Madhya Pradesh High Court
Madanlal Juharmal Goyal vs Union Of India on 21 January, 2025
Author: Vivek Rusia
Bench: Vivek Rusia
NEUTRAL CITATION NO. 2025:MPHC-IND:2244 -1-
WP No.7170/24
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE VIVEK RUSIA
&
HON'BLE SHRI JUSTICE GAJENDRA SINGH
ON THE 21st OF JANUARY, 2025
WRIT PETITION No. 7170 of 2024
MADANLAL JUHARMAL GOYAL AND OTHERS
Versus
UNION OF INDIA AND OTHERS
Appearance:
Shri Manoj Kumar Sharma, learned Senior Counsel with Shri Siddhartha
Kumar Jain, learned counsel for the petitioners.
Shri Vikramjit Banerjee, learned Senior Counsel (A.S.G.) with Shri
Sudhanshu Vyas, learned counsel for respondent No.2.
ORDER
Per: Justice Vivek Rusia
1. Petitioners have filed this present petition under Article 226 of the
Constitution of India seeking quashment of impugned sanction dated
30.11.2021 issued by respondent No.1 and the look out circular issued
against them.
2. The company SPG Multi Trade Private Limited (hereinafter referred
as "Company") was incorporated on 24.2.2006 by the erstwhile promoters.
The petitioners became major shareholder of the Company by virtue of
purchase of shares between the years 2008 to 2011. The company availed
financial assistance in the year 2009 from IDBI Bank to the tune of Rs.5 Cr.,
however the said facility was increased from time to time up to 2017 to the
tune of Rs.70 Cr. In the year 2016 the company made a request to the IDBI
Bank for grant of NOC to enter into a transaction for taking over company
by a listed entity. The IDBI Bank refused to give such NOC and insisted that
the existing management should continue with the company.
3. The IDBI Bank declared the account of the company as NPA on
18.3.2019 due to default in repayment of the loan amount. On 3.3.2020 the
CIRP (Corporate Insolvency Resolution Process) proceedings were admitted
against the company under Section 9 of the Insolvency and Bankruptcy
Code, 2016 (hereinafter referred as "IBC") on account of the complaint
made by one of the operational creditor. Later on a liquidation order was
passed on 4.12.2020. A transaction auditor submitted a report, based on
which the liquidator took steps to file an application under Section 43 & 45
of IBC. Subsequently on 21.6.2021 the liquidator filed an application under
Section 66 of the IBC, which is pending for adjudication.
4. The respondent No.1 issued the sanction to investigate into the affairs
of the Company on 30.11.2021 by exercising power under Section 212 of
the Companies Act. In the meantime the FIR has also been registered
against the petitioners. The petitioners were served with the summons for
investigation by the respondent No.2 on 11.3.2024. Being aggrieved by the
aforesaid, the petitioners approached this Court by way of present writ
petition. Vide order dated 19.3.2024 notices were issued to the respondents
and interim protection was granted to the petitioners. On 15.4.2024 by way
of one last indulgence, one week's time was granted to file reply. Since the
reply was not filed, the writ petition was heard finally on 23.4.2024 and vide
order dated 3.5.2024 same was allowed by quashing the impugned sanction
dated 30.11.2021 and the look out circular. Being aggrieved by the aforesaid
order, the respondents approached the Apex Court by way of Civil Appeal
No.10413-10414 of 2024 and vide order dated 9.9.2024 the Apex court has
set aside the order dated 3.5.2024 and restored the writ petition with the
direction to the respondents to file counter affidavit on 1.10.2024. The
interim relief which was in operation during pendency of the writ petition,
was directed to continue till the final disposal of the writ petition.
5. The respondents have filed the reply raising a preliminary objection
about the maintainability of this writ petition before this Court for want of
territorial jurisdiction.
6. Learned senior counsel appearing for the respondents submits that
the petitioners have wrongly approached this Court by way of writ petition
challenging the impugned sanction dated 30.11.2021 bearing Reference
No.34453/2021/581 because the company is registered at Mumbai, the
sanction has been granted by the respondent No.1 at New Delhi and the
Serious Fraud Investigation Office (SFIO) is conducting a investigation at
New Delhi. Merely because the summons were served to the petitioners at
their residential address - 106, M.G. Road, Sendhwa, District Barwani
(M.P.), would not give cause of action to file the present petition before the
High Court of M.P., Bench at Indore. Hence, the petition is liable to be
dismissed at this stage.
7. Shri Manoj Kumar Sharma, learned senior counsel for the petitioners
submits that the petitioners have a good prima facie case on merit. The
petitioners have already submitted an OTS proposal to the IDBI Bank on
31.12.2024 for Rs.23 Crores, out of which an amount of Rs.11.65 Crores
had been paid and sought time to pay the balance fund of Rs.11.35 Crores.
Thereafter a DD of Rs.11.35 Crores has also been presented, which has been
encashed/accepted by the Bank. Shri Manoj Kumar Sharma, learned senior
counsel further submits that the respondents No.1 and 2 have already
approached the NCLT, Bench at Mumbai vide Company Petition
No.274/2022 against the directors and the company under Section 241(2)
read with S. 242 read with S.246 read with S.339 of the Companies Act,
2013 on 22.12.2022. According to Mr Manoj Sharma Ld.Sr. Advocate that
properties of the petitioners are situated at Sendhwa and the petitioners have
been served with the summons at Sendhwa, since, in pursuant to the service
of said summons the petitioners are required to appear before the
SFIO,therefore, the part of cause of action arises within the territorial
jurisdiction of this Court. Hence, the writ petition is very much maintainable
before this Court. In support of his contention, learned senior counsel has
placed reliance upon the judgment passed by the Apex Court in the case of
M/s. Kusum Ingots and Alloys Ltd. Vs. Union of India and another
reported in AIR 2004 SC 2321 and in the case of Nawal Kishore Sharma
Vs. Union of India and others reported in (2014) 9 SCC 329.
8. Learned senior counsel appearing for the respondent submits that in
the Company Petition No.274/2022 the Hon'ble NCLT, Mumbai has passed
a restrained order dated 14.12.2022 against the petitioners from mortgaging
or creating charge or lien or third party interest in any way alienating the
movable and immovable property. The petitioners were aware about the
investigation going on against them and in order to get the time, they
submitted an OTS proposal only in the month of January, 2024. The writ
petition suffers not only for territorial jurisdiction but liable to be dismissed
on the ground of delay and laches also. It is further submitted that the
authority or government in the present case is located in Delhi, from where
the investigation order dated 30.11.2021 was issued, or in Mumbai from
where the investigation is being carried out and the summons/notices have
been issued. The registered office of the company in question is also located
in Mumbai only and in view of Section 463(1)(a) of the Companies Act,
2013, the Court at Mumbai will exercise the jurisdiction in the present case.
Learned senior counsel has placed reliance upon the judgments of Apex
Court in the case of Oil and Natural Gas Commission Vs. Utpal Kumar
Basu and others [1994 AIR SCW 3287], State of Rajasthan and others Vs.
M/s. Swaika Properties and another [AIR 1985 SC 1289] and the judgment
passed by High Court of Kerala at Ernakulam in the case of The Registrar,
Indian Maritime University Vs. Dr. K.G. Viswanathan and Another vide
judgment dated 29.10.2014 passed in WA No.743/2014.
9. We have heard the learned senior counsel for the parties only on the
issue of jurisdiction before proceeding further on merit of the case.
10. It is not in dispute that petitioners are the directors of the company,
which has registered office at Mumbai. The impugned sanction has been
granted by the respondents stationed at New Delhi. The petitioners have
been called upon to appear vide summons dated 4.3.2024 at Mumbai.
Therefore, except receipt of the summons at their residential address at
Sendhwa, none of the cause of action has arisen within the territorial
jurisdiction of this Court.
11. In the case of Nawal Kishore Sharma (supra), in which the Patna
High Court entertained the writ petition because the ailing petitioner was
residing at Patna. In the case of Nawal Kishore Sharma (supra) the writ
petition was related to release of retrial benefits. The Apex Court has held
that on the plain reading of the amended provision in Clause 2 of Article
226 now the High Court can issue a writ when the person or authority
against whom the writ is issued is located outside its territorial jurisdiction,
if the cause of action wholly or partially arises within the court's territorial
jurisdiction. In the case of M/s. Kusum Ingots and Alloys Ltd. (supra), the
Apex Court has elaborately discussed with Clause 2 of Article 226 of the
Constitution of India, particularly the meaning of the word "cause of action"
with reference to Section 20(c), Section 141 of the CPC and observed that
even if the small part of cause of action arises within the territorial
jurisdiction of High Court, the same by itself may not be considered to be a
determinative factor compelling the High Court to decide the matter on
merit. In appropriate cases, the High Court may refuse to exercise its
discretionary jurisdiction by invoking the doctrine of forum conveniences.
12. Recently in the case of State of Goa Vs. Summit Online Trade
Solutions Private Limited and others reported in (2023) 7 SCC 791, the
Apex Court has held that while dealing with an objection as to lack of
territorial jurisdiction to entertain writ petition on the ground that the cause
of action has not arisen within its jurisdiction, the High Court essentially has
to arrive at a conclusion on the basis of the averments made in the petition
memo treating the contents as true and correct. The party invoking the writ
jurisdiction has to disclose the integral facts pleaded in support of the cause
of action do constitute a cause empowering the high court to decide the
dispute and that, at least, a part of the cause of action to move the high court
arose within its jurisdiction. It is further held that such pleaded facts must
have a nexus with the subject matter of challenge based on which the prayer
can be granted. Those facts which are not relevant or germane for grant of
the prayer would not give rise to the cause of action conferring jurisdiction
on the court. The Hon'ble Apex Court held that merely because the
petitioner-company has its office at Gangtok, Sikkim, the same by itself
does not form an integral part of the cause of action authorizing the
petitioner-company to move the High Court. In para-21 the Apex Court has
followed the view taken in the case of M/s. Kusum Ingots and Alloys Ltd.
(supra) that even if a small part of the cause of action arises within the
territorial jurisdiction of a High Court, the same by itself could not have
been a determinative factor compelling the High Court to keep the writ
petitions alive.
13. In this petition the petitioners are challenging the validity of the
impugned sanction dated 30.11.2021, which was granted by the respondents
at Delhi. The petitioners did not approach immediately in the year 2021 or
2022 before this court by way of writ petition which is a cause of action for
filing this petition. In the year 2024 only a summon has been issued by the
Ministry of Corporate Affairs, Serious Fraud Investigation Office, Mumbai
for appearance of the petitioners, which is not forming the integral part of
the order of sanction. In the case of State of Rajasthan and others Vs. M/s.
Swaika Properties and another [AIR 1985 SC 1289], the Apex court has
held that mere service in the State of Bengal of the notice under Section
52(2) of the Rajasthan Urban Improvement Act 1959 on the owner of the
land situated in the State of Rajasthan intimating of the State Government
proposal to acquire the land for the public purpose, does not constitute an
integral part of the cause of action and sufficient to invest the Calcutta High
Court with jurisdiction to entertain a petition under Article 226 of the
Constitution of India challenging the validity of the notification acquiring
the land.
14. In view of the above discussion we are of the considered opinion that
this bench of the High court of M.P. lacks territorial jurisdiction to entertain
this writ petition. Hence without expressing any opinion on merit of the case
this writ petition is dismissed with liberty to avail the legal remedy available
under the law.
(VIVEK RUSIA) (GAJENDRA SINGH)
JUDGE JUDGE
trilok
