Tribunal lacked jurisdiction in insolvency case due to company's office shift. Petitioner directed to serve application.

The Court found that the National Company Law Tribunal, Kolkata Bench, did not have territorial jurisdiction to entertain the insolvency proceeding filed by a financial creditor against a company that had shifted its registered office to Odisha. The Tribunal's admission of the proceeding was deemed an illegal exercise of jurisdiction. The petitioner was directed to serve the application on the opposite party, and proceedings were stayed pending further consideration of maintainability.

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Issues: Territorial jurisdiction of National Company Law Tribunal, Kolkata Bench over insolvency proceeding filed by a financial creditor against a company whose registered office was shifted to another state.

The judgment pertains to an application filed against an order passed by the National Company Law Tribunal, Kolkata Bench, regarding an insolvency proceeding initiated by a financial creditor against a company. The petitioner, the company in question, argued that the Kolkata Bench did not have territorial jurisdiction to entertain the application as the company had shifted its registered office to Odisha. The petitioner contended that the insolvency proceeding should have been filed before the NCLT of Odisha, where the registered office was located. The petitioner relied on the procedure established by law for shifting the registered office and asserted that the bank had knowledge of this change. The petitioner further argued that the admission of the proceeding by the Kolkata Bench was an illegal exercise of jurisdiction and void ab initio under Section 7 of the Insolvency & Bankruptcy Code, 2016.

The Tribunal had admitted the application of the bank and directed the commencement of the corporate insolvency resolution process (CIRP). Upon learning of this, the petitioner filed an application for recalling the order, citing Section 60 of the Insolvency & Bankruptcy Code, which mandates that insolvency proceedings should be conducted before a Tribunal having territorial jurisdiction over the place where the registered office of the corporate person is located. The Tribunal, however, found that since the petitioner had knowledge of the proceeding and had received communication about it, the petitioner should have contested it. The Tribunal also asserted that it had territorial jurisdiction to hear the application based on the financial creditor's filing.

The Court observed that the registered office of the company had shifted to Odisha before the application was filed by the bank, and the NCLT, Odisha, was notified before the order of admission. The Court found that the petitioner had made an arguable case regarding the territorial jurisdiction issue. Consequently, the petitioner was directed to serve a copy of the application on the opposite party and file an affidavit of service. The proceedings in the matter were stayed until February 29, 2020, and the point of maintainability of the application was left open for further consideration. The case was listed for a hearing on December 20, 2019.

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