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Issues: Whether a civil suit seeking declaration of title to shares, cancellation of transfers and issue of duplicate shares is barred by the special machinery under section 111 of the Companies Act, 1956 and therefore liable to rejection under Order 7 Rule 11 of the Code of Civil Procedure, 1908.
Analysis: The reliefs claimed in substance concerned correction of entries in the register of members and the cancellation of transfers said to have been effected without sufficient cause. Section 111 of the Companies Act, 1956 empowers the Company Law Board to deal with applications for rectification of the register, to decide questions relating to title connected with such rectification, and to grant incidental or consequential reliefs, including injunctions and bonus shares. Where the dispute falls within this special statutory field, the civil court's jurisdiction under section 9 of the Code of Civil Procedure, 1908 is impliedly excluded. The plaint itself showed that the controversy related to shares already transferred or sought to be transferred, bringing the matter within the rectification jurisdiction.
Conclusion: The suit was not maintainable before the civil court and the plaint was liable to be rejected.
Final Conclusion: The statutory remedy before the Company Law Board was held to be the proper forum for the dispute, and the civil court could not entertain the claim.
Ratio Decidendi: Where the substance of the claim is rectification of the register of members and allied reliefs that fall within section 111 of the Companies Act, 1956, the civil court's jurisdiction is impliedly barred.