Civil court jurisdiction upheld where fraud and title to shares required adjudication beyond statutory rectification remedies.

A civil suit challenging allegedly fraudulent share entries and seeking declaration, cancellation of share certificates and injunction was held maintainable. The Court distinguished disputes confined to rectification of the register under the Companies Act from a controversy centred on fraud and title to shares, which required evidence and could be tried by the civil court. It held that Section 430 and the company-law share-transfer provisions did not bar civil jurisdiction on these facts, and the insolvency provisions cited were inapplicable because the alleged fraud did not concern initiation of insolvency proceedings. The objection to maintainability therefore failed.

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Issues: Whether the civil suit was barred by the jurisdiction of the National Company Law Tribunal and whether allegations of fraud and dispute over title to shares could be adjudicated by the civil court.

Analysis: The dispute centred on a plea that the entries recording the defendants as shareholders were fraudulent and void, together with prayers for declaration, cancellation of share certificates and injunction. The Court distinguished the case from matters confined to rectification of the register under the Companies Act, 2013, and held that the core controversy was the alleged fraud and the title to shares, which required adjudication on evidence. It further held that the provisions relied upon for NCLT jurisdiction, including the bar under Section 430 and the share-transfer provisions, did not oust the civil court's jurisdiction on these facts. The reliance placed on the insolvency provisions was found inapplicable because the fraud alleged was not one of fraudulent initiation of insolvency proceedings.

Conclusion: The civil suit was maintainable and the National Company Law Tribunal was not competent to decide the alleged fraud in the context of the claimed share title and injunction reliefs.

Final Conclusion: The objection to civil court jurisdiction failed, and the application challenging maintainability was dismissed.

Ratio Decidendi: Where the principal relief requires adjudication of alleged fraud and title to shares, and the controversy is not confined to a statutory rectification exercise, civil court jurisdiction is not barred merely because provisions relating to company-law remedies are invoked.

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