JUDGMENT Ajoy Nath Ray, C.J. and Ashok Bhushan, J.
1. Both the appeals are taken up and summarily disposed of. These are from two orders dated 31.3.2006 and 17.10.2006, by the former of which the appellant Company was directed to wind up and by the latter of which the application for recall of the winding up order made by the Company in the Court below was rejected.
2. The appellant raised a point of jurisdiction of the Company Court at Allahabad. Reliance is placed on the fact that the registered office of the appellant is at Lucknow. Further reliance is placed on the root case of Nasiruddin reported at AIR 1976 Supreme Court, page 331 which gave, with respect, a comprehensive interpretation of Clause 14 of the United Provinces High Courts (Amalgamation) Order, 1948. The said clause being Clause 14 is quoted below:
14. The new High Court and the judges and Division Courts thereof, shall sit at Allahabad on at such other places in the United Provinces as the Chief Justice may, with the approval of the Governor of the United Provinces, appoint:
Provided that unless Governor of the United Provinces with the concurrence of the Chief Justice, otherwise directs, such judges of the new High Court, not less than two in number, as the Chief Justice, may, from time to time nominate, shall sit at Lucknow, in order to exercise in respect of cases arising in such areas in Qudh, as the Chief Justice may direct, the jurisdiction and power for the time being vested in the new High Court:
Provided further that the Chief Justice may in his discretion order that any case or class of cases arising in the said areas shall be heard at Allahabad.
3. The decision in that case vests the Lucknow Bench with exclusive jurisdiction in regard to cases which arise in respect of places, which were part of the erstwhile Oudh.
4. This view is repeated in a later Supreme Court case reported at 2005(1) Supreme Court Cases, page 73 i.e., in the case of Manju Verma.
5. It is the admitted position before us that even if orders issued by the Hon'ble Chief Justice from time to time are considered, the last of such orders dated 5th of August, 1975 would compel the filing of a winding up petition of a company having its registered office at Lucknow at the Lucknow Bench. Such filing before the Allahabad seat of the Allahabad High Court would be erroneous. This has been opined by a Division Bench judgment given in the case of Kamal Infosys Limited reported at 2005 (59) A.LR. 492.
6. In the said judgment a pronouncement was made at paragraph 21 that a judgment of a Division Bench given in respect of the very appellant company before us was per incuriam. in That judgment, which has been held to be per incuriam in its turn is reported at (Sumac International Ltd. v. Ms. PNB Capital Services Ltd.). In that judgment the Division Bench had opined that institution of winding up petition before the Allahabad Bench was correct and in passing that opinion it had not considered the aforesaid last notification dated 5th August, 1975, which gave the Lucknow Bench jurisdiction to proceed up to the stage of passing of the winding up order. The 1997 Case dealt with this very appellant, this very winding up petition and this very point of the Allahabad-Lucknow Split of jurisdiction.
7. In this judgment of ours we make no pronouncement whatsoever as to whether it is permissible or not, in view of the judgment in Nasiruddin's case, to truncate the jurisdiction of cases which are to go before the Lucknow Bench. We assume the validity of the orders passed by the Hon'ble Chief Justices from time to time in regard to curtailment of the Lucknow Bench jurisdiction (sic) although never areawise and even on that basis we are of the opinion that the winding up petition should have been filed at Lucknow and not here.
8. Section 2(11) of the Companies Act is set out below:
2(11) "the Court" mean,-
(a) with respect to any matter relating to a company (other than any offence against this Act), the Court having jurisdiction under this Act with respect to that matter relating to that company, as provided in Section 10;
(b) with respect to any offence against this Act, the Court of a Magistrate of the First Class or, as the case may be, a Presidency Magistrate, having jurisdiction to try such offence;
9. Section 10 of the Companies Act is set out below but only up to Section (1)(a), which all that is material for our purpose:
Jurisdiction of Courts.
10. (1) The Court having jurisdiction under this Act shall be -
(a) the High Court having jurisdiction in relation to the place at which the registered office of the company concerned is situate, except to the extent to which jurisdiction has been conferred on any District Court or District Courts subordinate to that High Court in pursuance of Sub-section (2): and
10. A winding up petition is to be instituted in the High Court having jurisdiction in relation to the place where the registered office of the Company is situated.
11. Under Clause 14 of the Amalgamation Order of 1948, the jurisdiction of the new High Court is to be exercised for notified qudh areas by the nominated Judges, who will sit at Lucknow. Since the jurisdiction of the Allahabad High Court goes to Lucknow, so to speak for the areas of erstwhile Oudh, including no doubt the central area of Lucknow, only the Hon'ble Judges sitting at Lucknow would have jurisdiction to entertain the present winding up petition.
12. The reason for the decision in the Nasiruddin case is given by the Court in the judgment, as we respectfully read it in the last sentence of paragraph 28. The said sentence is quoted below:
One can only say that it is the wish and hope that both Allahabad and Lucknow will be the two important seats so that history is not wiped out and policy is not changed.
13. Because of this running theme the vesting of the Lucknow Bench with jurisdiction in regard to the entirety of the erstwhile Oudh, which was first made by the order of the then Hon'ble Chief Justice Vidh/Bhushan Mullick on the 26th of July, 1948 was entrenched by the Supreme Court, branding it as one time and final exercise of power.
14. It is thus possible, only theoretically for the Chief Justice and the Governor completely to stop the Lucknow Bench if such a sorry occasion should ever arise in future, but it is not possible to truncate the area (or perhaps even the suljeet matter jurisdiction, but we make no pronouncement in this regard) of the Lucknow Bench. It might be killed but it cannot be debilitated or dismembered.
15. The factual position is that the heavily indebted appellant has managed to pay of the petitioning creditor in full and has got a discharge certificate. The petitioning creditor has not felt it necessary today to appear before us, although Mr. Grover learned Counsel for the petitioning creditor was present in Court yesterday, which fact is particularly pointed out by Mr. Naveen Sinha who has rendered us the most excellent assistance in this case, as he does in all others he appears in.
16. According to Nasiruddin's case, which approved some parts of the Full Bench answers which had come for scrutiny before the Supreme Court, it would be quite in order for us to transmit the winding up petition to the Lucknow Bench ruling that all proceedings taken on the basis of the filing at Allahabad including the advertisements issued are non est and are to be disregarded and the winding up petition is to be proceeded with afresh.
17. But we are unable to do so because the Court should not ordinarily transmit papers suo motu unless the petitioner or the party having the carriage of proceedings is interested in the same. The proper course in such a situation as this is to consign the paper to the department with liberty to the petitioning creditor to take future steps in accordance with law as it might be advised.
18. Regarding the issue of res judicata, we are of the clear opinion that the ruling of the Division Bench in the case of the very appellant itself and in regard to the very winding up petition itself does not bind us to hold in similar manner, contrary to the clear Indication that the Allahabad seat does not have jurisdiction in the matter.
19. The Supreme Court case of Mathura Prasad reported at and especially paragraphs 9, 10 and 11 thereof are in point and those were correctly relied upon by Mr. Naveen Sinha. The Proposition elaborated there is court on a point of jurisdiction, there cannot be res judicata.
20. There is never any res judicata in regard to a point of jurisdiction. Numerous cases have laid down several rules in this regard, e.g., (i) parties cannot confer jurisdiction on a Court by consent; (ii) a point as to jurisdiction of a Court passing a decree can be taken by the judgment debtor for the first time even at the very last stage of execution (iii) an order of Court passed without jurisdiction can be disregarded (of course by courageous citizens only) since there is no contempt possible of any order passed without jurisdiction.
21. On this basis it appears that an order without jurisdiction is valid only for parties, who choose to treat it as valid, but otherwise the order can be disregarded by parties and therefore even moreso by Courts, before which such orders come to be considered and applied at later times.
22. On behalf of the official liquidator paragraph 7 was placed from the judgment of the State of Kerala reported at and the said paragraph contains, the following three quotations respectively from Halsbury, De Smith and Wade. The quotations are extracted below:
In Halsbury's Laws of England, 4th edition, (Reissue) volume 1 (1) in paragraph 26, page 31, it is stated, thus:-
If an act or decision, or an order or other instrument is invalid, it should, in principle, be null and void for all purposes; and it has been said that there are no degrees of nullity. Even though such an act is wrong and lacking in jurisdiction, however, it subsists and remains fully effective unless and until it is set aside by a court of competent jurisdiction. Until its validity is challenged, its legality is preserved.
In the judicial review of Administrative Action, Director of Education Smith, Woolf and Jowell, 1995 edition, at pages 259- 260 the law is stated, thus: -
The erosion of the distinction between jurisdictional errors and non-jurisdiction errors has, as we have seen, correspondingly eroded the distinction between void and voidable decisions. The courts have become increasingly impatient with the distinction, to the extent that the situation today can be summarised as follows:
(1) All official decisions are presumed to be valid until set- aside or otherwise held to be invalid by a court of competent jurisdiction.
Similarly, Wade and Forsyth in Administrative Law, Seventh edition- 1994, have stated the law us at pages 341-342:-
... every unlawful Administrative act, however invalid, is merely voidable. But this is no more than the truism' that in most situations the only way to resist unlawful action is by recourse to the law. In a well- known passage Lord Racliffe said:
An order, even if not made in good faith, is still an act capable of legal consequences. It bears no brand of invalidity upon its forehead. Unless the necessary proceedings are taken at law to establish the cause of invalidity and to get it quashed or other upset, it will remain as effective for its ostensible purpose as the most impeccable of orders.
This must be equally true even where the brand of invalidity is plainly visible: for there also the order can effectively be resisted in law only by obtaining the decision of the Court. The necessity of recourse to the court has been pointed out repeatedly in the House of Lords and Privy Council without distinction between patent and latent defects.
23. In the manner we respectfully read the said judgment and the said observations of the highest persuasive authorities, we feel that the rule still is that an order without jurisdiction is so void that a party can at almost all times disregard it at his choice, and that the party might also wait but that the safer course in any event is to have the order without jurisdiction set aside, or pronounced to be so as early as possible, which is the course which the pragmatic appellant has taken in this case.
24. The appeal is allowed. The two orders under appeal are both set aside. The winding up petition is consigned to the department with liberty to the petitioning creditor to take steps in regard thereto in accordance with law as it might be advised.
25. No order as to costs.