpaid.
  • The appellants approached the NCLT seeking release of their post-CIRP dues.
  • The NCLT directed payment of 75% of the balance dues within 60 days and accepted their claim to the extent of Rs. 44 lakhs. However, interest claimed under Section 16 of the MSMED Act was refused.
  • The appellants filed an appeal before the NCLAT challenging denial of interest.

Approval of resolution plan and multiple appeals

  • Independent Sugar Corporation Limited submitted a resolution plan for revival of the corporate debtor.
  • The NCLT approved the resolution plan on 14 August 2025.
  • The appellants filed an application before the NCLT seeking rejection of the resolution plan. That attempt failed and the plan was approved.
  • Multiple appeals, including those filed by the appellants, were preferred before the NCLAT against:
    • approval of the resolution plan, and
    • rejection of the appellants’ challenge to the plan.
  • By 28 October 2025, 24 appeals in relation to the resolution plan were pending before the NCLAT.

Application to shift registered office to another State

  • After acquiring control under the approved plan, the successful resolution applicant moved an application before the Regional Director under Section 13(4) of the Companies Act, 2013, seeking permission to shift the registered office from West Bengal to Maharashtra.
  • Initially, the Regional Director kept the matter in abeyance considering the pending NCLAT appeals on the resolution plan.

Approach to NCLAT for “clarification”

  • The resolution applicant then approached the NCLAT for clarification that the pendency of appeals should not obstruct consideration of the application to shift the registered office.
  • The NCLAT, while disposing of that request, observed that:
    • the Regional Director could consider the application “in accordance with law”,
    • no order passed in the appeals limited the statutory authority’s jurisdiction, and
    • it recorded that the appeals remained pending.
  • Importantly, the NCLAT did not hold that pending appeals were irrelevant to the applicability of the second proviso to Rule 30(9), nor did it direct that the office must or could be shifted despite the pending challenges.

Proceedings before the Regional Director

  • On 14 January 2026, the Regional Director issued notice to 11 parties, including the appellants, inviting comments and appearance on the application under Section 13(4) for change of registered office.
  • The appellants appeared, filed objections, and participated in the hearing.
  • By order dated 4 February 2026, the Regional Director approved shifting of the registered office, subject to:
    • the outcome of the NCLAT appeals, and
    • undertakings such as:
      • no retrenchment of employees, and
      • no alteration of jurisdiction in pending legal proceedings.

Writ petition and Single Judge’s dismissal

  • The appellants challenged the Regional Director’s order in a writ petition before the Calcutta High Court.
  • On 27 February 2026, a learned Single Judge dismissed the writ petition, holding that:
    • there was no violation of the second proviso to Rule 30(9),
    • the absence of any stay on the resolution plan by the NCLAT was significant, and
    • no demonstrable prejudice had been caused to the appellants.
  • The appellants then preferred the present intra-court appeal before the Division Bench.
  • During hearing, certain trade unions sought and obtained leave to intervene, although they were not parties before the Single Judge.

The High Court considered multiple intertwined questions:

  1. Scope of the second proviso to Rule 30(9)

    • Does it bar the Regional Director from allowing change of registered office once a resolution plan has been approved, if any appeal against that plan is pending before any court or tribunal?

  2. Interplay between Companies Act/Rules and IBC

    • Can Section 238 of the Insolvency and Bankruptcy Code, 2016 be invoked to bypass or dilute the restriction in the second proviso to Rule 30(9)?

  3. Nature of the second proviso – discretion or prohibition?

    • Is the second proviso merely enabling and discretionary, or does it impose a mandatory jurisdictional restriction?

  4. Relevance of prejudice and absence of stay

    • Was the Single Judge correct in focusing on the absence of a stay on the resolution plan and the lack of demonstrable prejudice to the appellants?