Companies Act, 2013 Applicability: Civil Suit Dismissed, Plaintiffs to Seek Proper Authority

The court upheld the decision that the suit was not maintainable in a civil court due to the applicability of the Companies Act, 2013. It directed the trial court to return the plaint to the plaintiffs for presenting it before the proper authority. The revision petition was dismissed, confirming the lower appellate court's conclusion.

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Issues Involved:
1. Maintainability of the suit in light of the Companies Act, 2013.
2. Applicability of arbitration clause under Rule 71 of the bye-law.
3. Application of the Kerala Non Trading Companies Act, 1961.

Issue-wise Detailed Analysis:

1. Maintainability of the Suit in Light of the Companies Act, 2013:
The primary issue was whether the civil court had jurisdiction to entertain the suit filed by the plaintiffs. The defendants argued that under Section 430 of the Companies Act, 2013, no civil court has jurisdiction over matters that the Tribunal or Appellate Tribunal is empowered to determine. The lower appellate court upheld this view, stating that the Companies Act provides an alternate forum for adjudication, thus making the suit non-maintainable in a civil court. The court concluded that the suit as framed was not sustainable and directed the trial court to return the plaint to the plaintiffs for presenting it before the proper authority.

2. Applicability of Arbitration Clause Under Rule 71 of the Bye-law:
The defendants contended that the plaintiffs did not invoke the arbitration clause provided under Rule 71 of the bye-law. The plaintiffs countered this by citing the decision in Sathyan v. Yogam and others (2019(1) KLT 76), which stated there was no arbitration clause. The lower appellate court agreed with the plaintiffs, aligning with the decision in Sathyan v. Yogam and others, thus rejecting the defendants' contention regarding the arbitration clause.

3. Application of the Kerala Non Trading Companies Act, 1961:
The plaintiffs argued that the Yogam was governed by the Kerala Non Trading Companies Act, 1961, and not the Companies Act, 2013. However, the court noted that Section 3 of the Non Trading Act made the Companies Act, 1956 applicable mutatis mutandis to non-trading companies in Kerala, subject to certain modifications. The court examined whether Section 3 of the Non Trading Act was an instance of legislation by incorporation or by reference. It concluded that it was legislation by reference, meaning that amendments to the Companies Act would apply to the Non Trading Companies Act. Therefore, the suit was not maintainable under the Companies Act, 2013.

Conclusion:
The court upheld the lower appellate court's decision that the suit was not maintainable in a civil court due to the applicability of the Companies Act, 2013, and directed the trial court to return the plaint to the plaintiffs for presenting it before the proper authority. The revision petition was dismissed, confirming the lower appellate court's conclusion.

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