TaxTMI 
TaxTMI 
2025 (12) TMI 828
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.... the Code of Civil Procedure, 1908 ('CPC') was dismissed by the impugned order. 3. The brief facts of the case are as follows: 3.1. The subject suit, being CS No. 3503/2024, is filed by the plaintiffs/Respondent Nos. 1 to 3 seeking declaration of certain documents as non est, null and void claiming that the said documents bore the forged signatures of the plaintiffs. The plaintiffs also sought a decree of permanent injunction restraining the defendants (that is, the petitioner and Respondent Nos. 4 to 11) from acting upon the subject documents. The impugned documents, as mentioned in Clause A of the prayer in the suit, are as under: i. Document titled as "Shareholders Agreement" dated 30th July 2020; ii. Form No. SH-1 dated 20th July, 2020 which bears the forged signatures of Mr. Nitin Katiyar (Plaintiff No. 3) & Mr. Vikash Kumar Mishra (Plaintiff No. 2) [Distinctive Number 10001 to 36520 - Corresponding Certificate No. 11 and registered folio number 01]; iii. Form No. SH-4 dated 30th July, 2020 which bears the forged signatures of Mr. Nitin Katiyar & Mr. Vikash Kumar Mishra [Distinctive Number 10001 to 36520 - Corresponding Certificate No. 11 and r....
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....nds for making the required products for the final phase of a competition, when Respondent Nos. 2 and 3 were introduced to Respondent No. 5 (partner of the petitioner firm)/Defendant No. 2). Respondent No. 5 agreed to extend loans for the aforesaid purpose and proposed to do the same from his and his wife's (Respondent No. 6/Defendant No. 3) account. 3.3. It is claimed that two loan agreements were executed for the said purpose between Respondent No. 4 company and Respondent Nos. 5 and 6 respectively. Two conditions were laid down for providing loans, that is, 26% of equity shares of Respondent No. 4 company would be pledged to the petitioner firm, where Respondent Nos. 5 and 6 were the only two partners, and Respondent Nos. 5 and 6 would be made Directors in Respondent No. 4 company to ensure that the extended loan is in compliance with the Companies Act, 2013. As per the plaintiffs, they were made to believe that the paperwork for the pledge will be done by Respondent No. 9's (Defendant No. 6/Chartered Accountant) team and the same would be discharged after repayment of loan. 3.4. It is claimed that thereafter Respondent No. 6 started getting involved in the work of Respond....
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....ts like board resolutions and security transfer forms, which have been challenged in the suit, for the purpose of misusing the same to undermine the operations of Respondent No. 4 company and create third party rights. A police complaint was also made by the plaintiffs to this effect. 3.8. The petitioner firm filed an application under Order VII Rule 11 of the CPC on the ground that the Court lacks subject matter jurisdiction to entertain the plaint in view of the bar under Section 430 of the Companies Act, 2013 as the learned NCLT has already assumed jurisdiction over the matter; the plaintiff's are guilty of forum shopping as they are seeking reliefs that overlap with the matter pending before the learned NCLT and the suit is without any cause of action; the suit is barred by law; the plaintiffs have suppressed material facts; the plaint is grossly undervalued and the Court lacks pecuniary jurisdiction to entertain the plaint. 3.9. By the impugned order, the learned Trial Court rejected the grounds agitated by the petitioner firm and found that the objections could be considered at the time of framing of issues. It was observed that as the plaintiffs' claim is primarily in ....
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.... the specialized jurisdiction and wide powers conferred upon the learned NCLT. 7. They relied upon Rules 39, 43 and 70 of the NCLT Rules, 2016 to contend that the NCLT is empowered to examine the issue of forgery and fabrication of documents. They submitted that the fact that the proceedings are pending before the learned NCLT and the plaintiffs are participating in the proceedings without jurisdictional objection makes the bar under Section 430 of the Companies Act, 2013 absolute. They submitted that mere allegation of forgery cannot divest the learned NCLT of its jurisdiction and placed reliance on the following judgments to endorse that the learned NCLT is empowered to look into the issue of forgery: i. Chalasani Udaya Shankar v. Lexus Technologies (P) Ltd. : (2024) 10 SCC 303; ii. Kavita Arora v. Leptons Designtek (P) Ltd. : (2024) 247 Comp Cas 167; iii. SAS Hospitality (P) Ltd. v. Surya Constructions : (2019) 212 Comp Cas 102; and iv. Channel Foods (P) Ltd. v. A.K. Nowshad : 2022 SCC OnLine NCLAT 4443. 8. They further submitted that the subject suit is filed on identical grounds which have been raised by the plaintiffs before the learn....
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....ial. They submitted that there is no provision under the Companies Act, 2013 which vests the learned NCLT with the jurisdiction to grant the relief as prayed for in the subject suit. They further submitted that the draft of the Shareholders Agreement was shared with the defendants through email after the purported execution of the said agreement which clearly shows that the agreement is forged and the dispute in relation to veracity of the same cannot be looked into by the learned NCLT. They relied upon the following judgments in this regard: i. Ammonia Supplies Corpn. (P) Ltd. v. Modern Plastic Containers (P) Ltd. : (1998) 7 SCC 105; ii. Jai Mahal Hotels (P) Ltd. v. Devraj Singh : (2016) 1 SCC 423; iii. Sita Chaudhry v. Verinder Singh : 2022 SCC OnLine Del 2235; iv. Shazia Rehman v. Anwar Elahi : 2023 SCC OnLine Del 4807; v. Morgan Securities and Credits Pvt. Ltd. v. BPL Limited & Ors. : 2023 SCC OnLine Del 119. 13. They submitted that the reliance on Rule 43 of the NCLT Rules, 2016 is misplaced as the same pertains to power of the Tribunal to call for further information or evidence in relation to fabrication of any statutory record....
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....if it is found that the dispute is commercial in nature, the same cannot lead to rejection of plaint and the plaint will need to be returned in such circumstances. 19. The learned counsel for Respondent No. 4 company supported the arguments advanced on behalf the plaintiffs. ANALYSIS 20. At the outset, it is relevant to note that the petitioner has challenged the impugned order by invoking the revisional jurisdiction of this Court. It is trite law that the scope of revision under Section 115 of the CPC is very limited and is to be exercised only if the subordinate Court appears to have exceeded its jurisdiction or to have failed to exercise its jurisdiction, or if the subordinate Court has exercised its jurisdiction illegally or with material irregularity. LAW IN RELATION TO ORDER VII Rule 11 OF THE CPC 21. The law in relation to rejection of plaint under Order VII Rule 11 of the CPC is well settled. The said Rule provides for summary dismissal of a suit at the threshold, before the parties have led their evidence, if one of the grounds stipulated therein is made out. The purpose of the said provision is to stifle sham civil actions and quell bogus and meaningless su....
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....d to be strictly adhered to. 23.6. Under Order 7 Rule 11, a duty is cast on the court to determine whether the plaint discloses a cause of action by scrutinising the averments in the plaint [Liverpool & London S.P. & I Assn. Ltd. v. M.V. Sea Success I, (2004) 9 SCC 512], read in conjunction with the documents relied upon, or whether the suit is barred by any law. XXX 23.9. In exercise of power under this provision, the court would determine if the assertions made in the plaint are contrary to statutory law, or judicial dicta, for deciding whether a case for rejecting the plaint at the threshold is made out. 23.10. At this stage, the pleas taken by the defendant in the written statement and application for rejection of the plaint on the merits, would be irrelevant, and cannot be adverted to, or taken into consideration. [Sopan Sukhdeo Sable v. Charity Commr., (2004) 3 SCC 137] 23.11. The test for exercising the power under Order 7 Rule 11 is that if the averments made in the plaint are taken in entirety, in conjunction with the documents relied upon, would the same result in a decree being passed... 23.12. In Hardesh Ores (P) Ltd....
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....he plaint if it appears "barred by law", including, by invoking the clauses pertaining to ouster of subject matter jurisdiction. 24. Although the petitioner had agitated a number of grounds in its application under Order VII Rule 11 of the CPC, the impugned order has been assailed before this Court on essentially three grounds-the suit could not be entertained by a Civil Court on account of the bar under Section 430 of the Companies Act, 2013; even if the suit is found to be maintainable, the same pertains to a commercial dispute in terms of the Commercial Courts Act, 2015; and the plaint is miserably undervalued. BAR UNDER SECTION 430 OF THE COMPANIES ACT, 2013 25. This Court deems it apposite to first consider the issue of the bar under Section 430 of the Companies Act, 2013 as the same goes to the very root of the jurisdiction of the Civil Court. 26. As noted above, the petitioner has initiated a petition before the learned NCLT alleging oppression and mismanagement against Respondent No. 4 company and others (including the plaintiffs) under Sections 59, 241 and 242 of the Companies Act, 2013 ("Companies Act"). It was only thereafter that Respondent Nos. 1 to 3 filed....
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....of Directors, or manager, or in the ownership of the company's shares, or if it has no share capital, in its membership, or in any other manner whatsoever, and that by reason of such change, it is likely that the affairs of the company will be conducted in a manner prejudicial to its interests or its members or any class of members, may apply to the Tribunal, provided such member has a right to apply under Section 244, for an order under this Chapter. (2) The Central Government, if it is of the opinion that the affairs of the company are being conducted in a manner prejudicial to public interest, it may itself apply to the Tribunal for an order under this Chapter. Provided that the applications under this sub-section, in respect of such company or class of companies, as may be prescribed, shall be made before the Principal Bench of the Tribunal which shall be dealt with by such Bench. (3) Where in the opinion of the Central Government there exist circumstances suggesting that- (a) any person concerned in the conduct and management of the affairs of a company is or has been in connection therewith guilty of fraud, misfeasance, persist....
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....e such order as it thinks fit. (2) Without prejudice to the generality of the powers under sub- section (1), an order under that sub-section may provide for- (a) the regulation of conduct of affairs of the company in future; (b) the purchase of shares or interests of any members of the company by other members thereof or by the company; (c) in the case of a purchase of its shares by the company as aforesaid, the consequent reduction of its share capital; (d) restrictions on the transfer or allotment of the shares of the company; (e) the termination, setting aside or modification, of any agreement, howsoever arrived at, between the company 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 conce....
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....ribunal, any alteration whatsoever which is inconsistent with the order, either in the memorandum or in the articles. (6) Subject to the provisions of sub-section (1), the alterations made by the order in the memorandum or articles of a company shall, in all respects, have the same effect as if they had been duly made by the company in accordance with the provisions of this Act and the said provisions shall apply accordingly to the memorandum or articles so altered. (7) A certified copy of every order altering, or giving leave to alter, a company's memorandum or articles, shall within thirty days after the making thereof, be filed by the company with the Registrar who shall register the same. (8) If a company contravenes the provisions of sub-section (5), the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to twenty-five lakh rupees and every officer of the company who is in default shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees. 430. Civil court not to have jurisdiction.-No civil court shall have jurisdictio....
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....has not given sufficient opportunity to the party to adduce evidence, the Bench, for reasons to be recorded, may allow such document to be produced or witness to be examined or affidavit to be filed or may allow such evidence to be produced. (2) Such document may be produced or such witness examined or such evidence adduced either before the Bench or before such authority as the Bench may direct. (3) If the document is directed to be produced or witness examined or evidence adduced before any authority, the party shall comply with the direction of the Bench and after compliance, send the document, the record of the deposition of the witness or the record of the evidence adduced, to the Bench. (4) Additional evidence or document shall be made available by the Bench to the parties to the proceedings other than the party adducing the evidence and they shall be afforded an opportunity to rebut the contents of the said additional evidence. 43. Power of the Bench to call for further information or evidence.-(1) The Bench may, before passing orders on the petition or application, require the parties or any one or more of them, to produce such further do....
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....unal is of opinion that there are no sufficient grounds for proceedings therewith." 31. From a bare perusal of the aforesaid provisions, it is apparent that Section 430 of the Companies Act, 2013 imposes an absolute bar on the jurisdiction of civil courts to entertain any suit or proceeding in respect of "any matter" which the Tribunal or the Appellate Tribunal is "empowered to determine" by or under the Companies Act or any other law for the time being in force. Moreover, Section 242 of the Companies Act, 2013 confers a broad and remedial jurisdiction on the Tribunal to pass such an order as it thinks fit to bring to an end the matters complained of. 32. It is also pertinent to note that Rule 11 of NCLT Rules, 2016 specifically provide that the Tribunal is vested with the inherent power to make such orders as may be necessary for meeting the ends of justice. Apart from the same, the Tribunal is vested with the power to call the parties to give evidence by way of affidavit and order cross- examination of deponent, if so required. The Tribunal can also call for production of additional evidence as well as further information, and summon witnesses for recording evidence. Rule 4....
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....er rectification, and Company Court has wide exclusive discretion to adjudicate fraud disputes itself, if such disputes are within the peripheral field of rectification, or send the party to seek his relief before a Civil Court for adjudication of some facts falling outside the purview of rectification. It was noted that the deletion of proviso to Section 38 of the Indian Companies Act, 1913 (which empowered the Company Court to direct an issue to be tried in which any question of law may be raised) in the subsequent act does not enable a party to lay claim of many contentious issues for adjudication under the garb of rectification. The matter was remitted for fresh consideration to the High Court as it was felt that it would be appropriate for the Court to assess as to whether the documents which were alleged to be forged, were said to be so only to exclude the jurisdiction of the Court. The relevant portion of the judgment is as under: "25. Now we proceed to examine the power of the court to rectify the Register of Members of a company under Section 155. The question raised for the appellant is that the court under this Act cannot direct an applicant to seek his remedy b....
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.... court is impliedly barred. We have already held above the jurisdiction of the "court" under Section 155, to the extent it has is exclusive, the jurisdiction of the civil court is impliedly barred. For what is not covered as aforesaid the civil court would have jurisdiction. Similarly we find even under Section 446(1), its words itself indicate the jurisdiction of the civil court is not excluded. This sub-section states, "... no suit or legal proceedings shall be commenced ... or proceeded with ... except by leave of the court". The words "except by leave of the court" itself indicate on leave being given the civil court would have jurisdiction to adjudicate one's right. Of course discretion to exercise such power is with the "court". Similarly under Section 446(2), "court" is vested with powers to entertain or dispose of any suit or proceedings by or against the company. Once this discretion is exercised to have it decided by it, it by virtue of the language therein excludes the jurisdiction of the civil court. So we conclude that the principle of law as decided by the High Court that the jurisdiction of the court under Section 155 is summary in nature cannot be faulted. Rever....
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....rable ruling for the appellants, effectively relegating them to a civil suit remedy without invoking Order VII Rule 11(d) of the CPC or explicitly applying Section 430 of the Companies Act, 2013 (the cause of action in that case had arisen prior to this enactment). The appellants argued that Section 59 of the Companies Act, 2013 (which provides for rectification of registers) and Section 430 of the Companies Act, 2013 bar civil jurisdiction in matters for which power has been conferred upon NCLT. The Hon'ble Apex Court found that the appropriate course of action would be to relegate the parties to the remedy before NCLT rather than Civil Court. It was held that: "5...The effect of the aforesaid provision is that in matters in respect of which power has been conferred on NCLT, the jurisdiction of the civil court is completely barred. 6. It is not in dispute that were a dispute to arise today, the civil suit remedy would be completely barred and the power would be vested with the National Company Law Tribunal (NCLT) under Section 59 of the said Act. We are conscious of the fact that in the present case, the cause of action has arisen at a stage prior to this enactme....
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....d it is only complex questions of title which would fall outside its jurisdiction. The relevant portion of the judgment is reproduced hereunder: "33. In Jai Mahal Hotels (P) Ltd. v. Devraj Singh [Jai Mahal Hotels (P) Ltd. v. Devraj Singh, (2016) 1 SCC 423 : (2016) 1 SCC (Civ) 354], this Court again held that issues which truly relate to "rectification" of the Register fall within the summary jurisdiction of the Company Law Board and only complex questions of title fall outside its jurisdiction. It was observed that there is a thin line in appreciating the scope of jurisdiction of the Company Court and the jurisdiction is exclusive, if the matter truly relates to "rectification", but if the issue is alien to "rectification", such matter may not be within the exclusive jurisdiction of the Company Court. XXX 41. In the present case, proper verification of the assertions made by the parties was a sine qua non. The Acting President of NCLT, by failing to carry out the said exercise, failed to discharge the mandate of law. Exercise of power under Section 59 of the 2013 Act is to be undertaken in right earnest by examining the material, evidence, and the facts o....
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....y shareholder and director in the respondent company) alleged oppression and mismanagement through fraudulent acts, including a forged gift deed on the strength of which the appellant's shares were transferred, invalid board resolutions whereby the appellant's alleged resignation was accepted and one of the respondents was inducted as an additional director, and fabricated resignation records. The NCLT ruled in favour of the appellant and declared the transfer of the appellant's shares by way of the gift deed to be null and void. The appellant was also restored to her position as an executive director. Subsequently, NCLAT reversed the decision, holding the issues of fraud, forgery or coercion to be beyond NCLT's summary jurisdiction. The Hon'ble Supreme Court decided in favour of the appellant. It was observed that the circumstances surrounding the gift deed were seriously questionable and the board meetings had been conducted in a mala fide manner, which show that the affairs of the company in question were being conducted in a manner prejudicially affecting the appellant. The order of NCLAT was set aside and the NCLT's decision was restored, whereby the gift deed and share tra....
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....The plaintiff also sought decree of injunctions restraining defendants from giving effect to the allotment or exercising any voting rights or creating any third-party rights. The defendants moved an application under Order VII Rule 11 of the CPC to reject the plaint as barred by Section 430 of the Companies Act, 2013. Taking note of the change in legislative scheme, this Court held as under: "10...The NCLT has been vested with powers that are far reaching in respect of management and administration of companies. The said powers of the NCLT include powers as broad as "regulation of conduct of affairs of the company" under Section 242(2)(a), as also various other specific powers. NCLT is a tribunal which has been constituted to have exclusive jurisdiction in the conduct of affairs of a company and its powers can be contrasted with that of the CLB under the unamended Companies Act, 1956. 11. In the 2013 Act, Sections 407 onwards deal with the constitution of the Tribunal. Section 420 has vested the Tribunal with powers to 'pass such orders thereon as it thinks fit'. The Tribunal is also vested with the power of review. Under Section 424 of the Companies Act, 2013, th....
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.... than what a Civil Court can do. Even if in the present case, the Court grants the reliefs sought for by the Plaintiff, after a full trial, the effective orders in respect of regulating the company, and administering the affairs of the company, cannot be passed in these proceedings. Such orders can only be passed by the NCLT, which has the exclusive jurisdiction to deal with the affairs of the company. 17. Moreover, the powers of the NCLT being broader and wider than what can be exercised by this Court in exercise of civil jurisdiction under Section 9 CPC. The NCLT is a specialised Tribunal constituted for the purpose of speedier and effective regulation of the affairs of the companies. As observed by the Supreme Court in Union of India v. R. Gandhi (2010) 11 SCC 1 (hereinafter, 'R. Gandhi') and thereafter, in Madras Bar Association v. Union of India (2015) 8 SCC 583 (hereinafter, 'Madras Bar Association') the NCLT has been created by a specific amendment in the law. The constitution of the NCLT has been upheld... XXX 19. The bar under Section 430 of the 2013 Act being absolute in nature, this Court is of the view that the jurisdiction to adjudicate the d....
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.... to be challenged, a suit is open. A writ of certiorari may include a direction for refund if the claim is clearly within the time prescribed by the Limitation Act but it is not a compulsory remedy to replace a suit. (5) Where the particular Act contains no machinery for refund of tax collected in excess of constitutional limits or illegality collected a suit lies. (6) Questions of the correctness of the assessment apart from its constitutionality are for the decision of the authorities and a civil suit does not lie if the orders of the authorities are declared to be final or there is an express prohibition in the particular Act. In either case the scheme of the particular Act must be examined because it is a relevant enquiry. (7) An exclusion of the jurisdiction of the civil court is not readily to be inferred unless the conditions above set down apply." (Emphasis supplied) 27. The Division Bench in Jai Kumar Arya (supra), after applying Dhulabai (supra), lays down the following test: "102 From the above authorities, the primary indicia, which would govern determination of the question of whether the jurisdiction of civil court....
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....ction 59 of the Companies Act, 2013, which is cognizable exclusively by NCLT. It was further held that Section 430 of the Companies Act, 2013 ousts civil court jurisdiction for such matters and there is no triable issue warranting plenary adjudication. It was thus opined that the Trial Court and First Appellate Court were respectively justified in rejecting the plaint under Order VII Rule 11 of the CPC, and the second appeal was dismissed with no interference. The Hon'ble High Court, relying upon the cases of SAS Hospitality (P) Ltd. & Anr. v. Surya Constructions Pvt. Ltd. & Anr. (supra) and Shashi Prakash Khemka v. NEPC Micon (supra), held as follows: "42. The grievance of the Plaintiff in the suit as culled out from the averments made in the plaint is that the name of Kumar Harishchandra has been omitted without his knowledge and consent and that has been substituted by the names of the contesting Defendants, and they have been illegally included / entered in the Register of the Members of the Company. These are now sought to be rectified and the Plaintiff with others claim their inclusion/entry in the Register of the Members of the Company. Thus, such grievance....
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....rship with all the rights and privileges appertaining thereto. The shareholding of the plaintiff in defendant No. 2 Company was illegally and fraudulently transferred/reduced by Defendant No. 1 from 5002 to 547 shares, bringing it down from 12.77% of the issued share capital to 1.39% of the issued share capital of the Company. As Transferred Shares, belonging to the plaintiff, were transferred fraudulently and illegally by defendant No. 1, the plaintiff was constrained to file the present suit seeking prayers of declaration, mandatory injunction and permanent injunction in order to assert her individual rights in respect of the Transferred Shares, in opposition to the individual rights asserted by defendant No. 1 qua the Transferred Shares. XXX 15. In the present case, prior to rectification of the register of members, inter alia, (a) the fraudulent execution of the share transfer forms would be required to set aside and declared void ab initio; and (b) the question of title of the Plaintiff in relation to the Transferred Shares would be required to be adjudicated; (c) the question whether Plaintiff was paid the consideration for the so called transfer shares be r....
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....raud. 19. Per section 430 of Companies Act, 2013 civil court's jurisdiction is diminished only to an extent the Ld. NCLT has been correspondingly empowered. A bare reading of section 430 of the Companies Act, 2013, makes it clear the extent of the ouster of the jurisdiction of the civil court is directly proportionate to the extent of conferment of jurisdiction on the Ld. NCLT. Further, it is settled law the exclusion of the jurisdiction of the Civil Courts is not to be readily inferred, but that such exclusion must either be explicitly expressed or clearly implied. There is a thin line in appreciating the scope of jurisdiction of Ld. NCLT. In the present case, the jurisdiction of the Ld. NCLT would have been exclusive if the matter truly pertained to rectification of register of members. However, if the issue is alien to rectification of register of members such matter would not be within the exclusive jurisdiction of the Ld. NCLT. 21. Thus, in the present matter, the question relates to disputed title and fraudulent transfer of the Transferred Shares. Therefore, learned NCLT, being a summary jurisdiction, is not empowered to decide such questions and said qu....
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....pany Court and if it finds adjudication of any matter not falling under it, it may direct a party to get his right adjudicated by a civil court. In N. Ramji v. Ashwath Narayan Ramji, 2017 SCC OnLine Mad 37591 the court held it is relevant to note as per Section 111A of the Companies Act, 1956, the Company Law Board was empowered to decide the issue of title also. The word 'title' was not included in Section 58 of the Companies Act, 2013. Even while considering the Section 111A, it was held by the Hon'ble Apex Court a seriously disputed question of title cannot be decided by the Company Court or Company Law Board. This conclusion was arrived by the Hon'ble Apex Court by taking into consideration of the jurisdiction of the Company Law board is summary in nature. The procedure in National Company Law Tribunal constituted under the Companies Act, 2013 is also summary in nature. 23. I have also gone through the judgments relied upon by the learned counsel for defendants. In Shahi Prakash Khemka (supra) the observations of the Hon'ble Supreme Court were not in the context of disputed title to the shares. In the said case the dispute was not amongst the members in rel....
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.... in relation to bar under Section 430 of the Companies Act, 2013 on essentially two counts-firstly, that the learned NCLT does not have the jurisdiction to decide the dispute involved in the suit as the same pertains to declaration of certain documents as forged, which is primarily a civil dispute; and secondly, that the primary relief in the suit is in relation to declaration of certain documents as forged and the learned NCLT has no jurisdiction to declare documents as such, due to which, the suit is not hit by the bar under Section 430 of the Companies Act, 2013. 37. Firstly, insofar as the NCLT's jurisdiction to decide the issue of forgery is concerned, the plaintiffs allege that the basis on which the company petition is filed is itself under serious question as the documents on the basis of which the petitioner claims to be a shareholder are forged. Undisputably, the said defence has been agitated by the plaintiffs before the learned NCLT as well. 38. It is apparent from the aforesaid judgments that there is nothing in the Companies Act, 2013 which estops the NCLT from rendering a finding that the documents in question are forged, even under summary procedure, and the l....
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.... in pleas of fraud being agitated solely to oust the jurisdiction of the NCLT. As held in Ammonia Supplies Corpn. (P) Ltd. v. Modern Plastic Containers (P) Ltd. (supra), even where allegations of fraud are made, it is incumbent that the learned NCLT determine as to whether such contentions are raised merely to oust its jurisdiction. 43. During the course of arguments, the petitioner had relied upon the case of Kavita Arora v. Leptons Designtek (P) Ltd. (supra), where a Coordinate Bench of this Court had found that the Tribunal has the requisite jurisdiction to adjudicate the allegations of forgery and fabrication by placing reliance upon Rule 43 of the NCLT Rules, 2016, to contend that the NCLT is vested with sufficient powers to determine issues of fraud. The plaintiffs have contested the said assertion by arguing that the said Rule has limited applicability qua statutory records alone, however, the documents in the present case, including the Shareholders Agreement et al., have not been made part of the statutory records of the company. 44. While it may be correct that the documents in question are not part of the statutory record of Respondent No. 4 company, even otherwise....
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....complex or convoluted that the aforesaid issues cannot be determined by the Tribunal in exercise of its wide powers as encompassed in the Companies Act, 2013 and NCLT Rules, 2016. 50. Secondly, as far as the issue in relation to NCLT not having the jurisdiction to grant the reliefs that are sought is concerned, pertinently, Section 242 of the Companies Act, 2013 clearly empowers the NCLT to nullify the legal effect of such documents. In fact, where the lis concerns oppression and mismanagement under Sections 241 and 242 of the Companies Act, 2013, the statute permits restrictions on transfer or allotment of shares; permits termination, setting aside or modification of agreements with directors, managers and with any other person, and concludes with a residuary head that the Tribunal may provide for any other matter for which it is just and equitable that provision should be made. 51. Reliance is placed by the plaintiffs on the case Shazia Rehman v. Anwar Elahi (supra) to contend that the power of the learned NCLT to grant reliefs is severely limited. As discussed above, in the said case, a Coordinate Bench of this Court was pleased to reject the argument raised by the defenda....
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....ffairs of the company which is being conducted in a manner prejudicial or oppressive to any member or members and that to wind up the company would unfairly prejudice such member or members, but the facts justify the makings of a winding up order, the power of the NCLT can be invoked. However, in the present suit the plaintiffs do not claim winding up of the defendant No. 1 Club which is a company by guarantee. As noted above, the cause of action pleaded by the plaintiff in this suit is the manner in which Article 13(3)(b) of the Articles of Association of the defendant company is being interpreted thereby creating irrational and illegal`. classification. NCLT not being empowered to determine the said cause of action, this Court is of the opinion that the plea of the defendant that the present suit is not maintainable and only a petition before the NCLT is maintainable, is liable to be rejected. Thus, issue No. 1 is decided in favour of the plaintiffs and against the defendant No. 1." 53. It cannot be disputed that a Civil court's jurisdiction is ousted only to the extent the statutory forum is expressly and correspondingly empowered, and such exclusion is not to be lightly infe....
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.... suit are such which are integral to the petition already filed by the petitioner before the learned NCLT. 56. Moreover, in the opinion of this Court, the words "any matter" in Section 430 of the Companies Act, 2013 are to be understood in contradistinction of "any reliefs" which the Tribunal is empowered to grant. The ouster of jurisdiction of Civil Court is not limited to or conditional on the ability of the Tribunal to grant a relief of a particular nature and is rather hedged upon the wider phrase - "any matter", which the Tribunal is empowered to determine. Thus, the learned Trial Court has erred gravely in limiting the applicability of the ouster in Section 430 of the Companies Act, 2013 on the basis of the apparent inability of the NCLT to grant a particular relief. Though a party cannot approach the Tribunal for solely seeking declarations qua title, the NCLT is empowered to determine such an issue if the same is integral to the complaint instituted before it and to nullify the effect of the subject documents in pursuance of a just and equitable resolution. 57. In the present case, at the cost of repetition, it is also imperative to emphasise that the learned NCLT has....
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....nder Section 34 of the Sarfaesi Act and by such a clever drafting the plaintiff intends to bring the suit maintainable despite the bar under Section 34 of the Sarfaesi Act, which is not permissible at all and which cannot be approved. Even otherwise it is required to be noted that it is the case on behalf of the plaintiff-appellant herein that in view of the approved resolution plan under IBC and thereafter the original corporate debtor being discharged there shall not be any debt so far as the plaintiff-appellant herein is concerned and therefore the assignment deed can be said to be "fraudulent". 10. The aforesaid cannot be accepted. By that itself the assignment deed cannot be said to be "fraudulent". In any case, whether there shall be legally enforceable debt so far as the plaintiff-appellant herein is concerned even after the approved resolution plan against the corporate debtor still there shall be the liability of the plaintiff and/or the assignee can be said to be secured creditor and/or whether any amount is due and payable by the plaintiff, are all questions which are required to be dealt with and considered by the DRT in the proceedings initiated under the Sarf....
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....nd for which the Companies Act, 2013 furnishes no forum or remedy, would escape Section 430 of the Companies Act, 2013. 62. In every case, where the controversy is anchored in the company's affairs and the issue is one which the Tribunal or the Appellate Tribunal is empowered to determine the matter in question, Section 430 of the Companies Act, 2013 bars parallel civil suits and compels recourse to the NCLT and, in appeal, to the NCLAT, strengthening the case for regaling such disputes to the NCLT. 63. Even if the case of the plaintiffs is taken at the highest, the doctrine of judicial comity emphasises mutual respect and deference among courts to avoid conflicting decisions and to promote judicial harmony and may be invoked in challenges under Order VII Rule 11(d) of the CPC (rejection of plaint as "barred by any law" due to statutory ouster or parallel proceedings). While comity is discretionary and often overlaps with statutory bars, it serves as an underlying principle to interpret these provisions, particularly in cases of concurrent jurisdiction or multiplicity of proceedings. 64. Courts ought to apply the said doctrine to restrain proceedings where another forum's ....