2013 (6) TMI 937 - HC - Companies Law

Civil Court Retains Jurisdiction in Company Irregularities Case, Dismissing Petition for Registrar Forum Transfer.

The City Civil Court, Ahmedabad, dismissed the petitioners' application under Order VII Rule 11 of CPC, affirming its jurisdiction over the civil suit ... - Issues: Jurisdiction of Civil Court under Order VII Rule 11 of CPC, Interpretation of Section 10GB of Companies Act, Ouster of Civil Court's jurisdiction, Application of Dwarka Prasad Agarwal case, Applicability of Section 9 of CPCThe judgment pertains to a petition challenging the order of the Chamber Judge, City Civil Court, Ahmedabad, dismissing the petitioners' application under Order VII Rule 11 of the Code of Civil Procedure (CPC) in Civil Suit No.322 of 2009. The respondents, original plaintiffs, alleged irregularities in the administration of a company and sought to prevent the transfer of company properties to the petitioners. The petitioners contended that the City Civil Court lacked jurisdiction to entertain the suit and that grievances should be addressed to the Registrar of Companies. The Court rejected the petitioners' application, citing the Dwarka Prasad Agarwal case.The petitioners argued that all allegations in the suit concerned company affairs, already under the Registrar of Companies' purview, and that the trial court erroneously entertained the suit. The petitioners invoked Section 10GB of the Companies Act, which bars Civil Court jurisdiction in certain matters. The Court noted the plaintiffs' request for an injunction against the petitioners, who were company directors, regarding property transfer, emphasizing the Act's provision restricting Civil Court jurisdiction.The judgment highlighted that Civil Courts typically lack jurisdiction over company business matters, citing the Dwarka Prasad Agarwal case to support the view that the Civil Court's jurisdiction is not ousted by the Companies Act. The Chamber Judge correctly noted that ousting Civil Court jurisdiction requires strict interpretation, referencing the Abdul Waheed Khan case. The plaintiffs' claims involving civil rights were deemed within the Civil Court's jurisdiction, supported by the Suvvari Sanyasi Apparao case. The Court found no manifest error in the Chamber Judge's decision and dismissed the petition, affirming the Chamber Judge's order and declining to entertain the petition.