TMI Blog2022 (2) TMI 1255X X X X Extracts X X X X X X X X Extracts X X X X ..... I 25 - SUPREME COURT] , it is clear that when an appeal remedy is provided under the Act, the aggrieved party should exhaust the said remedy by filing an appeal before the Appellate Forum and the Writ Petition/Civil Revision Petition filed by them under Articles 226/227 of the Constitution is not maintainable. When the petitioner can raise all the grounds available to them under law before the Appellate Forum, the filing of the Civil Revision Petition under Article 227 cannot be entertained. The Civil Revision Petition filed under Article 227 of the Constitution challenging the order passed by the National Company Law Tribunal is not maintainable - the Civil Revision Petition is dismissed as not maintainable. - C.R.P. (PD) No. 525 of 2022 and C.M.P. No. 2785 of 2022 - - - Dated:- 24-2-2022 - M. DURAISWAMY AND T.V. THAMILSELVI, JJ. For the Appellant : P.S. Raman, Senior Counsel for Cibi Vishnu For the Respondent : P.H. Arvind Pandian, Senior Counsel assisted by A.G. Sathyanarayana ORDER M. Duraiswamy, J. 1. Challenging the order passed by the National Company Law Tribunal, Division Bench-II, Chennai, made in I.A.(IBC)/460/CHE/2021 in IBA/1099/2019, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Karnataka in bypassing the remedy of appeal to NCLAT and the act of the High Court in entertaining the writ petition against the order [Vasudevan v. State of Karnataka] of the NCLT are being questioned. 12. For finding an answer to the question on hand, the scope of the jurisdiction and the nature of the powers exercised by -- (i) the High Court under Article 226 of the Constitution, and (ii) the NCLT and NCLAT under the provisions of the IBC, 2016 are to be seen. Jurisdiction and the powers of the High Court under Article 226 13. What is recognised by Article 226(1) is the power of every High Court to issue (i) directions, (ii) orders, or (iii) writs. They can be issued to (i) any person, or (ii) authority including the Government. They may be issued (i) for the enforcement of any of the rights conferred by Part III, and (ii) for any other purpose. But the exercise of the power recognised by clause (1) of Article 226, is restricted by the territorial jurisdiction of the High Court, determined either by its geographical location or by the place where the cause of action, in whole or in part, arose. While the nature of the power exercised by the High Court is delineated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and decided a matter which they had no right to consider. 16. Anisminic [Anisminic Ltd. v. Foreign Compensation Commission, (1969) 2 AC 147 : (1969) 2 WLR 163 (HL)], hailed as a breakthrough and a legal landmark (see Racal Communications Ltd., In re [Racal Communications Ltd., In re, 1981 AC 374 : (1980) 3 WLR 181 (HL)]) abolished the old distinction between errors of law that went to jurisdiction and errors of law that did not. Anisminic [Anisminic Ltd. v. Foreign Compensation Commission, (1969) 2 AC 147 : (1969) 2 WLR 163 (HL)] was hailed in O'Reilly v. Mackman [O'Reilly v. Mackman, (1983) 2 AC 237 : (1982) 3 WLR 1096 (HL)] to have liberated English public law from the fetters that the courts had theretofore imposed upon themselves so far as determinations of inferior courts and statutory tribunals were concerned, by drawing esoteric distinctions between errors of law committed by such tribunals that went to their jurisdiction, and errors of law committed by them within their jurisdiction. 17. But Racal, In re [Racal Communications Ltd., In re, 1981 AC 374 : (1980) 3 WLR 181 (HL)] made a distinction between courts of law on the one hand and administrative tribunal/a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not jurisdictionally lawful.' (WLR p. 1251, para 84)] 18. Interestingly just four days before the House of Lords delivered the judgment in Anisminic [Anisminic Ltd. v. Foreign Compensation Commission, (1969) 2 AC 147 : (1969) 2 WLR 163 (HL)] (on 17-12-1968), an identical view was taken by a three-member Bench of this Court (delivered on 13-12-1968) in Official Trustee v. Sachindra Nath Chatterjee [Official Trustee v. Sachindra Nath Chatterjee, (1969) 3 SCR 92 : AIR 1969 SC 823] approving the view taken by the Full Bench of the Calcutta High Court in Hriday Nath Roy v. Ram Chandra Barna Sarma [Hriday Nath Roy v. Ram Chandra Barna Sarma, ILR (1921) 48 Cal 138]. It was held therein that : (Sachindra Nath Chatterjee case [Official Trustee v. Sachindra Nath Chatterjee, (1969) 3 SCR 92 : AIR 1969 SC 823], AIR p. 828, para 15) 15. ...before a court can be held to have jurisdiction to decide a particular matter it must not only have jurisdiction to try the suit brought, but must also have the authority to pass the orders sought for . (emphasis supplied) This Court also pointed out that it is not sufficient that it has some jurisdiction in relation to the subject-matter o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce the difference between jurisdictional error and error of law within jurisdiction almost to a vanishing point and that it came perilously close to saying that there is jurisdiction if the decision is right in law, but none if it is wrong. Anisminic [Anisminic Ltd. v. Foreign Compensation Commission, (1969) 2 AC 147 : (1969) 2 WLR 163 (HL)], according to him virtually left a court or tribunal with no margin of legal error. 21. Again in Hari Prasad Mulshanker Trivedi v. V.B. Raju [Hari Prasad Mulshanker Trivedi v. V.B. Raju, (1974) 3 SCC 415] K.K. Mathew, J., speaking for the Constitution Bench, pointed out that though the dividing line between lack of jurisdiction or power and the erroneous exercise of it has become thin with Anisminic [Anisminic Ltd. v. Foreign Compensation Commission, (1969) 2 AC 147 : (1969) 2 WLR 163 (HL)], the distinction had not been wiped out completely. 22. But it is relevant to note that Official Trustee [Official Trustee v. Sachindra Nath Chatterjee, (1969) 3 SCR 92 : AIR 1969 SC 823]/Anisminic [Anisminic Ltd. v. Foreign Compensation Commission, (1969) 2 AC 147 : (1969) 2 WLR 163 (HL)] and what followed both, were mostly in the context of the power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l under the DRT Act, 1993 and SARFAESI Act, 2002 should deter the High Courts from exercising the jurisdiction under Article 226. Similarly, the availability of remedy of appeal under Section 173 of the Motor Vehicles Act, 1988 as against an award of the Accidents Claims Tribunal was held in Sadhana Lodh v. National Insurance Co. Ltd. [Sadhana Lodh v. National Insurance Co. Ltd., (2003) 3 SCC 524 : 2003 SCC (Cri) 762] as sufficient for the High Court to refuse to exercise its supervisory jurisdiction. The same principle was applied in (1) Nivedita Sharma v. COAI [Nivedita Sharma v. COAI, (2011) 14 SCC 337 : (2012) 4 SCC (Civ) 947], and (2) Cicily Kallarackal v. Vehicle Factory [Cicily Kallarackal v. Vehicle Factory, (2012) 8 SCC 524 : (2012) 4 SCC (Civ) 540] in relation to the awards passed by the special fora constituted under the Consumer Protection Act, 1986. 24. Therefore insofar as the question of exercise of the power conferred by Article 226, despite the availability of a statutory alternative remedy, is concerned, Anisminic [Anisminic Ltd. v. Foreign Compensation Commission, (1969) 2 AC 147 : (1969) 2 WLR 163 (HL)] cannot be relied upon. The distinction between the lack ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reholders, under challenge, is purely a civil dispute. The remedy under Article 226 of the Constitution of India is available against a State or authority or instrumentality of the State, falling within the ambit of the definition State under Article 12 of the Constitution of India. 117. Writ petition filed under Article 226 of the Constitution of India, can be for the enforcement of fundamental rights or for any other purpose, as envisaged under Article 226 of the Constitution. There is no pleadings or materials to substantiate that the appellants are discharging public duties or public functions, and thus, amenable to writ jurisdiction under Article 226 of the Constitution of India. 118. On a scrutiny of the decisions extracted above, it is clear that insofar as challenge to the judicial acts of the Courts or the Tribunals, in exercise of the powers under Article 227 of the Constitution of India, the High Court exercises overall superintendence on such Tribunals under Article 227. Orders by Courts or Tribunals, as the case may be, can be challenged by way of filing a writ petition under Article 227 of the Constitution of India, and the administrative orders passed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risdiction. This is in marked contradistinction to the jurisdiction of a civil court which is governed by statute. [Section 9. Courts to try all civil suits unless barred - The Courts shall (subject to the provisions herein contained) have jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred]. In exercising its discretion to entertain a particular case under Article 226, a High Court may take into consideration various factors including the nature of the injustice that is alleged by the petitioner, whether or not an alternate remedy exists, or whether the facts raise a question of constitutional interpretation. These factors are not exhaustive and we do not propose to enumerate what factors should or should not be taken into consideration. It is sufficient for the present purposes to say that the High Court must take a holistic view of the facts as submitted in the writ petition and make a determination on the facts and circumstances of each unique case. 23. At this juncture, it is worth discussing the decision of this Court in Aligarh Muslim University v. Vinay Engineering [(1994) 4 SCC 710]. In that c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all their legal disputes before the courts at Chennai. However, this can be a factor within the broader factual matrix of the case. The High Court may decline to exercise jurisdiction under Article 226 invoking the principle of forum non conveniens in an appropriate case. The High Court must look at the case of the Appellant holistically and make a determination as to whether it would be proper to exercise its writ jurisdiction. We do not express an opinion as to what factors should be considered by the High Court in the present case, nor the corresponding gravity that should be accorded to such factors. Such principles are well known to the High Court and it is not for this Court to interfere in the discretion of the High Court in determining when to engage its writ jurisdiction unless exercised arbitrarily or erroneously. The sole and absolute reliance by the Bombay High Court on Clause 21 of the Constitution and Bye Laws to determine that its jurisdiction under Article 226 is ousted is however one such instance. 27. We accordingly allow the appeal and set aside the impugned judgment and order of the High Court dated 25 September 2018. Writ Petition No. 7770 of 2017 is accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id prayer virtually amounts to reversal/recall of the resolution plan and the same cause could be taken as a ground for filing an appeal under Section 32 of Insolvency and Bankruptcy Code and not by way of this application which is impermissible in law. As regards exercise of inherent power, the Tribunal has observed that assuming the power of recall is in-built in Insolvency and Bankruptcy Code and it can be exercised only in cases where the order is passed without jurisdiction or fraudulently obtained and that is not the case here and the Tribunal, further observed that in the absence of specific conferment of review jurisdiction, it cannot exercise the power to review. 17. In the decision of Embassy Property Developments P. Ltd. Vs. State of Karnataka reported in [2019] 17 Scale 37 : [2020] 9 Comp. Case-OL 609 (SC), the Hon'ble Supreme Court of India has considered the interplay between Insolvency and Bankruptcy Code, certain provisions of the Companies Act and Mines and Minerals [Development and Regulation] Act and Mines and Mineral Concession Rules and other related Rules as well as the power of the High Court under Articles 226 and 227 of the Constitution of India. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anuary 22, 2020, the papers were represented and the revision itself came to be numbered on February 5, 2020. The learned counsel has also drawn the attention of this Court to the proviso to Section 61[2] of the Insolvency and Bankruptcy Code and would submit that since the period of limitation is self contained one and that the impugned order came to be passed as early as on November 4, 2019, the petitioner may not be in a position to avail the appeal remedy. 23. This Court has considered the said submission. From the perusal of the papers, it is prima facie disclosed that the petitioner was diligently prosecuting the proceedings by filing Civil Revision Petition and though it was presented on December 6, 2019, it came to be numbered on February 5, 2020 after compliance of certain returns. Therefore, it is for the revision petition to convince the National Company Law Appellate Tribunal as to how the appeal petition is within the limitation period. 24. In the result, the Civil Revision Petition stands dismissed. No costs. Consequently, the connected miscellaneous petition is closed. 3. Mr. P.S. Raman, learned senior counsel appearing for the petitioner submitted that ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Supreme Court in the judgment reported in AIR 2007 Supreme Court 861 [I.R. Coelho (dead) by L.Rs. Vs. State of Tamil Nadu], followed the ratio laid down in the judgment reported in (1997) 3 Supreme Court Cases 261, cited supra. 4. On a careful consideration of the materials available on record, the submissions made by the learned senior counsel on either side and also the judgments relied upon by them, it is clear that as per Section 61 of the Insolvency and Bankruptcy Code, 2016, the petitioner has got remedy by way of an appeal before the National Company Law Appellate Tribunal. However, without exhausting the appeal remedy available to them, the petitioner has filed the Civil Revision Petition under Article 227 of the Constitution. 4.1. In the judgment reported in (2019) 13 Supreme Court Cases 497 [ICICI Bank Limited and others Vs. Umakanta Mohapatra and others], the Apex Court held as follows: ... 2. Despite several judgments of this Court, including a judgment by Hon'ble Navin Sinha, J., as recently as on 30-1-2018, in State Bank of Travancore v. Mathew K.C. [State Bank of Travancore v. Mathew K.C., (2018) 3 SCC 85 : (2018) 2 SCC (Civ) 41], the High Courts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the statutory scheme under the SARFAESI Act, the availability of remedy to the aggrieved under Section 17 before the Tribunal and the appellate remedy under Section 18 before the Appellate Tribunal, the object and purpose of the legislation, it was observed that a writ petition ought not to be entertained in view of the alternate statutory remedy available holding: (SCC pp. 123 128, paras 43 55) 43. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this Rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc. the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ories[SBI v. Allied Chemical Laboratories, (2006) 9 SCC 252].) 13. In Ikbal [Sri Siddeshwara Coop. Bank Ltd. v. Ikbal, (2013) 10 SCC 83 : (2013) 4 SCC (Civ) 638] it was observed that the action of the bank under Section 13(4) of the SARFAESI Act available to challenge by the aggrieved under Section 17 was an efficacious remedy and the institution directly under Article 226 was not sustainable, relying upon Satyawati Tondon [United Bank of India v. Satyawati Tondon, (2010) 8 SCC 110 : (2010) 3 SCC (Civ) 260] observing: (Ikbal case [Sri Siddeshwara Coop. Bank Ltd. v. Ikbal, (2013) 10 SCC 83 : (2013) 4 SCC (Civ) 638], SCC pp. 94-95, paras 27-28) 27. No doubt an alternative remedy is not an absolute bar to the exercise of extraordinary jurisdiction under Article 226 but by now it is well settled that where a statute provides efficacious and adequate remedy, the High Court will do well in not entertaining a petition under Article 226. On misplaced considerations, statutory procedures cannot be allowed to be circumvented. 28.... In our view, there was no justification whatsoever for the learned Single Judge [Ikbal v. Registrar of Coop. Societies] to allow the borrower to bypas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 46. It must be remembered that stay of an action initiated by the State and/or its agencies/instrumentalities for recovery of taxes, cess, fees, etc. seriously impedes execution of projects of public importance and disables them from discharging their constitutional and legal obligations towards the citizens. In cases relating to recovery of the dues of banks, financial institutions and secured creditors, stay granted by the High Court would have serious adverse impact on the financial health of such bodies/institutions, which (sic will) ultimately prove detrimental to the economy of the nation. Therefore, the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Of course, if the petitioner is able to show that its case falls within any of the exceptions carved out in Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad [Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad, AIR 1969 SC 556], Whirlpool Corpn. v. Registrar of Trade Marks [Whirlpool Corpn. v. Registrar of Trade Marks, (1998) 8 SCC 1] and Harbanslal Sahnia v. Indian Oil Corpn. Ltd. [Harbanslal Sahnia v. Indian Oil Corpn. Ltd., (2003) 2 SCC 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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