Andhra Pradesh High Court
Judges : R.M.BAPAT
Pandian Graphites (India) Ltd. - Appellant
Versus
Lovvuri Lakshmi - Respondent
Decided On : 12-14-95
COMPANIES ACT - JURISDICTION - SECTION 10 - COURT JURISDICTION - CIVIL COURT JURISDICTION - TERRITORIAL JURISDICTION - REGISTERED OFFICE LOCATION - CENTRAL GOVERNMENT NOTIFICATION - CAUSE OF ACTION - SUBJECT MATTER JURISDICTION - PECUNIARY JURISDICTION - CIVIL PROCEDURE CODE, 1908 - SECTION 9 - SECTION 20 - INTERPRETATION - APPLICATION TO COMPANIES ACT - JURISDICTION OF CIVIL COURT TO ENTERTAIN SUIT AGAINST COMPANY - DETERMINATION.
Fact of the Case:
Plaintiff filed a suit against the defendant company, seeking various reliefs, including shares, compensation, and damages. The defendant company challenged the jurisdiction of the civil court at Ramachandrapuram to try the suit, arguing that the court lacked territorial jurisdiction as the company's registered office was located in Madras. The plaintiff contended that the court had jurisdiction based on the cause of action arising within its jurisdiction and relied on provisions of the Civil Procedure Code, 1908.
Finding of the Court:
The court held that the civil court at Ramachandrapuram lacked territorial jurisdiction to entertain the suit. It interpreted section 10 of the Companies Act, 1956, which deals with the jurisdiction of courts in matters related to companies, and found that the Central Government had the authority to confer jurisdiction on District Courts by issuing a notification in the Official Gazette. However, the plaintiff had not provided any evidence that such a notification had been issued conferring jurisdiction on the court at Ramachandrapuram.
Issues: 1. Whether the civil court at Ramachandrapuram had territorial jurisdiction to entertain the suit against the defendant company. 2. Whether the provisions of the Civil Procedure Code, 1908, specifically sections 9 and 20, could confer jurisdiction on the civil court in this case.
Ratio Decidendi: 1. The court relied on section 10 of the Companies Act, 1956, which provides that the High Court having jurisdiction in relation to the place where the registered office of the company is situated has jurisdiction to entertain suits related to the company. It also noted that the Central Government could confer jurisdiction on District Courts by issuing a notification in the Official Gazette. 2. The court held that the provisions of the Civil Procedure Code, 1908, specifically sections 9 and 20, could not confer jurisdiction on the civil court in this case because the jurisdiction of the court in matters related to companies was specifically governed by the Companies Act, 1956.
Final Decision: The court allowed the revision petition filed by the defendant company and set aside the order of the civil court at Ramachandrapuram appointing an Advocate-Commissioner. It directed the court to return the plaint to the plaintiff for filing in the proper court having jurisdiction.
( 1 ) THIS civil revision petition is filed by the petitioner herein under article 227 of the Constitution of India.
( 2 ) THE petitioner herein is the first defendant in O. S. No. 63 of 1995, filed by the plaintiff first respondent herein in the court of the Subordinate Judge, Ramachandrapuram. The original plaintiff also filed I. A. No. 1011 of 1995, in the same proceedings.
( 3 ) THE plaintiff first respondent herein had filed the suit against the petitioner herein claiming various reliefs. It is stated by the plaintiff in her plaint in nutshell that she is entitled for different types of shares, compensation, etc. The prayer made by the plaintiff in the suit reads as follows :" (A) declaring that the plaintiff is entitled to 3,500 shares of Rs. 10 each, out of 5,000 shares issued in lieu of 500 shares of Rs. 100 each by the first defendant; (b) to grant a consequential mandatory injunction directing defendants Nos. 1 to 5 and 7 to issue 3,500 shares of Rs. 10 each to the plaintiff which are lying with them; (c) declaring that the plaintiff is entitled to 7,812 shares of Rs. 10 each under the promoters quota while the public issue was made by the first defendant in the years, 1994; (d) to grant a consequential mandatory injunction directing defendants Nos. 1 to 4 and 7 to issue 7,812 shares of Rs. 10 each to par to the plaintiff with all the consequential benefits; (e) for recovery of Rs. 20,000 from defendants Nos. 1 to 4 and being the dividends payable by the first defendant to the plaintiff on her shares of 7,812; (f) for recovery of Rs. 4,55,000 from defendants Nos. 1 to 4 and 7 as damages for their inaction and delay in sending the split shares in time when demanded by the plaintiff; and (g) to grant a mandatory injunction directing to issue to the plaintiff future rights, bonus issues and dividends as and when declared by the first defendants. "
( 4 ) DURING the pendency of the suit, she had also filed an application for appointment of an Advocate-Commissioner with a prayer that the Advocate-Commissioner should visit the registered office of the first defendant-company, check all the account books, share certificates, etc. , for the purposes of filing a report in the court so that the first defendant-company may not tamper with the evidence which is likely to come before the court during the trial. Being aggrieved by the appointment of the Advocate-Commissioner, the present civil revision petition is filed by the first defendant-company under article 227 of the Constitution of India.
( 5 ) IT is also contended by the first defendant-petitioner herein that the court at Ramachandrapuram has no jurisdiction to try the suit.
( 6 ) THE original plaintiff, i. e. , the first respondent herein, had filed the suit for getting reliefs with the following averments; that she had invested a sum of Rs. 50,000 towards 500 shares of Rs. 100 each with the first defendant-company. It is further stated by her that the defendant No. 1 made a public issue of equity shares of Rs. 10 each at par. While making the public issue, the first defendant reserved 7,81,250 shares at Rs. 10 each for the promoters which she was not given though she is a promoter of the first defendant-company. It is the further case of the plaintiff that she is entitled for rights issue, which was not given to her by the first defendant-company. For all these reasons, she had filed the suit against defendant No. 1 and others with the prayers as stated in the earlier paragraphs of my order.
( 7 ) LEARNED counsel for the petitioner first defendant submitted at the Bar that the civil court at Ramachandrapuram has no jurisdiction to entertain the suit. Learned counsel for the petitioner herein invited my attention to section 10 of the Companies Act, which reads as follows :"jurisdiction of courts.- (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 offic
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