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Spectrum Voyages Pvt. Ltd. v. Fortis Healthcare Ltd. .
Factual and Procedural Background
This appeal was preferred by the Appellant Operational Creditor against an order dated 15th May, 2018 passed by the Adjudicating Authority (National Company Law Tribunal), Principal Bench, New Delhi. The impugned order directed that the territorial jurisdiction over the matter lies with the NCLT-Adjudicating Authority Chandigarh and allowed the petitioner to file the petition before the jurisdictional Bench at Chandigarh. The appeal challenges this jurisdictional decision.
Legal Issues Presented
- Whether the National Company Law Tribunal, New Delhi has jurisdiction to entertain the insolvency application when the registered office of the Corporate Debtor is located outside Delhi, specifically in Gurgaon, Haryana.
- Interpretation of Section 60(1) of the Insolvency and Bankruptcy Code (I&B Code) regarding territorial jurisdiction of the Adjudicating Authority for corporate persons.
Arguments of the Parties
Appellant's Arguments
- The Adjudicating Authority where the office of the Corporate Person is located has statutory jurisdiction under Sub-section (1) of Section 60 of the I&B Code.
- Since the Appellant is located in Delhi, the National Company Law Tribunal, New Delhi, being the Adjudicating Authority for the purpose of the I&B Code, has jurisdiction to entertain the application.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The court analyzed the relevant statutory provisions, particularly Sub-section (1) of Section 5 and Sub-section (1) of Section 60 of the Insolvency and Bankruptcy Code. Section 5(1) defines the Adjudicating Authority as the National Company Law Tribunal constituted under the Companies Act, 2013. Section 60(1) specifically provides that the Adjudicating Authority for insolvency and liquidation of corporate persons is the NCLT having territorial jurisdiction over the place where the registered office of the corporate person is located.
The court emphasized that jurisdiction is determined by the location of the registered office of the Corporate Debtor, not the location of the Operational Creditor. Since the Corporate Debtor’s registered office is in Gurgaon, Haryana, the NCLT Chandigarh Bench has jurisdiction. The petition filed at the NCLT New Delhi Bench was therefore not maintainable. Consequently, the court upheld the decision of the Adjudicating Authority to dismiss the petition for lack of territorial jurisdiction.
Holding and Implications
The appeal was dismissed.
The direct effect of this decision is that insolvency petitions must be filed before the NCLT having jurisdiction over the registered office of the Corporate Debtor. The ruling confirms the territorial jurisdiction rule under Section 60(1) of the I&B Code and clarifies that the location of the Operational Creditor does not confer jurisdiction. No new precedent was established beyond affirming the statutory interpretation.
04.10.2018: This appeal has been preferred by the Appellant Operational Creditor against order dated 15th May, 2018 passed by the Adjudicating Authority (National Company Law Tribunal), Principal Bench, New Delhi, which reads as follows:- ORDER The territorial jurisdiction over this matter is with the NCLT-Adjudicating Authority Chandigarh. Let this petition be filed before the jurisdictional Bench. With the aforesaid observations, the petitioner is relegated to the remedy available. The petition stands disposed of with liberty to file before jurisdictional bench, i.e. NCLT-Adjudicating Authority Chandigarh.
2. Learned counsel appearing on behalf of the Appellant submits that in terms of Sub-section (1) of Section 60 the Adjudicating Authority, where the office of the Corporate Person located, has the statutory jurisdiction. The Appellant being located at Delhi, National Company Law Tribunal, New Delhi which is the Adjudicating Authority for the purpose of I&B Code has jurisdiction to entertain the application. Though such submission appears to be attractive, yet cannot be accepted in view of the specific provisions of the law, which are as follows:
(i) Sub-section (1) of Section 5 defines Adjudicating Authority for the purpose of Part II i.e. National Company Law Tribunal constituted under section 408 of the Companies Act, 2013.
(ii) Sub-section (1) of Section 60 of I&B Code also deliberates with Adjudicating Authority for Corporate Persons which is as follows:
60. Adjudicating Authority for corporate persons. (1) The Adjudicating Authority, in relation to insolvency and resolution and liquidation for corporate persons including corporate debtors and personal guarantors thereof shall be the National Company Law Tribunal having territorial jurisdiction over the place where the registered office of the corporate person is located.
3. From the aforesaid provision it is clear that the Adjudicating Authority in relation to insolvency resolution and liquidation for corporate persons including corporate debtors and personal guarantors thereof shall be the National Company Law Tribunal having territorial jurisdiction that means that it will be the Corporate Debtor against whom the resolution process or liquidation is initiated, the National Company Law Tribunal has the jurisdiction, Adjudicating Authority having jurisdiction to entertain such application. It is not in dispute that with regard to Corporate Debtor whose registered office is situated in Haryana, the National Company Law Tribunal Chandigarh has been made the Company Appeal (AT) (Insolvency) No. 409 of 2018 Adjudicating Authority. In the present case, the Corporate Debtor/ Corporate Persons registered office is situated in Gurgaon, Haryana, therefore, the Honble President, NCLT for New Delhi Bench (Adjudicating Authority) rightly observed that petition at New Delhi is not maintainable.
4. We find no merit in this appeal. It is accordingly dismissed. [Justice S. J. Mukhopadhaya] Chairperson [Justice Bansi Lal Bhat] Member (Judicial) am/gc Company Appeal (AT) (Insolvency) No. 409 of 2018
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