Case Law Details
Lalitaben Govindbhai Patel Vs Gujarat State Financial Corporation (Gujarat High Court)
The present litigation on the board of this Court in the form of Special Civil Application No.11116 of 2008 and Letters Patent Appeal No.2480 of 2010 has arisen on account of sheer misconception on the part of the writ petitioners and writ appellants in the Letters Patent Appeal, that such complicated and complex questions of facts regarding financial liability of Creditors viz-a-viz the statutory action of the financial institutions under the Special Laws like State Financial Corporation Act, 1951, etc. can be undertaken by the writ Court under Article 226 of the Constitution of India. From the facts contained in the various orders above, it is clear that in the present case, the parties have not only indulged in filing Civil Suits, Writ Petitions and Letters Patent Appeals under Article 226 of the Constitution of India, but also have gone for forum shopping and while the auction purchaser – SIL not only was involved in litigation before this Court, and entered into an alleged OTS (One Time Settlement) with GSFC which is with a doubtful integrity to say the least and is under a serious contest by left out Secured and Unsecured Creditors, but SIL also approached the Hon’ble Delhi High Court by way of writ petitions merely because it had a namesake registered office of the Company in Delhi also, whereas its industry in question is in Gujarat. This kind of scattering the litigation in various Forums is the root cause of multiplicity of litigation and amounts to misuse and abuse of process of law and by sheer passing of the different orders which may or may not be conflicting orders inter-se by different Forums, who apparently would have the competent jurisdiction to be seized of those proceedings and passed those orders, ultimately may result in an utter messy confusion of the things and unresolved problems for long time. Such malpractices deserve to be seriously checked by enacting some kind of filters where the parties to one lis essentially are restricted to one competent Forum to avoid any such chance of conflicting orders and forum shopping. Even if different Forums entertain such litigation launched by any of the parties to one lis before them, as soon as they come to know or are made aware of the pendency of the proceedings before the competent Forum, they should transfer the proceedings to that Forum or return the plaint for proper presentation and this streamlining of litigation and restricting the adjudication by one competent Forum is considered very essential in such circumstances and that is why after a detailed hearing of the matter not on merits of the claims and counter-claims, but on the question of appropriateness of the Forum which should decide these issues, we are of the considered opinion that NCLT would be the best suited Forum in these circumstances to the said all the concerned and connected issues in this case.
We are not seized of the winding-up of proceedings in the present Letters Patent Appeal, we make our aforesaid proposed order absolute now and dispose of this Letters Patent Appeal No.2480 of 2010 as well as Special Civil Application No.11116 of 2008 by requesting the learned Company Judge, who is seized of the winding-up proceedings of Company Petition No.139 of 1985 to consider all the aforesaid relevant aspects of the matter and then take appropriate decision in the matter to transfer the winding-up proceedings to NCLT, Ahmedabad Bench which we strongly recommend. We may make it clear that we have not made any pronouncement on the merits of claims or counterclaims of any of the parties in this matter and advisedly so left the said aspects to be considered and decided by the NCLT afresh, once the proceedings are transferred by learned Company Judge, who may pass appropriate orders in it’s his discretion in this regard and for that purpose, only the impugned orders and OTS Settlement will not stand in the way of NCLT.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1. The aforesaid Letters Patent Appeal No.2480 of 2010, Lalitaben Govindbhai Patel and others Vs. Gujarat State Financial Corporation and others has been filed by the Guarantors-Shareholders of the Defaulter Company – M/s. Ganpati Pulp and Paper Mills Limited (GPPML) (now in liquidation) with the Official Liquidator attached to High Court of Gujarat, aggrieved by the order of the learned Single Judge dated 06.10.2010 (Coram: Hon’ble Mr. Justice K.S. Jhaveri) in Special Civil Application No.12979 of 2009 – Lalitaben Govindbhai Patel and others Vs. Gujarat State Financial Corporation and seven others.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
