AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 1482
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....utta Club Limited (hereinafter referred as "club") a company incorporated under the Indian Companies Act 1913, from in any manner giving effect to the EOGM. 3. In the suit, the plaintiff, who is a senior citizen and a qualified chartered accountant claimed to be a member of the club for over 40 years. He was elected as a committee member in the general committee of the club for 9 years. During the period 2018-19 the plaintiff was Chairman of the finance sub-committee of the club. 4. An election of the general committee of the club was held on 23/12/2020, as a result of which the committee was reorganized. A new committee by a show cause notice dated 18/08/2021 communicated the decision of the Managing Committee of the club as per resolution taken in the EOGM dated 12/12/2020. The resolution was founded on a forensic audit/review conducted by Ernst and Young (hereinafter referred to as 'defendant No. 3'). 5. The substance of the alleged financial lapse detected by the forensic audit was that the plaintiff as Chairman of Finance sub-committee made investments without any communication to, or approval from the Managing Committee of the club; and that without obtaining quotati....
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....he show cause notice sent to the Appellant was illegal, and the suspension letter dated 27th September, 2021 was wrongful, illegal and invalid. The Appellant sought consequential decrees of perpetual and mandatory injunction. The Appellant filed an Application under Order XXXIX Rule 1 and 2 along with the Plaint, seeking temporary injunction against his suspension from the Club. 13. Respondent No. 1 filed an application before this Hon'ble Court seeking a transfer of the suit to this Hon'ble Court on the ground that a similar civil suit is pending before this Hon'ble Court. Such application was allowed, and the suit was transferred to this Hon'ble Court. During such proceedings, Respondent No.1 did not contend that the Civil Court did not have jurisdiction to try and entertain the present suit. 14. The Appellant submits that a plain reading of Section 2(2) of the CPC, which deals with the definition of a decree, clearly shows that the said provision carves out an exception in the case of an adjudication from which an appeal lies as an appeal from an order. The said provision is reproduced below: "(2) "decree" means the formal expression of an adjudica....
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....etain us from proceeding to dispose of the appeal, considering the law that when technicality is pitted against substantial justice, the later must prevail. 17. The Learned advocate for the appellant/plaintiff submits that the impugned order of the Hon'ble Single Judge dismissing the suit as being not maintainable, is factually and legally unsustainable. 18. He further submits that there is no established procedure which can be said to be violated by the plaintiff. The decisions to make investments were ratified unanimously by the Managing Committee. There were also no established norms requiring obtaining of quotations from banks prior to a decision to make investments of the surplus funds of the club. The investments were made for the benefit of the club, which continues to reap the benefits of such investment which witnessed robust growth. The investments were made with reputed banks. He further submits that the plaintiff brought on record overwhelming evidence that the EOGM, resolutions were product of a pre-meditated decision of the new Managing Committee of the club to wrongfully and illegally suspend the plaintiff on baseless grounds and unsustainable allegations. 1....
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.... after affording the plaintiff an opportunity of hearing to meet the requirement of the principles of natural justice. 25. The Hon'ble Single Judge in the suit held that Civil Court does not have jurisdiction to deal with the issue, we therefore take note of Section 430 of the Companies Act, 2013 which is as follows: "430. Civil court not to have jurisdiction.-No civil court shall have jurisdiction 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 this Act or any other law for the time being in force and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or any other law for the time being in force, by the Tribunal or the Appellate Tribunal" 26. From the section it transpires that no Civil Court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the NCLT or the NCLAT is empowered to determine. 27. Section 241 of the Companies Act lays down as follows: "241. Application to Tribunal for relief in cases of oppress....
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.... (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 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 suc....
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.... reported in 2019 SCCC OnLine Del 9010 again is a judgment rendered by a learned Single Judge Bench, that also of another High Court. This judgment also has no binding effect on the present forum. We also notice the fact that the learned Single Judge therein proceeded on a finding that "subject matter of the present suit is not mismanagement but the action of the defendant of issuing notice to the plaintiffs to show cause why the membership of the plaintiffs should not be terminated." The facts, therefore, in the said case is essentially different from the present case, wherein the plaintiff has substantially raised a grievance against alleged oppressive EOGM. This judgment, therefore, also does not help the case of the appellant to sustain maintainability of the case stated in the plaint before a Civil Court. c) He has also relied upon decision of a Single Judge judgment of the Madras High Court in the case of D. Pradhaman vs. The Towers Club reported in 2014 (1) CTC 32 to submit that in view of the provisions contained in Section 9 CPC the Civil Court has jurisdiction to try all suits. The suit involves civil right of the petitioner. The respondents therein took a plea t....
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....erred powers to address grievance arising out of affairs of a company which may be prejudicial or oppressive to any member of the company. The Delhi High Court thus has held that the Trial Court did not have jurisdiction to entertain the suit. 36. Learned Counsel for the appellant has also relied upon the judgment in the case of Vikram Jairath (supra) to submit that in the present case all the reliefs claimed in the plaint are not exclusively amenable to the NCLT, therefore, the suit, was maintainable. 37. The issue, viewed from the plaintiff's perception, without any doubt raises an issue of the EOGM being an act of alleged oppression of the plaintiff (member) by the company. Such issue also falls within the scope of the above noted provisions of the Companies Act 2013, for which jurisdiction lies exclusively under the NCLT. In view of the jurisdiction ouster clause in Section 430 of the Companies Act, we are of the opinion that there is an ouster of jurisdiction of the civil Court with respect to the issue raised in the plaint. 38. We are not inclined to accept the submission advanced by the learned Advocate for the appellant that only one relief is amenable to the NCLT.....