Appeal Success: Company Petition Transfer Ordered, Chennai Bench to Expedite

The judgment set aside the order of the Principal Bench, NCLT, New Delhi, and directed the transfer of the Company Petition to the NCLT Bench at Chennai. The Chennai Bench was tasked with promptly disposing of the petition in compliance with the law. The appeal was granted with specific observations and instructions provided.

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Issues Involved:
1. Jurisdiction of NCLT Benches
2. Transfer of pending proceedings
3. Interpretation of relevant sections of Companies Act, 1956 and 2013
4. Application of NCLT Rules, 2016
5. Role of Principal Bench of NCLT

Issue-Wise Detailed Analysis:

1. Jurisdiction of NCLT Benches:
The primary issue was whether a petition under Section 388-B of the Companies Act, 1956 should be heard by the 'Principal Bench' of the NCLT, New Delhi, or the Bench having jurisdiction over the area where the registered office of the company is situated. The appellant argued that the jurisdiction of an NCLT Bench to decide or adjudicate a proceeding is dependent on the location of the registered office of the company. The respondents contended that the Principal Bench, New Delhi has territorial jurisdiction to entertain the petition under Section 388-B, as established in previous cases.

2. Transfer of Pending Proceedings:
The appellant sought the transfer of the Company Petition to the NCLT Bench at Chennai, which has territorial jurisdiction over the registered office of the company. The Principal Bench, New Delhi, rejected this request, stating that the appellant had already appeared before it on multiple occasions and that transferring the case would cause delays. The Tribunal emphasized that all matters under Section 388-B of the Companies Act, 1956, used to be heard by the Principal Bench of the erstwhile Company Law Board.

3. Interpretation of Relevant Sections of Companies Act, 1956 and 2013:
The judgment referenced various sections of the Companies Act, 1956, and 2013, including Sections 397-398, 388B, 388C, 401, 402, 403, 406, 408, and 419. It was noted that the 1956 Act determined jurisdiction based on the location of the registered office of the company. The 2013 Act, particularly Section 419, outlines the constitution of NCLT Benches and their jurisdiction.

4. Application of NCLT Rules, 2016:
Rule 64 of the NCLT Rules, 2016, mandates the transfer of pending proceedings from the Company Law Board to the respective NCLT Benches exercising corresponding territorial jurisdiction. The judgment highlighted that the circular issued by the Company Law Board under Regulation 4 of the 1991 Regulations cannot override Rule 64 of the NCLT Rules, 2016.

5. Role of Principal Bench of NCLT:
The Principal Bench of NCLT, New Delhi, initially handled the petition under Section 388-B. However, the judgment concluded that the Principal Bench does not have exclusive jurisdiction over such matters. The President of the NCLT is not empowered to decide which Bench will hear the matter if a petition under Section 388-B is filed. The judgment ultimately directed the transfer of the petition to the NCLT Bench at Chennai, where the registered office of the appellant company is situated.

Conclusion:
The judgment set aside the impugned order dated 6th December 2016 by the Principal Bench, NCLT, New Delhi, and directed the transfer of the Company Petition to the NCLT Bench at Chennai. The Chennai Bench was instructed to ensure the early disposal of the petition in accordance with the law. The appeal was allowed with the observations and directions mentioned above.

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