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TMI Blog2002 (7) TMI 725X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The writ petition filed by the petitioner-company and its Managing Director is supported by a sworn affidavit filed by the second petitioner, who is the Managing Director of the Company. The petitioners prayed the following reliefs. . . . to issue a writ of mandamus, writ, order or direction declaring the action of the respondents is not taking necessary prohibitive steps for the safety of the petitioners and on the other hand, calling upon the writ petitioners to make payments on the basis of civil transactions between the petitioners and their investors/shareholders as arbitrary, illegal, unjust, unconstitutional without jurisdiction, without authority of law and violative of fundamental rights guaranteed under articles 14,19, 20 and 21 of the Constitution of India and also has the effect of violation of constitutional guarantees guaranteed to the petitioner under Articles 50 and 300A of the Constitution of India and also contrary to ratio laid down by this Hon ble Court and direction to the 1st respondent to centralize all alleged complaints against the Ist and 2nd petitioners, if any and carry out the investigations in accordance with law and for consequential reliefs and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vestors would be utilized for allotment of shares to them and funds/deposits collected would be invested in other companies. The petitioners allege that they collected non-interest yielding/profit-sharing investments in the form of equity and invested in equity shares. There were baseless rumours of cheating against first petitioner and, therefore, some of the members of public filed complaints in various Police Stations including in the Police Station at Shahjahanabad, Bhopal, Madhya Pradesh; Sarafa Police Station, Indore; and New Friends Colony Police Station, New Delhi. The Directors of the Company obtained bail/anticipatory bail. As there was a threat to their lives, the second petitioner left the city of Mhow and is leading a subdued life elsewhere. It is also alleged that in spite of repeated requests to some of the Station House Officers (SHOs) to extend proper protection, those Police Officers instead of protecting the second petitioner are compelling to repay the deposits collected by the Company. It is also alleged that sometime ago when some of the investors attacked the office of second petitioner and threatened with physical abuses, he sought protection from the third ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01 before his Lordship Hon ble Sri Justice Goda Raghuram the learned Advocate Commissioner made oral request that he be discharged due to personal circumstances. Therefore, his Lordship by order dt. 19-4-2001 while discharging Sri P.V. Vidyasagar as Advocate Commissioner, appointed Sri R. Raghunandan Rao, a practising Lawyer of this Court to take charge of the movable and immovable properties. The new Advocate Commissioner was also further directed as under : The said Advocate Commissioner shall invite claims from all the creditors and also supervise the management of the properties ensuring that the properties are not alienated and in any way encumbered. The manage-ment and administration, wherever it is required in respect of the properties aforementioned shall be under the supervision and instructions of the Advocate Commissioner. The petitioners shall not be entitled to deal with the properties except with and in accordance with the written instructions of the Advocate Commissioner. The Advocate Commissioner shall submit an interim report as to the nature of the properties, their valuation, and adequacy of the value of the properties qua the liabilities of the petitioners t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The learned counsel did not place any material as to any complaint lodged with the third respondent or anywhere in Andhra Pradesh nor did he place any material that the second petitioner has lodged a complaint when allegedly some of the investors behaved in such a manner that the second petitioner reasonably apprehends that there is threat to his life. The learned Counsel is also not able to place any material to show that a part of cause of action arose within the territorial jurisdiction of this Court under article 226 of the Constitution of India. The learned counsel only makes a request that the Registrar of the Companies be directed to conduct enquiry under Section 241 of the Companies Act, 1956. Before adverting to these submissions, it is necessary to refer to the counter-affidavit filed by the Station House Officer, Mirchowk Police Station, Hyderabad on 9-11-2000 which was not brought to the notice of the Court when the two learned Judges passed orders appointing Advocate Commissioners. Counter Averments 12. The third respondent in the counter denied all the allegations made in the writ affidavit. It is also stated that the various allegations made by the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to entertain the writ petition the Court must take all the pleas and pleadings in support of cause of action into consideration without embarking about the correctness or otherwise of the facts. It was so held by the Supreme Court in Aligarh Muslim University v. Vinay Engg. Enterprises (P) Ltd. [1994] 4 SCC 710 as well as Oil Natural Gas Commission v. Utpal Kumar Basu [1994] 4 SCC 711. In Aligarh Muslim University s case ( supra ) it was held under : "We are surprised, not a little, that the High Court of Calcutta should have exercised jurisdiction in a case where it had absolutely no jurisdiction. The contracts in question were executed at Aligarh, the construction work was to be carried out at Aligarh, even the contracts provided that in the event of dispute the Aligarh Court alone will have jurisdiction. The arbitrator was from Aligarh and was to function there. Merely because the respondent was a Calcutta-based firm, the High Court of Calcutta seems to have exercised jurisdiction where it had none by adopting a queer line of reasoning. We are constrained to say that this is a case of abuse of jurisdiction and we feel that the respondent deliberately moved the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eged must depend upon whether the averments made in paragraphs 5,7,18, 22, 26 and 43 are sufficient in law to establish that a part of the cause of action had arisen within the jurisdiction of the Calcutta High Court." 17. The Apex Court further held that merely because NICCO became aware of the contract advertisement in the Times of India, Calcutta and submitted their tender from Calcutta, it cannot be said that cause of action arose partly within the territorial jurisdiction of Calcutta High Court. Further, the Supreme Court observed [Para 8]: ". . . . when it learnt that it was considered ineligible it sent representations, including fax messages, to EIL, ONGC, etc., at New Delhi, demanding justice. As stated earlier, the Steering Committee finally rejected the offer of NICCO and awarded the contract to CIMMCO at New Delhi on 27-1-1993. Therefore, broadly speaking, NICCO claims that a part of the cause of action arose within the jurisdiction of the Calcutta High Court because it became aware of the advertisement in Calcutta, it submitted its bid or tender from Calcutta and made representations demanding justice from Calcutta on learning about the rejection of its offer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so facto give cause of action to the High Court within whose jurisdiction the registered office is situated. Before the Supreme Court a question arose whether any of the facts mentioned in the respondents application would give rise to part of cause of action at Ahmedabad at least for the purpose of conferring territorial jurisdiction of High Court at Ahmedabad. After noticing the facts disclosed by the respondents in paragraph 16 as summarised above the Supreme Court observed that mere fact that respondent-company is receiving export and import orders and making payments from Ahmedabad has no connection whatsoever with the dispute that is involved in the case and, therefore, the same would not give rise to any cause of action to a Court at Ahmedabad to adjudicate on the actions complained against Union of India. After referring to Utpal Kumar Basu s case ( supra ) the Supreme Court held : "It is seen from the above that in order to confer jurisdiction on a High Court to entertain a writ petition or a special civil application as in this case, the High Court must be satisfied from the entire facts pleaded in support of the cause of action that those facts do constitute a caus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leging cheating. One such complaint was registered as FIR No. 290/2000 under sections 406, 409, 420 and 120B of Indian Penal Code (IPC) in Police Station, New Friends Colony, New Delhi. The petitioners approached this Court alleging that there were serious threats to their life from the investors/depositors and that respondents failed to give protection and they are compelling the petitioners to repay the deposits. The counter-affidavit filed by the third respondent as well as the letters addressed by LT CDR Bhisham Kumar (Retd.) as well as Inspector of Police (Economic Offences Wing), Crime Branch, New Delhi would show that no cause of action whatsoever arose in the State of Andhra Pradesh, much less in Hyderabad except the petitioners allegedly have branch office at SYJ Shopping Mall, Pathergatti Main Road, Hyderabad. Further, it is the case of the petitioners that the respondents, including the first respondent, namely, Central Economic Intelligence Bureau, Janpath, New Delhi are harassing them. If that be the case, one fails to understand as to how the petitioners chose to file present writ petition and obtained an order from this Court appointing Advocate Commissioner. 21. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances, as the writ petition is not admitted and rule nisi is not ordered, the dismissal of the writ petition would be sufficient, but by filing the writ petition and obtaining order appointing Advocate Commissioner the petitioners have resorted to sharp practices and should be condemned. This aspect is considered under Point No. ( ii ). IN RE POINT NO. (II) 24. Whether filing of this writ petition by the petitioners in High Court of Judicature, Andhra Pradesh is a proceeding taken bona fide by them or whether it was a sharp practice designed to abuse the process of law and to take unfair advantage over the law enforcing agencies and depositors/ investors of the Company. A reference to counter-affidavit filed by third respondent as well as letters addressed by the Investigating Officer, Economic Offences Wing, Crime Branch, New Delhi and an investor has already been made. These would disclose that none of the depositors lodged complaint with the respondents 2 and 3. The so called depositors/investors who allegedly threatened the second petitioner have not been made parties to this case. Indeed, none of the depositors allegedly at whose instance respondents 2 and 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tach the properties in Uttar Pradesh and sought the relief of declaration that the assessment order passed by the Delhi Municipal Corporation is illegal, void ab initio . She also sought prohibitory injunction against the attachment of her property. An ex parte decree was passed against Delhi Municipal Corporation though no document was filed showing that any attempt was made by the Corporation or its officials to restrain or attach the property. Before the Supreme Court the Municipal Corporation contended that Kamla Devi has filed suit in Ghaziabad, deliberately concealing the fact of filing appeal before the appellate authority and obtained decree hoodwinking the Courts below. It was also contended that the Corporation did not receive any notice from Ghaziabad Court and that filing of suit by Kamla Devi in Ghaziabad Court by making false allegations amounted to abuse of process of the Court. The Supreme Court held that filing of suit by Kamla Devi in Ghaziabad Court which has no jurisdiction concealing the factum of filing appeal and making false allegations amounted to sharp practice designed to abuse process of the Court and allowed the appeal. It is apposite to except the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the RBI Act. This Court has no doubt whatsoever that this writ petition is filed by the petitioners only to pre-empt any action by respondents as well as scores of helpless depositors. As already observed by me, the allegations made in the writ affidavit to the effect that the respondents 2 and 3 failed to protect the life of second petitioner and the property of petitioners in spite of giving complaint that there is a grave threat to the petitioners is a total falsehood and mere pretence to create jurisdiction in High Court of Judicature, Andhra Pradesh. Further, the report submitted by the Advocate Commissioner falsified the rosy picture given by the second petitioner about the financial soundness of first petitioner-company. In these circumstances, any submission of the learned counsel for the petitioners that an enquiry be ordered by the Registrar of the Companies is wholly misconceived and is rejected. 28. In this context, a reference may be made to the decision of the Supreme Court in Sri Ramdas Motor Transport (SRMT) Ltd. v. Tadi Adhinarayana Reddy AIR 1997 SC 2189. A writ petition, in effect, was filed before this Court praying for investigation into the affairs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basically deal with mismanagement of the affairs of the company and oppression of the minority shareholders. The company is only a deemed public limited company. Its shareholding is very closely held. The only other factor referred to in the writ petition to invoke the doctrine of so called public interest in the fact that the company had borrowed moneys from public institutions. This is no ground for not availing of the statutory remedies provided under the Companies Act before the appropriate statutory forums which are designed for this very purpose. We are distressed to find that the well reasoned judgment of the single judge was interfered with in a casual manner. The impugned judgment rests on fragile foundations and reads more like an ipse dixit ." 29. The judgments of the Supreme Court in Kamla Devi case ( supra ) and S.R.M.T.s case ( supra ) squarely apply to the facts of this case. The petitioners in fact have remedies both under the Companies Act and the RBI Act before the Company Law Board. 30. In the result, for the aforesaid reasons, the writ petition fails and is accordingly dimissed holding that these proceedings are not bona fide and only a sharp p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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