HC stays FIR filed against Chennai firm in Kolkata
Dispute came in the wake of acquisition of the JV firm by another company
Allowing an appeal by a private company seeking a direction to quash an FIR registered against it in Kolkata, the Madurai Bench of the Madras High Court observed that it can issue a direction even if a small cause of action arose within its territorial jurisdiction.
The court was hearing the appeal preferred by Chennai-based Coastal Energen Pvt Ltd, involved in the business of thermal power generation and transmission.
In 2010, the company entered into a joint venture with Aster Tele Services Pvt. Ltd. and SPIC-SMO for a project to develop infrastructure that involved around ₹30 crore towards construction of transmission lines between its plant in Thoothukudi and Madurai. SPICSMO was acquired by Kolkata-based Mirador Commercial Pvt. Ltd (MCPL) in 2011. However, Coastal Energen said that the acquisition was not acceptable to it nor was there an amendment to the original contract in favour of MCPL in the place of SPIC.
The project was completed in 2014 and following the completion of contractual obligations, a no-due payment certificate was issued in favour of Coastal Energen. However, despite the complete payment, MCPL sent a communication to the company seeking a retention amount of around ₹3.30 crore. The MCPL moved the Chief Metropolitan Magistrate, Kolkata, following which an FIR was filed by the Kolkata police under various sections of the Indian Penal Code.
Subsequently, Coastal Energen moved the Madras High Court seeking to quash the FIR proceedings claiming that the dispute was only civil in nature and the lower court in Kolkata had no jurisdiction in the case. A single judge Bench held that the High Court had no jurisdiction to decide the validity of a criminal proceeding beyond its jurisdiction.
Taking up the appeal for hearing, a Division Bench of Justices S.S. Sundar and C. Saravanan took cognisance of the fact that the work under the contract was executed in Thoothukudi, which was within the jurisdiction of the High Court and stayed the FIR proceedings initiated in Kolkata. The case for quashing the FIR had been referred to a single judge Bench for passing appropriate orders.