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        Companies Law

        2016 (10) TMI 1320 - HC - Companies Law

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        Civil court jurisdiction cannot be shut out unless the plaint itself shows an express or clearly implied statutory bar. A plaint cannot be rejected under Order VII Rule 11(d) unless a bar to civil jurisdiction is apparent from the plaint itself and is express or clearly ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.

                          Civil court jurisdiction cannot be shut out unless the plaint itself shows an express or clearly implied statutory bar.

                          A plaint cannot be rejected under Order VII Rule 11(d) unless a bar to civil jurisdiction is apparent from the plaint itself and is express or clearly implied. On the plaint averments, allegations of fraud, misuse of authority, and claims for declaration, injunction, and monetary reliefs under general law did not disclose a clear statutory bar merely because company-law provisions were mentioned. Questions about proper representation of the company and ultimate maintainability were not suitable for determination at the stage of rejecting the plaint. The rejection order was therefore unsustainable, and the suit was restored for decision according to law.




                          Issues: Whether the plaint could be rejected under Order VII Rule 11(d) on the ground that the civil court's jurisdiction was barred by the Companies Act.

                          Analysis: In an application under Order VII Rule 11, only the plaint can be looked into and the defence in the written statement cannot be considered. The exclusion of civil court jurisdiction is not to be readily inferred and must be express, explicit, or clearly implied. On the plaint averments, the dispute concerned alleged fraud, misuse of authority, and reliefs founded on the general law, including declarations, injunctions, and monetary reliefs. The pleaded case did not disclose a clear statutory bar to civil jurisdiction merely because company-law provisions were referred to. Whether the company was properly represented and whether the suit was ultimately maintainable were matters that could not be decided at the stage of rejecting the plaint.

                          Conclusion: The rejection of the plaint under Order VII Rule 11(d) was unsustainable and the civil court's jurisdiction was not barred on the plaint as framed.

                          Final Conclusion: The appeal succeeded to the extent that the impugned rejection order was set aside and the suit was restored for decision in accordance with law, with the respondents' merits contentions left open.

                          Ratio Decidendi: A plaint cannot be rejected under Order VII Rule 11(d) unless the bar of civil jurisdiction is apparent from the plaint itself and is express or clearly implied; where the claim on its face rests on general-law reliefs and raises disputed questions, rejection on jurisdictional bar is impermissible.


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                          ActsIncome Tax
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