Facts
The Petitioner, a suspended director of ‘Associate Décor Limited,’ filed a complaint on 17.05.2024 with the Insolvency and Bankruptcy Board of India (IBBI) alleging irregularities by the Resolution Professional (RP) overseeing the company’s Corporate Insolvency Resolution Process (CIRP).
Source reference: para. 2The CIRP proceedings are currently pending before the National Company Law Tribunal (NCLT) in Bengaluru.
Source reference: para. 2Although the IBBI initiated show-cause proceedings against the RP in July 2024 and received a reply in August 2024, the Petitioner alleged a lack of progress.
Source reference: para. 3The Petitioner approached the Delhi High Court seeking a Writ of Mandamus to compel a time-bound disposal of the proceedings, arguing that since the IBBI is headquartered in New Delhi, the cause of action arose within this Court's jurisdiction.
Source reference: paras. 1, 5Issues
1. Whether the mere location of the respondent-authority’s headquarters in New Delhi is a sufficient determinative factor to exercise territorial jurisdiction when the underlying subject matter is located elsewhere.
Source reference: paras. 5, 72. Whether the Court should invoke the doctrine of forum conveniens to decline jurisdiction in favor of the court where the material part of the cause of action arose.
Source reference: paras. 8, 9Law Applied
The Court applied the doctrine of forum conveniens and the principles of territorial jurisdiction under Article 226 of the Constitution.
Source reference: no citationThe Indure Pvt. Ltd. v. Government of NCT of Delhi, which established that the location of a decision-making authority in the national capital does not automatically grant jurisdiction if the "offending action" or "foundational facts" occurred elsewhere.
Source reference: para. 7Kusum Ingots Alloys Ltd. v. Union of India, which held that even if a small part of the cause of action arises within a High Court's jurisdiction, the Court may refuse to exercise its discretionary jurisdiction if it is not the most appropriate forum.
Source reference: para. 8Reasoning
The Court observed that while the IBBI is located in Delhi, the subject matter—the conduct of the RP—is "intricately connected" to the CIRP proceedings pending before the NCLT in Bengaluru.
Source reference: para. 6The Court reasoned that the substance of the matter, including the legal injury and the foundational facts, arose outside Delhi.
Source reference: para. 7Following the precedent in The Indure Pvt. Ltd., the Court noted that the act of an authority passing an order in Delhi is a "static/uniform facet" that should not override the location of the actual dispute.
Source reference: para. 7Applying Kusum Ingots, the Court determined that the material and substantial part of the cause of action lies outside its jurisdiction, making the High Court with jurisdiction over Bengaluru the forum conveniens.
Source reference: paras. 6, 9Holding
The Court declined to entertain the petition, holding that the mere presence of the respondent's head office in Delhi is insufficient to compel the Court to decide the matter on merits when the core dispute is rooted in another jurisdiction.
The Court relegated the Petitioner to the jurisdictional High Court (Karnataka) and dismissed the petition while leaving all rights and contentions open.
Source reference: paras. 9, 11Original Court PDF
Farooq Ali KhanvsInsolvency And Bankruptcy Board Of India & Anr.
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