Andhra Pradesh High Court
Judges : R.RAMANUJAM, S.B.SINHA, V.V.S.RAO
K.Venkat Rao - Appellant
Versus
M/s.Rockwool (India) Limited, Hyderabad - Respondent
Decided On : 11-20-01
Companies Act, 1956 - Section 283 (l) (f) – Arbitration and Conciliation Act, 1996 - Section 8 - conflicting – Jurisdiction - whether an application filed by a director of a Company before a Company judge challenging a notice in terms whereof his shares were directed to be forfeited and was directed to vacate office can be entertained by this Court is question involved in this petition - This Court to entertain petition referred matter for a decision by appropriate Bench - When matter was listed before a Division Bench of this Court it having regard to importance of question involved in matter referred matter to Full Bench by an order – Held, Division Bench of Bombay High Court while considering question where a suit was filed for a declaration that first defendant has ceased to be a Director it was directed that decisions taken by board of Directors were void - Referring to of Companies Act it was opined: it is however quite clear from reading of these two sections that there is no ouster of jurisdiction of a Civil court in all cases where provisions of Companies Act may be attracted - It is only in respect of these proceedings which are expressly contemplated Companies act any specific provision that Court which is referred to in that section would be special Court namely High Court or Notified district Court - In all other cases ordinarily Civil Courts would continue to have jurisdiction - This has been so held by a Single Judge of our high Court in the case – Order Accordingly
( 1 ) WHETHER an application filed by a director of a Company before a Company judge challenging a notice in terms whereof his shares were directed to be forfeited and he was directed to vacate the office, can be entertained by this Court is the question involved in this petition. REASONS FOR REFERENCE:
( 2 ) A learned Company Judge having noticed two conflicting decisions in m/s. Nizamabad Corn Products Pvt. Ltd. , v. Vasudev Dalia and in Avanthi Explosives v. Principal Subordinate Judge as regards jurisdiction of this Court to entertain such petition, referred the matter for a decision by appropriate Bench. When the matter was listed before a Division Bench of this Court, it having regard to the importance of the question involved in the matter referred the matter, to Full Bench by an order dated 17-10-2001. FACTS:
( 3 ) THE petitioner herein by reason of the impugned notices was declared to have ceased to be a Director of the first respondent company with effect from 21-7-2001 in terms of Sec. 283 (l) (f) of the companies Act on the ground that he had failed to deposit the call money of the shares. The said decision was communicated to him by notice dated 30-8-2001 by the first respondent.
( 4 ) THE Company petition was filed praying this Court to declare the notice dated 30-8-2001 as also another notice dated 30-8-2001 issued by the respondent company to the petitioner as illegal, ultra vires the Articles of Association of the respondent company and the provisions of sections 283 and 292 of the Companies Act, 1956 (for brevity the said Act ), null and void.
( 5 ) SECTION 283 of the said Act provides for certain contingencies on occurrence of which the office of the Director shall become vacant. SUBMISSIONS:
( 6 ) MR. Kodanda Ram, the learned counsel appearing on behalf of the petitioner would submit that having regard to the definition of court as contained in Section 2 (11) as also the provisions contained in Section 10 of the said Act, an application filed before a company Judge is maintainable despite the fact that the Civil Court may also have jurisdiction to adjudicate upon the dispute. The learned counsel would contend that the company Court is also a Civil Court and if a right can be adjudicated in a Civil Court, the same can also be adjudicated upon by a company Court.
( 7 ) THE learned counsel in support of his contention has placed strong reliance on the decisions in Avanthi Explosives (supra), nava Samaj Ltd. , v. Civil Judge, Class I, rajnandgaon, British India Corporation v. Robert Menzies.
( 8 ) MR. Bimal Bhaskar, the learned counsel appearing for the respondents on the other hand would submit that the Civil Court having regard to the provisions contained in section 9 of the C. P. C. has got the exclusive jurisdiction to deal with such matter. The learned counsel would contend that section 283 (l) (f) postulates automatic cessation of directorship and no application challenging the same is contemplated in respect thereof. Strong reliance in this connection has been placed on Santosh poddar v. Kamalkumar Poddar, Radhakrishnan v. Thirumani Asphalts and Pelts, Tejprakash S. Dandi v. Coramandal Pharmaceuticals Ltd. STATUTES:
( 9 ) SECTION 2 (11) of the Companies Act defines court to mean (A) with respect to any matter relating to a company (other than any offence against this Act), the Court having jurisdiction under the Act with respect to that matter relating to that company, as provided in section 10; (B) with respect to any offence against this Act, the Court of a Magistrate of the First Class, or as the case may be, a Presidency Magistrate, having jurisdiction to try such offence. Section 10 of the Companies Act reads thus: (1) The Court having jurisdiction under this Act shall be- (a) the High Court having jurisdiction in relation to the place at which the registered office of the company concerned is situate, except to the extent to which jurisdiction has been conferred on any District
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.