THE HON'BLE THE CHIEF JUSTICE ALOK ARADHE
AND
THE HON'BLE SRI JUSTICE N.V.SHRAVAN KUMAR
WRIT PETITION No.29236 OF 2023
ORDER: (Per the Hon'ble the Chief Justice Alok Aradhe)
Mr. K.V.Satyanarayana, learned counsel for the petitioner.
Mr. Gadi Praveen Kumar, learned Deputy Solicitor General
of India for respondent No.1.
2. With consent of the parties, the matter is heard finally.
3. In this writ petition, the petitioner, which is a cooperative society, inter alia seeks an order of restraint against the National Company Law Tribunal, Mumbai Bench-III, Mumbai (hereinafter referred to as "the Tribunal") from proceeding further in I.A.No.3781 of 2023, which is an application filed under Sections 7 and 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "the Code") in Company Petition No.27 of 2019.
4. Learned counsel for the petitioner submitted that the provisions of the Code do not apply to a cooperative society. In support of the aforesaid submission, reliance has been placed on ::2::
the judgment of the Supreme Court in Union of India vs. Rajendra N. Shah and Ors. 1 It is further submitted that the Tribunal is created under the Code and it has no jurisdiction. It is further submitted that part of cause of action has arisen within the territorial jurisdiction of this Court, as the land is situated in Kukatpally Mandal, Medchal-Malkajgiri District of Telangana State.
5. We have considered the submissions made on both sides.
6. Article 226(2) of the Constitution of India provides that High Courts power to issue writs, directions or orders, as provided under Article 226(1) of the Constitution of India, can also be exercised in relation to the territories within which the cause of action, wholly or in part, arises.
7. The Supreme Court considered the scope and ambit of Article 226(2) of the Constitution of India in M/s Kusum Ingots & Alloys Ltd., vs Union Of India And Anr 2 wherein it was held that even if a small part of cause of action arises within the territorial jurisdiction of a High Court, the same by itself could not have been 1 AIR 2021 SC 4905 2 (2004) 6 SCC 254 ::3::
a determinative factor compelling the High Court to keep the writ petitions alive. In State of Goa vs. Summit Online Trade Solutions (P) Ltd. 3, a company whose office was situated in Sikkim made a challenge to the notification issued by the Government of Goa, before the Sikkim High Court. The Supreme Court held that merely because the petitioning company had its office in Gangtok, Sikkim, the same by itself does not form an integral part of cause of action authorizing the company to move the High Court of Sikkim. It was further held that the High Court essentially has to arrive at a conclusion on the basis of the averments made in the petition to decide whether or not on the facts pleaded constitute a part of cause of action, sufficient to attract Article 226(2) of the Constitution of India.
8. It has further been held that if a slender part of the cause of action did arise within the jurisdiction of High Court, the concept of forum conveniens should be considered by the High Court.
9. In the backdrop of the aforesaid well settled legal position, we may advert to the facts of the case on hand. 3 (2023) 7 SCC 791 ::4::
10. An averment is made in paragraph 6 of the writ affidavit and the same is reproduced below:
"It is further submitted that under Article 226(2) of the Constitution since a part of the cause of action arose in Telangana, since the land is situated in Kukatpally Mandal, Medchal-Malkajgiri District of Telangana, which is the subject matter of the company petition, hence the present writ petition is being filed before this Hon'ble Court".
11. Thus, it is evident that except stating that the land is situated in the State of Telangna, no other averment has been made and it has been stated that a part of cause of action has arisen within the State of Telangana. The proceeding has been initiated by respondent No.2 against the petitioner in Mumbai under the provisions of the Code which is pending, namely Company Petition No. 27 of 2019. In the aforesaid petition, an application under Section 7 read with Section 60 of the Code has been filed which is pending adjudication before the Tribunal. In our considered opinion, merely because the land is situated in the State of Telangana, the Court will not be sufficient to deal with the writ petition on merits. The concept of forum conveniens has also to be taken into account. Respondent No.2 is a company situated in ::5::
Mumbai. The proceeding is pending before the Tribunal at Mumbai. Therefore, we are not inclined to entertain writ petition even otherwise. It is pertinent to note that the petitioner has already entered appearance in the proceeding before the Tribunal. It is open for it to raise all such contentions as have been raised in this writ petition, before the Tribunal. Therefore, at this point of time, we are not inclined to deal with the submissions made by learned counsel for the petitioner on merits.
12. In view of the aforesaid submissions, the writ petition is disposed of with liberty to the petitioner to take recourse to the remedies which are available to it in law. There shall be no order as to costs.
As a sequel, miscellaneous petitions, pending if any, stand closed.
__________________ ALOK ARADHE, CJ ________________________ N.V.SHRAVAN KUMAR, J Date:18.10.2023 Note:
Issue CC today.
Lrkm