Court Directs Complaint to Be Filed in New Delhi, Citing Jurisdictional Mandate Under Insolvency and Bankruptcy Code
In a significant ruling, the Madhya Pradesh High Court has quashed the jurisdiction assumed by the IX Additional District and Sessions Judge, Gwalior, in a case concerning the Insolvency and Bankruptcy Code (IBC) 2016. The case, Vinay Bhadauria v. Insolvency and Bankruptcy Board of India, centered on the appropriate venue for filing complaints under the IBC.
The court, presided over by Justice Rajesh Kumar Gupta, held that the complaint against Vinay Bhadauria was improperly filed in Gwalior, as the registered office of the company in question is situated in New Delhi. The court emphasized that, under Section 60(1) of the IBC, the National Company Law Tribunal (NCLT) or the Special Court with territorial jurisdiction over the company's registered office location is the appropriate authority to handle such cases.
The case stemmed from allegations of non-compliance with directions issued by the NCLT Principal Bench, New Delhi. The complainant had initially filed the complaint in Gwalior, citing the residence of the company's suspended directors and ongoing contraventions within Gwalior's jurisdiction. However, the court ruled that the statutory provisions of the IBC take precedence over the general territorial jurisdiction rules of the Criminal Procedure Code (Cr.P.C.).
The court directed the complainant to file the complaint before the competent Special Court in New Delhi, designated under Section 435 of the Companies Act, 2013, as the Court of Additional Sessions Judge, Dwarka. Justice Gupta clarified that this decision does not reflect the merits of the case, leaving all issues open for adjudication by the competent court.
In a further directive, the court instructed the Special Court to overlook any limitations if the complaint is re-filed within three months. The decision underscores the importance of adhering to jurisdictional mandates under the IBC, reinforcing the legal framework governing corporate insolvency and liquidation processes.
Bottom line:-
Insolvency and Bankruptcy Code, 2016 - Jurisdiction of Special Court - Complaint must be filed before the Special Court having jurisdiction where the registered office of the company is located.
Statutory provision(s): Insolvency and Bankruptcy Code, 2016 Sections 236, 60(1); Criminal Procedure Code, 1973 Sections 177, 178, 179; Companies Act, 2013 Section 435.
