Civil jurisdiction and interim injunctions preserved in company dispute over allegedly unauthorized property transfers by former management.

Section 430 of the Companies Act, 2013 does not oust civil court jurisdiction where a company seeks cancellation of sale deeds and related reliefs arising from allegedly unauthorized transfers of immovable property by a former Managing Director. The dispute was treated as a civil challenge to the validity of transfers, outside the scope of Sections 241 and 242, and Section 9 CPC continued to apply absent express or implied exclusion. On interim relief, the company showed a prima facie case, balance of convenience and risk of irreparable prejudice if the properties were alienated or altered, so temporary injunctions preserving the suit properties were justified.

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Issues: (i) Whether the suit filed by the company to cancel sale deeds executed by its former Managing Director and to seek mandatory reliefs was maintainable before the civil court; (ii) Whether the company had made out a case for grant of temporary injunction restraining alienation and alteration of the suit properties.

Issue (i): Whether the suit filed by the company to cancel sale deeds executed by its former Managing Director and to seek mandatory reliefs was maintainable before the civil court.

Analysis: Section 430 of the Companies Act, 2013 bars civil court jurisdiction only where the National Company Law Tribunal or the Appellate Tribunal is empowered to determine the matter. The dispute raised by the company was not one by a member under Section 241, but a civil dispute by the company challenging the validity of sale deeds executed by its former Managing Director in favour of himself, family members and others. The scheme of Sections 241 and 242 did not cover such a claim, and the relief contemplated under Section 242(2)(g) was in any event inapplicable on the facts. Section 9 of the Code of Civil Procedure, 1908 continued to confer jurisdiction unless exclusion was express or clearly implied, which was not the position here. The validity of the sale deeds and cancellation of transfers of immovable property remained matters within civil court jurisdiction.

Conclusion: The suit was maintainable in the civil court and the bar under Section 430 did not apply.

Issue (ii): Whether the company had made out a case for grant of temporary injunction restraining alienation and alteration of the suit properties.

Analysis: The company established a prima facie case by showing that the former Managing Director, while controlling the company's assets, had caused substantial transfers of land to himself and persons closely connected with him, and that sale proceeds did not appear in the company accounts. In the circumstances, the balance of convenience lay in favour of preserving the properties during the pendency of the suit. If alienation or change in the nature of the properties were permitted, the company would face serious difficulty in enforcing any eventual decree and would likely suffer irreparable prejudice. The settled principles governing interim injunctions therefore supported protection of the subject property pending trial.

Conclusion: The company was entitled to the injunctions sought.

Final Conclusion: The civil court's jurisdiction was upheld, and the refusal of interim protection was set aside in order to preserve the suit properties pending adjudication of the substantive claims.

Ratio Decidendi: Section 430 of the Companies Act, 2013 does not bar a civil suit where the relief sought is cancellation of sale deeds and related civil reliefs arising from allegedly unauthorized transfers of immovable property by a former Managing Director, and interim injunction may be granted where prima facie case, balance of convenience and irreparable injury are established.

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