2018 (9) TMI 1927 - HC - Companies Law

Jurisdiction - principles of natural justice - violation of Section 91 and Section 91A of the Maharashtra Co-operative Societies Act - alternate efficacious remedy in view of Section 61 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - In the present case the party has not only one but two alternate remedies available. One remedy that is available is under Section 61 of the said Code to prefer an appeal before the National Company Law Appellate Tribunal. The party has also further remedy under Section 62 of the said Code to prefer an appeal if it is aggrieved by an order of the Appellate Tribunal, before the Hon'ble Supreme Court on question of law. Upon perusal of pleadings and prayer clauses of the petition it would reveal that petition is based on various questions of law that have been framed by the petitioner. Even if the petitioner fails before the learned Appellate Tribunal, the petitioner can very well raise the questions of law which are sought to be raised in the present petition, before the Hon'ble Supreme Court. When the Court is flooded with thousands of petitions, we do not expect the petitioner to approach this Court under Article 226 of the Constitution of India. The Court cannot have the luxury to entertain the petition when the petitioner has not only alternate but equally efficacious remedy in law. Hence the petition is dismissed on the ground of availability of alternate remedy in law. Perusal of the record would reveal that there is no interim protection granted by the earlier Bench when the petition was entertained. Shri Nedumpara states that there was no written order passed by the Court but one of the Bench granted oral protection. The Court proceeds on the basis of the record that is available before it. Notice of Motions are disposed of.

Summary

Issues:
Challenge to the order of National Company Law Tribunal, Mumbai Bench on grounds of jurisdiction and natural justice violation.

Analysis:
The petitioner challenged the order of the National Company Law Tribunal, Mumbai Bench, dated August 18, 2017, citing lack of jurisdiction, violation of natural justice, and contravention of Section 91 and Section 91A of the Maharashtra Co-operative Societies Act. Respondent No.3 raised a preliminary objection regarding the tenability of the petition, arguing that the petitioner had an alternative remedy under Section 61 of the Insolvency and Bankruptcy Code, 2016, to appeal before the National Company Law Tribunal. The petitioner contended that they should have the right of first audience as the dominus litus. The Court clarified that when a party raises a preliminary objection, they must be heard first, and only then the petitioner can respond. Despite the objection, the petitioner was allowed to make their arguments after the respondent's objection was argued. The Court expressed that the petition should be dismissed due to the availability of an alternate remedy, but the petitioner requested a brief hearing which was granted. However, the Court refused to extend the time for arguments beyond the allotted 10 minutes, emphasizing the constraints faced by the Court in hearing extensive arguments to satisfy the lawyer.

The petitioner relied on the Constitution Bench judgment in A.R. Anthulay vs. R.S. Nayak, highlighting that they could raise the issue in a suit or before the Court under Article 226 of the Constitution of India, despite having an alternate remedy. The Court acknowledged its power to entertain petitions under Article 226 even when an alternate remedy exists but emphasized that it is a self-imposed restraint. In this case, the Court noted that the petitioner had two alternate remedies available under the Insolvency and Bankruptcy Code - appeal before the National Company Law Appellate Tribunal and, if needed, before the Supreme Court on a question of law. The petition, based on legal questions framed by the petitioner, could be pursued through these alternate remedies, making the petition under Article 226 unnecessary. Therefore, the Court dismissed the petition due to the availability of equally efficacious remedies in law, emphasizing the importance of not burdening the Court with petitions when alternate remedies exist.

The Court rejected the petitioner's request for a stay of the order, noting the absence of any interim protection granted earlier. The Court emphasized that decisions are based on written orders, not oral communications between the Court and counsel. The respondent's counsel confirmed that no oral protection was granted. With the dismissal of the writ petition, the Notice of Motions was disposed of accordingly, as nothing remained pending for consideration.