Madhya Pradesh High Court

M/S Bansal Construction Works Pvt ... vs National Company Law Tribnal on 5 July, 2021

Author: Atul Sreedharan

                               1
        THE HIGH COURT OF MADHYA PRADESH
                Writ Petition No.10961 of 2021
 (M/s Bansal Constructions Works Pvt. Ltd. Vs. National Company
                    Law Tribunal and others)

Jabalpur, Dated : 05.07.2021

      Shri Himanshu Khemuka, learned counsel for the petitioner.

      Heard finally through Video Conferencing.

      The present petition has been filed by the petitioner whereby

an order dated 18.03.2021 has been impugned. The said order has

been passed by the National Company Law Tribunal, Indore Bench at

Ahmedabad.

      The office has taken an objection with regard to the territorial

jurisdiction as the respondent No.1/National Company Law Tribunal

is situated at Ahmedabad and outside the territorial jurisdiction of

this Court.

Today this case has been fixed to decide the question whether

this Court has the territorial jurisdiction to entertain this writ petition.

This Court is not going in depth into the merits of the case, but

however, it is necessary to give a brief background on the factual

aspects of the case.

The petitioner is a Private Limited Company having its

registered office at Bhopal. It is engaged in the business of

constructing roads, commercial and non-commercial buildings,

houses for the poor and executes works for the Government. The

petitioner Company is a sub-contractor for M/s GVR Infra Projects

Limited and it entered into a contract on 11.10.2018 with the said

THE HIGH COURT OF MADHYA PRADESH Writ Petition No.10961 of 2021 (M/s Bansal Constructions Works Pvt. Ltd. Vs. National Company Law Tribunal and others)

company for rehabilitation and upgradation of Sindoor River to the

start of Bareli Bypass section of NH-12.

The respondent No.2 moved an application under Section 9 of

the Insolvency and Bankruptcy Code, 2016 before the respondent

No.1/Tribunal. On 25.02.2021 after hearing the parties, the case was

reserved for orders and thereafter on 18.03.2021, the impugned order

was passed where there was a conflict of opinion seen between the

learned Judicial Member and the Technical Member.

While passing the impugned order, the two Members Bench of

the Tribunal is stated to have erred both on facts as well as on law

because it did not formulate the point or points of difference of

opinion and point or points on which difference of opinion arose

which were never communicated to the petitioner on account of

which, grave injustice has been caused to the petitioner. This Court

had given time to the learned counsel for the petitioner to address it

on the question of territorial jurisdiction as the orders have been

passed by the National Company Law Tribunal, Indore Bench at

Ahmedabad.

Learned counsel for the petitioner has submitted that the

National Company Law Tribunal at Indore would have had the

jurisdiction ordinarily in this case, had it been functioning. He has

orally referred to a notification of the Central Government dated

THE HIGH COURT OF MADHYA PRADESH Writ Petition No.10961 of 2021 (M/s Bansal Constructions Works Pvt. Ltd. Vs. National Company Law Tribunal and others)

31.01.2020 being F.A.-45011-44-2018 by which the jurisdiction of

the NCLT, Indore was transferred to the National Company Law

Tribunal at Ahmedabad.

Learned counsel for the petitioner has argued with much

vehemence that mere situs of the Tribunal would not divest this

Court of jurisdiction to entertain the present petition, as according to

him, the cause of action as arisen at Madhya Pradesh and merely

because the Tribunal is situated at Ahmedabad, it cannot be said that

this Court has no jurisdiction.

Learned counsel for the petitioner has referred to several

judgments. The first judgment he has referred to is [Kusum Ingots &

Alloys Ltd. Vs. Union of India and Another], (2004) 6 SCC 254.

The brief background of the case before the Supreme Court would be

essential to appreciate the ratio laid down by it. In that case, Kusum

Ingots, which was the appellant/Company before the Supreme Court,

had its registered Office at Mumbai. It obtained a loan from the

Bhopal Branch of the State Bank of India and a notice was issued for

repayment of the said loan from Bhopal, in terms of the provision of

the Securitisation and Reconstruction of Financial Assets and

Enforcement of Security Interest Act, 2002 {hereinafter referred to as

"SARFAESI Act"}. The vires of the said Act was questioned before

the Delhi High Court which was dismissed on the ground of lack of

THE HIGH COURT OF MADHYA PRADESH Writ Petition No.10961 of 2021 (M/s Bansal Constructions Works Pvt. Ltd. Vs. National Company Law Tribunal and others)

territorial jurisdiction. Before the Supreme Court, the appellant

argued that the constitutionality of a parliamentary Act was in

question and, therefore, the High Court of Delhi had the requisite

jurisdiction to entertain the writ petition. The counter to that

argument on behalf of the respondent was that no cause of action

arose within the territorial jurisdiction of the High Court of Delhi and

so the writ petition was dismissed. In other words, the Supreme Court

was examining the issue of territorial jurisdiction of Delhi High

Court for the purpose of hearing the case challenging the vires of a

statute. The Supreme Court held in Kusum Ingots's case that even if

a part of cause of action arises, the High Court situated where the

cause of action arose is well within the jurisdiction to entertain a

petition under Article 226. In the case at hand, the cause of action is

with regard to the impugned order dated 18.03.2021 passed by the

respondent No.1/Tribunal at Ahmedabad.

The second judgment that has been referred to by the learned

counsel for the petitioner is [Ambica Industries Vs. Commissioner

of Central Excise] (2007) 6 SCC 769. In this case, before the

Supreme Court the issue that was examined was the determination of

appropriate High Court which could hear a writ petition against an

order passed by an Appellate Tribunal exercising jurisdiction over

several States. The factual background in that case was that the

THE HIGH COURT OF MADHYA PRADESH Writ Petition No.10961 of 2021 (M/s Bansal Constructions Works Pvt. Ltd. Vs. National Company Law Tribunal and others)

appellant who carried on business at Lucknow and was assessed at

Lucknow, filed an appeal which was heared by the Central Excise

and Service Tax Appellate Tribunal (hereinafter referred to as

"CESTAT") at New Delhi. The Tribunal exercised the jurisdiction in

respect of cases arising within the territorial limits of the States of

Uttar Pradesh, Maharashtra and National Capital Territory, Delhi. It is

relevant to mention here that Central Excise Act under which the

dispute arose had a specific provision of preferring an appeal to the

High Court under Section 35-G(1) of the said Act. So the question

before the Supreme Court was whether it would be the High Court at

Delhi which could exercise the jurisdiction and hear the statutory

appeal or the High Court of Allahabad at its Lucknow Bench.

In paragraph 17 of the said judgment, the Supreme Court held

that without doubt it can be said that under Article 227 of the

Constitution of India as also under Clause (2) of Article 226, the

High Court would exercise its discretionary jurisdiction as also the

power to issue writ of certiorari, in respect of orders passed by the

subordinate courts within its territorial jurisdiction or in a situation

where a part of cause of action has arisen within the said High Court.

However, it went to hold that the same test cannot be applied when

the Appellate Court exercises a jurisdiction over a Tribunal situated

in more than one State. In such a situation, the Supreme Court held

THE HIGH COURT OF MADHYA PRADESH Writ Petition No.10961 of 2021 (M/s Bansal Constructions Works Pvt. Ltd. Vs. National Company Law Tribunal and others)

that the High Court situated in the State where the first Court is

located should be considered to be the appropriate Appellate

Authority. In other words, the Supreme Court held that the State

where the original order was passed would have the jurisdiction to

entertain the writ, even though the Appellate Authority against the

original order was situated in another State. The same is the position

in the case before the Delhi High Court reported in 2012 SCC

Online Del 5264 [M/s Chinteshwar Steel Pvt. Ltd. Vs. Union of

India and others]. In that case, the Delhi High Court following the

ratio laid down by the Supreme Court in the case of Ambica

Industries (supra) held likewise.

However, in the case at hand the factual aspects are different.

Undisputedly, no original order has been passed by any authority in

the State of Madhya Pradesh which was taken to the NCLT at

Ahmedabad by the aggrieved party. Merely because the petitioner is

situated in Madhya Pradesh or the fact that the NCLT at Ahmedabad

which passed the impugned order on account of notification passed

by the Central Government on 31.01.2020 was now vested with all

the cases which would otherwise have been tried by the NCLT at

Indore, cannot give jurisdiction to this Court, in view of Article 227

of the Constitution, where High Courts have been vested with the

authority of superintendence over all Courts and Tribunals within the

THE HIGH COURT OF MADHYA PRADESH Writ Petition No.10961 of 2021 (M/s Bansal Constructions Works Pvt. Ltd. Vs. National Company Law Tribunal and others)

territory to which its power extends, precludes this High Court from

entertaining the present writ petition on the ground of lack of

territorial jurisdiction. As the original order itself has been passed by

the NCLT at Ahmedabad and there being no other order which has

been passed by any authority in Madhya Pradesh by which the

petitioner herein was aggrieved by, it would only be the High Court

of Gujarat that would have jurisdiction to entertain the present

petition.

Under the circumstances, in view of the office objection, this

petition is dismissed for want of territorial jurisdiction. However,

liberty is granted to the petitioner to approach the appropriate forum

for the relief prayed for herein.