1993 (10) TMI 230 - SC - Companies Law

Interpreting 'High Court' in Companies Act: Jurisdiction based on Registered Office Location

Stridewell Leathers (P.) Ltd. Versus Bhankerpur Simbhaoli Beverages (P.) Ltd.

The Supreme Court held that the expression 'the High Court' in section 10F of the Companies Act refers to the High Court having jurisdiction over the ... Whether the High Court to which the appeal lies under section 10F from an order of the Company Law Board is the High Court having jurisdiction in relation to the place at which the registered office of the company is situate or it is the High Court having jurisdiction in relation to the place at which the Company Law Board makes the order under appeal? Held that:- Appeal allowed. The expression 'the High Court' in section 10F of the Companies Act means the High Court having jurisdiction in relation to the place at which the registered office of the company concerned is situate as indicated by section 2(11) read with section 10(1)(a) of the Act. Accordingly, in the present case, the appeal against the order of the Company Law Board would lie in the Madras High Court which has jurisdiction in relation to the place at which the registered office of the company concerned is situate and not the Delhi High Court merely because the order was made by the Company Law Board at Delhi. This appeal is allowed and the impugned order made by the Delhi High Court is set aside resulting in acceptance of the preliminary objection raised by the appellants in the Delhi High Court. Issues Involved:1. Interpretation of the expression 'the High Court' in section 10F of the Companies Act, 1956.2. Jurisdiction of the High Court for appeals under section 10F.3. Impact of the Companies (Amendment) Act, 1988, on the appellate forum.4. Relevance of the location of the Company Law Board's order.Detailed Analysis:1. Interpretation of the Expression 'the High Court' in Section 10F of the Companies Act, 1956:The primary issue in this appeal is the interpretation of the term 'the High Court' in section 10F of the Companies Act, 1956. The controversy revolves around whether the High Court referred to in section 10F is the one having jurisdiction over the location of the company's registered office or the High Court at the place where the Company Law Board (CLB) issued the order under appeal.2. Jurisdiction of the High Court for Appeals Under Section 10F:The appellants argued that 'the High Court' should be interpreted as the High Court with jurisdiction over the location of the company's registered office. This interpretation is based on section 10(1)(a) of the Companies Act, which specifies that the High Court having jurisdiction in relation to the place of the registered office of the company is the competent court. The respondents, however, contended that the jurisdiction lies with the High Court where the CLB made the order under appeal.3. Impact of the Companies (Amendment) Act, 1988, on the Appellate Forum:The Companies (Amendment) Act, 1988, introduced section 10F and established the CLB to take over certain judicial functions from the High Courts. The amendment did not explicitly alter the forum for appeals. The court noted that the absence of any clear provision indicating a change in the appellate forum suggests that the existing forum, i.e., the High Court having jurisdiction over the registered office of the company, remains unchanged.4. Relevance of the Location of the Company Law Board's Order:The court rejected the argument that the High Court at the place where the CLB made the order should have jurisdiction. It was emphasized that the expression 'the High Court' in section 10F should be interpreted in a manner that avoids any ambiguity or inconsistency. The court found that using the location of the CLB's order to determine jurisdiction would lead to an uncertain and variable appellate forum, which is not supported by the statutory provisions.Conclusion:The Supreme Court held that the expression 'the High Court' in section 10F of the Companies Act refers to the High Court having jurisdiction in relation to the place where the registered office of the company is situated. This interpretation aligns with section 2(11) read with section 10(1)(a) of the Act. Consequently, the appeal against the CLB's order should be filed in the Madras High Court, where the registered office of Shoe Specialities Pvt. Ltd. is located, and not in the Delhi High Court, where the CLB made the order. The appeal was allowed, and the Delhi High Court's order was set aside, accepting the appellants' preliminary objection. The Delhi High Court was directed to make the consequential order. No costs were awarded.