2022 (10) TMI 935 - HC - Companies Law

Court quashes ROC order, restores petitioner's complaint for fresh hearing. No opinion on merits.

Moorgate Industries India Private Limited, Rajendra Bohra Versus Registrar of Companies (Western Region), Union of India Mideast Integrated Steels Limited, Twenty First Century Finance Limited Ms. Natasha Singh Sinha, Ms. Shipra Singh Rana, Ms. Rita Singh

The court quashed the impugned order passed by the ROC, NCT Delhi and Haryana, and restored the complaint filed by the petitioner. The ROC was directed to ... Jurisdiction of Court to entertain the writ petition - Jurisdiction of ROC to deal with complaint - effect of the pending Commercial Suit No.584 of 2017 on the complaint - Non-issuance of duplicate certificate - non-payment of dividend - non-receipt of notice for general meeting - dispute sub-judice before the High Court of Judicature at Bombay - HELD THAT:- In case of Damomal Kausomal Raisinghani vs. Union of India & Ors. [1965 (12) TMI 154 - BOMBAY HIGH COURT], a co-ordinate Bench of this Court held that the place where the consequences of the impugned order fell on the Petitioner would be a place where at least the cause of action in part would arise. The Petitioners have specifically averred that the Petitioner No.1 would be able to trade with the shares in Mumbai and therefore, impugned order of ROC has affected Petitioners’ rights in Mumbai. The said averments have remained uncontroverted. Thus, it is clear that the consequence of the impugned order fell on the Petitioner at Mumbai where atleast the cause of the action in part has taken place - there is no substance in the contention raised by the Respondents that this Court has no jurisdiction to deal with this Writ Petition. Whether ROC has jurisdiction to deal with complaint dated 1st December 2015 filed by the Petitioner No.1? - What is the effect of pending Commercial Suit No.584 of 2017 on the said complaint dated 1st December 2015. 20? - HELD THAT:- The factual position on record clearly show that although Petitioner No.1 remained absent when the hearing of the said complaint was scheduled on 28th November 2018 as they have not been served with the notice of hearing but all along they requested for another date of hearing and without granting hearing, order was passed. It is further significant to note that this is not a case where after 28th November 2018 i.e. after scheduled date of hearing the ROC has immediately passed the impugned order. In fact, the impugned order has been passed after a period of four months after the said scheduled date of hearing. Thus, there was no impediment for ROC to grant hearing to the Petitioner No.1. It is clear that the impugned order is passed without giving hearing to the Petitioner No. 1 and without following principles of natural justice. The Petitioner has requested for fresh hearing and Petitioner No.1 has given valid reason for the absence. The factual position on record clearly demonstrates that the Petitioner No.1 from time to time requested for hearing even prior to 28th November 2018 and immediately after 28th November 2018 also. Thus, the impugned order is liable to be quashed and set aside on this ground alone. The impugned order is liable to be quashed and set aside - Petition disposed off. Issues Involved:1. Jurisdiction to entertain the writ petition.2. Jurisdiction of the Registrar of Companies (ROC) to deal with the complaint.3. Effect of the pending Commercial Suit on the complaint.Detailed Analysis:1. Jurisdiction to entertain the writ petition:The court first addressed whether it had jurisdiction to entertain the writ petition, given that the impugned order was passed by the ROC, NCT Delhi and Haryana. The petitioner argued that since their registered office is in Mumbai, the shares are listed on the Bombay Stock Exchange, and the consequences of the ROC's order affected their rights in Mumbai, the Bombay High Court had jurisdiction. The respondent did not contest these jurisdictional facts. The court cited precedents to affirm that even if a small part of the cause of action arises within its jurisdiction, it can entertain the petition. The court concluded that it had jurisdiction to hear the case as part of the cause of action arose in Mumbai and the consequences of the impugned order were felt there.2. Jurisdiction of the Registrar of Companies (ROC) to deal with the complaint:The petitioner contended that the ROC was the appropriate forum to resolve disputes related to the issuance of duplicate share certificates, relying on the Supreme Court judgment in Shripal Jain vs. Torrent Pharmaceuticals Ltd. The petitioner also argued that the National Company Law Tribunal (NCLT) did not have jurisdiction over such matters. The respondents countered that the NCLT, constituted under the Companies Act, 2013, had exclusive jurisdiction over company matters, including the issuance of duplicate share certificates. They also argued that SEBI had jurisdiction over complaints regarding non-payment of dividends. The court noted that substantial questions of law and fact were raised, including the jurisdiction of the ROC, and decided not to resolve these issues at this stage. Instead, it remanded the matter to the ROC for a fresh hearing.3. Effect of the pending Commercial Suit on the complaint:The ROC had dismissed the complaint primarily on the ground that a commercial suit was pending before the Bombay High Court. The court observed that the complaint was filed in 2015, while the suit was filed in 2017, making it impossible for the petitioner to mention the suit in the complaint. The court found this reasoning of the ROC to be incorrect. Additionally, the court noted that the ROC had failed to provide the petitioner with a hearing, violating the principles of natural justice. The court emphasized that the petitioner had consistently followed up with the ROC for a hearing and had valid reasons for their absence on the scheduled date. Consequently, the court quashed the ROC's order and remanded the matter for a fresh hearing.Conclusion:The court quashed the impugned order dated 3rd April 2019 passed by the ROC, NCT Delhi and Haryana, and restored the complaint dated 1st December 2015 filed by the petitioner. The ROC was directed to give a fresh hearing to all parties and decide the complaint afresh within six months. The court clarified that it had not expressed any opinion on the merits of the complaint, including the jurisdiction of the ROC, and kept all contentions of the parties open. The writ petition was disposed of with no order as to costs.