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2024 (7) TMI 1467 - HC - Companies LawLack of territorial jurisdiction - petition seeking initiation of investigation into the affairs of M/s Vikram Structures Pvt. Ltd. (VSPL) and its related parties by the SFIO dismissed on the ground of lack of territorial jurisdiction - HELD THAT - This Court is of the view that the foundation for approaching the Ministry of Corporate Affairs, Government of India is the order passed by NCLT, Bengaluru. Moreover as the registered office of VSPL is situated in the state of Karnataka, the High Court which would have the jurisdiction to deal with the issues arising out of the order passed by NCLT, Bengaluru would be the Karnataka High Court. The learned Single Judge has rightly refused to exercise its discretionary jurisdiction by invoking the Doctrine of Forum Conveniens and directed the Appellant to approach the Karnataka High Court instead. Appeal dismissed.
Issues: Lack of territorial jurisdiction for writ petition seeking investigation into the affairs of a company.
In this case, the Appellant filed an appeal challenging the judgment passed by the Single Judge dismissing their writ petition seeking an investigation into the affairs of a company by the SFIO. The Appellant argued that the cause of action for the writ petition, based on the inaction of the Ministry of Corporate Affairs, arose within the territorial jurisdiction of the High Court. On the other hand, the Union of India contended that an investigation had already been ordered by the Central Government under the Companies Act, 2013. The High Court referred to the doctrine of forum conveniens and analyzed the nature of the cause of action, citing precedents like Sterling Agro Industries Ltd. vs. Union of India & Ors. The Court found that the alleged acts of cheating and misappropriation of funds by the company and its directors had arisen in the State of Karnataka, where the subject land and relevant agreements were located and executed. As the registered office of the company was in Karnataka, the High Court with jurisdiction over the issues arising from the NCLT order would be the Karnataka High Court. Therefore, the High Court dismissed the appeal, directing the Appellant to approach the Karnataka High Court instead.
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