DINESH JAJODIA Vs. CITI BANK & ORS
HIGH COURT OF BOMBAY
Citi Bank And Ors
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(1.) The submissions of the learned Counsel appearing for the parties were heard yesterday. This Appeal takes exception to the order dated 22nd December 2015 passed by the learned Company Judge in Company Petition filed by the HDFC Bank Limited. The operative part of the impugned order is in paragraph 7, which reads thus :
" In view of what is stated above, SEBI as well as the Enforcement Directorate are directed to forthwith take action against the Directors of the Respondent Company as well as Shri Dinesh Jajodia under the appropriate provisions of law, including attachment of their properties as permissible in law. The Company Registrar of this Court shall forward a copy of the Affidavit of Shri Dhananjay Kamalakar dated 22nd December, 2015, to SEBI as well as the Enforcement Directorate along with a copy of this Order. E.O.W. shall render all assistance required by SEBI and the Enforcement Directorate for effective compliance of this Order."
(2.) We must note here that a preliminary objection raised by the learned Counsel appearing for 1st Respondent is that the impugned order dated 22nd December 2015 is not a Judgment within the meaning of the Letters Patent. The objection is that on the basis of earlier orders passed by the learned Company Judge from time to time starting from the order dated 8th May 2015, all that the learned Company Judge has done is to direct the Securities and Exchange Board of India ("SEBI") and the Enforcement Directorate to take action against the Directors of the Company under winding up (M/s. Geodesic Limited) and the present Appellant in accordance with law. The submission is that in view of the law laid down in the Apex Court in the well known decision in the case of Shah Babulal Khimji Vs. Jayaben D. Kania & Anr., 1981 4 SCC 8, the Appeal is not maintainable.
(3.) The learned Senior Counsel appearing for the Appellant has taken us through earlier orders passed by the learned Company Judge from time to time. His first submission is that the impugned order is a Judgment within the meaning of the Letters Patent inasmuch as the order is virtually a final order directing a very stringent action to be taken against the present Appellant and others. Inviting our attention to the order of the learned Magistrate by which the bail was denied to the Appellant, he urged that the learned Magistrate has been influenced by the conclusions drawn by the learned Company Judge and in particular in the impugned order. His next submission is that the impugned order has been passed in breach of the principles of natural justice as no opportunity of being heard was afforded to the Appellant by the learned Company Judge.
His second submission is based on the provisions of Prevention of Money Laundering Act, 2002 (for short "said Act of 2002"). He submitted that under the provisions of the said Act of 2002 and in particular under Section 41 thereof, the Jurisdiction of Civil Court has been ousted in respect of any matter which the Director or an Adjudicating Authority or the Appellate Tribunal is empowered by or under the said Act of 2002 to determine. He submitted that though the power of the Civil Court to grant injunction is also taken away by virtue of the said Act of 2002, by the impugned order, learned Company Judge has in fact, granted mandatory injunction directing SEBI and Enforcement Directorate to take action against the Appellant. He also invited our attention to the provisions of Section 15Y of the Securities Contracts (Regulation) Act, 1956 as well as Section 20A thereof. He submitted that under both the Sections, the jurisdiction of the Civil Court has been ousted and in view of the specific provision of Section 20A, the Civil Court is powerless to grant any injunction. In support of his submissions, he relied upon the decisions of the Apex Court in National Organic Chemical Industries Ltd. Vs. Miheer H. Mafatlal & Anr., 2004 12 SCC 356, as well as Padam Sen and Anr. Vs. The State of Uttar Pradesh, 1961 AIR(SC) 218. He submitted that the Appellant has been condemned unheard and he has suffered irreparable prejudice. He submitted that the direction has been given to initiate proceedings on the basis of pleadings in the Company Petition for winding up though the Appellant is not a party to the said proceedings and in that sense, he had no opportunity to even know what is stated in the proceedings. He, would, therefore urge that the impugned order being an order without jurisdiction needs to be quashed and set aside.;
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