TaxTMI 
TaxTMI 
2019 (7) TMI 1944
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.... Facts 2. Briefly stated facts of the present case are that the plaintiff-appellant was one of the Directors in the respondent no.1 Company. The defendant-respondent No.1 is a Limited Company. It purchased an immovable property being House No.19/1, B.L.K.-B, Okhla Industrial Area, Phase -2, New Delhi (hereinafter referred to as the "disputed property"). The plaintiff-appellant and the defendant-respondent No.2 and their family members were Directors in six companies, namely, M/s. Himalayan Bioxteracts Pvt. Ltd., Kamero Technosys Ltd., Virat Residency Ltd., Dynacon Cares Ltd., Dynacon Systems Ltd. and Duet Marketing Pvt. Ltd. The plaintiff-appellant and the defendant-respondent no.2 and their two guests drawn Minutes of the Meeting dated 10.2.2016, which is reproduced below :- "MINUTES OF THE MEETING OF THE DIRECTORS OF KAMERO TECHNOSYS LIMITED HELD ALONGWITH TWO OTHER GUESTS ON 10/02/2016 AT ROOM NO. 600 OF VIJAY INTERCONTINENTAL HOTEL AT 12.30 P.M. The Following person were present - 1. Nirbhay Kapoor -Director Kamero Tecnosys Ltd. 2. Pankaj Kumar Gupta- -Director of Kamero Technosys Ltd. 3. Brijesh Saxena -Guest 4. Muqaddar Ali -Guest....
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....ner - Pankaj Kumar Gupta Nirbhay Kapoor Himalayan Bioxteracts Pvt. Ltd. Dynacon Cares Ltd. Kamero Technosys Ltd. Dynacon Systems Ltd. Virat Residency Ltd. Duet Marketing Pvt. Ltd. 4. The matter of immovable assets in the above six companies was discussed and it was amicably decided to find out the valuation of immovable assets and divide them amongst both the directors. Both the directors were agreeable to this proposition readily. After discussions with various property dealers by both the directors the following valuation of the properties was made which was readily acceptable to both the directors - Name of the Property Valuation reached amicably (Rs in Crores) 1. C-6, Panki Industrial Area, Site - 1, Kanpur 17.00 2. Okhla factory at Delhi 6.00 3. Land at Rania, Kanpur Dehat 7.50 4. Property at Sarojini Nagar, Kanpur 1.25 5. Flat at Lajpat Nagar, Kanpur 0.30 6. Flat at Jangpura Extension, Delhi 1.25 7. Factory at G-116, Site-3, Panki, Kanpur 1.00 Total 34.30 5. That the above properties will be divided amongst both the directors as mentioned below - Pankaj Gupta Valuation Nir....
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....alance both the director's valuation an amount of Rs 0.36 Lacs will be paid by Shri Pankaj Kumar Gupta to Shri Nirbhay Kapoor (19.87-19.51)(19.51-19.15). 8. Besides the above it was also decided that the proceeds of sale of Land at Bhadurgrah, Haryana of Rs 1.46 Crores will be divided amongst both the directors in equal proportion, after deducting expenses of Rs 4.00 lacs incurred on its sale and Tax on Long term capital gains to be calculated as per I. Tax Act, 1961. 9. It was also decided that the advance payment of flats made in one of the Company of Rs 23.00 Lacs approx. which was received back will be divided equally amongst both the directors. 10. Both the directors also readily agreed that the payments received from Defence Organizations for sale of Shoes in Kamero Technosys Ltd will go to the credit of Shri Nirbhay Kapoor and will be paid to him even after separation. In the event of payment received being less than the liabilities then that shortfall will be borne by Shri Nirbhay Kapoor. 11. It was also readily agreed by both the directors that any liability of the common six companies arising of the period prior to 31st July, 2012 w....
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....ore, without calling for the records and paper book, the appeal may be finally heard on the following question. Accordingly, this appeal has been heard on the following question :- "Whether under the facts and circumstances, the suit filed by the plaintiff-appellant was not maintainable under Section 9 of the Civil Procedure Code being barred by the provisions of Section 430 of the Companies Act, 2013"? Submissions on behalf of the plaintiff-appellant 6. Sri Ashish Kumar Srivastava, learned counsel for the plaintiff-appellant submits, as under: i) That the plaintiff-appellant was Director and share holder in the companies in respect of which declaratory relief was sought in the suit. An agreement dated 10.2.2016 was entered between the Directors of the companies under which with respect to the disputed property, it was agreed that when the defendant-respondent no.1, shall sell the aforesaid property, the proceeds thereof shall be transferred to the plaintiff-appellant. The defendant-respondent no.1 has sold the said property for Rs.5,40,00,000/- but has not transferred/paid that amount to the plaintiff-appellant. This caused the plaintiff-appellant to file the sui....
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....s no concern or lien of any nature whatsoever over the properties of the aforesaid companies. ii) As per plaint, declaratory relief has been sought against the aforesaid three companies but only Kamero Technosys Ltd. has been made as defendant in the suit as well as before this Court as defendant-respondent. The rest of the two companies against which declaratory relief and relief of permanent injunction have been sought were not parties either in the aforesaid suit No.79 of 2019 or are parties in this appeal. iii) The reference of paragraph 10 of the plaint made by learned counsel for the plaintiff-appellant is wholly irrelevant in as much as the averment made in paragraph 10 does no give any cause of action to the plaintiff-appellant since the plaintiff-appellant has no concern with the defendant-respondent no.1 - Company. iv) Cause of action disclosed in paragraphs 17 & 18 of the plaint is that some person came to the plaintiff-appellant on 15.1.2019 and requested him to sign the sale deed being Ex-Director of the Company so that there may not arise any dispute in future. On 17.1.2019, the plaintiff-appellant came to know about the sale of the properties and on 21.1.201....
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.... appropriate to reproduce the provisions of Section 9, Order VII Rule 11 C.P.C. and Section 430 of the Act 2013, as under:- Civil Procedure Code "Section 9. Courts to try all civil suits unless barred-- The Courts shall (subject to the provisions herein contained) have jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred. [Explanation I].--A suit in which the right to property or to an office is contested is a suit of a civil nature, notwithstanding that such right may depend entirely on the decision of questions as to religious rites or ceremonies. [Explanation II]. For the purposes of this section, it is immaterial whether or not any fees are attached to the office referred to in Explanation I or whether or not such office is attached to a particular place.]. Order VII Rule 11 Rejection of plaint-- The plaint shall be rejected in the following cases:-- (a)where it does not disclose a cause of action; (b)where the relief claimed is undervalued, and the plaintiff, on being required by the Court to correct the valuation within a time to be fixed....
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....ctors. (1) Subject to the provisions of this Act, a director of a company shall act in accordance with the articles of the company. (2) A director of a company shall act in good faith in order to promote the objects of the company for the benefit of its members as a whole, and in the best interests of the company, its employees, the shareholders, the community and for the protection of environment. (3) A director of a company shall exercise his duties with due and reasonable care, skill and diligence and shall exercise independent judgment. (4) A director of a company shall not involve in a situation in which he may have a direct or indirect interest that conflicts, or possibly may conflict, with the interest of the company. (5) A director of a company shall not achieve or attempt to achieve any undue gain or advantage either to himself or to his relatives, partners, or associates and if such director is found guilty of making any undue gain, he shall be liable to pay an amount equal to that gain to the company. (6) A director of a company shall not assign his office and any assignment so made shall be void. (7) If a director of....
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....e of a company which is being wound up, of the liquidator, order a meeting of the creditors or class of creditors, or of the members or class of members, as the case may be, to be called, held and conducted in such manner as the Tribunal directs. Under Section 231 of the Act Tribunal has power to enforce the compromise or arrangement under Section 230 of the Act. The alleged minutes of the meeting dated 10.2.2016 does not fall under Section 230 of the Act. 14. Section 241 of the Act empowers any member of a Company to apply to the Tribunal in certain circumstances provided such member has a right to apply under Section 244, for an order under Chapter XVI and in that event power has been conferred upon the Tribunal for appropriate action under Section 242 of the Act. 15. Sections 241, 242 and 245 of the Act are relevant, which are reproduced below:- "241. Application to Tribunal for Relief in Cases of Oppression, etc (1) Any member of a company who complains that-- (a) the affairs of the company have been or are being conducted in a manner prejudicial to public interest or in a manner prejudicial or oppressive to him or any other member or members or in a man....
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....pany and the managing director, any other director or manager, upon such terms and conditions as may, in the opinion of the Tribunal, be just and equitable in the circumstances of the case; (f) the termination, setting aside or modification of any agreement between the company and any person other than those referred to in clause (e): Provided that no such agreement shall be terminated, set aside or modified except after due notice and after obtaining the consent of the party concerned; (g) the setting aside of any transfer, delivery of goods, payment, execution or other act relating to property made or done by or against the company within three months before the date of the application under this section, which would, if made or done by or against an individual, be deemed in his insolvency to be a fraudulent preference; (h) removal of the managing director, manager or any of the directors of the company; (i) recovery of undue gains made by any managing director, manager or director during the period of his appointment as such and the manner of utilisation of the recovery including transfer to Investor Education and Protection Fund or r....
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....d to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees, or with both. 245. Class Action (1) Such number of member or members, depositor or depositors or any class of them, as the case may be, as are indicated in sub-section (2) may, if they are of the opinion that the management or conduct of the affairs of the company are being conducted in a manner prejudicial to the interests of the company or its members or depositors, file an application before the Tribunal on behalf of the members or depositors for seeking all or any of the following orders, namely:-- (a) to restrain the company from committing an act which is ultra vires the articles or memorandum of the company; (b) to restrain the company from committing breach of any provision of the company's memorandum or articles; (c) to declare a resolution altering the memorandum or articles of the company as void if the resolution was passed by suppression of material facts or obtained by mis-statement to the members or depositors; (d) to restrain the company and its directors from acting on such resolution; (e) to restrain the company....
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....-section (1),the Tribunal shall take into account, in particular- (a) whether the member or depositor is acting in good faith in making the application for seeking an order; (b) any evidence before it as to the involvement of any person other than directors or officers of the company on any of the matters provided in clauses (a)to (f) of subsection (1); (c) whether the cause of action is one which the member or depositor could pursue in his own right rather than through an order under this section; (d) any evidence before it as to the views of the members or depositors of the company who have no personal interest, direct or indirect, in the matter being proceeded under this section; (e) where the cause of action is an act or omission that is yet to occur, whether the act or omission could be, and in the circumstances would be likely to be-- (i) authorised by the company before it occurs; or (ii) ratified by the company after it occurs; (f) where the cause of action is an act or omission that has already occurred, whether the act or omission could be, and in the circumstances would be likely to be, ratified by t....
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.... the disputed property was purchased by the defendant-respondent no.1 - Company in its own name which is in accordance with the provisions of Section 187 of the Act. Whatsoever may be the nature of the alleged Minutes of the Meeting dated 10.2.2016, but it relates to the affairs of the defendant-respondent-Company which may be complained under Section 241(1)(a) of the Act 2013 by making application before the Tribunal. Under Clause (e) and Clause (f) of sub-Section 2 of Section 242, the Tribunal has the power to terminate, set aside or modify any agreement, howsoever, arrived at between the Company and the Managing Director or any other Director or Manager, upon such terms and conditions as may in the opinion of the Tribunal be just and equitable in the circumstances of the case. The Tribunal has power to terminate, set aside or modify any agreement between the Company or any person other than those referred to in Clause (e). A class of member or members, depositor or depositors may also apply to the Tribunal in the circumstances mentioned in sub-section 1 of Section 245 of the Act. 17. Thus, the alleged Minutes of the Meeting drawn by the Directors plaintiff-appellant and the d....
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....(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 it is necessary to see if the statute creates a special right or a liability and provides for the determination of the right or liability and further lays down that all questions about the said right and liability shall be determined by the tribunals so constituted, and whether remedies normally associated with actions in civil courts are prescribed by the said statute or not. (3) Challenge to the provisions of the particular Act as ultra vires cannot be brought before Tribunals constituted under that Act. Even the High Court cannot go into that question on a revision or reference from the decision of the Tribunals. (4) When a provision is already declared unconstitutional or the ....
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....of O.S. no.79 of 2019, reveals that the plaintiff-appellant has set up a case that he and the defendant-respondent no.2 and their family members were directors in six companies and there arose some dispute between him and other Directors relating to the conduct of the affairs of the Company and in that event two guests, namely, Brijesh Saxena and Muqadar Ali intervened and an agreement dated 10.2.2016 (alleged minutes of the meeting) was entered on calling of a meeting of Directors but the defendant-respondent no.2 has not complied with the conditions of the aforesaid minutes of the meeting. It has been mentioned in paragraphs 5 to 16 of the plaint that in terms of the Minutes of the Meeting the plaintiff-appellant and his family members resigned from Directorship on 11.3.2016 but the defendant-respondents sold the disputed property and have not complied with the terms of the Minutes of the Meeting. The cause of action arose when on 15.1.2019 some persons came to the plaintiff-appellant with regard to purchase by them the Plot No.C-6, Panki Industrial Area, Site 1, Panki, Kanpur and requested him to sign the sale deed and thereupon the plaintiff-appellant contacted the defendant-re....