2025 (2) TMI 595 - HC - Companies Law

Doctrine of forum convinens - forum shopping - jurisdiction of High Court to entertain the petition filed by the petitioners seeking to quash the order passed by the Committee of the ICICI Bank - Classification of Petitioner s account as fraud - HELD THAT - Admittedly the Petitioners and the branch of the Respondent No. 1-Bank transacting with the Petitioners is in New-Delhi. The OTS Proposals are also being exchanged with the New-Delhi Branch of the ICICI Bank. All the correspondence and the communication between the parties are exchanged with the New-Delhi Branch. Hence the Petitioners rightly approached the Delhi High Court by way of its earlier W. P. No. 11886 of 2021. The integral part of the cause of action even going by the Petitioners own averment in paragraph 29 of its Petition before the Delhi High Court arose within the territorial limits of Delhi High Court. Thus applying the settled legal position to the facts in the present matter it is clear that the cause of action must be addressed to the Delhi High Court. The Petitioners have assailed the act of the Committee of the Bank in classifying its accounts as fraud even though the Master Circular is not assailed perhaps since its validity was already tested before the Supreme Court. Nevertheless the integral part of the cause of action is similar in both the Petitions. Even the averment in the present Petition regarding cause of action relating to the corporate office of the Respondents being within the territorial jurisdiction of this Court is identical to the averment made in the Petition before the Delhi High Court. It is failed to see as to how the Petitioners could have averred the same pleading in both these Petitions based on the corporate office of the Respondents to selectively choose a forum of their choice. Invoking the jurisdiction of this Court in the second round of litigation involving the same issue is nothing but Forum-Shopping on the part of the Petitioners. The forum convinens is undoubtedly the Delhi High Court and not this Court. Conclusion - The petitioners engaged in forum shopping and should have filed the petition before the Delhi High Court. Petition disposed off.

Summary

The issues presented and considered in the judgment are as follows:1. Whether the High Court has jurisdiction to entertain the petition filed by the petitioners seeking to quash the order passed by the Committee of the ICICI Bank classifying the petitioners' account as fraud.2. Whether the petitioners engaged in forum shopping by filing the petition before the Bombay High Court instead of the Delhi High Court.The detailed analysis of the issues is as follows:Issue 1: Jurisdiction of the High Court- Relevant legal framework and precedents: Article 226 of the Constitution of India and Section 20(c) of the Code of Civil Procedure were cited.- Court's interpretation and reasoning: The Supreme Court's decisions in Kusum Ingots and Alloys Ltd. v. Union of India & Anr. and State of Goa v. Summit Online Trade Solutions (P) Ltd. were referenced to determine the jurisdiction of courts based on the cause of action.- Key evidence and findings: The petitioners and the ICICI Bank branch transacting with them were in New Delhi, leading to the conclusion that the cause of action arose within the territorial limits of the Delhi High Court.- Application of law to facts: The court applied the legal principles to the facts of the case, emphasizing that the cause of action should be addressed to the Delhi High Court.- Conclusions: The court dismissed the petition, stating that the petitioners should file a fresh petition before the appropriate court with jurisdiction.Issue 2: Forum Shopping Allegation- Relevant legal framework and precedents: The court referred to the doctrine of forum conveniens and the nature of the cause of action.- Court's interpretation and reasoning: The court analyzed the petitioners' actions in filing the petition before the Bombay High Court instead of the Delhi High Court, where the cause of action arose.- Key evidence and findings: The petitioners' averments in both the present petition and the earlier petition before the Delhi High Court were found to be identical, indicating forum shopping.- Application of law to facts: The court applied the doctrine of forum conveniens and scrutinized the cause of action based on the factual matrix of the case.- Conclusions: The court concluded that the petitioners engaged in forum shopping and should have filed the petition before the Delhi High Court. The petition was dismissed with liberty to file a fresh petition before the appropriate court.Significant Holdings:- The court held that the cause of action should determine the jurisdiction of the court, emphasizing that the petitioners should have filed the petition before the Delhi High Court where the cause of action arose.- The court dismissed the petition, highlighting the importance of judicial propriety and preventing forum shopping by litigants.In conclusion, the Bombay High Court dismissed the petition filed by the petitioners, citing lack of jurisdiction and forum shopping as reasons for the dismissal. The court emphasized the importance of filing petitions before the appropriate court based on the cause of action.