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TMI Blog2021 (10) TMI 996X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the proposition urged by the petitioner that one of the factors which the High Court will consider while exercising its discretion to entertain a writ petition would be whether the order passed by the Tribunal was without jurisdiction or was merely a case of an error of jurisdiction. In the present case, the only basis for the petitioner to approach this Court is that under the proviso to Section 241(2), it is only the Principal Bench of NCLT at Delhi which could entertain the petition preferred by the Central Government and therefore, the very filing of the petition before the NCLT, Mumbai Bench and the passing of any order by the said Bench being coram non judice, was a nullity - there is also no denial that the Companies Act is a complete code in itself, as also that the NCLT and NCLAT are specialized Tribunals created by the statute for dealing with issues arising under the Companies Act. The petitioner s primary plea before this Court is that in view of the proviso to Section 241(2) of the Companies Act, the NCLT, Mumbai did not have the jurisdiction to entertain the petition and therefore, the proceedings before it and all orders passed by the said Bench are a nullity. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Mumbai Bench on 31.08.2018. The respondent no.3 company is, therefore, being represented in the present petition by the Resolution Professional ( RP ) appointed by the NCLT, Mumbai Bench. 3. As 12 other companies of Videocon Industries Ltd. group were also undergoing CIRP, the NLCT, Mumbai vide its order dated 08.08.2019, consolidated the insolvency process of all the Videocon group companies, including the respondent no.3. On 08.06.2021, the resolution plan filed by Twin Star Technologies Ltd. for the consolidated CIRP of all the Videocon Group companies was approved by the NCLT, Mumbai Bench. Upon the said order being assailed by way of Company Appeal Nos. (AT) (Insolvency) 503 and 505 of 2021, the National Company Law Appellate Tribunal (NCLAT), on 19.07.2021, stayed the said order. Aggrieved thereby, Twin Star Technologies Limited approached the Supreme Court by way of Civil Appeal Nos. 4626 and 4593 of 2021, which came to be dismissed on 13.08.2021. 4. In the meanwhile, the respondent no.1, on the basis of the material placed before it by the Resolution Professional (RP), passed the Impugned Order on 08.07.2021 directing the Serious Fraud Investigation Office (SFIO) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... VII. That all movable and immovable properties of Respondents (except companies) including bank accounts, lockers, demat accounts including jointly held properties be attached during the pendency of the company petition (emphasis supplied) 6. Being aggrieved with this order passed by the NCLT, Mumbai whereby inter alia all his assets have been attached, the petitioner has approached this Court seeking quashing of order dated 08.07.2021 and letter dated 16.07.2021 issued by respondent no.1, and has also prayed that the proceedings initiated before the NCLT, Mumbai Bench, including order dated 31.08.2021, be declared as non-est. 7. The first and foremost contention of Mr. Arvind Nigam, learned senior counsel for the petitioner, is that the proceedings initiated by the respondent no.1 before the NCLT, Mumbai are a nullity as the Bench at Mumbai did not have any jurisdiction to entertain such a petition in view of the proviso to Section 241(2) of the Companies Act, 2013 which in unequivocal terms states that only the NCLT, Principal Bench at New Delhi has the exclusive jurisdiction to entertain a petition under Section 241(2) filed by the Central Government. Cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the nature of an ouster clause as it categorically provides that only the Principal Bench of the NCLT at New Delhi would have the exclusive jurisdiction to entertain all petitions filed by the Central Government under Sections 241-242 of the Act. He submits that though prior to the amendment, Section 241(2) provided the Central Government with the right to file an application for oppression and mismanagement with the concerned NCLT if it was of the opinion that the affairs of the company have been conducted in a manner prejudicial to public interest; however, by way of a proviso added to Section 241(2), the Principal Bench of the NCLT has been vested with exclusive jurisdiction to entertain such applications filed by the Central Government. 11. He submits that keeping in view the exclusive jurisdiction conferred on the Principal Bench in terms of the proviso to Section 241(2), there can be no doubt that the jurisdiction of all benches of NCLT was excluded and therefore, the impugned letter issued by the respondent no.1 on 16.07.2021 authorizing the Regional Director (WR), Ministry of Corporate Affairs, to file a petition under Section 241(2) of the Act before the NCLT, Mumbai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t petition once a statutory alternative remedy of appeal is available as there was lack of jurisdiction on the part of the NCLT, Mumbai Bench in entertaining the petition. The exercise of jurisdiction where none existed would certainly be amenable to the extraordinary jurisdiction of this Court under Article 226 of the Constitution and therefore, despite the availability of an appellate remedy, the impugned order and letter issued by the respondent no.1 at Delhi, from which proceedings before the NCLT, Mumbai Bench have emanated, are liable to be set aside by this Court. 14. In support of his plea that this Court, despite the existence of the statutory alternate remedy, ought to exercise its jurisdiction under Article 226 to entertain the present petition, Mr. Nigam relies on a decision of the High Court of Calcutta in Kolkata Municipal Corporation Anr. vs. Union of India Ors., WPA No. 977/2020; as also a decision of the High Court of Jammu Kashmir in SA Gold Ipsat Pvt. Ltd. v. The J K Bank Ltd. Ors., W.P. (C) 361/2020. 15. Mr. Nigam also seeks to place reliance on a decision of a Coordinate Bench of this Court in Venus Recruiters Private Limited vs. Union o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s contends that not only do the impugned order and letter suffer from non-application of mind, but the same have been passed by also ignoring the relevant material - including the audit report prepared by N.V. Dand Associates, Chartered Accountants, appointed by the RP, which did not point out any irregularities in the transaction audit conducted during the CIRP of the respondent no.3 and group companies, namely avoidance transactions as claimed by the respondent no.1, while issuing the impugned order and letter. 19. He further submits that in any event, once the RP, who is sufficiently empowered under the mandate of the IBC to take sufficient steps against such avoidance transactions and is presently seized of the affairs of the respondent no.3 company, has not raised any grievance and has, in fact, actively supported the resolution plan approved by the committee of creditors (CoC), the impugned order and letter were without jurisdiction. Moreover, even though both the impugned letter and the order have been purportedly passed to safeguard public interest, all the companies are already undergoing CIR Process and therefore, the public interest is already being taken care o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be said to be without jurisdiction, the learned ASG contends that even otherwise, once specialized bodies like the NCLT and NCLAT have been created to adjudicate upon the disputes arising under the Companies Act, this Court ought not to exercise its discretion and instead, the petitioner ought to avail of the readily available alternative statutory remedy provided for in the Companies Act, which is a complete Act in itself and does not envisage any room for challenging the orders of the NCLT, other than in a manner prescribed by the Act itself. He contends that once an efficacious alternative remedy is available and a statutory forum has been created for the redressal of the grievances sought by the petitioner, this Court ought not to entertain the present petition and that too against an order passed by the Mumbai Bench of the NCLT, over which it does not even exercise supervisory jurisdiction under Article 227 of the Constitution. By placing reliance on a decision of a Co-ordinate Bench in Shriraj Investment and Finance Limited Ors. vs. Union of India, W.P.(Crl.) 1823/2020 , he urges that once the Mumbai Bench of the NCLT is seized with the petition, all contentions includi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... favourably and permit the petitioner to withdraw the requisite amounts. 28. Having considered the submissions of the parties, I may at the outset note that they are ad idem that the existence of an alternative statutory remedy would not be an absolute bar for an aggrieved party to invoke writ jurisdiction of the High Court under Articles 226 227 of the Constitution of India. The petitioner has vehemently urged that in a case like this, where his plea is that the order passed by the Tribunal is wholly without jurisdiction and therefore a nullity, the Court ought not to relegate him to the alternative statutory remedy under the Companies Act. The respondent, on the other hand, has firstly urged that the petitioner s plea that the proceedings before the NCLT, Mumbai Bench, are without jurisdiction is contrary to the scheme of Section 241 of the Act and secondly, even if the petitioner s plea that the same are without jurisdiction were to be accepted, the petitioner ought to be relegated to the readily available statutory remedy under the Companies Act. 29. It is, thus, clear that the only issue which this Court needs to determine is as to whether in the light of the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he subtle distinction between errors of law that went to jurisdiction and errors of law that did not, would still survive, if the decisions of such courts are declared by the statute to be final and conclusive. Thus one distinction was gone with Anisminic [Anisminic Ltd. v. Foreign Compensation Commission, (1969) 2 AC 147 : (1969) 2 WLR 163 (HL)] , but another was born with Racal, In re [Racal Communications Ltd., In re, 1981 AC 374 : (1980) 3 WLR 181 (HL)]. This could be seen from the after-effects of Anisminic [Anisminic Ltd. v. Foreign Compensation Commission, (1969) 2 AC 147 : (1969) 2 WLR 163 (HL)] . [Anisminic, (1969) 2 AC 147 : (1969) 2 WLR 163 (HL) had its own quota of problems. Prof. Wade, as pointed out in R. v. Lord President of the Privy Council, ex p Page, 1993 AC 682 : (1992) 3 WLR 1112 (HL), seems to have opined that the true effect of Anisminic was still in doubt. People like Sir John Laws, quoted by Prof. Paul Craig, and which was extracted in the decision in R. (Privacy International) v. Investigatory Powers Tribunal, 2019 UKSC 22 : (2019) 2 WLR 1219, seems to have opined that once the distinction between jurisdictional and non-jurisdictional errors was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) the power to hear and decide the questions at issue, and (2) the power to grant the relief asked for. This decision in Official Trustee [ Official Trustee v. Sachindra Nath Chatterjee, (1969) 3 SCR 92 : AIR 1969 SC 823] was followed in a recent decision in Iffco Ltd. v. Bhadra Products [Iffco Ltd. v. Bhadra Products, (2018) 2 SCC 534 : (2018) 2 SCC (Civ) 208], quite independent of Anisminic [Anisminic Ltd. v. Foreign Compensation Commission, (1969) 2 AC 147 : (1969) 2 WLR 163 (HL)] and its followers. (emphasis supplied) 31. Reference may also be made to a decision dated 29.01.2021 in Kolkata Municipal Corporation (supra), wherein the High Court of Calcutta observed as under: 38. As such, a combined reading of the aforesaid propositions, as laid down in the various judgments, boil down to the ratio that although a wrongful exercise of available jurisdiction would not be sufficient to invoke the High Court s jurisdiction under Article 226 of the Constitution, the ground of absence of jurisdiction could trigger such invocation. Hence, in view of the nature of challenge involved in the present writ petition, the same is maintainable in law . (emph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench had the necessary jurisdiction. The conflicting stands taken by the parties will depend only on the interpretation of the proviso to Section 241(2) and thus, it is evident that the petitioner is ultimately seeking to urge that a provision of the Companies Act is required to be read in a particular manner. This aspect, in my view, can be and ought to be considered by the forums of NCLT/ NCLAT created under the Companies Act for dealing with issues arising under the said Act. Even otherwise, the petitioner has given absolutely no justification as to why he cannot approach these specialized forums created for dealing with the issues arising under the Companies Act. In this regard, reference may also be to the decision of the High Court of Madras in Church of South India Association (supra) relied upon by the respondent wherein, the Madras High Court, while dealing with a challenge to an order passed by the NCLT, Chennai had, after noticing that an efficacious alternate remedy was available to the petitioner therein by approaching the NCLT and NCLAT created under the Companies Act, declined to entertain the writ petition. 35. I have also considered the decision of the Coordina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er by the respondent no.1 are, even otherwise, vitiated by non-application of mind or that the condition precedent for invocation of Section 241(2) of the Act, which requires the Central Government to come to an opinion that the affairs of the company are being conducted in a manner prejudicial to public interest was not satisfied. 37. Before I conclude, I may observe that the petitioner has, by relying on the decisions in Navinchandra N. Majithia vs. State of Maharashtra and Ors. (2000) 7 SCC 740 and M/s Sterling Agro Industries Ltd. vs. Union of India Ors. ILR (2011) VI Delhi 729 , urged that this Court has territorial jurisdiction to deal with the matter as the impugned order dated 08.07.2021 and letter dated 16.07.2021 were issued by the respondent no.1 at Delhi. However, in view of my conclusion that the present petition is not maintainable on account of the alternative statutory remedies available to the petitioner and not for want of territorial jurisdiction, I do not deem it necessary to delve into this aspect. 38. For the aforesaid reasons, the writ petition, along with the pending application, is dismissed. Needless to observe that this Court has not gone int ..... X X X X Extracts X X X X X X X X Extracts X X X X
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