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2021 Supreme(Cal) 302
IN THE HIGH COURT OF CALCUTTA
RAJASEKHAR MANTHA, J.
Kamsco Industries Private Limited and Others - Appellant
Versus
Union of India and Others - Respondent
W.P.A. No. 12067of 2021 With CAN 1 of 2021
Decided on : 13-12-2021
Advocate Appeared:
For the Petitioners:Mr. Ratnanko Banerjee, Senior Advocate Mr. D.K. Sarkar Mr. A. Deb
Ms. A. Daga
For the UOI : Mr. Y. J. Dastoor, ASG Mr. Rudraman Bhattacharyya Mr. Rajashree Venket Kundalia
For the Respondent:Mr. Sudipto Sarkar, Senior Advocate Mr. Paritosh Sinha Ms. A. Agnihotri Mr. Saubhik Chowdhury Mr. Vividh Tandon Mr. R.V. Goutham Mr. Dripto Majumdar Ms. Ayusmita Sinha Ms. K. Kapadia Mr. D. Das
For the Applicants for Addition of Parties : Mr. S.K. Sinha Mr. Debashis Saha Ms. Dipika Banu Ms. Namrata Chatterjee Mr. Souvik Dian
Point of Law: Under existing Article 226 of Constitution, only High Court which has jurisdiction with respect to the Central Government is Punjab High Court. This involves considerable hardship to litigants from distant places. It is, therefore, proposed to amend Article 226 so that when any relief is sought against any Government, authority or person for any action taken, the High Court within whose jurisdiction the cause of action arises may also have jurisdiction to issue appropriate directions, orders or writs.
Headnote:
Debt recovery and Monetary Laws - Recovery Certificate - Order of proclamation and attachment and sale of shares - Maintainability of writ petition - Territorial jurisdiction - Petitioners are aggrieved by order of proclamation and attachment and sale of the said shares - Petitioners have assailed order of attachment, proclamation order of Sale and Recovery Certificate being RC issued by Recovery Officer of DRT at Bengaluru - Shares of petitioners were put up sale in the Recovery Proceedings of the DRT. By a Sale Proclamation, Recovery Officer of DRT sold 3,96,44,346 equity shares in UBL, USL and MHL to the 4th respondent M/s. Heineken N.V. in a block deal on the Bombay Stock Exchange duly approved by the SEBI and the Central Government.
Finding of the court:
This Court has carefully considered the arguments advanced by the parties. The expression, ‘cause of action’ would essentially mean the entire bundle of facts that are required to be proved for the purpose of availing of a judicial remedy. The expression, ‘cause of action’ in the context of under Article 226 of Constitution of India has been explained – It is seen that the petitioner is primarily aggrieved by the orders passed by the Recovery Officer, in RC Case attached to the DRT-II at Bengaluru. The said recovery proceeding was to execute a decree and certificate passed by the DRT II at Bengaluru. The shares, sold by the Recovery Officer, were of M/s. UBL the principal debtor and M/s. USL and McDowell Holdings Limited located at, inter alia, Bengaluru - The sale of shares was affected at the Bombay Stock Exchange and sale approved by the SEBI at Mumbai, outside the jurisdiction of the Calcutta High Court.
Result: Writ petition dismissed
JUDGMENT :
Rajasekhar Mantha, J.
CAN 1 of 2021
This application has been filed for addition of parties. The applicant is State Bank of India for itself and as a leader of a consortium of lenders to, inter alia, M/s. UBL. The applicants are necessary and proper parties. Hence, CAN 1/2021 is allowed. The said applicants shall be added as party-respondents to the instant writ petition.
Learned advocate of record or the applicants shall make necessary amendments in the cause title of the writ petition in course of the day.
CAN 1 of 2021 is allowed and disposed of.
W.P.A. No. 12067of 2021
1. By order dated 12th August, 2021, a Co-ordinate Bench, reserving the point of maintainability to be decided in course of final hearing, called for affidavits from the parties. This matter has been listed before this Court as a motion. The principal Respondents have not filed affidavits.
2. The respondent No. 4 has used affidavit-in-opposition. The Union as well as the State Bank of India prayed that this Court should first decide on the maintainability of the writ petition on the question of territorial jurisdiction. It is submitted that affidavits are not needed for deciding the preliminary issue. The parties were duly notified and have made detailed submissions.
3. The facts of the case are, inter alia, that OA 766 of 2013 was filed by the State Bank of India against, ‘Kingfisher Airlines’, the ‘United Breweries (Holdings) Limited’, Dr. Vijay Mallya, Kingfisher Finvest (India) Ltd. and five others before the Debt Recovery Tribunal-II at Bengaluru in the State of Karnataka. The said OA was decreed for a sum of Rs.6203,35,03,879.42/-.
4. A Recovery Certificate being RC No. 11395 of 2017 dated 10th April, 2017 came to be issued and subsequently amended.
5. In the mean time, an FIR came to be lodged against defendants in OA No. 766 of 2014 at the instance of the IDBI. On 11th June, 2016 and 3rd September, 2016 the Enforcement Directorate (ED) issued Provisional Orders attaching certain assets of M/s. UBL and UBHL under the provisions of PMLA Act, inter alia, held by the writ petitioners. On 7th January, 2019, the Recovery Officer of DRT at Bengaluru passed orders of attachment of the shares held by the petitioners in M/s. UBL, United Spirits Limited and McDowell Holdings Limited. In the meantime the principal debtor UBL was directed to be wound up by the Hon’ble Karnataka High Court on 7th February 2017.
6. The said attached shares of the petitioners were put up sale in the Recovery Proceedings of the DRT. By a Sale Proclamation dated 7th June, 2021, the Recovery Officer of the DRT sold 3,96,44,346 equity shares in UBL, USL and MHL to the 4th respondent M/s. Heineken N.V. in a block deal on the Bombay Stock Exchange duly approved by the SEBI and the Central Government.
7. The petitioners are aggrieved by the order of proclamation and attachment and sale of the said shares. The writ petition has been filed in July, 2021. The petitioners have assailed the order of attachment, proclamation dated 7th January, 2019, the order of Sale dated 7th June, 2021 and the Recovery Certificate being RC No. 11395 of 2017 issued by the Recovery Officer of DRT at Bengaluru.
8. Counsel for the petitioners, Mr. Ratnanko Banerjee, would argue that the writ petitioners are located at and have their registered offices at Kolkata. The order of attachment of the shares of the petitioners was received and its effect felt at Kolkata. The writ petitioners are neither borrowers nor guarantors to the State Bank of India or any financial institution. The petitioners are separate corporate entities and Juristic persons and it, therefore, cannot be said that the petitioners are proxies for Dr. Vijay Mallya, the principal promoter of M/s. UBL.
9. In support of the territorial jurisdiction of this Court to entertain the writ petition, Senior Counsel for the petitioners would rely upon the judgments of the Supreme Court in the case of M/s. Kusum Ingots & Alloys Ltd. Vs. Union of India and Anr. rep
