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2022 (2) TMI 1255
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....etitioner has got remedy only before the National Company Law Appellate Tribunal. 2.1. In support of his contentions, the learned senior counsel relied upon the following judgments: (i) (2020) 13 Supreme Court Cases 308 [Embassy Property Developments Private Limited Vs. State of Karnataka and others] wherein the Hon'ble Supreme Court held as follows: "... 10. In the backdrop of the facts narrated and in the light of the rival contentions extracted above, the first question that arises for consideration is as to whether the High Court ought to interfere, under Articles 226/227 of the Constitution, with an order [Vasudevan v. State of Karnataka] passed by NCLT in a proceeding under the IBC, 2016, despite the availability of a statutory alternative remedy of appeal to NCLAT. 11. It is beyond any pale of doubt that the IBC, 2016 is a complete code in itself. As observed by this Court in Innoventive Industries Ltd. v. ICICI Bank [Innoventive Industries Ltd. v. ICICI Bank, (2018) 1 SCC 407 : (2018) 1 SCC (Civ) 356 : AIR 2017 SC 4084] it is an exhaustive code on the subject-matter of insolvency in relation to corporate entities and others. It is also true that the IBC, 2016 i....
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.... in view of the use of the expression "any person" in Article 226(1), courts recognised that the jurisdiction of the High Court extended even over private individuals, provided the nature of the duties performed by such private individuals, are public in nature. Therefore, the remedies provided under Article 226 are public law remedies, which stand in contrast to the remedies available in private law. As observed by this Court in Nilabati Behera v. State of Orissa [Nilabati Behera v. State of Orissa, (1993) 2 SCC 746 : 1993 SCC (Cri) 527] public law proceedings serve a different purpose than private law proceedings. 15. One of the well-recognised exceptions to the self-imposed restraint of the High Courts, in cases where a statutory alternative remedy of appeal is available, is the lack of jurisdiction on the part of the statutory/quasi-judicial authority, against whose order a judicial review is sought. Traditionally, English courts maintained a distinction between cases where a statutory/quasi-judicial authority exercised a jurisdiction not vested in it in law and cases where there was a wrongful exercise of the available jurisdiction. An "error of jurisdiction" was always dist....
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....ation Commission, (1969) 2 AC 147 : (1969) 2 WLR 163 (HL)], but another was born with Racal, In re [Racal Communications Ltd., In re, 1981 AC 374 : (1980) 3 WLR 181 (HL)]. This could be seen from the after-effects of Anisminic [Anisminic Ltd. v. Foreign Compensation Commission, (1969) 2 AC 147 : (1969) 2 WLR 163 (HL)]. [Anisminic, (1969) 2 AC 147 : (1969) 2 WLR 163 (HL) had its own quota of problems. Prof. Wade, as pointed out in R. v. Lord President of the Privy Council, ex p Page, 1993 AC 682 : (1992) 3 WLR 1112 (HL), seems to have opined that the true effect of Anisminic was still in doubt. People like Sir John Laws, quoted by Prof. Paul Craig, and which was extracted in the decision in R. (Privacy International) v. Investigatory Powers Tribunal, 2019 UKSC 22 : (2019) 2 WLR 1219, seems to have opined that once the distinction between jurisdictional and non-jurisdictional errors was discarded, there was no longer any need for the ultra vires principle and that ultra vires is, in truth, a fig leaf which has enabled the courts to intervene in decisions without an assertion of judicial power which too nakedly confronts the established authority of the Executive or other public bodie....
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....C (Civ) 208], quite independent of Anisminic [Anisminic Ltd. v. Foreign Compensation Commission, (1969) 2 AC 147 : (1969) 2 WLR 163 (HL)] and its followers. 19. Though the decision in Official Trustee [Official Trustee v. Sachindra Nath Chatterjee, (1969) 3 SCR 92 : AIR 1969 SC 823] preceded Anisminic [Anisminic Ltd. v. Foreign Compensation Commission, (1969) 2 AC 147 : (1969) 2 WLR 163 (HL)] and can proudly be claimed as the Indian precursor to an English legal landmark, several subsequent decisions of this Court considered Anisminic [Anisminic Ltd. v. Foreign Compensation Commission, (1969) 2 AC 147 : (1969) 2 WLR 163 (HL)] alone to have provided the breakthrough. In Mafatlal Industries Ltd. v. Union of India [Mafatlal Industries Ltd. v. Union of India, (1997) 5 SCC 536], Paripoornan, J. provided the list of Indian cases which cited Anisminic [Anisminic Ltd. v. Foreign Compensation Commission, (1969) 2 AC 147 : (1969) 2 WLR 163 (HL)] with approval. They are: (1) Union of India v. Tarachand Gupta & Bros. [Union of India v. Tarachand Gupta & Bros., (1971) 1 SCC 486], (2) A.R. Antulay v. R.S. Nayak [A.R. Antulay v. R.S. Nayak, (1988) 2 SCC 602 : 1988 SCC (Cri) 372], (3) R.B.....
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....re the exercise of jurisdiction by a superior court is questioned on the ground of availability of alternative remedy, was recognised even in Anisminic [Anisminic Ltd. v. Foreign Compensation Commission, (1969) 2 AC 147 : (1969) 2 WLR 163 (HL)], when Lord Reid referred to the decision in Smith v. East Elloe Rural District Council [Smith v. East Elloe Rural District Council, 1956 AC 736 : (1956) 2 WLR 888 (HL)] as posing some difficulty. As a result, the Court of Appeal held in R. v. Secy. of State for the Environment, ex p Ostler [R. v. Secy. of State for the Environment, ex p Ostler, 1977 QB 122 : (1976) 3 WLR 288 (CA)] that the availability of a statutory right to challenge within a specified time-limit, among other points, provided a sufficient basis for distinguishing Anisminic [Anisminic Ltd. v. Foreign Compensation Commission, (1969) 2 AC 147 : (1969) 2 WLR 163 (HL)]. This was taken note of by the UK Supreme Court in Regina (Privacy International) [R. (Privacy International) v. Investigatory Powers Tribunal, 2019 UKSC 22 : (2019) 2 WLR 1219]. Therefore the question whether the error committed by an administrative authority/tribunal or a court of law went to jurisdiction or wh....
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....vate Limited] it has been held as follows: "... 48. Issues raised for consideration in this appeal are:- 1. On the facts and circumstances of the case, when an order of the NCLT is challenged, writ petition has to be filed under Article 226 or 227 of the Constitution of India. 2. Whether a writ petition filed under Article 226 of the Constitution of India is maintainable, when an alternate remedy is available. 3. Whether a writ petition is maintainable under Article 226 of the Constitution, when a party pursues multiple remedies. 4. Whether a writ petition is maintainable under Article 226 of the Constitution, in a dispute between private parties. 5. Whether a relief available under Article 226 of the Constitution, when the respondents/writ petitioners are guilty of suppression of crucial material. 6. Whether NCLT should be made a party, in a petition filed under Articles 226 or 227 of the Constitution, as the case may be. 7. Whether the judgment in W.P.(C) No. 14341/2020 dated 22.07.2020 can be treated as a binding precedent, so as to enable the respondents to file a writ petition under Article 226 of the Constitution of India. 8. Whether the appellants have be....
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....een the exercise of powers under Articles 226 and 227 of the Constitution of India has been explained in the foregoing paragraphs. Thus, in the case on hand, when none of the parties, State or authority or instrumentality of the State, or any private body, discharging public functions, have been arrayed as respondents, when the writ petition has been filed under Article 226 of the Constitution of India, having regard to the roster followed in listing the cases, writ court ought to have directed the respondents/writ petitioners to make necessary amendments, to the provisions under which the writ petition ought to have been filed, or in the alternative, directed that the writ petition be placed before the concerned court, dealing with the challenges made to the orders passed by Courts, or Tribunals, as the case may be. Admittedly, the order impugned in the writ petition (Exhibit-P1) is not an administrative order, passed by the National Company Law Tribunal. 120. Writ court, without drawing a distinction between a writ petition filed under Articles 226 and 227 of the Constitutions of India, has erroneously proceeded to entertain the writ petition under Article 226 against an interi....
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....rk was to be carried out at Aligarh, even the contracts provided that in the event of dispute the Aligarh Court alone will have jurisdiction. The arbitrator was from Aligarh and was to function there. Merely because the respondent was a Calcutta-based firm, the High Court of Calcutta seems to have exercised jurisdiction where it had none by adopting a queer line of reasoning. We are constrained to say that this is a case of abuse of jurisdiction and we feel that the respondent deliberately moved the Calcutta High Court ignoring the fact that no part of the cause of action had arisen within the jurisdiction of that Court. It clearly shows that the litigation filed in the Calcutta High Court was thoroughly unsustainable." 24. The court examined the facts holistically, noting that the contract was executed and to be performed in Aligarh, and the arbitrator was to function at Aligarh. It did consider that the contract conferred jurisdiction on the courts at Aligarh, but this was one factor amongst several considered by the court in determining that the High Court of Calcutta did not have jurisdiction. 25. In the present case, the Bombay High Court has relied solely on Clause 21 of ....
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....rit court, while entertaining the writ petition, has not considered or examined the facts holistically. 122. Giving due consideration to the decisions on jurisdiction, we are of the view that there is an error in exercising the jurisdiction under Article 226 of the Constitution of India." (iii) (2021) 225 Comp. Cas 442 (Mad) [Hero Exports Vs. K. Vasudevan, Resolution Professional and others], wherein the Division Bench of this Court held as follows: "... 12. Learned counsel also placed reliance upon the judgment reported in [2019] 17 Scale 37 : [2020] 9 Comp. Case-OL 609 (SC) (Embassy Property Developments P. Ltd., Vs. State of Karnataka). 13. This Court has carefully considered the arguments advanced by the learned counsel for the petitioner and also perused the materials placed before it. 14. It is relevant to extract Rule 11 of the NCLT Rules, 2016: "11: Inherent Powers:- Nothing in these Rules shall be deemed to limit or otherwise affect the inherent powers of the Tribunal to make such orders as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Tribunal." 15. The first respondent/IRP, in the e-mail communication dated Apr....
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....t with the jurisdiction and the powers of National Company Law Tribunal. There cannot be any difficulty in accepting the proposition laid down by the Apex Court in the above cited decision for the reason that it is also a well settled position of law. 19. The revision petitioner, under the guise of filing a revision, under Article 227 of the Constitution of India, wants this Court to issue a positive direction to National Company Law Tribunal, Chennai Bench, to exercise its inherent power in a particular manner. In the considered opinion of the Court, it cannot issue a positive direction to National Company Law Tribunal, Chennai Bench, as to how it should exercise its inherent power. The National Company Law Tribunal/Tribunal also found that in real sense, the revision petitioner wants to recall of the Resolution Plan and the said cause could be taken as a ground for filing an appeal under Section 32 of the Insolvency and Bankruptcy Code. Thus, there is an effective alternate remedy provided to the revision petitioner who also claimed to be an Operational Creditor. 20. If this Court starts entertaining revision petitions like this, there is a likelihood of opening of flood gate....
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....gment reported in (1997) 3 Supreme Court Cases 261 [L. Chandra Kumar Vs. Union Bank of India and others] wherein the Hon'ble Supreme Court held as follows: "... 91. It has also been contended before us that even in dealing with cases which are properly before the Tribunals, the manner in which justice is dispensed by them leaves much to be desired. Moreover, the remedy provided in the parent statutes, by way of an appeal by special leave under Article 136 of the Constitution, is too costly and inaccessible for it to be real and effective. Furthermore, the result of providing such a remedy is that the docket of the Supreme Court is crowded with decisions of Tribunals that are challenged on relatively trivial grounds and it is forced to perform the role of a first appellate court. We have already emphasised the necessity for ensuring that the High Courts are able to exercise judicial superintendence over the decisions of the Tribunals under Article 227 of the Constitution. In R.K. Jain case [(1993) 4 SCC 119 : 1993 SCC (L & S) 1128 : (1993) 25 ATC 464], after taking note of these facts, it was suggested that the possibility of an appeal from the Tribunal on questions of law t....
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....lp but disapprove the approach of the High Court for reasons already noticed in Dwarikesh Sugar Industries Ltd. v. Prem Heavy Engineering Works (P) Ltd. [Dwarikesh Sugar Industries Ltd. v. Prem Heavy Engineering Works (P) Ltd., (1997) 6 SCC 450], observing: (SCC p. 463, para 32) '32. When a position, in law, is well settled as a result of judicial pronouncement of this Court, it would amount to judicial impropriety to say the least, for the subordinate courts including the High Courts to ignore the settled decisions and then to pass a judicial order which is clearly contrary to the settled legal position. Such judicial adventurism cannot be permitted and we strongly deprecate the tendency of the subordinate courts in not applying the settled principles and in passing whimsical orders which necessarily has the effect of granting wrongful and unwarranted relief to one of the parties. It is time that this tendency stops.'" 4. The writ petition, in this case, being not maintainable, obviously, all orders passed must perish, including the impugned order [Umakanta Mohapatra v. ICICI Bank, WP (C) No. 5890 of 2012, order dated 3-2-2014 (Ori); Sabita Kumar Nayak v. ICICI Bank, W....
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....e SARFAESI Act and exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on the right of banks and other financial institutions to recover their dues. We hope and trust that in future the High Courts will exercise their discretion in such matters with greater caution, care and circumspection." 11. In Union Bank of India v. Panchanan Subudhi [Union Bank of India v. Panchanan Subudhi, (2010) 15 SCC 552 : (2013) 2 SCC (Civ) 221], further proceedings under Section 13(4) were stayed in the writ jurisdiction subject to deposit of Rs 10,00,000 leading this Court to observe as follows: (SCC pp. 553-54, para 7) "7. In our view, the approach adopted by the High Court was clearly erroneous. When the respondent failed to abide by the terms of one-time settlement, there was no justification for the High Court to entertain the writ petition and that too by ignoring the fact that a statutory alternative remedy was available to the respondent under Section 17 of the Act." 12. The same view was reiterated in Kanaiyalal Lalchand Sachdev v. State of Maharashtra [Kanaiyalal Lalchand Sachdev v. State of Maharashtra, (2011) 2 SCC 782 : (2011) 1 SCC (Civ) 570]....
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....jab National Bank v. Imperial Gift House [Punjab National Bank v. Imperial Gift House, (2013) 14 SCC 622], observing: (SCC p. 622, paras 3-4) "3. Upon receipt of notice, the respondents filed representation under Section 13(3-A) of the Act, which was rejected. Thereafter, before any further action could be taken under Section 13(4) of the Act by the Bank, the writ petition was filed before the High Court. 4. In our view, the High Court [Imperial Gift House v. Punjab National Bank] was not justified in entertaining the writ petition against the notice issued under Section 13(2) of the Act and quashing the proceedings initiated by the Bank." 15. It is the solemn duty of the court to apply the correct law without waiting for an objection to be raised by a party, especially when the law stands well settled. Any departure, if permissible, has to be for reasons discussed, of the case falling under a defined exception, duly discussed after noticing the relevant law. In financial matters grant of ex parte interim orders can have a deleterious effect and it is not sufficient to say that the aggrieved has the remedy to move for vacating the interim order. Loans by financial institution....