Bombay High Court
Ram Kishor Arora vs Icici Bank on 31 January, 2025
Author: Revati Mohite Dere
Bench: Revati Mohite Dere
2025:BHC-OS:2475-DB
33-wpl-4344-2024.docx
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.4344 OF 2024
1. Ram, Kishor Arora,
Suspended Director of Supertech
Township Projects Ltd.
2. Mohit Arora,
Suspended Director of Supertech
Township Projects Ltd.
3. Sangita Arora,
Erstwhile Director of Supertech
Township Projects Ltd.
All having their office at 114,
Hemkunt Chambers, 89, Nehru Place,
New Delhi - 110 019. .....Petitioners
Vs.
1. ICICI Bank,
ICICI Bank Tower,
Bandra-Karla Complex,
2. Reserve Bank of India,
6, Sansad Marg,
New Delhi, Delhi - 110 001.
3. Supertech Township Projects Ltd,
Having its registered office at 114,
Hemkunt Chambers, 89, Nehru Place,
New Delhi - 110 019.
Through the Interim
Resolution Professional. .....Respondents
Gaikwad RD 1/12
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Mr. Karl Tamboly with Ms. Vidhi Mehta, i/b. Aagam Doshi, for the
Petitioners.
Dr. Birendra Saraf, Senior Advocate, Mr. Nimay Dave, Mr. Mayur
Bhojwani & Ms. Dhamini Nagpal, i/b. Manilal Kher Ambalal & Co.,
for the Respondent No.1-ICICI Bank Ltd.
CORAM : REVATI MOHITE DERE &
DR. NEELA GOKHALE, JJ.
DATE : 31st JANUARY 2025
PC:
1. The Petitioners seek a direction to quash order dated 5 th
January 2024 passed by the Committee of the Respondent No.1-ICICI
Bank classifying the Petitioner's account as fraud and other ancillary
reliefs including quashing of show-cause notice dated 26 th September
2023.
2. The Petitioners No.1 and 2 are Directors of Supertech
Township Projects Ltd., ( for the sake of brevity referred as 'STPL'),
which Directorship is presently placed under suspension. The Petitioner
No.3 is the erstwhile Director of the STPL. The Respondent No.1 is
the ICICI Bank, the Respondent No.2 is the Reserve Bank of India and
the Respondent No.3 is the STPL, which is the Principal Borrower
Company.
3. Admittedly, Corporate Insolvency Resolution Process is
initiated against STPL by the Punjab and Sindh Bank and by order
dated 12th July 2024, National Company Law Tribunal (for the sake of
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brevity referred as 'NCLT'), New Delhi has appointed an Interim
Resolution Professional (for the sake of brevity referred as 'IRP'). An
Appeal is preferred and pending before the National Company Law
Appellate Tribunal (for the sake of brevity referred as 'NCLAT'), New
Delhi. The account of STPL is classified as 'Non Performing Asset' (for
the sake of brevity referred as 'NPA').
4. It is the case of the Petitioners that there are some amounts
outstanding and payable to the Respondent No.1-Bank and the
proposal for settlement is also made to the Bank. In the meantime,
STPL learnt that the ICICI Bank has forwarded the classification of its
accounts as 'Fraud' with the Serious Fraud Investigation Office (for the
sake of brevity referred as 'SFIO'). The fraud classification was
admittedly challenged by STPL before the High Court of Delhi in Writ
Petition (C) No.11886 of 2021. Some orders have been passed in that
Petition by the Delhi High Court from time to time. According to the
Petitioners, the Delhi High Court disposed off a bunch of Writ
Petitions including its W. P. No.11886 of 2021 by order dated 12 th May
2023. The Respondent-Bank was given liberty to proceed against the
present Petitioners and other Petitioners in their respective Petitions, in
accordance with law.
33-wpl-4344-2024.docx
5. Mr. Karl Tamboly, learned counsel appearing for the
Petitioners submits that pursuant to the liberty granted by Delhi High
Court, the Petitioners received a show-cause notice dated 26 th
September 2023 issued by the Respondent No.1-Bank, calling upon
them to give their explanations on the issues raised in the show-cause
notice. The STPL requested a complete copy of the Forensic Audit
Report and other documents. It also issued a response to the show-
cause notice. Correspondence going back and forth between the parties,
were exchanged and the impugned order dated 5 th January 2024 was
passed by the Bank, classifying the accounts of the Petitioners as 'fraud'.
Being aggrieved by this order, the Petitioners have filed the present Writ
Petition.
6. Dr. Birendra Saraf, learned Senior Advocate represented the
Respondent No.1-Bank. At the very outset, he raised an objection that
the Petition was not maintainable on the ground that this Court does
not have jurisdiction to entertain the Petition. He brought to our notice
paragraph 29 of the Petition relating to the averment of the Petitioners
pertaining to jurisdiction of this Court. He also referred to paragraph
29 of the earlier Petition before the Delhi High Court, which
specifically averred the jurisdiction of Delhi High Court. Albeit, wryly,
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Dr. Saraf also brought to our notice the 7 th row on page 'C' of the
synopsis to this Petition, which refers to the Delhi High Court to
suggest that the Petition was in fact drafted to be filed before the Delhi
High Court to imply that the Petitioners are fully aware of the
appropriate jurisdiction of the Delhi High Court to entertain the
present Petition. Most importantly, the relief sought in the present
Petition based on grounds of challenge are similar to those sought in the
earlier Petition before the Delhi High Court. To buttress this point, he
referred to the prayers and the grounds in both the Petitions. Dr. Saraf,
thus, submits that the Petitioners have indulged in Forum-Shopping and
even judicial propriety requires that this Petition ought to have been
filed before the Delhi High Court.
7. We have heard learned counsel for the parties and perused
the documents, with their assistance.
8. Clause (2) of Article 226 of the Constitution of India and
Section 20(c) of CPC reads thus:
"226. (2) The power conferred by clause (1) to issue
directions, orders or writs to any Government,
authority or person may also be exercised by any High
Court exercising jurisdiction in relation to the
territories within which the cause of action, wholly or
in part, arises for the exercise of such power,
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notwithstanding that the seat of such Government or
authority or the residence of such person is not within
those territories."
Section 20(c) of the Code of Civil Procedure reads as
under:
"20. Other suits to be instituted where defendants
reside or cause of action arises.-- Subject to the
limitations aforesaid, every suit shall be instituted in a
court within the local limits of whose jurisdiction--
(a) ......
(b) .......
(c) the cause of action, wholly or in part, arises.
9. The Supreme Court in its decision in the case of Kusum
Ingots and Alloys Ltd. v. Union of India & Anr. ,1 has dealt with the
issue pertaining to jurisdiction of Courts and the doctrine of forum
conveniens in depth. Referring to its previous decision in State of
Rajasthan v. Swaika Properties, 2 the Court held that the answer to the
question, whether the service of notice is an integral part of the cause of
action within the meaning of Article 226(2) of the Constitution, must
depend upon the nature of the impugned order giving rise to the cause
of action. The Apex Court also referred to paragraph 15 of its
judgment in Aligarh Muslim University v. Vinay Engg. Enterprises (P)
(2004) 6 SCC 254.
(1985) 3 SCC 217.
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Ltd.,3 which reads as under:
"2. We are surprised, not a little, that the High Court of
Calcutta should have exercised jurisdiction in a case where
it had absolutely no jurisdiction. The contracts in question
were executed at Aligarh, the construction work was to be
carried out at Aligarh, even the contracts provided that in
the event of dispute the Aligarh court alone will have
jurisdiction. The arbitrator was from Aligarh and was to
function there. Merely because the respondent was a
Calcutta-based firm, the High Court of Calcutta seems to
have exercised jurisdiction where it had none by adopting a
queer line of reasoning. We are constrained to say that this
is a case of abuse of jurisdiction and we feel that the
respondent deliberately moved the Calcutta High Court
ignoring the fact that no part of the cause of action had
arisen within the jurisdiction of that Court. It clearly shows
that the litigation filed in the Calcutta High Court was
thoroughly unsustainable. "
10. In another of its recent judgment in the matter of State of
Goa v. Summit Online Trade Solutions (P) Ltd., 4 the Supreme Court
held that even if a small part of the cause of action arises within the
territorial jurisdiction of a High Court, the same by itself cannot be a
determinative factor compelling the High Court to entertain the Writ
Petition. In the context of the facts in that matter, the Apex Court held
(1994) 4 SCC 710.
(2023) 7 SCC 791.
33-wpl-4344-2024.docx
that merely because the Petitioning Company has its office in Gangtok,
Sikkim, the same by itself does not form an integral part of the cause of
action authorizing the Petitioner Company to move that High Court.
The view of the Supreme Court in Kusum Ingots (supra) is thus
consistently followed.
11. A Full Bench of the Delhi High Court in the case of Sterling
Agro Industries Ltd. v. Union of India & Ors. 5 also held that a
conclusion that where the Appellate or the Revisional Authority is
located constitutes the forum conveniens is not correct and it will vary
from case to case and depends upon the lis in question. The High Court
also held that while entertaining a Writ Petition, the doctrine of forum
conveniens and the nature of the cause of action are required to be
scrutinized by the High Court depending upon the factual matrix of
each case.
12. Admittedly, the Petitioners and the branch of the
Respondent No.1-Bank transacting with the Petitioners is in New-
Delhi. The OTS Proposals are also being exchanged with the New-
Delhi Branch of the ICICI Bank. All the correspondence and the
communication between the parties are exchanged with the New-Delhi
(2011) SCC OnLine Del. 3162.
33-wpl-4344-2024.docx
Branch. Hence, the Petitioners rightly approached the Delhi High
Court by way of its earlier W. P. No.11886 of 2021. The integral part
of the cause of action even going by the Petitioners own averment in
paragraph 29 of its Petition before the Delhi High Court arose within
the territorial limits of Delhi High Court. Thus, applying the settled
legal position to the facts in the present matter, it is clear that the cause
of action must be addressed to the Delhi High Court.
13. In any case, the Petitioners had already challenged the
Circular dated 1st July 2016 issued by the Reserve Bank of India as
violative of Articles 14 and 19(1)(g) of the Constitution of India as well
as the action of the Bank in classifying its accounts as 'fraud'. Paragraph
29 of the said Petition containing the jurisdiction clause specifically
avers as under:
"29. The Petitioner submits that the Respondents has
offices within the territorial jurisdiction of this Hon'ble
Court. Further, the Petitioner Company submits that the
Corporate Banking Branch of the Respondent No. 1 Bank
with which communications were exchanged by the
Petitioner Company is situated within New Delhi. Hence,
this Hon'ble Court has the jurisdiction to entertain, try and
dispose of the present Petition."
33-wpl-4344-2024.docx
14. In the present Petition also, the Petitioners have assailed the
act of the Committee of the Bank in classifying its accounts as 'fraud',
even though the Master Circular is not assailed, perhaps since its
validity was already tested before the Supreme Court. Nevertheless, the
integral part of the cause of action is similar in both the Petitions. Even
the averment in the present Petition regarding cause of action relating
to the corporate office of the Respondents being within the territorial
jurisdiction of this Court is identical to the averment made in the
Petition before the Delhi High Court. We fail to see as to how the
Petitioners could have averred the same pleading in both these Petitions
based on the corporate office of the Respondents, to selectively choose
a forum of their choice.
15. At this juncture, Mr. Tamboly tried to justify this Court's
jurisdiction by pointing to the show-cause notice dated 26 th September
2023, whereby the address of communication at the bottom of the
notice is shown to be at Bandra (East), Mumbai. We are not impressed
by this argument for the reason that the ICICI Bank has offices pan
India. The determination of jurisdiction shall be the territorial limits of
the cause of action. In the present case, the Petitioners already invoked
the jurisdiction of the Delhi High Court assailing the act of the Bank in
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classifying its accounts as 'fraud'. Pursuant to the directions of the
Apex Court, the Petitions were disposed off by the Delhi High Court
reserving liberty to the Banks to initiate action against the Petitioners
and others by following due process of law. The Respondent No.1-
Bank has thus availed the liberty to issue fresh show-cause notice to the
Petitioners and take it to its logical conclusion in terms of the impugned
order. Once the Delhi High Court was seized with the integral part of
the issue, judicial propriety requires that the present Petition should
also be filed before the Delhi High Court. Invoking the jurisdiction of
this Court in the second round of litigation involving the same issue is
nothing but Forum-Shopping on the part of the Petitioners. The forum
convinens is undoubtedly the Delhi High Court and not this Court.
16. In view of the aforesaid discussion, we are inclined to
dismiss the present Petition giving liberty to the Petitioners to file a
fresh Petition before the appropriate Court.
17. Accordingly, the Petition stands disposed of with the
aforesaid liberty.
18. Dr. Saraf undertakes, on instructions, that no objection on
the jurisdiction of the Petition, if filed before the Delhi High Court,
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shall be taken by the Respondents. Save and except an objection
pertaining to the jurisdiction of the Delhi High Court, all contentions
of all the parties are left open.
19. All parties to act on an authenticated copy of this order.
(DR. NEELA GOKHALE, J.) (REVATI MOHITE DERE, J.)
Gaikwad RD
Signed by: Raju D. Gaikwad
Designation: PS To Honourable Judge
Date: 14/02/2025 10:28:41
