Delhi High Court
Money Market Services (India) ... vs Union Of India Represented ... on 27 August, 2020
SINDHU KRISHNAKUMAR
29.08.2020 16:42
$~4
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 27th August, 2020
+ W.P.(C) 5723/2020 & CM APPLS. 20679/2020, 20680/2020,
20681/2020, 20682/2020
MONEY MARKET SERVICES (INDIA) PRIVATE
LTD. ..... Petitioner
Through: Mr. R. Subramanian, Advocate (M-
9381288048)
versus
UNION OF INDIA REPRESENTED THROUGH: THE
SECRETARY MINISTRY OF CORPORATE
AFFAIRS ..... Respondent
Through: Mr. Rakesh Kumar, CGSC for UOI
(M-9811549455)
CORAM:
JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J. (Oral)
1. This hearing has been held through video-conferencing.
2. The present petition has been filed by the Petitioner - M/s Money
Market Services (India) Pvt. Ltd. challenging the order dated 25th October,
2019 by which the name of the Petitioner has been struck off from the Register
of Companies.
3. Mr. Rakesh Kumar, ld. CGSC takes a preliminary objection of
territorial jurisdiction on the ground that the impugned order striking off the
name of the company has been passed by the Registrar of Companies
(hereinafter, 'ROC') in Chennai and not in Delhi. He relies upon three orders
passed by the ld. Division Bench in Sanjay Agarwal & Anr. v. Union of
India & Ors., [W.P.(C) 7480/2018, decided on 29th January, 2019], Vishal
Bhati v. Union of India & Anr. [W.P.(C) 9932/2018, decided on 24th
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By:PRATHIBA M SINGH
Signing Date:28.08.2020 21:32
September, 2018] and Prakash Chand Jain v. Union of India & Anr.
[W.P.(C) 9975/2018, decided on 24th September, 2018] under similar
circumstances, where the petitions have been dismissed by the ld. Division
Bench, with liberty to file appropriate petition before the Court having
territorial jurisdiction over the matter.
4. Mr. R. Subramanian, ld. Counsel appearing for the Petitioner, however,
refutes this position and submits that the case herein is distinct from the said
cases, inasmuch as there is a Serious Fraud Investigation Office (hereinafter,
'SFIO') investigation, which has been ordered by the Ministry of Corporate
Affairs (Central Government) located at Delhi, under Section 212 of the
Companies Act, 2013. According to ld. counsel, once an SFIO investigation
has been ordered, the name of the company cannot be removed under Sub-
Rule 3(1) of the Companies (Removal of Names of Companies from the
Register of Companies) Rules, 2016 (hereinafter, 'Rules'). Ld Counsel
submits that the SFIO investigation forms part of the bundle of facts
constituting the cause of action.
5. This Court has considered the matter. There is no doubt that under
Section 212 read with the said Rules, there is an investigation by SFIO. The
SFIO investigation may have been directed by the Central Government and
the authorities located in Delhi. However, the order by which the Petitioner is
aggrieved is not the order directing investigation by SFIO, but the order dated
25th October, 2019 by which the name of the Petitioner has been struck off by
the ROC at Chennai.
6. The legal position on cause of action and territorial jurisdiction as also
forum conveniens is well settled. In Alchemist Ltd. & Ors. v. State Bank of
Sikkim & Ors., AIR 2007 SC 1812, the Supreme Court observed as under:-
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By:PRATHIBA M SINGH
Signing Date:28.08.2020 21:32
"28. From the aforesaid discussion and keeping in
view the ratio laid down in catena of decisions by
this Court, it is clear that for the purpose of deciding
whether facts averred by the petitioner-appellant,
would or would not constitute a part of cause of
action, one has to consider whether such fact
constitutes a material, essential, or integral part of
the cause of action. It is no doubt true that even if a
small fraction of the cause of action arises within
the jurisdiction of the Court, the Court would have
territorial jurisdiction to entertain the suit/petition.
Nevertheless it must be a 'part of cause of action',
nothing less than that."
7. Issues of jurisdiction, cause of action and forum conveniens have also
been raised from time to time before this Court. In Sterling Agro Industries
Ltd. and Ors. v. Union of India & Ors., AIR 2011 Delhi 174, a 5-judge bench
of this Court held as under:-
"33. In view of the aforesaid analysis, we are
inclined to modify the findings and conclusions of
the Full Bench in New India Assurance Company
Limited (supra) and
proceed to state our conclusions in seriatim as
follows:
(a)...
...
(f) While entertaining a writ petition, the doctrine of
forum conveniens and the nature of cause of action
are required to be scrutinized by the High Court
depending upon the factual matrix of each case in
view of what has been stated in Ambica Industries
(supra) and Adani Exports Ltd. (supra)."
8. Thus, in order for the Court to have jurisdiction, the impugned action
forming part of the cause of action, ought to have taken place within the
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By:PRATHIBA M SINGH
Signing Date:28.08.2020 21:32
territorial jurisdiction of the Court. The various orders of the Ld. Division
Bench passed in similar circumstances are clear to the effect that this Court
would not have territorial jurisdiction if the striking off has been directed by
the authority in a different state. In those cases, before the Ld. Division Bench,
the striking off orders were passed by the ROCs located in Kanpur and in
Maharashtra. For e.g., the order of the Division Bench in Vishal Bhati (supra)
reads:
"Considering the fact that the issue pertains to
action taken by the Registrar of Companies, Kanpur
and under identical situation with regard to action
taken by Registrar of Companies, Mumbai on
account of lack of territorial jurisdiction, we had
refused to interfere into the matter earlier.
Accordingly, we dismiss this petition also with
liberty to the petitioner to file an appropriate
petition before the Court having territorial
jurisdiction over the matter".
9. In the present case the grievance of the Petitioner is not against the
SFIO investigation. In fact, the Petitioner relies on the said investigation to
argue that the name of the company cannot be struck off. Thus, the cause of
action arose due to the act of the ROC in Chennai and not the Central
Government's act of directing the SFIO investigation. The impact of Sub-Rule
3(1) on the striking-off of the name of the Petitioner-Company would be a
legal argument which the Petitioner would have to raise before the appropriate
forum. The said forum would be entitled to consider the effect of Sub-Rule
3(1) and also to examine the legality of the order dated 25th October, 2019.
The mere fact that the Central Government may have directed the SFIO
investigation, would not vest jurisdiction in this Court, especially when the
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By:PRATHIBA M SINGH
Signing Date:28.08.2020 21:32
specific order impugned in this case has been passed by the ROC in Chennai.
Accordingly, this Court is of the view that this Court lacks territorial
jurisdiction to entertain the present writ petition.
10. Accordingly, the present petition is dismissed, with liberty to the
Petitioner to approach the appropriate forum in accordance with law. All
pending applications are also disposed of. Nothing said here would be
construed as an opinion on merits.
PRATHIBA M. SINGH
JUDGE
AUGUST 27, 2020
Rahul/A
Signature Not Verified
Digitally Signed
By:PRATHIBA M SINGH
Signing Date:28.08.2020 21:32
