TaxTMI 
TaxTMI 
2017 (4) TMI 478
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....ief facts of the case is as follows: - The Central Government filed the Company Petition No. 01/2015 under Sections 397-398 read with Sections 388B, 388C, 401, 402, 403, 406 & 408 of the Companies Act, 1956 along with supporting documents before the erstwhile Company Law Board. Apart from other relief, declaration has been sought for to declare the 2nd to 28th respondents of the 1st respondent company are not "fit and proper" persons to hold the office as directors or any other office connected with the conduct and management of 1st respondent company and 29th respondent company and also not eligible for appointment as directors in any other Company by invoking the provisions of Section 388B(l)(a) to (d) of the Companies Act, 1956. 3. The Company Law Board in exercise of power conferred under Regulation 44 of the Company Law Board Regulations 1991 (hereinafter referred to as 'Regulations 1991') issued circular that all matters filed under Section 388-B of Act 1956 will be dealt with by the 'Principal Bench' at New Delhi. In this background the Company Petition was filed by the Central Government before the Principal Bench of the Company Law Board, New Delhi an....
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....ction 388-B of 1956 Act used to be heard by the Principal Bench of Company Law Board at New Delhi. Accordingly, these matters same shall be continued to be heard by the Principal Bench. List for arguments on 9.8.2016 at 2.00 PM." We are also inclined to agree with the submission made by learned counsel for the non-applicant - petitioner that transfer of the proceeding to Chennai Bench of the NCLT would result in delay. Therefore, in the interest of justice also such a transfer should be avoided. For all the reasons stated above the application fails and the same is dismissed. The matter shall continue to be heard by the Bench of NCLT, New Delhi." 6. The stand taken by the appellant is summarized as follows: - i Jurisdiction of a bench of the NCLT to decide or adjudicate a proceeding would be solely dependent on whether the registered office of the concerned company is located in the area over which such Bench exercises jurisdiction, i.e. territorial jurisdiction as specified in the Notification. ii The location of the registered office of the concerned company has always determined jurisdiction for proceedings under the provisions of the Companies Act, 1956 (the 1956....
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....ned company. Thus it was only such High Court which had territorial jurisdiction. 10. The CLB framed its regulations under Section 10E of the 1956 Act and Regulation 7 of the CLB Regulations, 1991 also determined territorial jurisdiction on the basis of the location of the registered office of the concerned company. However, by Regulation 4 of the CLB Regulations, 1991, an exception was created for certain proceedings including Section 388B of the 1956 Act where if so ordered by the Chairman of the CLB, the Principal Bench would hear such proceedings rather than the Regional Bench which had territorial jurisdiction. It is also significant to note that the Principal Bench of the CLB could hold its sittings all over India and thus exercise jurisdiction all over India. 11. In "Stridewell Leathers (P.) Limited. vs. Bhankerpur Simbhaoli Beverages (P.) Ltd." [1994] 1 SCC 34, the Hon'ble Supreme Court notices that no clear indication was found in Section 10-F of the Companies Act, 1956 to indicate which High Court is meant as the Forum of appeal against the order passed by the Company Law Board. In the said case the Hon'ble Apex court observed as follows: - "6. The Compan....
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....igh Court is set aside resulting in acceptance of the preliminary objection raised by the appellants in the Delhi High Court. The Delhi High Court will now make the consequential order. No costs." 12. Section 2(29) of the 2013 Act also determines territorial jurisdiction on the basis of where the registered office of the concerned company is located for matters covered under section 2(29)(i) and (ii) of the 2013 Act. 13. Section 419 of Act 2013 deals with "Benches of Tribunal", which reads as follows: - "419. Benches of Tribunal. - (1) There shall be constituted such number of Benches of the Tribunal, as may, by notification, be specified by the Central Government. (2) The Principal Bench of the Tribunal shall be at New Delhi which shall be presided over by the President of the Tribunal. (3) The powers of the Tribunal shall be exercisable by Benches consisting of two Members out of whom one shall be a Judicial Member and the other shall be a Technical Member: Provided that it shall be competent for the Members of the Tribunal authorised in this behalf to function as a Bench consisting of a single Judicial Member and exercise the powers of the Tribunal in respect o....
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....Assam. (3) State of Manipur. (4) State of Mizoram. (5) State of Meghalaya. (6) State of Nagaland. (7) State of Sikkim. (8) State of Tripura. 8 National Company Law Tribunal, Hyderabad Bench. Hyderabad (1) State of Andhra Pradesh. (2) State of Telangana. 9 National Company Law Tribunal, Kolkata Bench. Kolkata Bench (1) State of Bihar. (2) State of Jharkhand. (3) State of Odisha. (4) State of West Bengal. (5) Union territory of Andaman and Nicobar Islands. 10 National Company Law Tribunal, Mumbai Bench. Mumbai Bench (1) State of Chhattisgarh. (2) State of Goa. (3) State of Maharashtra. 15. Sub-section (a) of Section 434 deals with 'transfer of pending proceedings' including the proceedings or cases pending before the Company Law Board, which reads as follows:- "434. Transfer of certain pending proceedings. - (1) On such date as may be notified by the Central Government in this behalf, - (a) All matters, proceedings or cases pending before the Board of company Law Administration (herein in this section referred to as the Company Law Board) constituted under sub-section (1) of section 10E of the Companies Act, 1956 (1....
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....justice." 17. The Constitutional Bench of Hon'ble Supreme Court in Election Commission versus. Venkata Rao", AIR 1953 SC 210 was deciding whether the rule that cause of action attracts jurisdiction is applicable to writs issuable under Article 226 of the Constitution of India which makes no reference to any cause of action but insists on the territorial jurisdiction in relation to which the High Court exercises jurisdiction. In the said case the Hon'ble Supreme Court held as follows: - "The rule that cause of action attracts jurisdiction in suits is based on statutory enactment and cannot apply to writs issuable under Art. 226 which makes no reference to any cause of action or where it arises but insists on the presence of the person or authority "within the territories" in relation to which the High Court exercises jurisdiction." 18. There is no provision in the Companies Act, 2013 conferring any territorial jurisdiction on a High Court or any Bench of the NCLT on the basis of cause of action. In other words, there is no statutory enactment conferring territorial jurisdiction on the basis of where the cause of action has arisen. 19. The Notification dated 1st J....