TaxTMI 
TaxTMI 
2012 (8) TMI 1091
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....led the suit in O.S.No.410 of 2011 to declare the notice dated 19.4.2011 calling for the Board Meeting as sham and nominal as the notice is illegal and against the terms of the memorandum of understanding dated 17.4.2010 and for permanent injunction restraining the defendants in the suit from conducting any Board Meeting in respect of any subject covered under the memorandum of understanding dated 17.4.2010. Respondents 1 and 2 in C.R.P. PD No.2833 of 2012 filed the suit in O.S.No.862 of 2010 for declaration that the acts of defendants 1 to 3 in going back upon and violating the memorandum of understanding is illegal and arbitrary and for permanent injunction restraining defendants 1 to 3 from selling or transferring their shares in the first plaintiff company to any other person and for mandatory injunction to direct defendants 1 to 3 to comply with their commitment as per the memorandum of understanding. 3. Mr.M.Venkatachalapathy, learned Senior Counsel appearing for the revision petitioners in C.R.P.PD No.2009 of 2012 submitted that as per the provisions of section 2(11) and 10 of the Companies Act, 1956, in respect of Company matters, the court is the High Court when the cau....
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.... Plastic Containers Pvt. Ltd. (AIR 1998 SC 3153) 3. Canara Bank v. Nuclear Power Corporation of India Ltd. (1995 SUPP. (3) SCC 81) 4. K.Venkat Rao v. M/S.Rockwool (India) Limited, Hyderabad (CDJ 2001 APHC 477) 5. Reliance Industries Limited & Others v. Usha Devi (2011-1-LW 559) 4. Mr.Venkataseshan, learned counsel appearing for the petitioners in C.R.P. PD No.2833 of 2012, supplementing the arguments of the learned Senior Counsel Mr.Venkatachalapathy, submitted that under the provisions of the Companies Act, in respect of any matters relating to Company, only the Company Court has got jurisdiction to entertain any suits or petitions and the Munsif Court has no right to entertain any application relating to Company in respect of mattes arising under the Companies Act and therefore, the suit is not maintainable. He further submitted that in C.R.P.PD No.2833 of 2012, the revision petitioners seek to set aside the order passed in I.A.No.1876 of 210 in O.S.No.862 of 2010 and in O.S.No.862 of 2010, respondents 1 and 2/plaintiffs prayed for permanent injunction restraining defendants 1 to 3 from selling or transferring their shares in the first plaintiff comp....
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....wered to determine by or under the Companies Act and or in law for time being in force and therefore, in respect of any matter which does not fall within the exclusive domain of the Company Court, the same can be filed before an ordinary civil court. He further submitted that though section 10GB was passed by the Parliament and has been brought into effect, the same has not been notified and as per the judgment of the Honourable Supreme Court reported in Union of India v. Madras Bar Association ((2010) 11 SCC 1), the Constitution of Tribunal as per the Act has been stayed by the Honourable Supreme Court and unless the members are appointed as per the guidelines given in that judgment, the Tribunal cannot function and therefore, section 10GB could not be invoked in support of the contention of the learned counsel for the revision petitioners. He also submitted that in respect of reliefs which are available under the common law, the civil court has got jurisdiction and is also made clear in various judgments having regard to the scope of section 9 of the Code of Civil Procedure and unless the relief sought for falls exclusively within the powers of the Company Court or Tribunal, the ....
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....rther, in the judgment rendered in Dhulabhai v. State of M.P. (AIR 1969 SC 78), various guidelines are given by the Supreme Court in respect of matters which can be tried by the civil court, and the guidelines are as follows:- "(1) Where the statute gives a finality to the orders of the special tribunals the civil court's jurisdiction must be held to be excluded if there is adequate remedy to do what the civil courts would normally do in a suit. Such provision, however, does not exclude those cases where the provisions of the particular Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure. (2) Where there is an express bar of the jurisdiction of the court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the civil court. Where there is no express exclusion the examination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result of the inquiry may be decisive. In the latter case i....
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....t, the only remedy is to approach the forums created by the said Act. (3) Similarly, where the dispute involves the recognition, observance or enforcement of rights and obligations created by enactments like Industrial Employment (Standing Orders) Act, 1946 -- which can be called 'sister enactments' to Industrial Disputes Act -- and which do not provide a forum for resolution of such disputes, the only remedy shall be to approach the forums created by the Industrial Disputes Act provided they constitute industrial disputes within the meaning of Section 2(k) and Section 2-A of Industrial Disputes Act or where such enactment says that such dispute shall be either treated as an industrial dispute or says that it shall be adjudicated by any of the forums created by the Industrial Disputes Act. Otherwise, recourse to civil court is open. (4) It is not correct to say that the remedies provided by the Industrial Disputes Act are not equally effective for the reason that access to the forum depends upon a reference being made by the appropriate Government. The power to make a reference conferred upon the Government is to be exercised to effectuate the object of th....
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....lekar Shantaram Wadke of Bombay ((1976) 1 SCC 496) which being a three-Judge Bench judgment and having followed Dhulabhai v. State of M.P. (AIR 1969 SC 78), which is a Constitution Bench judgment, is binding on us." 11. Therefore, from the reading of the above judgment, it is clear that whenever a person has got grievance of a civil nature, he has got a right to institute a civil suit in a competent civil court and the civil court can entertain such suits unless the suit is expressly or impliedly barred by any statute. Further, it is well settled that there is a presumption that the civil court has jurisdiction and the ouster of civil court's jurisdiction is not be readily infered and a person may taking a plea contra must establish the same and even in a case where the jurisdiction of a civil court is sought to be barred under a statute, the civil court can exercise its jurisdiction in respect of similar matters particularly when the statutory Tribunal acts without jurisdiction. (para 12 to 14 in the aforesaid judgment). 12. In the judgment in Dwarka Prasad Agarwal v. Ramesh Chandra Agarwala(AIR 2003 SC 2696), while interpreting sections 9 and 10 of the Companies Act, th....
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....ore, we will have to see whether the civil courts have got jurisdiction to entertain the plaint having regard to the allegations in the plaint and also the prayers prayed for in those two suits. 15. As stated supra, the allegations in both the suits are in respect of enforcement of memorandum of understanding entered into between the parties on 17.4.2010 and in O.S.No.410 of 2011, the prayer is to declare the notice dated 19.4.2011 as illegal on the ground that it is against the terms of memorandum of understanding and for permanent injunction from convening any Board Meeting in respect of any subject matter under the memorandum of understanding till all the disputes are resolved as per the memorandum of understanding. In O.S.No.862 of 2010, the prayer is to declare that the acts of defendants 1 to 3 in going back upon and in violating the terms of the memorandum of understanding is illegal and arbitrary and for mandatory injunction directing defendants 1 to 3 to comply with the commitment as per the memorandum of understanding and for injunction restraining defendants 1 to 3 from selling or transferring their shares in the first plaintiff company to any other person. Further, a....
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....t. In view of the elaborate provisions contained in the 1956 Act in regard to management and conduct of a company's affairs, including even important internal matters of administration, the scope for interference by the civil court may have become more limited, but the power has not at all been taken' away. It has been rightly observed in a case reported as R. Prakasam v. Sree Narayana Dharma Paripalanayogem; 1980 Company cases page 611(2) that except in cases where the Companies Act 1956 confers jurisdiction on the Company Court or some other authority like the Central Government or the Company Law Board, either expressly or by implication, all other disputes pertaining to a company are to be resolved through a forum of Civil Court when the dispute are kept on being resolved by them. Where wrong is done to an individual member, he can insist by recourse to a civil suit, on "strict observance of the legal rules, statutory provisions and provisions in; the memorandum and articles of association which cannot be waived by a bare majority of share holders". Similar view was taken in a judgment reported as Panipat Woollen and General Mills Company Ltd. and another v. P.L.Kaushik....
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....than proceedings relating to an offence under the Act) the Court which will have jurisdiction shall be the High Court or, if there is the requisite Notification, the District Court. 12. There are number of sections under the Companies Act where such mention is made of proceedings before a Court. For example, under section 391 of the Companies Act, where a compromise or arrangement is proposed between a Company and its creditors or its members, the Court may, on the application of the company or a creditor or a member of the company, order a meeting of the creditors or members to be called, held and conducted in such manners as the Court directs. The meaning of the word 'Court' here is as provided in section 2(11) read with section 10 of the Companies Act. It will therefore be the High Court, in the absence of any Notification under section 10(2). Similarly under section 397 of the Companies Act, as it originally stood, where any members of the Company complain that the affairs of the Company are being conducted in a manner prejudicial to public interest or in a manner oppressive to any member or members, an application can be made to the Court for an order under th....
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....urt and ordinary civil court has no jurisdiction. 21. In the judgment reported in 1995 Supp. (3) SCC 81, the Honourable Supreme Court was considering the scope of section 9-A of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 and having regard to the provisions of that section, it was held that ordinary civil court has no jurisdiction to entertain the matters and as per the provisions of section 9-A of the said Act, the Special Court has to exercise the jurisdiction and powers and such power cannot be exercised by a civil court and therefore, the civil court has no jurisdiction. 22. Therefore, having regard to the above judgments, it is made clear that the Company Court has the exclusive jurisdiction to deal with matters which are exclusively falling within the domain of the Company Court or Tribunal constituted by the Companies Act and in respect of other matters, the civil court has got jurisdiction. As a matter of fact, under section 111 of the Companies Act, in cases of refusal by a Company to register the transfer or the transmission of shares by operation of law, the transferor or transferee may appeal to the court against any refu....