Territorial jurisdiction is determined by the location of the cause of action and the residence of the defendants; mere presence of corporate office does not confer jurisdiction.

JUDGMENT :

I.A. 10274/2016

1. This is an application under Order VII Rule 10 CPC on behalf of Defendants No.1 to 3 seeking return of plaint filed by the Plaintiff.

2. The present suit is one for recovery of sum of Rs.8,29,82,904/- along with pendente lite and future interest on account of alleged illegal cash withdrawals by the Defendants from the account of the Plaintiff/Company.

3. The facts in brief as stated in the Plaint are that the Plaintiff Company is part of „MBD group‟, which consists of various Private Limited companies, Partnership firms, and LLPs, and is one of the major leaders in education, publishing, hospitality sector and has presence in various other sectors of businesses. The MBD Group is owned by Ms. Satish Bala Malhotra, Ms. Monica Malhotra, Ms. Sonica Malhotra, and Late Mr. Ashok Kumar Malhotra.

4. The Defendant No. 2 is the father of Defendant No. 1 and grandfather of Defendant No. 3. Defendant No. 2, who is also an Advocate used to represent MBD Group in tax related matters before various competent authorities for numerous years whereas his son i.e. Defendant No. 1 is a chartered accountant by profession and was the statutory auditor of the MBD Group for many years. Further, Defendant No. 3 is actively associated in the professional, executive and administrative activities of Defendant No. 1 and 2.

5. The Plaintiff Company was incorporated and formed in order to construct a hotel project on Delhi-Phagwara Highway at Jalandhar, Punjab ("Hotel") on land admeasuring about 7.44 acres. Initially the paid-up capital of the Plaintiff Company was Rs. 40,000/- divided into 400 shares of Rs. 100/- each which was allotted amongst Late. Sh. Ashok Kumar Malhotra, Mrs. Satish Bala Malhotra, Defendant No. 1, and Defendant No. 2. Though there was an initial allotment of 100 shares each, however, in the year 2002, additional allotment of 1000 shares at Rs. 100/- each was made to Sh. Ashok Kumar Malhotra and Defendant No. 1. Late Sh. Ashok Kumar Malhotra and Mrs. Satish Bala Malhotra continued infusing funds to the tune of Rs. 8.22 crores until death of Sh. Ashok Kumar Malhotra i.e., end of 2009, which was shown as share application money in the audited balance sheet of the company. Defendant No. 1 and 2 brought only about Rs. 20 lakhs as an additional investment till 2003. As Defendant No. 1 and 2 were personally known to Late Sh. Ashok Kumar Malhotra, he had implicit trust on them and thus, Late Mr. Ashok Kumar Malhotra never insisted upon issuing additional allotment of shares in proportion to his and Mrs. Satish Bala Malhotra‟s investment, and Defendant no. 1 and 2 with malafide intent, deliberately manipulated and showed the investment of Shri Ashok Kumar Malhotra and Mrs. Satish Bala Malhotra as share application money in the accounts of the Plaintiff Company.

6. That pursuant to disputes arising between the Plaintiff and Defendants, a Company Petition bearing number C.P. No. 48(ND)/2012, titled as Ms. Sonica Malhotra & Ors. Vs. Krishna Real Estate Enterprises (P) Ltd. & Ors., was filed before the Company Law Board, Principal Bench, New Delhi against the Defendant No.1 and 2. The Company Law Board vide Order dated 09.12.2013 declared the resolutions passed by the Defendants as invalid. The Company Law Board, Principal Bench, at New Delhi vide Order dated 09.12.2013 issued directions to Defendant No.1 and 2 to exit the Plaintiff Company and also handover the physical possession of the assets and records of the Plaintiff Company within seven days in presence of the Administer-cum-Facilitator i.e. Hon‟ble Justice S.N. Aggarwal (Retd.) at his residence in New Delhi. That it is imperative to mention that the Company Law Board vide order dated 09.12.2013 held that Defendant No. 1 and 2 were actively involved in the management and affairs of Plaintiff Company and accordingly held them to be liable and accountable for the mismanagement and oppression in the company.

7. It is further stated in the Plaint that the siphoning of fund