Territorial jurisdiction of NCLT in relation to Insolvency Resolution cannot be changed by making provisions in an agreement – Anil Kumar Malhotra Vs. M/s. Mahindra & Mahindra Financial Services Ltd. – NCLAT New Delhi
April 25, 2022
The Application under Section 7 of the Code has been admitted by the Principal Bench, New Delhi. Learned Counsel for the Appellant submits that there was no jurisdiction with the Principal Bench New Delhi to entertain the Section 7 Application. He has referred to Clause 24.12 of the Facility Agreement according to which it was provided the Courts at Mumbai has a jurisdiction in respect of any matter of the Facility Agreement dated 15.12.2018. NCLAT upheld Order of the Adjudicating Authority and held that Adjudicating Authority in relation to Insolvency Resolution shall be the NCLT having territorial jurisdiction over the place where the registered office of the corporate persons is located. The provisions of the Code has to be given overriding effect by virtue of Section 238 of the Code. In view of the Section 60(1) read with Section 238 of the Code, the Appellant cannot rely on clause 24.12 to the Facility Agreement which provides jurisdiction to the Mumbai Courts. For filing Application under Section 7 of the Code, the provisions of Section 60(1) read with Section 238 of the Code shall be overriding clause 24.12 of the Facility Agreement to the above extent.