2019 (5) TMI 1784 - Tri - Insolvency and Bankruptcy

Institution of the suit or other legal proceedings on behalf of the Corporate Debtor under Liquidation - Courts/Tribunals situated within the jurisdiction of NCLT ordering the Liquidation - section 60(5) of the IBC, 2016 - the applicant has sought permission under section 60 (5) of IBC,2016 permitting him to apply within the jurisdiction of NCLT, Mumbai even though the Registered Offices of the defaulter Corporate Debtors are situated in different states and jurisdiction lies in different NCLT, Benches - HELD THAT - It is to be clarified that as per the statutory provision, case against the company can be filed where the registered office of the company is situated. This statutory provision provides the jurisdiction, and it cannot be changed under the guise of section 60(5) of the Code. While exercising the jurisdiction under section 60(5), the jurisdiction of other benches cannot be shifted to Mumbai Bench where the registered office of liquidating company lies. It is beyond the scope of this Bench to shift the jurisdiction of specified cases to Mumbai Bench under the guise of section 60(5) of the Code. Application dismissed.

Summary

Issues involved:
Liquidator seeking directions for institution of legal proceedings on behalf of Corporate Debtor under Liquidation, jurisdiction of NCLT benches for filing cases against debtors, interpretation of section 60(5) of IBC, 2016.

Analysis:
The Liquidator filed MA 1731/2019 seeking directions to file legal proceedings on behalf of the Corporate Debtor under Liquidation. The Liquidator emphasized the need to expedite the process of realising assets and recovering debts, especially from unresponsive debtors. The application aimed to seek permission to file cases against defaulter Corporate Debtors before the Mumbai Bench of NCLT, even if their registered offices were in different states. The Liquidator referred to a Supreme Court judgment highlighting the historical evolution of provisions related to winding up proceedings to support the application.

The Tribunal considered the arguments presented by the Liquidator and noted the statutory provision that cases against a company should be filed where its registered office is situated. The Tribunal clarified that jurisdiction is determined by the registered office location and cannot be altered under section 60(5) of the Code. The Tribunal emphasized that it is not within its purview to shift jurisdiction from specified benches to Mumbai Bench based on section 60(5) of the Code. Consequently, the Tribunal found the application lacking merit and rejected MA 1731 of 2019.

In conclusion, the Tribunal dismissed the application, stating that the request to shift jurisdiction to the Mumbai Bench for filing cases against debtors of the Corporate Debtor was not permissible under the law. The judgment underscored the importance of adhering to statutory provisions regarding jurisdiction and highlighted that such provisions cannot be circumvented using section 60(5) of the Code.