2003 (10) TMI 395 - HC - Companies Law

Issues Involved:
1. Jurisdiction of the High Court of Allahabad to hear company petitions for winding up companies with registered offices in Lucknow.
2. Validity and interpretation of orders passed by the Chief Justice under Clause 14 of the Uttar Pradesh High Court Amalgamation Order, 1948.
3. Procedural and administrative issues arising from conflicting orders and jurisdictional ambiguities.

Detailed Analysis:

Issue 1: Jurisdiction of the High Court of Allahabad
The primary issue is whether the High Court of Allahabad has jurisdiction to hear company petitions for winding up companies whose registered offices are in Lucknow. The petitions were filed under Section 439(e) and (f) of the Companies Act by the Registrar of Companies, U.P. and Uttaranchal, Kanpur. The companies and their directors are being prosecuted based on a CBI investigation revealing fraud and forgery. The petitions were directed to be advertised, and the official liquidator was appointed as the provisional liquidator.

A preliminary objection was raised by the respondents regarding the jurisdiction of the Allahabad High Court, arguing that the registered offices of the companies are situated in Lucknow. The question of jurisdiction hinges on the interpretation of Clause 14 of the Uttar Pradesh High Court Amalgamation Order, 1948.

Issue 2: Validity and Interpretation of Orders under Clause 14
Clause 14 of the Amalgamation Order allows the Chief Justice to direct where the High Court and its judges shall sit. The clause includes provisos allowing the Chief Justice to specify areas in Oudh for the Lucknow Bench's jurisdiction and to direct that any case or class of cases arising in these areas be heard at Allahabad.

Several orders passed by the Chief Justice under Clause 14 were examined:
- Order dated 26-7-1948: Directed that the Lucknow Bench shall exercise jurisdiction in the whole of Oudh.
- Order dated 15-7-1949: Excluded the Lucknow Bench from exercising jurisdiction over cases under the Indian Companies Act, 1913.
- Order dated 5-8-1975: Directed that the Lucknow Bench shall exercise jurisdiction over cases under the Companies Act, 1956 up to the stage of winding up.
- Order dated 4-1-2003: Restored the position regarding the exercise of jurisdiction under the Companies Act as enforced from 15-7-1949.
- Order dated 14-1-2003: Modified the earlier order to reflect the date 1-10-1975 instead of 15-7-1949.

The Supreme Court in Nasiruddin v. State Transport Appellate Tribunal (AIR 1976 SC 331) interpreted the first proviso to Clause 14, stating that the Chief Justice's power to specify areas in Oudh for the Lucknow Bench's jurisdiction can be invoked only once. This interpretation was affirmed in U.P. Rashtriya Chini Mill Adhikari v. State of U.P. (AIR 1995 SC 2148).

Issue 3: Procedural and Administrative Issues
The conflicting orders and jurisdictional ambiguities have led to procedural confusion and administrative challenges. For instance, multiple petitions for winding up the same company were filed and entertained both at Allahabad and Lucknow, leading to inconsistent orders.

- M/s. Sapa Electricals Pvt. Limited: Different winding up petitions were filed at both Lucknow and Allahabad, resulting in conflicting orders regarding the appointment of provisional liquidators and the winding up of the company.
- Kuber Mutual Benefit Ltd.: The Reserve Bank of India filed a winding up petition at Allahabad, while the company and its directors filed cases at Lucknow, leading to conflicting directives regarding the company's assets.

The judgment highlights the need for an authoritative pronouncement to settle the jurisdiction dispute. The matter was referred to a Division Bench to decide whether the company petition for winding up a company with its registered office in Lucknow is maintainable in the High Court at Allahabad.

Conclusion:
The judgment underscores the complexities arising from jurisdictional disputes between the Allahabad and Lucknow Benches of the High Court. It calls for a clear and authoritative resolution to ensure consistency and avoid procedural chaos in handling company matters. The matter was referred to a Division Bench for a definitive ruling on the jurisdictional issue.

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