2020 (8) TMI 699 - AT - Companies Law

Territorial Jurisdiction - Continuation of proceedings before Ahmedabad Bench of NCLT - Section 419(1) of the Companies Act, 2013 - Appellants claimed before the NCLT that the matters cannot proceed at Ahmedabad but in spite of objections when the NCLT continued to proceed, the present Appeals have been filed - Whether after notification, dated 08.03.2019, the NCLT, Ahmedabad has jurisdiction over TP-122/397- 398,58-59,235(2),237(b)NCLT.AHM/2016(New) and other connected matters, which pertain to the State of Madhya Pradesh? HELD THAT - The present Appeals have been filed referring to this Notification dated 8th March, 2019 to claim that from 8th March, 2019 onwards the Bench at Ahmedabad had no jurisdiction to exercise with regard to matters arising from the State of Madhya Pradesh - When these Appeals were filed, Notices were issued to not only Registrar, NCLT, Ahmedabad Bench but also to Registrar, NCLT, Principal Bench, New Delhi asking them to file Affidavits. It was recorded in proceeding dated 20.08.2019 to issue Notice to Respondents as to why the concerned cases pending before NCLT, Ahmedabad Bench, Ahmedabad be not transferred to Indore Bench, Madhya Pradesh pursuant to the above Notification dated 8th March, 2019. The Order dated 20.08.2019 further directed the Ahmedabad Bench not to hear the case on merits and to adjourn the same to subsequent dates till final Orders are passed in these Appeals. These Appeals were filed on the basis that by Notification dated 8th March, 2019, the Ahmedabad Bench lost jurisdiction over matters relating to State of Madhya Pradesh. By Notification dated 31st January, 2020 which has now been issued by the Ministry of Corporate Affairs, the foundation for maintaining these Appeals has been lost. Although the learned Counsel for Appellant is trying to argue regarding the validity and legality of the Notification dated 31st January, 2020, we find that already High Court of Madhya Pradesh was moved by the Appellant - PHG International Private Limited in Writ Petition No.4479 2020 which has considered this very Notification dated 31st January, 2020 and dismissed the same. Appellants can pursue remedies as available in law. However, it appears to us that with Notification dated 31.01.2020 issued by Central Government, we have no reason to keep these Appeals pending and stay operating. Considering the Notification dated 1st June, 2016 read with the Notification dated 8th March, 2019, read with the present Notification dated 31st January, 2020, it is apparent that jurisdiction of State of Madhya Pradesh will be exercised by Ahmedabad Bench of NCLT till the operationalization of Indore Bench of NCLT which will be notified by the Central Government by a subsequent notification - There are no reasons to keep these Appeals pending now. Appeal disposed off as now they have become infructuous.

Summary

Issues:
1. Jurisdiction of NCLT Ahmedabad over matters from the State of Madhya Pradesh.
2. Validity and implications of Notifications dated 8th March 2019 and 31st January 2020.
3. Stay orders and subsequent developments in the case.

Issue 1: Jurisdiction of NCLT Ahmedabad over matters from the State of Madhya Pradesh

The Appeals questioned the jurisdiction of NCLT Ahmedabad over matters from the State of Madhya Pradesh post the Notification dated 8th March 2019. The Appellants argued that the Bench at Ahmedabad had no jurisdiction to handle cases from Madhya Pradesh after this notification. The subsequent proceedings involved the consideration of relevant notifications and territorial jurisdiction delineated by the Central Government for NCLT benches.

Issue 2: Validity and implications of Notifications dated 8th March 2019 and 31st January 2020

The Notification dated 8th March 2019 altered the territorial jurisdiction of NCLT benches, specifically omitting the State of Madhya Pradesh from the jurisdiction of NCLT Ahmedabad. However, the subsequent Notification dated 31st January 2020, issued by the Ministry of Corporate Affairs, reinstated the jurisdiction of the Ahmedabad Bench over matters from Madhya Pradesh until the operationalization of the Indore Bench. The Appellants challenged the validity of the latter notification, leading to legal proceedings and a writ petition in the High Court of Madhya Pradesh.

Issue 3: Stay orders and subsequent developments in the case

Following the filing of Appeals and issuance of stay orders, various legal actions were taken by the parties involved. The Respondents filed applications seeking to vacate the stay orders based on the Notification dated 31st January 2020. The Appellants contested the stay vacation, citing challenges to the notification's legality and the High Court's dismissal of their writ petition. The Tribunal ultimately found that the Appeals had become infructuous due to the new notification, leading to the disposal of the Appeals without costs.

In conclusion, the judgment addressed the jurisdictional issues of NCLT Ahmedabad over matters from Madhya Pradesh, the validity and impact of relevant notifications, and the subsequent legal actions taken by the parties involved. The Tribunal's decision to dispose of the Appeals due to the new notification's implications highlighted the evolving nature of jurisdictional matters and the need to adhere to regulatory changes in the legal landscape.