In a landmark decision emphasizing procedural discipline in litigation, the Supreme Court of India has ruled that objections related to the place of suing must be raised at the earliest opportunity in the initial stages of a case. Delivering the judgment in Punjab National Bank v. Atin Arora & Anr. (Civil Appeal Nos. [2025], arising out of SLP(C) Nos. 15347-15348 of 2020), the bench, comprising Chief Justice Sanjiv Khanna and Justice Sanjay Kumar, quashed a Calcutta High Court order and reinstated proceedings under the Insolvency and Bankruptcy Code (IBC).
Case Background
The case arose from a petition filed by Punjab National Bank (PNB) under Section 7 of the IBC, 2016, against M/s. George Distributors Pvt. Ltd. and its director Atin Arora. The dispute began when PNB initiated insolvency proceedings before the National Company Law Tribunal (NCLT) in Kolkata. However, the respondents challenged the jurisdiction of the NCLT, citing a change of the registered office of the company from Kolkata, West Bengal, to Cuttack, Odisha.
The High Court of Calcutta set aside the NCLT order admitting the application, invoking its supervisory jurisdiction under Article 227 of the Constitution. The High Court reasoned that the proceedings should have been initiated in NCLT Cuttack. This decision was challenged by PNB in the Supreme Court.
Key Legal Issues
The Supreme Court focused on two pivotal issues:
1. Jurisdictional Objections: Whether the objection regarding the place of suing was raised in accordance with Section 21 of the CPC, which mandates that such objections must be taken at the earliest opportunity.
2. Role of High Courts: Whether the High Court’s exercise of supervisory jurisdiction under Article 227 was appropriate in this case.
Supreme Court’s Observations
The Supreme Court held that the Calcutta High Court erred in setting aside the NCLT order. Referring to Section 21 CPC, the Court reiterated that jurisdictional objections related to the place of suing cannot be entertained if they are not raised at the earliest stage of the proceedings. The bench cited its earlier rulings in Harshad Chiman Lal Modi v. DLF Universal Ltd. and Subhash Mahadevasa Habib v. Nemasa Ambasa Dharmadas to underline the principle.
“Objections regarding the place of suing shall not be allowed unless raised in the Court/Tribunal of first instance at the earliest possible opportunity and in a manner compliant with the procedural rules,” the Court observed.
The Court further noted that PNB had no knowledge of the change in the company’s registered address as the respondents failed to communicate this change in a timely manner. Notices served by NCLT Kolkata were valid and binding, the Court held.
Decision
The Supreme Court allowed the appeals filed by Punjab National Bank and set aside the High Court’s order. It clarified that the proceedings under the IBC would continue in accordance with the law. However, the bench also preserved the respondents’ right to seek other remedies under the law, stating:
“This order shall not affect the rights of Atin Arora, M/s. George Distributors Pvt. Ltd., or its other directors to take recourse to any remedy available to them, as per law.”
The appellant, Punjab National Bank, was represented by Advocate-on-Record Ms. Arti Singh and Advocate Mr. Aakashdeep Singh Roda. The respondents were represented by Senior Advocate Mr. Chinmoy Pradip Sharma, along with Advocates Mr. Dhruv Surana and Ms. Ravina Sharma.
