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TMI Blog2003 (10) TMI 395X X X X Extracts X X X X X X X X Extracts X X X X ..... C.B.I. submitted a report on 20/23-8-2001 stating therein that it had registered criminal cases against the directors of the said companies. By the aforesaid order of 24-11-2001 petition was directed to be advertised in accordance with rule 24 of Companies (Court) Rules, 1959 and notices were issued to the respondents. By the same order official liquidator was appointed as Provisional liquidator of the companies and was directed to take over the assets of the companies and to prepare inventories. By another order dated 29-1-2002 it was provided that the operation of the order of the Court dated 24-11-2001 directing the official liquidator to take over the possession of the assets as Provisional liquidator shall remain in abeyance upto 1st March, 2002. The said order dated 29-1-2002 has been extended from time to time and by virtue of the last order dated 29-8-2003 it is to remain in operation until 17-10-2003. In these petitions on behalf of the respondents (i.e. company and its Directors) a preliminary objection has been raised regarding jurisdiction of this Court as the registered offices of all the Companies are situate in Lucknow. On 13-3-2003 an order was passed directing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the powers conferred by Article 14 of the United Provinces High Courts (Amalgamation) Order, 1948, and in partial modification of the Court's notification No. 6103, dated July 26, 1948, as amended up-to-date, the Chief Justice of the High Court of Judicature at Allahabad is pleased to direct that with effect from July 25, 1949, the Lucknow Bench of the High Court of Judicature at Allahabad shall not exercise jurisdiction and power in respect of cases under the following Act arising within its existing territorial jurisdiction :- 1. & 2.****** 3. The Indian Companies Act, 1913 (Act VII of 1913). 4. to 6.****** Provided that nothing herein contained shall affect the jurisdiction and power of the Lucknow Bench in respect of proceedings already pending before that Bench prior to the coming into force of this Notification. By order of the Hon'ble the Chief Justice, Sd. D.S. Mathur, I.C.S. Registrar." The Amalgamation Order, 1948 was interpreted by the Hon'ble Supreme Court in the authority in Nasiruddin v. State Transport Appellate Tribunal AIR 1976 SC 331. The said authority has been referred with approval in U.P. Rashtriya Chini Mill Adhikari v. State of U.P. AIR 1995 SC 21 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1976 All. 532 on the basis of the decision of Supreme Court in Nasiruddin's case (supra). 7. In one of the cases a question arose regarding validity of the order dated 15-7-1949. The matter was decided in special appeal the judgment of which is in Sumac International Ltd. v. P.N.B. Capital Services (P.) Ltd. AIR 1997 All. 424. The argument before the learned Single Judge as well as the Division Bench was that in view of the Nasirudeen's authority (supra) after passing of the order dated 26-7-1948 the source of passing similar orders dried up hence the Chief Justice had no jurisdiction to pass the order dated 15-7-1949 therefore the order is void and without jurisdiction. The Division Bench held that order dated 15-7-1949 does not affect territorial jurisdiction of Lucknow Bench defined by earlier order hence it is valid and not bad for want of authority. 8. It appears that even after the aforesaid Division Bench authority of Sumac International Ltd.'s case (supra) matters pertaining to companies like winding up and amalgamation petitions particularly regarding those companies which had their registered office within the territorial jurisdiction of Lucknow Bench continued to be fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er passing of the order dated 4-1-2003 by the Chief Justice no one at Allahabad was aware of the aforesaid notification of 1975 otherwise the said notification would have been considered by the aforesaid Division Bench authority of Sumac International Ltd.'s case (supra) and noticed in the order dated 4-1-2003. On enquiry the Registry has informed that after intimation about the said order by Lucknow Bar a search was made and a photocopy of the aforesaid order of 1975 was found in a file of Administrative Section/Office of the High Court. It is most unfortunate that orders passed by Chief Justice under Clause-14 of the amalgamation order which affect the jurisdiction of Allahabad and Lucknow are not collectively kept in a separate file. The Registrar General is directed to maintain separate file for the said purpose and keep therein all the available orders in this regard and orders which may be passed in future. The Chief Justice on being informed about the 1975 order passed another order on 14-1-2003 modifying its earlier order dated 4-1-2003 to the extent that the figures 15-7-1949 were substituted by 1-10-1975. True copy of order of Hon'ble the Chief Justice dated 14-1-2003 is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter of filing, entertaining and hearing of cases under Companies Act. In several cases it has given rise to disturbing situations which is against the interest of administration of justice. In company matters stakes involved are quite high and often large number of people are affected as in the case in hand. Hence it is all the more desirable in company matters to settle the jurisdiction dispute authoritatively, lest cases under Companies Act become res nullius like a fish in the sea or a bird in the sky, which becomes the property of the one who catches it first. 11. The following are the illustrations where seemingly concurrent jurisdiction of both Allahabad and Lucknow has prompted me to make the above observations. Regarding the company known by the name of M/s. Sapa Electricals Pvt. Limited having its registered office at Varanasi, a case by some of the creditors for winding up of the company was filed before Lucknow Bench being company petition No. 31 of 2001 (C.P.) and the Lucknow Bench by order dated 12-12-2001 passed an order appointing official liquidator as provisional liquidator. The order is annexed herewith as Annexure-2. Another similar case for winding up of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany's properties and assets etc. I am informed by official liquidator that the said company and/or its Directors have also filed some cases at Lucknow Bench and orders have been passed therein directing the company and its Directors to clear the debts and make payment to the investors by selling the assets of the company. 13. On 25-9-2003 in Company Petition No. 26 of 2003 Hon'ble S. Harkauli, J. passed a detailed order and directed the Registry to place the records of the case before Hon'ble Chief Justice for appropriate orders for "considering whether a formal order under clause 14 should be passed directing that this case shall be heard at Allahabad". Copy of Order is annexed as Annexure-5. 14. In view of the above, it is essential to settle the dispute by authoritative pronouncement. Initially I was tempted to refer the matter to Full Bench however later on I realized that it would not be in accordance with judicial discipline - Vide Constitution Bench authority of Supreme Court in Union of India v. Hansoli Devi AIR 2002 SC 3240. 15. Accordingly, the matter is referred to Division Bench for deciding the question of jurisdiction which is tentatively framed as follows :- " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and power of the High Court in respect of cases under the Income-tax Act, 1961 and under the Companies Act, 1956 upto the stage of winding up arising within the area of erstwhile Oudh. NOW THEREFORE, in exercise of the powers conferred by Clause 14 of the U.P. High Court (Amalgamation) Order, 1948 and in supersession of the notification Nos. 8427/Ib-39-49 dated July 15, 1949 and No. 6984/Ib-39 dated July 2, 1954, the Hon'ble the Chief Justice of the High Court of Judicature at Allahabad is pleased to direct that with effect from 1st October, 1975, the Lucknow Bench of the High Court of Judicature at Allahabad shall exercise the jurisdiction and power of the High Court in respect of the cases under the following Acts arising in the areas of erstwhile Oudh : 1.The Income-tax Act, 1961 (Act No. XLIII of 1961) 2.The Companies Act, 1956 (Act No. 1 of 1956) upto the stage of winding up i.e. upto the stage of proceedings under section 439 of Companies Act, 1956 : Provided that after the winding up order is passed the subsequent proceedings will be heard at Allahabad : Provided further that all proceedings under the above Acts instituted or commenced before the date of enforcement o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anasi on the averments that the company has defaulted in making payment of Rs. 40,94,890 for which a statutory notice was sent on 30-11-2001 and that it unable to pay the debts. On the presentation of the winding up petition on 8-1-2002, it was directed to be put up tomorrow. On 9-1-2002, it was directed to be listed on 15-1-2002 alongwith the record of Company Petition Nos. 79 of 1998; 57 of 2000; 19 of 2001 and 20 of 2001 being winding up petitions pending against the same company, namely, M/s. Sapa Electricals (Pvt.) Ltd. On 15-1-2002, the Official Liquidator informed the court that the Company has been wound up in pursuance of the order passed by the Lucknow Bench of this court. On this the learned counsel for the applicant was granted three days time to produce the order and the matter was directed to be listed on 21-1-2002. It was passed over on the said date and has come up for hearing today. Shri Anupam Kulshreshtha, learned counsel appearing for the applicant has filed an application after giving copy of the same to the Official Liquidator, annexing the copy of the order of Lucknow Bench of this Court, dated 12-12-2001 in C.M. Application No. 1048 of 2001. In re Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d sought to pay the amount in instalment and had also paid some instruments. The Official Liquidator is also required to inform the Lucknow Bench of this Court that the matter pertaining to the company petition at Varanasi falls within the territorial jurisdiction of Allahabad High Court under the notification issued by the then Chief Justice under clause 14 of the High Court (Amalgamation) Rules, 1949. In the aforesaid circumstances, this company petition is admitted. Let notices be issued to the respondent-company at its registered office to show cause as to why the proceedings be not initiated for winding up the company in accordance with the provisions of Companies (Court) Rules, 1959. List for orders on 25-2-2002 Sd/- S.V. Khan, J. ANNEXURE 4 Company Petition No. 79 of 1998 Hon'ble S. Harkauli, J. In the circumstances, let the Company M/s. Sapa Electricals Private Ltd. be wound up. The Official Liquidator is appointed as Liquidator of the Company. He will proceed to take charge. While dealing with this case as well as connected cases, it has become necessary to consider another issue namely whether the date of winding up order should be taken to be today's date when t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shareholder against the sanction of an earlier scheme of arrangement was pending in respect of the same company, therefore, the learned counsel representing the two applicant companies were directed to serve the counsel representing the said shareholder in the special appeal, with the copy of the Company Application No. 9 of 2003 to enable the said shareholder to submit his objections, if any, within the legally permissible limits. The said shareholder was H.B. Stock Holdings Ltd. of Delhi (hereinafter referred as the objector No. 1). The said objector No. 1 filed written objections against the company application and also applied for stay of the meetings of shareholders and creditors on the various grounds. This objection was filed on 21-3-2003. At that stage no objection was taken with regard to the jurisdiction of Allahabad High Court to hear the matter. Accordingly, this Court passed a detailed order on 24-3-2003 refusing to stay holding of three meetings on the ground that purpose of meeting was merely to ascertain views of the shareholders and creditors in respect of the proposed scheme. If the scheme was not approved at the meetings, the objections of the objector No. 1 wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to enable the parties to prepare the case on the question of jurisdiction between Allahabad High Court and its Lucknow Bench in respect of this matter. I have heard Sri S.P. Gupta, Senior Advocate, Sri S.N. Verma, Senior Advocate, assisted by Sri R.P. Agarwal on behalf of two applicant companies and Sri Navin Sinha, Senior Advocate, assisted by Sri S.K. Mehrotra on behalf of objector No. 1 and Sri Pankaj Bhatia, Advocate on behalf of the two other shareholders/objectors at length on 23-9-2003, 24-9-2003 and today in respect of the preliminary objection about jurisdiction only. Sri S.P. Gupta, Senior Advocate has relied upon a judgment of the Division Bench of this Court in the case of Sumac International Ltd. v. Punjab National Bank Capital Service Ltd. AIR 1997 All. 424, more particularly on the latter part of para 13 of that law report which says that because (a) the company petition has remained pending at Allahabad for more than a year, (b) counter and rejoinder affidavit have been exchanged and the company petition is ripe for hearing, and (c) no prejudice has been shown as being likely on account of the petition being heard at Allahabad, therefore, notwithstanding the objec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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