1997 (7) TMI 548 - HC - Companies Law

Summary

Issues Involved:
1. Maintainability of the company petition at Allahabad.
2. Jurisdiction of the Lucknow Bench in company cases.
3. Validity of the notification dated July 15, 1949.
4. Interpretation of the term "heard" in the context of jurisdiction.
5. Application of Section 10 of the Companies Act, 1956.

Issue-wise Detailed Analysis:

1. Maintainability of the Company Petition at Allahabad:
The appeal challenges the order overruling the appellant's objection regarding the maintainability of the company petition filed at Allahabad. The respondent, Punjab National Bank, filed a petition for winding up the appellant company under Sections 433, 434, and 439 of the Companies Act, 1956, on the grounds of the company's inability to pay its debts. The appellant argued that the petition should have been filed at the Lucknow Bench, not Allahabad.

2. Jurisdiction of the Lucknow Bench in Company Cases:
The appellant contended that the notification dated July 15, 1949, excluding the jurisdiction of the Lucknow Bench in company cases, was issued under the second proviso to para. 14 of the United Provinces High Courts (Amalgamation) Order, 1948. The appellant argued that the second proviso only allows the Chief Justice to order that cases already instituted at Lucknow be heard at Allahabad, not to exclude future cases from being instituted at Lucknow.

3. Validity of the Notification Dated July 15, 1949:
The appellant claimed that the notification dated July 15, 1949, partially modified the notification dated July 26, 1948, defining the jurisdiction of the Lucknow Bench, and was therefore invalid. The court, however, found that the notification was passed under the first proviso to para. 14, which allows the Chief Justice to define the jurisdiction and power of judges sitting at Lucknow. The order excluded the exercise of jurisdiction and power in respect of certain cases, including those under the Companies Act, from the Lucknow Bench.

4. Interpretation of the Term "Heard" in the Context of Jurisdiction:
The appellant relied on the Supreme Court's interpretation in Nasiruddin v. State Transport Appellate Tribunal, AIR 1976 SC 331, arguing that the term "heard" does not include the institution of cases. The court, however, clarified that the notification dated July 15, 1949, was issued under the first proviso to para. 14, and it excluded the exercise of jurisdiction and power, which includes the institution of cases, from the Lucknow Bench. The court found that the notification was valid and did not suffer from want of authority.

5. Application of Section 10 of the Companies Act, 1956:
The appellant argued that under Section 10 of the Companies Act, 1956, the company petition for winding up should be filed at Lucknow, not Allahabad. The court, however, found that the High Court at Allahabad has jurisdiction to hear company petitions filed under the Companies Act. The court noted that the Chief Justice's order dated July 15, 1949, excluded the jurisdiction of the Lucknow Bench in company cases, and the company judge at Allahabad alone has jurisdiction to entertain such petitions.

Conclusion:
The court dismissed the appeal, finding no illegality or error of law in the impugned order. The court held that the notification dated July 15, 1949, was valid and excluded the jurisdiction of the Lucknow Bench in company cases. The court also found that the company petition was rightly filed at Allahabad, and no prejudice or failure of justice was shown by the appellant. The interim order dated March 31, 1997, was vacated, and the appeal was dismissed with no order as to costs.