TMI Blog2011 (10) TMI 515X X X X Extracts X X X X X X X X Extracts X X X X ..... 45/2003 under sections 397/398 r/w section 402 of the Companies Act, 1956 pending before the Company Law Board, Principal Bench, Delhi. 2. Before proceeding further, the facts material for disposal of the writ petition, as pleaded by the petitioner, may be noticed. The petitioner is a resident of Shillong, Meghalaya. The respondent No. 2 is a private limited company ("the company" for short) registered under the Companies Act, 1956 ("the Act" for short) and having its registered office at Ziakurvilla, Bishnupur, Shillong, Meghalaya. According to him, he is a shareholder of the company with a holding of 2000 equity shares, the value of each share being Rs. 100/-. The shares purchased by him were registered with the Registrar of the Companies at Shillong in accordance with the provisions of the Act under registration Folio No. 48 and Certificate No. 87: he was accordingly issued a share certificate dated 27-2-2002 in his favour. As a shareholder of the company, he has a right over the company, which cannot be taken away without following the procedure laid down by law. According to him, on 17-6-2011, he was surprised to receive the letter dated 10-6-2011 from the respondent-comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned senior counsel, vehemently opposed the writ petition on the ground of maintainability of the writ petition. It is his submission that this Court under Article 226 of the Constitution cannot issue any writ against the Company Law Board, Principal Bench located at Delhi, and clause (2) of Article 226 is not applicable at all inasmuch as there is no whisper of statement made by the petitioner as to what part of the cause of action arose in Shillong: his having share of 2000 with the respondent-company registered at Shillong cannot per se constitute a cause of action. He maintains that the petitioner has an alternative remedy under section 10-F of the Act as well as section 405 of the Act to redress his grievances; having failed to exhaust the alternative statutory remedy provided for by law, the writ petition is not maintainable and is, therefore, liable to be dismissed. He places strong reliance on the following decisions of the Apex court, namely, Alchemist Ltd. v. State Bank of Sikkim [2007] 75 SCL 421 /11 SCC 335; Sri Ramdas Motor Transport Ltd. v. Tadi Adhinarayana Reddy [1997] 13 SCL 118 / 90 Comp. Cas. 383; Stridewell Leathers (P.) Ltd. v. Bhankerpur Simbhaol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to issue writs can be exercised by the High Court "throughout the territories in relation to which it exercises jurisdiction i.e. the writs issued by court cannot run beyond the territories subject to its jurisdiction. Secondly, the person or authority to whom the High Court is empowered to issue such writs must be within those territories; it must be amenable to its jurisdiction either by residence or location within those territories. In the instant case, the petitioner is admittedly challenging the legality of the company petition entertained by the Company Law Board located at Delhi, which is not located within the territorial jurisdiction of this Court. Therefore, there can be no dispute that the case of the petitioner does not come within the purview of Article 226(1) of the Constitution, and is, therefore, maintainable. The next question for consideration is, whether this Court has the jurisdiction to entertain the writ petition under Article 226(2) of the Constitution. In other words, whether the cause of action for the writ petition, wholly or in part, arises within the jurisdiction of this Court so as to enable him to invoke Article 226(2)? The issue once again came up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner at Ahmedabad and (e) A had furnished bank guarantee and executed a bond at Ahmedabad, etc. The Apex Court held that none of the facts pleaded by A constituted a cause of action. This is what it said: "Facts which have no bearing with the lis or the dispute involved in the case, do not give rise to a cause of action so to confer territorial jurisdiction on the court concerned." 6. In other words, all necessary facts must form an integral part of the cause of action. The fact which is neither material nor essential nor integral part of the cause of action would not constitute a part of the cause of action within the meaning of Clause (2) of Article 226 of the Constitution. It will be profitable to refer to the following conclusions of the Apex Court in Alchemists Ltd. ( supra ) at para 37, which succinctly explain the legal position: "37. From the aforesaid discussion and keeping in view the ratio laid down in a catena of decisions by this court, it is clear that for the purpose of deciding whether facts averred by the appellant-petitioner would or would not constitute a part of cause of action, one has to consider whether such fact constitutes a material, essential, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he bundle of facts to be proved by the respondent-company before the Company Law Board at Delhi for the right to judgment is not about the situs of their registered office. On the contrary, this writ petition is squarely covered by the decision of the Apex Court in Adani Exports Ltd. case ( supra ). Therefore, in my judgment, the mere fact that the respondent No. 2 has its registered office at Shillong or carries on its business at Shillong has absolutely no bearing on whether the shares allotted by it in the year 2001-02, is legal or not is rather the cause of action for the company petition such an issue cannot, by any stretch of imagination, be held to constitute a material, essential or integral part of the cause of action; they are as different as chalk and cheese. In the view that I have taken, I have no alternative but to hold that no part of the cause of action of the company petition pending before the Company Law Board at Delhi lies within the territorial jurisdiction of this Court. As this writ petition is being dismissed on the ground of its non-maintainability alone, I refrain from deciding the remaining issues raised by the petitioner. 9. For what has been state ..... X X X X Extracts X X X X X X X X Extracts X X X X
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