Art 226 jurisdiction hinges on nexus, not issuing authority’s location | MCA order to be heard in Mumbai : Delhi HC

The Delhi High Court clarified that a writ under Article 226 cannot be entertained merely because the impugned order emanates from a central authority in Delhi; the court must examine the substantive nexus of the dispute, and in this case the appropriate forum is the Bombay High Court.

Background & Facts

The Dispute

The petitioner, Anil Laxminarayan Biyani, challenged an order dated 31.10.2025 issued by the Ministry of Corporate Affairs (MCA) directing the Serious Fraud Investigation Office (SFIO) to investigate Future Retail Limited (FRL) and Future Consumer Retail Private Limited (FCRPL). The order was issued under Section 212(1)(c) of the Companies Act, 2013.

Key Facts

• FRL and FCRPL were incorporated in 2007 and are engaged in retail trading of branded products.
• In March 2017 the group announced a scheme of arrangement leading to a demerger of its HomeTown and FabFurnish businesses into Praxis Home Retail Private Limited, announced on 20.04.2017.
• In 2019 Amazon acquired a 49% stake in Future Coupons Private Limited, subject to restrictive covenants.
• SEBI initiated insider-trading proceedings against Kishore Biyani and related entities for the period 10.03.2017 to 20.04.2017; the Whole Time Member of SEBI passed an order on 03.02.2021 holding violations of PIT Regulations.
• The order was appealed before the Securities Appellate Tribunal (SAT) as Appeal No. 81 of 2021.
• FRL entered Corporate Insolvency Resolution Process (CIRP) on 20.07.2022 by order of the National Company Law Tribunal (NCLT), Mumbai.
• SAT quashed the SEBI order on 20.12.2023, exonerating the appellants.
• On 29.07.2024 the NCLT, Mumbai, ordered liquidation of FRL after the CIRP period expired without a resolution plan.
• Insolvency proceedings against FCRPL were initiated on 24.09.2024; no Section 66 IBC application was filed for FCRPL.
• The Insolvency and Bankruptcy Board of India (IBBI) on 20.11.2024 referred alleged avoidance transactions amounting to approximately ₹15,856.68 crore involving FRL and FCRPL.
• In 2025 the liquidator of FRL filed further applications before the NCLT alleging preferential transactions.
• The MCA issued the impugned order on 31.10.2025 directing SFIO investigation, relying on references from the Central Economic Intelligence Bureau and IBBI.
• The petitioner became aware of the order through media reports in October - November 2025 and obtained a copy.

Procedural History

• 31.10.2025: MCA issued order under Section 212(1)(c) directing SFIO investigation of FRL and FCRPL.
• 19.01.2026: Petitioner filed writ petition (W.P.(C) 971/2026) before Delhi High Court seeking quashing of the order.
• 18.08.2026: Judgment reserved.
• 25.08.2026: Judgment pronounced, dismissing the petition on jurisdictional grounds.

The Parties' Positions

• Petitioner argued that the MCA order was issued from New Delhi, that the SFIO officer filing the affidavit was based in Delhi, and that a substantial part of the cause of action therefore arose within Delhi’s territorial jurisdiction.
• Respondents (Union of India and SFIO) contended that the companies under investigation have their registered offices, statutory records, and pending insolvency proceedings in Mumbai; consequently, the substantive nexus lies in Mumbai and the Delhi High Court lacks jurisdiction.

Relief Sought

The petitioner sought a writ of certiorari or any appropriate writ directing the setting aside of the MCA order dated 31.10.2025 and all consequential actions.

The Legal Issue

What is the proper test for territorial jurisdiction of a High Court under Article 226(2) of the Constitution when a writ challenges an investigation order issued by a central authority located in Delhi, but the companies and substantive records involved are situated in another state?

Arguments Presented

For the Petitioner

• The petitioner relied on the premise that the cause of action “arises” where the impugned order is issued, invoking Article 226(2) to claim jurisdiction for the Delhi High Court.
• Cited Oil and Natural Gas Commission v. Utpal Kumar Basu (1994) 4 SCC 711, asserting that a High Court may entertain a petition if any part of the cause of action falls within its territorial jurisdiction.
• Emphasised that the SFIO officer filing the affidavit was stationed at the SFIO headquarters in New Delhi, indicating that the investigation machinery operates from Delhi.

For the Respondent

• Submitted that territorial jurisdiction under Article 226(2) is not automatic; the court must apply the doctrine of forum conveniens, examining the location of the substantive dispute, statutory records, and pending proceedings.
• Relied on Kusum Ingots & Alloys Ltd. v. Union of India (2004) 6 SCC 254, stating that a High Court may decline jurisdiction even if a part of the cause of action arises within its territory.
• Highlighted that the companies’ registered offices, ROC, and insolvency proceedings are all in Mumbai, and any prosecution would fall before the Special Court under Section 436 of the Companies Act, also situated in Mumbai.
• Argued that Section 2(29) of the Companies Act defines “Court” for jurisdiction under the Act and does not affect Article 226 jurisdiction.

The Court's Analysis

The Court began by noting that Article 226(2) uses the word “may,” indicating discretion rather than a mandatory rule. It reiterated that the existence of a “part” of the cause of action within a High Court’s territorial limits does not compel the court to entertain the petition; the court must assess the overall nexus of the dispute.

"Article 226(2) of the Constitution undoubtedly enables a High Court to exercise jurisdiction where the cause of action, wholly or in part, arises within its territorial jurisdiction."

The Court examined the statutory framework of Section 212(1)(c) of the Companies Act, 2013, which empowers the MCA to direct investigations irrespective of the location of the companies. However, the Court held that the mere fact that the MCA is a central authority situated in Delhi cannot, by itself, confer territorial jurisdiction on Delhi courts for every order it issues.

Applying the doctrine of forum conveniens, the Court considered several factors:

1. Registered Offices - Both FRL and FCRPL have their registered offices in Mumbai.
2. Statutory Records - The companies’ books of accounts and compliance records are maintained in Mumbai; the Registrar of Companies (ROC) concerned is ROC Mumbai.
3. Pending Proceedings - Insolvency and avoidance proceedings are pending before the NCLT, Mumbai Bench, and any prosecution would be before the Special Court under Section 436 of the Companies Act, also located in Mumbai.
4. Investigation Nexus - While the SFIO headquarters are in Delhi, the investigation concerns the affairs, transactions, and records of companies situated in Mumbai. The Court observed that the location of the investigating officer does not, per se, determine the substantive nexus of the investigation.
5. Parallel Proceedings - The existence of a related writ before the Bombay High Court involving another director underscores the need for a single, convenient forum.

The Court distinguished the Oil and Natural Gas Commission case, noting that there the cause of action was wholly within the territorial jurisdiction. Here, the substantive elements are anchored in Mumbai. It also followed Kusum Ingots in emphasizing that the High Court may decline jurisdiction when another forum has a closer connection.

Consequently, the Court concluded that the principal and substantial nexus of the impugned investigation is with Mumbai. The Delhi High Court therefore lacks the requisite territorial jurisdiction to entertain the writ.

The Verdict

The Delhi High Court dismissed the writ petition, holding that it does not have territorial jurisdiction under Article 226(2) to entertain the challenge to the MCA order dated 31.10.2025. The matter must be pursued before the High Court of Bombay. No monetary or other relief was granted; the petition was dismissed on jurisdictional grounds.

What This Means For Similar Cases

Territorial Jurisdiction Hinges on Substantive Nexus

• Courts will look beyond the location of the issuing authority and focus on where the companies, records, and related proceedings are situated.
• A writ cannot be entertained solely because an order originates from a central agency in Delhi.

MCA Orders Do Not Confer Delhi Jurisdiction

• Section 212(1)(c) investigations may be directed from Delhi, but the investigation’s substantive focus determines the appropriate forum.
• Parties should file writs in the High Court where the investigated entities have their registered offices and statutory records.

Forum Conveniens Remains Controlling

• The doctrine of forum conveniens requires a holistic assessment of factors such as location of parties, pending litigation, and where evidence resides.

• Parallel proceedings in another High Court strengthen the argument for a single, convenient forum.

• Practitioners must assess the “principal and substantial nexus” before filing writ petitions under Article 226.

• When a central authority issues an order affecting entities located elsewhere, advise clients to approach the High Court of the state where the entities are registered.