S. 21 CPC | Objections To Place Of Suing Can't Be Allowed Unless Taken In Court Of First Instance At Earliest Opportunity: Supreme Court

The Supreme Court held that objections to jurisdiction under Section 21 of the Code of Civil Procedure, 1908 (“CPC”), must be filed at the earliest, and no objection will be entertained at the belated stage unless injustice is caused.

“The principle enjoins that objections regarding the place of suing shall not be allowed unless such objection is taken in the Court/tribunal of first instance at the earliest possible opportunity. This Court, in Harshad Chiman Lal Modi v. DLF Universal Ltd. and Anr., has held that if such objection is not taken at the earliest, it cannot be allowed to be taken at a subsequent stage. These principles were reiterated by this Court in Subhash Mahadevasa Habib v. Nemasa Ambasa Dharmadas (Dead) by LRS. and Ors.”, the Court observed.

The bench comprising Chief Justice Sanjiv Khanna and Justice Sanjay Kumar was hearing the appeal filed against the Calcutta High Court's decision, which had set aside the National Company Law Tribunal's (NCLT) order rejecting a recall application challenging the admission of the appellant's insolvency petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“IBC”).

The Appellant Punjab National Bank (PNB) filed an application under Section 7 of the IBC to initiate the Corporate Insolvency Resolution Process (CIRP) against Respondent No. 2. The NCLT, Kolkata, admitted the application, as the company's registered office was in Kolkata, and the company had not informed PNB about its address change to Cuttack. Moreover, the company participated in the proceedings before the NCLT, Kolkata.

Later, Respondent No. 2 filed an application under Section 21 of the CPC, seeking to recall the NCLT's admission order, claiming that jurisdiction doesn't with the NCLT, Kolkata, due to the change in registered address from Kolkata to Cuttack. After the NCLT, Kolkata dismissed the recall application, Respondent No. 2 approached the Calcutta High Court under Article 227 of the Constitution. The High Court set aside the NCLT's order rejecting the recall application.

Aggrieved by the High Court's decision, the Appellant approached the Supreme Court.

Setting aside the High Court's decision, the Supreme Court observed that the High Court erred in invoking its jurisdiction under Article 227 of the Constitution. The Court noted that since the respondents were aware of the proceedings initiated by the Appellant before the NCLT Kolkata, then they should have exercised promptness in raising the objections under Section 21. The Court added that their failure to inform the Appellant about the address change would preclude them from raising the objections to jurisdictions at a later stage.

The Court said the High Court's decision to set aside the NCLT order failed to appreciate these facts and did not adequately consider the limited jurisdiction under Article 227.

“The High Court, in our opinion, remained oblivious to the limited role and jurisdiction of superintendence in exercising power under Article 227 of the Constitution as well as in not fully examining the apparent facts as well as consequences of setting aside the order of admission under the IBC.”, the Court observed.

Appearance:

For Petitioner(s) Ms. Arti Singh, AOR Mr. Aakashdeep Singh Roda, Adv.

For Respondent(s) Mr. Chinmoy Pradip Sharma, Sr. Adv. Mr. Dhruv Surana, Adv. Ms. Ravina Sharma, Adv. Mr. Arya Hardik, Adv. Mr. Rajeev Ahuja, Adv. Mr. Krishnajyoti Deka, Adv. Mr. Rohit Amit Sthalekar, AOR Mr. Ashish Choudhury, Adv. Mr. Vijay Deora, Adv. Mr. Irfan Hasieb, Adv.

Case Title: PUNJAB NATIONAL BANK VERSUS ATIN ARORA & ANR.

Citation : 2025 LiveLaw (SC) 27

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