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        Companies Law

        1968 (9) TMI 73 - HC - Companies Law

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        Civil court jurisdiction over director-injunction suit upheld despite Companies Act remedies for different reliefs. Section 9 CPC preserves civil court jurisdiction in all civil matters unless expressly or impliedly barred, and the Companies Act, 1956 did not exclude ...
                      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 over director-injunction suit upheld despite Companies Act remedies for different reliefs.

                          Section 9 CPC preserves civil court jurisdiction in all civil matters unless expressly or impliedly barred, and the Companies Act, 1956 did not exclude that jurisdiction for a suit seeking a declaration that a plaintiff could continue as director with consequential injunctions. Sections 2(11)(a), 10 and 10(2) merely allocate certain company matters to the High Court or district courts; they do not, by themselves, bar ordinary civil suits. The reliefs claimed were different from proceedings for regulation of company affairs under sections 398 and 402(a), and the statutory remedy invoked did not fully cover the plaint reliefs. The suit was therefore maintainable in civil court, and the revisional challenge failed.




                          Issues: Whether the civil court's jurisdiction to entertain a suit seeking a declaration that a person is entitled to continue as a director of a company, along with consequential injunctive relief against an allegedly invalid election of directors, was barred by the Companies Act, 1956.

                          Analysis: Section 9 of the Code of Civil Procedure, 1908 confers jurisdiction on civil courts in all civil matters unless expressly or impliedly barred. The provisions of sections 2(11)(a), 10 and 10(2) of the Companies Act, 1956 merely allocate company matters to the High Court or, in specified cases, to district courts, and do not by themselves exclude the ordinary civil court. The relief claimed in the suit was a declaration of the plaintiff's right to continue as director and injunctions protecting that right; it was not an application for regulation of the company's affairs under sections 398 and 402(a) of the Companies Act, 1956. The court also noted that the statutory remedy relied upon by the petitioners did not comprehensively cover the reliefs claimed in the plaint, and the authorities cited showed that similar suits had been entertained by civil courts.

                          Conclusion: The civil court's jurisdiction was not barred, and the suit was maintainable in the civil court.

                          Final Conclusion: The revisional challenge to the trial court's finding on jurisdiction failed, and the suit was permitted to proceed before the civil court.

                          Ratio Decidendi: Where the Companies Act, 1956 does not expressly or by necessary implication exclude the ordinary civil court, a civil suit seeking declaration of a director's right and consequential injunction is maintainable notwithstanding the existence of company-court remedies for different reliefs.


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