Safedabad Cold Storage & Allied ... vs Shabbir Ahmed & Ors

(arising out of Order dated 16th February, 2017, passed by National Company Law Tribunal, Allahabad Bench, Allahabad in C.P. No. 38 (ND) of 2016)

IN THE MATTER OF:

Safedabad Cold Storage & Allied Industries Pvt. Ltd. & Ors. .Appellants

Vs

Shabbir Ahmed & Ors. ...Respondents

Present: For the Appellants: - Mr. Saurabh Kalia and Ms. Samridhi Gogia, Advocates.

For the Respondents: - Mr. Ratnanko Banerji, Senior Advocate with Mr. Pankaj Bhatia, Mr. Shaunak Mitra, Mr. Debjani, Mr. Dhruv Surana, Mr. Nipun Goel, Advocates.

JUDGEMENT

SUDHANSU JYOTI MUKHOPADHAYA,J.

This appeal has been preferred by appellants against order dated 16th

February 2017,passed by National Company Law Tribunal (hereinafter referred to

as "Tribunal"), Kolkata Bench, Kolkata and I.A.No. 20/2016 in C.P. No. 38/2016

whereby and whereunder the Tribunal rejected the Interlocutory Application

preferred by appellants and held that Company Petition was maintainable at

Kolkata Bench.

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2. The brief facts of the case are as follows: -

The Company Petition No. 38/2016 was filed by respondents/ petitioners,

namely Shabbir Ahmed and others on 12th April 2016 before erstwhile Company

Law Board at Kolkata under Section 235, 397, 398, 402, 403 and 406 of the

Companies Act 1956. After constitution of the National Company Law Tribunal

w.e.f. 1st June 2016, the Interlocutory Application No. 20/2016 was preferred by

appellants for transfer of the case from Kolkata Bench to Allahabad Bench on the

ground that Registered Office of the Appellant No. 1 Company is situated at

Safedabad, Barabanki, U.P.

3. In support of prayer for transfer, the following facts were brought to the

notice of the Tribunal by the appellants which were also not disputed by the

respondents: -

(i) On 17th February 2015, the Extra Ordinary General Meeting of the

Company was convened for taking decision to shift the Registered

office from Kolkata to Barabanki, U.P.

(ii) The application for shifting of Registered Office was filed on 5th August

2015 before Ld. Regional Director, Eastern Region Kolkata.

(iii) The application for shifting of Registered Office from Kolkata to

Barabanki, U.P. was allowed by Ld. Regional Director Eastern Region,

Kolkata by its order dated 1 1th February 2016.

(iv) Form No. INC 22 i.e. Notice for situation of change of place of

Registered Office and INC 28, a notice of order of the Court or Tribunal

or any other competent authority was filed by appellant company on

17th February 2016 in the Ministry of Corporate Affairs Portal. 3

(v) The Certificate of shifting of Registered Office at Kolkata to U.P. was

issued by Registrar of Companies, Kanpur on 18th March 2016.

(vi) It was only thereafter the Company Petition was filed on 19th April

2016 by the respondent inter alia challenging the various action

including the shifting of Registered Office from Kolkata to U.P. before

erstwhile Company Law Board.

4. Learned counsel for the appellants submitted that the Company Petition

should have been preferred before a Bench of the Company Law Board/Tribunal

where the Registered Office of the Company is situated as on the date of filing,

which is at Barabanki, U.P. Thereby, the Company Law Board, at New Delhi had

the jurisdiction and not the Kolkata bench. Further according to appellants, after

constitution of the Tribunal since 1St June 2016, it was required to be transferred

and heard by Bench of Tribunal at Allahabad.

5. Further, according to Learned counsel for the appellants, any territorial

jurisdiction of any Bench cannot be decided based upon cause of action. In this

regard, learned counsel for the appellants relied on decision of the Appellate

Tribunal dated 9th March 2017 in "63 Moons Technologies Ltd. Vs.I Union of India

& Others" Company Appeal (AT) No. 03/2017.

6. It was also contended by Learned counsel for the appellants that the matter

ought to have been dismissed by Kolkata Bench for want of jurisdiction as the

original matter itself was filed before the Bench which had no jurisdiction to

entertain the said petition. Reliance was placed on Hon'ble Supreme Court

decision in "Stridewell Leathers (P) Ltd. Vs. Bhankerpur Shimbhaoli Beverages (P)

Ltd." (1994) 1-SCC 34.

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7. Per contra, according to Learned counsel for the respondents as the

respondents has challenged the acts of illegal shifting of Registered Office on the

basis of alleged Extra Ordinary General Meeting held on 17th February 2017

without notice to the respondents/ petitioners, sich act of illegal shifting being

illegal, null and void the Registered Office deemed to be continuing at Kolkata and

thereby the petition is maintainable at Tribunal Kolkata Bench.

8. Learned counsel for the respondent relied on the decision of this Appellate

Tribunal dated 24th January 2017 in "Crystal Thermotech Ltd" Company Appeal

(AT) No. 17 of 2016 to suggest that where an applicant alleges that Registered

office has been illegally shifted by oppression and mismanagement without notice

and knowledge then the petition is maintainable at the place where original

Registered office was situated.

9. We have heard Learned counsel for the parties and perused the impugned

order

10. It is not in dispute that wrongly or rightly the Registered Office of the 1st

appellant company was transferred from Kolkata to Barabanki, UP, which was

also approved by the competent authority and appropriate orders were passed

much prior to filing of Company Petition. The appellants have challenged the

jurisdiction of the Kolkata Bench, as the Principal Bench of Company Law Board,

New Delhi had jurisdiction in respect of State of U. P.

11. Once the question of jurisdiction of the Kolkata Bench was challenged by

the appellants/ respondents, though it was open to the Tribunal, Kolkata Bench

to decide the question of its jurisdiction and maintainability of the Company

Petition before erstwhile Company Law Board, it was not open to the Tribunal to

decide the main issue as to whether the transfer of the Registered Office from Kolkata to Barabanki, U.P. was illegal or not and whether there is any act of

'Oppression and Mismanagement" on the part of any one or other member

including the appellants as has been observed by Tribunal.

12. It is not in dispute that with regard to the companies having its Registered

office in the State of U.P., Principal Bench of erstwhile Company Law Board, New

Delhi had the jurisdiction and not with the Kolkata Bench.

13. Once the respondents challenged the transfer of the Registered Office from

Kolkata Bench to Barabanki, U.P., it was well within the domain of Principal

Bench of erstwhile Company Law Board to decide the case on merit i.e. legality

and propriety of transfer of Registered Office from one State to another. The

judgement of this Appellate Tribunal in "Crystal Thermotech Ltd.", as referred by

respondents is not applicable in the present case.

14. In the case of "63 Moons Technologies Limited", Appellate Tribunal held as

follows: -

"24. Sub-section (1) of Section 434 mandates transfer

of proceedings pending before the Company Law Board to

respective Tribunal having territorial jurisdiction. The

circular issued under Regulation 4 of 1991 Regulation cannot

be given effect in view of the aforesaid mandate under the

Act.

25. Section 434(a) read with sub-section (1) of

Section 419 of Companies Act 2013 and Notification dated

1st June 2016 issued by Central Government under sub-

section (1) of Section 419 and the Rule 64 of NCLT Rule it is

clear the Benches, including Principal Bench have territorial jurisdiction on the Companies exclusively on the basis of

location of the registered office of such company. In fact, this

law is also being followed by the Principal Bench of NCLT,

New Delhi for placing all the petitioners before one or other

Bench and that Section 488-B of Act 1956, cannot be

exception of the same."

15. In view of the aforesaid discussion and of decision in "63 Moons

Technologies Limited", we hold that the petition preferred by

respondents/ petitioners before erstwhile Company Law Board, Kolkata Bench

was not maintainable and the Tribunal, Kolkata Bench has no jurisdiction to

decide the Company Petition on merit We, accordingly, set aside the impugned

order dated 16th February 2017 passed by the Tribunal, Kolkata Bench and

dismiss the Company Petition preferred by Respondents/ Petitioners as not

maintainable before Kolkata Bench with liberty to respondents/ petitioners to file

a fresh petition before the Bench of Tribunal at Allahabad under relevant

provisions with same and similar allegations, as has been made in the Company

Petition. If such petition is filed within one month from the date of this order, the

Tribunal will decide the case on merit and will not dismiss the petition on the

ground of limitation or delay. The appeal is allowed with the aforesaid

observations. However, there shall be no order as to cost.

(Balvinder Singh) (Justice S .J. Mukhopadhaya) Member (Technical) Chairperson

NEW DELHI 21St July, 2017 sm