P.K. Deb, J.
1. Originally this petition was filed under Section 40 of the Industrial Reconstruction Banff of India Act, 1984 for an order to sell the properties contained in Schedule A, B and C and Till then ad interim order of injunction restraining the respondent No. 1, its agents and servants from removing or alienating or encumbering or transferring to properties and assets mentioned in the above Schedule. Afterwards when this Act has been repealed by new Act as Industrial Reconstruction Bank of India Act, 1995, an amendment petition has been filed under the repealed Act. The position regarding proceedings under Section 40 of the Old Act remained in vogue as the petition was filed before coming into the force of the new Act in the month of December, 1995. Such amendment was allowed after hearing the Counsel for the parties. That even after amendment also the petition shall be constituted as a petition under Section 40 of the Industrial Reconstruction Bank of India Act.
2. The case of the petitioners in, brief is that it is the financial Institution incorporated under the Act of 1984 and the petitioner No. 2 is an officer of the petitioner No. 1 and is authorised for preferring such petitions. The respondent No. 1 is a Company incorporated under the Companies Act and was functioning for manufacture of cast iron spun pipes and other metal products and its factory and Unit is situated at Hirdih in the district of Hazaribagh in the State of Bihar. The respondent Nos. 2 and 3 among the others are the promoters of respondent No. 1, while respondent No. 4 is the Managing Director-cum-Chief Executive of the Respondent No. 1 and represents the private promoters. These respondent Nos. 2, 3 and 4 are also the guarantors of Respondent No. 1.
In the month of December, 1985 the respondent No. 1 alongwith respondent Nos. 2, 3 and 4 approached the petitioner No. 1 for obtaining credit facilities for modernising and diversification of its factory situated at Hazaribagh. The petitioner No. 1 agreed and sanctioned a term loan of Rs. 1,22,00,000/- to the respondent No. 1 to enable the said respondent to implement its modernization and diversification etc. The agreement of loan was also arrived at vide Annexure-2 dated 5th May, 1989. The relevant terms and conditions of the loan agreement have been mentioned specifically in para-7 of the petition. In terms of the aforesaid loan agreement, a deed of hypothecation was duly executed on behalf of the respondent No. 1 and under that hypothecation, plant, machineries of the factory were hypothecated to the petitioner No. 1 as Securities to the term loan. The respondent Nos. 1 and 2 further created an equitable mortgage in favour of the petitioner No. 1 by depositing the title deeds relating to all the moveable properties belonging to the respondent No. 1 wherein factory etc. are situated within the district of Hazaribagh in the Stave of Bihar. Further, the respondent Nos. 2, 3 and 4 also executed the deeds of guarantee in favour of the petitioner No. 1.
3. In terms of the sanctioned loan, the petitioner No. 1 disbursed in favour of the respondent No. 1 a sum of Rs. 1,07,00,000/- on 31st March, 1990, and even though such financial accommodation had been made by the petitioner No. 1, the respondent No. 1 failed and neglected to implement/carry out the rehabilitation scheme for which loan was sanctioned. Further, the respondent No. 1 defaulted in repayment of the loan as per the terms and conditions of the loan agreement. On 31.3.1994 a sum of Rs. 1,93,60,116.00 became due to the petitioner No. 1, the break up of which has been given in para-13 of the petition.
When various attempts were made from the side of the petitioners to get repayment of the loan and the amount was going higher and higher day by day due to inclusion of interest as per the loan agreement, the petitioner No. 1 took various steps against the respondent No. 1, but for getting the amounts reimbursed, when all attempts failed and when it could be found that the respondent No. 1 were not in good terms with the respondent Nos. 2, 3 and 4 who were the promoters and guarantors of the respondent No. 1 then the petitioner became apprehensive of losing the whole amount unless proper steps are being taken regarding the hypothecated properties and as such this petition had been filed under Section 40 of the Act.
4. Although, notices were issued to all the respondents, other respondents did not come forward except the respondent No. 1.
It may be mentioned here that at the time of admission of this petition, at preliminary stage, vide order dated 9.12.1994 ad-interim injunction as prayed for was allowed restraining the respondents from alienating with the properties as contained in Schedule-A, B and C as contemplated under Section 40(5) of the Act. Notices were also issued to the respondents no show cause as to why such injunction should not be made absolute. As stated above, the respondent No. 1 only contested the matter and show cause in respect of the injunction matter and also objection regarding the main petition had been filed.
5. In the objection, it has been contended, inter alia, that this petition is not maintainable before this High Court or Ranchi Bench of this Patna High Court as the respondent-Company had already shifted its registered office to 229/B, Udaipura House, Sri Krishnapuri, Patna-1 before the filing of this petition and afterwards also by a Resolution of the Board of Directors of the Company, Registered office has again been transferred to Indira Bhawan, Ramcharitra Singh Path, Patna and on the date of filing of this petition, the registered office of the company is situated at Patna at Indira Bhawan. It has further been stated that the respondent No. 2 being a Govenrment Company has also its registered office at Indira Bhawan and regarding the respondent Nos. 3 to 7, it has been stated that they are not the residents of Bihar and as such not residing within the territorial jurisdiction of Ranchi Bench of this Patna High Court. It has been specifically mentioned that under Section 10 of the Companies Act when the Registered office is situated at Patna then as per Patna High Court Rules, Ranchi Bench cannot have any jurisdiction to entertain such a petition under Section 40 of the Act.
Regarding the maintainability of the petition, it has further been contended from the side of the Respondent No. 1 that the petition should be thrown out at the inception as the petitioners knowingly and purposely suppressed the fact that it had already filed a suit being Original Suit No. 150 of 1994 in the Original side of the Calcutta High Court for realising the amount of loan against the respondents.
6. It is mentioned at the time of argument by Mr. P.K. Prasad, on behalf of the petitioners, that the said suit was filed not against all the respondents but against some of the respondents, but by Mr. Kameshwar Prasad, Sr. Advocate, for and on behalf of the respondent No. 1, it is submitted that in that suit all the respondents have joined afterwards and that the suit is proceeding on the same subject matter of realisation of loan amount on the basis of the hypothecation and mortgage of title deeds and when the suit is pending before the Calcutta High Court in its original jurisdiction, there is no scope of entertaining the second suit in the form of Section 40 of the Act. It is further stated that the petition has been registered as a Company petition but there is no provision under the Company Act as per Section 10 of the Company Act entertaining this petition. Moreover, if it is not a Company petition then also as the Patna High Court in its Rules, having no original jurisdiction, there is no scope to grant any relief under Section 40 of the Act in view of the provisions of Section 39 of the Act as well as Section 66 of the Transfer of Property Act, 1982. It is also contended from the side of the respondent No. 1 that one Mr. Krishna Kumar Kabra has already filed a petition before the Patna Bench of this Court under Section 442/446 of the Companies Act, 1956 for winding up of the respondent No. 1-Company and that petition had been registered in the Patna Bench as Company Petition No. 6 of 1991 and when a winding up proceeding is pending then no suit or any such petition under Section 40 of the Act can be maintainable or proceeded with, having no leave being granted by the Company Judge of Patna Bench of this Court.
In this connection analogy has been brought from Sub-section (13) of the Section 40 of the Act, wherein it is mentioned that where a liquidation proceeding of an industrial concern has commenced before an application is made under Sub-section (1) of Section 40, it does not give the Industrial Bank any previledge over the other creditors or such Industrial concern as and when a liquidation proceeding is being filed before the Patna Bench of this Court.
7. On factual aspect also many grievances have been put forward by the respondent No. 1 as there is long history of disagreement amongst the respondents for which there was already a penal action, but for the purpose of disposal of this petition, I am not going to enter into the factual aspect as the matter can be disposed of on the legal objections regarding maintainability and jurisdiction of the present petition.
8. The Industrial Reconstruction Bank of India Act, 1984 gives right to the reconstruction bank in case of default by the Industrial concern and such rights have been enumerated under Section 39 of the Act. Under Section 39(1), where an assisted Industrial concern makes default in the payment of any dues the Reconstruction Bank has the right to take over management or possession of the Industrial concern as well as the right to transfer by way of lease or sale of the properties assigned and for the enforcement of claims by the Reconstruction Bank procedures have been enumerated under Section 40 of the Act and under Section 40(1), wherein an assisted Industrial concern makes any default in the payment of any dues to, or in meeting its obligation as per the terms of the agreement with the Bank then the Reconstruction Bank, without prejudice to the provisions of Section 39 of the Act and Section 69 of the Transfer of Property Act, any Officer of the Reconstruction Bank may file a petition to the concerned High Court for the following reliefs:
(i) for an order for the sale or lease of the property assigned, charged, hypothecated, mortgaged or pledged to the Reconstruction Bank as security for the assistance granted to it, or for the sale or lease of any other property, of the industrial concern ; or
(ii) for transferring the management of the industrial concern to the Reconstruction Bank or to its nominee; or
(iii) For an ad interim injunction restraining the industrial concern from transferring or removing its machinery, plant or equipment from the premises of the industrial concern without the previous permission of the Board where such transfer or removal is apprehended; or
(iv) for an order for the appointment of a receiver where there is apprehension of the machinery, equipment or any other property of substantial value which has been assigned, charged, hypothecated, mortgaged or pledged to the Reconstruction Bank being removed from the premises of the industrial concern or of being transferred without the previous permission of the Reconstruction Bank.
9. Then there are various procedures have mentioned how the claim, if made from the side of the Industrial concern or other persons can be dealt with and also how to proceed with such petition being filed by the Reconstruction Bank. In the Section itself except the word 'concerned High Court' nothing more has been elaborated. Then it is required to consider as to whether this Bench of the Patna High Court has got the jurisdiction to entertain a petition under Section 40 of the Act or not, when the said jurisdictional point has been vemently stressed from the side of the respondent No. 1.
10. Although, this petition has been registered as a Company petition, but according to Mr. P.K. Prasad, for and on behalf of the petitioner, it is virtually not a Company petition but as this Bench has been authorised as a Company Judge then for the purpose of Registration only it was mentioned as a Company petition, but it is not a Company petition under the Companies Act. Then the question comes in, if it is not a Company petition then this Court under the Patna High Court Rules, having no original jurisdiction except for specific purpose like that of Indian Succession Act etc., no such petition can be maintained under the original jurisdiction. If the petition is construed to be a petition before a Company Judge as the respondent No. 1 and some of the other respondents are Companies registered under the Companies Act then the Company Act will be in vogue for entertaining and deciding such petition. Then comes in, if it is to be construed as a petition before a Company Judge then the jurisdiction of the Court shall be decided under the Companies Act as provided under Section 10 which provides that the High Court having jurisdiction in relation to the place at which the registered office of the Company concern is situated shall have the only jurisdiction to entertain such petition.
11. In the original petition, the registered office of the respondent Nos. 1 and 2's addresses have been mentioned within the district of Hazaribagh and as per Patna High Court Rules, Ranchi Bench has got the jurisdiction to entertain such Company petition. In the objection being filed, it is mentioned that the registered office of the Companies of both respondent Nos. 1 and 2 have been shifted to Patna before this petition is filed and as such only the Patna Bench of this Court can have jurisdiction as contemplated under Section 10 of the Companies Act. This contention of the respondent No. 1 has not been denied specifically from the side of the petitioners. If this petition should be dealt as per the jurisdiction of the Company Judge then definitely this Court has got no jurisdiction because of bar under Section 10 of the Companies Act. This point can be more clarified as it remains an admitted fact that one Mr. Kabra has already filed a Company petition for winding up of respondent No. 1-Com-pany before the Patna Bench of this Court. In that view of the matter, if the concerned High Court as mentioned under Section 40 of the Act is construed to be a High Court having jurisdiction to entertain Company petitions then this Court has got no jurisdiction to entertain this petition.
12. Mr. P.K. Prasad then submits that it is not a Company petition in its truest sense as nowhere under the Reconstruction Act it has been clarified or specified, rather from different Sections of this Act and even under Section 40, Sub-section (8) of the Act, it is clear that for investigation of claims provisions of Civil Procedure Code would be applicable. In that sense, Section 10 of the Companies Act cannot come into play regarding the jurisdiction, rather Section 16 of the Civil Procedure Code would be applicable as admittedly the properties which had been hypothecated as contained in Schedule-A, B and C and situated within the jurisdiction of this Court.
13. Let us take this contention of Mr. P.K. Prasad for arguments sake to the correct that this petition shall be governed under the Civil Procedure Code. Then Patna High Court Rules requires amendment as no original jurisdiction under the Reconstruction at has been included and this Court has got no original jurisdiction to entertain any such petition to be governed under the Civil Procedure Code.
It has been further stated, when Statute has given the power then the Court, must entertain it without looking to the Patna High Court Rules. It has further been stated that Patna High Court being carved out from original Calcutta High Court which had the original jurisdiction and in construing the letters patent matter it had always been referred back to the original High Court then this Court must entertain a petition under Section 40 of the Act on the ground that its original Court i.e. the Calcutta High Court from which it had been carved out had the original jurisdiction. But in that case, Patna High Court Rules must be amended and without such amendment being made this Court cannot entertain such petition under the Civil Procedure Code as contemplated under (for argument's sake) the said Act.
14. let us for argument's sake take the fact that this petition can be made maintainable even under the original jurisdiction as per the Statute, then also the reliefs claimed are at par with that of the reliefs already been made by the petitioners before the original jurisdiction of the Calcutta High Court. It is admitted on being quarried from the side of the Court that the reliefs which can be granted by this Court under the Act are at par with the Mortgage Suit or the Money Suit related to hypothecation and mortgage. Then the suit filed in the original jurisdiction before the Calcutta High Court for the same affect as that of the reliefs which can be granted under Section 40 of the Act should be construed as a prior suit, already before the original jurisdiction of the Calcutta High Court and practically in that suit all the respondents have joined as has been admitted in the Bar then the subsequent suit of the same reliefs cannot be maintainable under Section 10 of the Civil Procedure Code and the subsequent suit requires to be stayed mandatory. In that view of the matter also the present petition cannot be proceeded and no reliefs can be granted at this stage.
15. Again, it is streneuously argued from the side of the respondent No. 1 that already a winding up proceeding against respondent No. 1 is proceeding before the Patna Bench of this Court as field by one Mr. Kabra and any suit before any other Court cannot be proceeded further without leave of the Company Judge who is in seisin of the Company petition regarding the respondent No. 1-Company.
In that view of the matter also, this petition in the form of a suit must be stayed till an appropriate order is being passed regarding leave of the Court by the Company Judge at Patna Bench of this Court.
16. In this connection Sub-section (13) of Section 40 is of much relevance, which runs as follows:
Sub-section (13)
Nothing in this section shall be construed where proceedings for liquidation in respect of industrial concern have commenced before an application is made under Sub-section (1), as giving to the Reconstruction Bank any preference over the other creditors of the industrial concern not conferred on it by any other law.
17. Thus, when a Company petition for winding up of respondent No. 1 is proceeding before the Patna Bench of this Court then Reconstruction Bank can very well represent their case before the Company Judge of Patna Bench on that Company petition to include it as its creditor, hence in this Court also the present petition at this stage is not maintainable.
18. Mr. P.K. Prasad, for and on behalf of the petitioners has submitted that even if the respondent No. 1's show cause is accepted and there cannot be any proceeding against respondent No. 1 then also Sub-section (7) of Section 40 would come into play against other respondents and the same can be proceeded regarding the properties wherein the other respondents besides respondent No. 1 are directly interested and the ad interim order passed against all the respondents, even if the respondent No. 1 is allowed to be immuned from it because of the objection being filed the same should continue against the other non-contesting respondents and final order regarding sale etc. may be passed against the other respondents.
But, when question of maintainability and jurisdiction raised then there is no scope to hold the petition to be maintainable and having jurisdiction against the other respondents, when as per discussion above it has already been held that this Court can have no jurisdiction to entertain such a petition. First of all, if this petition is construed as a Company petition then Section 10 remains as a bar and if it is not a Company petition then there is no original jurisdiction of this Court to proceed under the Civil Procedure Code having jurisdiction under Section 16 of the Code of Civil Procedure and even if the same is also maintainable then also Section 10 of the C.P.C. is a bar. Further, non-maintainability is there as the Company petition before the Patna Bench is pending and no further suit can be proceeded without the prior leave of the Company Judge of Patna Bench of this Court.
19. So, this contention of Mr. P.K. Prasad to pass orders in final form against the non-contesting respondents is also not maintainable.
20. In this petition, some employees of the assisted concern i.e. respondent No. 1 have also filed caveat but such caveat cannot have any scope to be entertain in view of non-maintainability of this petition before this Court at this stage.
21. Hence, this petition is rejected having no jurisdiction and not being maintainable in its present form before this Court.