2000 (11) TMI 1129 - HC - Companies Law

Summary

Issues:
Transfer of proceedings to Ranchi Bench by Chief Justice, Jurisdiction of Ranchi Bench, Transfer of winding up proceedings between principal seat and Circuit Bench, Creditor's entitlement to attachment and realization of debts.

Transfer of Proceedings to Ranchi Bench by Chief Justice:
The judgment addresses the issue of whether the Chief Justice could transfer proceedings to the Ranchi Bench within the same High Court. The court examined the High Court at Patna (Establishment of Permanent Bench at Ranchi) Act, 1976, and the Patna High Court Rules. It was concluded that the jurisdiction of the Ranchi Bench is defined to deal with cases from specific districts, and cases falling under the principal seat's exclusive jurisdiction should not be transferred to the Ranchi Bench. The judgment highlighted that transferring such cases would be illegal.

Jurisdiction of Ranchi Bench:
The judgment analyzed the establishment of the Ranchi Bench and the discretion of the Chief Justice to direct cases to be heard at Patna. It emphasized that the Ranchi Bench's jurisdiction is limited to cases from designated districts, and cases within the principal seat's exclusive jurisdiction should not be transferred. The judgment concluded that the order transferring the case to the Ranchi Bench was against the Act and Rules.

Transfer of Winding Up Proceedings Between Principal Seat and Circuit Bench:
The court discussed the issue of transferring winding up proceedings between the principal seat and the Circuit Bench. It highlighted that the jurisdiction for winding up proceedings is exclusive and unfettered, with only one Company Judge designated by the Chief Justice. The judgment emphasized that all winding up proceedings should be at the principal seat where the liquidation proceedings are attached, following the pattern set by law.

Creditor's Entitlement to Attachment and Realization of Debts:
The judgment briefly touched upon the creditor's contention regarding attachment and realization of debts. It indicated that the law provides for handling such situations concerning debts of corporate bodies. The court refrained from delving into the merits of the debt or strict proof liability under the law. The judgment mentioned the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, and the principle of pari passu ranking among creditors. It noted that parties could address their claims and defenses within the existing legal framework.

In conclusion, the letters patent appeal was allowed, setting aside the order of the learned Judge dated 16-5-2000. The judgment highlighted the impending changes due to the Bihar Reorganisation Act, 2000, which would affect the jurisdiction and proceedings related to the case.