Jurisdictional Limits of Trial Courts in Company Director Removal Disputes

The High Court held that the trial court lacked jurisdiction under section 10 of the Companies Act to entertain a suit challenging the removal of a director under section 283. The plaintiff's claim fell within the jurisdiction of the High Court or empowered district courts, not the civil court. The appellate court vacated the injunction granted by the trial court, emphasizing that district courts do not typically handle disputes related to company affairs unless specifically authorized. The Civil Revision Application by the plaintiff was dismissed, and the defendants' application was allowed, maintaining the status quo until a specified date.

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Issues Involved:
Jurisdiction of civil court under section 10 of the Companies Act to entertain a dispute regarding the removal of a director under section 283.

Summary:
The applicant, a director of a public limited company, filed a suit challenging his removal by the managing director without a resolution of the board of directors. The plaintiff contended that the removal was illegal u/s 284 of the Companies Act as he was not given a show-cause notice. An ad interim injunction was granted by the trial court allowing the plaintiff to attend a meeting. The defendants argued that the civil court lacked jurisdiction u/s 10 of the Companies Act due to the plaintiff's actions violating section 295. The trial court upheld its jurisdiction and granted the injunction, which was later vacated by the appellate court finding lack of jurisdiction.

The High Court held that the trial court had no jurisdiction to entertain the suit as per section 10 of the Companies Act, which specifies the jurisdiction of the High Court or empowered district courts. The plaintiff's challenge to his removal fell under section 283, and the district court did not have jurisdiction over such matters. The court emphasized that the High Court typically handles disputes concerning company affairs unless specific powers are granted to district courts by the Central Government. The decision was influenced by a precedent from the Calcutta High Court, supporting the lack of jurisdiction of the trial court in this case. Other cases cited by the plaintiff were deemed irrelevant to the current dispute.

In conclusion, the Civil Revision Application filed by the plaintiff was dismissed, and the one filed by the defendants was allowed, quashing the trial court's order. The status quo was to be maintained until a specified date.

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