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IN THE HIGH COURT OF DELHI AT NEW DELHI
REKHA PALLI, J.
SUNIL TANDON - Petitioner
Versus
UNION OF INDIA & ANR. - Respondent
W.P.(C) 10645 of 2021 & CM APPL. 32831 of 2021 (stay)
Decided On : 22-10-2021
Constitution of India - Article 226 - Companies Act, 2013 - Sections 221, 241, 242, 246 r/w 339 - petitioner is an erstwhile independent Non-Executive Director - Corporate insolvency resolution process – Attachment of assets - seeking interim prayers for declaration and the freezing of the assets and properties, including that of “persons prima facie responsible - whether in the light of the petitioner’s plea that the proceedings before the NCLT, Mumbai Bench are without jurisdiction having been filed before a Bench whose jurisdiction has been specifically ousted by the proviso to Section 241(2), the writ petition ought to be entertained or the petitioner ought to be relegated to the NCLT/NCLAT.
Finding of the Court : Well-settled proposition that the mere existence of an alternate remedy does not by itself bar the High Court from exercising its writ jurisdiction. The power of judicial review with which the High Court is vested under Article 226 of the Constitution cannot be taken away merely because an alternative statutory remedy of appeal is available. However, it cannot be denied that the power of the High Court to entertain a writ petition under Article 226 even when an alternative statutory remedy is available, is ultimately only discretionary and therefore, it is for the High Court to consider whether, in the facts of the case, a party must be relegated to the available statutory remedy. There can be no dispute with the proposition urged by the petitioner that one of the factors which the High Court will consider while exercising its discretion to entertain a writ petition would be whether the order passed by the Tribunal was without jurisdiction or was merely a case of an error of jurisdiction - Only basis for the petitioner to approach this Court is that under the proviso to Section 241(2), it is only the Principal Bench of NCLT at Delhi which could entertain the petition preferred by the Central Government and therefore, the very filing of the petition before the NCLT, Mumbai Bench and the passing of any order by the said Bench being coram non judice, was a nullity - Only basis for the petitioner to approach this Court is that under the proviso to Section 241(2), it is only the Principal Bench of NCLT at Delhi which could entertain the petition preferred by the Central Government and therefore, the very filing of the petition before the NCLT, Mumbai Bench and the passing of any order by the said Bench being coram non judice, was a nullity.
Result : Dismissed
JUDGMENT :
REKHA PALLI, J.
1. By way of the present petition filed under Article 226 of the Constitution of India, the Petitioner, an erstwhile independent Non-Executive Director in respondent no.3 company, assails order dated 08.07.2021 (“Impugned Order”) and letter dated 16.07.2021 (“Impugned Letter”) issued by respondent no.1 and all consequential actions emanating therefrom, which includes the filing of C.P. No. 295/MB/2021 before the Hon’ble National Company Law Tribunal (NCLT), Mumbai Bench, and the order passed by the said Bench on 31.08.2021 against the petitioner and other persons.
2. The brief facts leading to the filing of the present petition are that the respondent no.3 company, of which the petitioner is an erstwhile independent Non-Executive Director till 18.05.2018, is a part of a group of companies associated with the flagship company i.e. Videocon Industries Ltd. and was admitted under the IBC Framework and thereafter, made subject to the corporate insolvency resolution process (CIRP) before the NCLT, Mumbai Bench on 31.08.2018. The respondent no.3 company is, therefore, being represented in the present petition by the Resolution Professional (“RP”) appointed by the NCLT, Mumbai Bench.
3. As 12 other companies of Videocon Industries Ltd. group were also undergoing CIRP, the NLCT, Mumbai vide its order dated 08.08.2019, consolidated the insolvency process of all the Videocon group companies, including the respondent no.3. On 08.06.2021, the resolution plan filed by Twin Star Technologies Ltd. for the consolidated CIRP of all the Videocon Group companies was approved by the NCLT, Mumbai Bench. Upon the said order being assailed by way of Company Appeal Nos. (AT) (Insolvency) 503 and 505 of 2021, the National Company Law Appellate Tribunal (NCLAT), on 19.07.2021, stayed the said order. Aggrieved thereby, Twin Star Technologies Limited approached the Supreme Court by way of Civil Appeal Nos. 4626 and 4593 of 2021, which came to be dismissed on 13.08.2021.
4. In the meanwhile, the respondent no.1, on the basis of the material placed before it by the Resolution Professional (RP), passed the Impugned Order on 08.07.2021 directing the Serious Fraud Investigation Office (SFIO) to conduct an investigation into the affairs of Videocon Industries Ltd. and its group companies, including respondent no.3. Simultaneously, vide its Impugned Letter dated 16.07.2021, the respondent no.1 directed the Regional Director (WR), Ministry of Corporate Affairs, to file a petition under Sections 221, 241, 242, 246 r/w 339 of Companies Act, 2013 (hereinafter referred to as “the Act”) before the NCLT, Mumbai Bench against Videocon Industries Ltd. and its group companies, seeking interim prayers for declaration and the freezing of the assets and properties, including that of “persons prima facie responsible”.
5. In pursuance of the impugned order and letter, the respondent no.1 filed a company petition bearing C.P. No. 295/MB/2021 before the NCLT, Mumbai which, on 31.08.2021, issued the following directions:
II. That the Respondents (except companies) are immediately directed to disclose on affidavit their moveable and immovable properties/assets, including bank accounts, owned by them in India or anywhere in the world;
III. That the Central Depository Services Ltd. (CDSL) and National Securities Depository Ltd. (NSDL) is directed that securities owned/ held by the Respondents (except companies) in any company/society be frozen, and be prohibited from being transferred or alienation and details thereof be shared with the Petitioner; (emphasis supplied)
IV. That the Central Board of Direct Taxes (CBDT) is be directed to disclose information about all assets of the Responden
Condition precedent for invocation of Section 241(2) of the Act, which requires the Central Government to come to an opinion that the affairs of the company “are being conducted in a manner prejudici....
The court established that the nature of challenge under Article 226 and the absence of jurisdiction could trigger the invocation of the High Court's jurisdiction. The court also clarified that the f....
Power can only be given by the board of directors of the company in exercise of its statutory power by passing the resolution under the provisions of Section 291 of the Companies Act in favour of a d....
The NCLT has jurisdiction to adjudicate insolvency petitions against personal guarantors even in the absence of pending CIRP against the corporate debtor, as per the provisions of the Insolvency and ....
When a specialized tribunal is empowered by statute to adjudicate disputes involving company oppression and mismanagement, including the authority to grant interim injunctions, the jurisdiction of ci....
The court emphasized the importance of raising challenges to jurisdiction before the appropriate forum and the availability of alternate remedies and statutory forums for redressal of grievances.
The availability of an equally efficacious alternative remedy does not bar the maintainability of a writ petition, and the NCLT has the power to regulate the conduct of a company's affairs and provid....
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