The civil court has jurisdiction to decide the question of alleged disqualification of a director of a company under the Companies Act, 1956, in the context of section 211 and section 10 of that Act, and section 9, Civil Procedure Code.

M. JAGANNATHA RAO, J.

( 1 ) THE point of law raised in this writ petition relates to the jurisdiction of the civil court to entertain a civil suit involving the question as to the disqualification of the director of a company, under the Companies Act, 1956, in the context of sections 2 (11), 10, 283, and 299 of the Companies Act (hereinafter called "the Act") and section 9 of the Code of Civil Procedure.

( 2 ) THE petitioner is a company registered under the Act and the first respondent is the Principal subordinate Judge, Tirupathi. The second respondent, Sri N. S. Vasantakumar, who is the plaintiff in the suit was the managing director of the petitioner-company. The petitioner- company was initially having its registered office at Secunderabad. A proposal to shift the registered office of the company from Secunderabad to Tirupathi was accepted by the board of directors at a meeting dated 13/06/1980. At Tirupathi, the company was to be located in premises bearing No. 194/c, Prakasam Road, Tirupathi, as a lessee of another firm, M/s Triveni Enterprises, which, in its turn,. was the principal lessee from the owners of the building. Certain disputes arose among the directors of the petitioner-company in September, 1983. The matters came to a crisis during February, 1984. the second respondent-plaintiff was a partner of M/s Avanthi Enterprises with whom the petitioner-company entered into the sub- lease. The second respondent had not "specifically" disclosed the fact of his being a partner of M/s Avanthi Enterprises to the company as required by section 293 read with section 299 of the Act. On that ground, the other directors are said to have passed a resolution on 13/02/1984, that the petitioner has become disqualified from being a director with retrospective effect from 13/06/1980. This was because 13/06/1980, was the date on which the company passed a resolution in shift the registered office from Secunderabad to Tirupathi and, according to the petitioner, was the date on which the second respondent did not "specifically" disclose his being a partner of Triveni Enterprises and incurred the disqualification. A letter intimating the passing of this resolution was communicated to the second respondent by a letter dated 14/02/1984. The second respondent denies the passing of any such resolution.

( 3 ) THE second respondent then filed the present suit stating that he was present at the meeting which took place on 13/02/1984, and no such resolution disqualifying him was passed. The allegation of the petitioner that the second respondent had walked out of the meeting when this item was taken up in the agenda was denied.

( 4 ) THE reliefs claimed in the suit are for a declaration that the plaintiff, second respondent, is and continues to be the managing director of the first defendant (petitioner-company) and for a further declaration that any board meeting held by the petitioner subsequent to 13/02/1984, is null and void and also for a further declaration that any change effected on the board of the petitioner subsequent to 13/02/1984, is illegal and for a permanent injunction restraining the defendants therein from interfering with the office of the second respondent-plaintiff as managing director in the day-to-day affairs of the petitioner-company. In the lengthy plaint, the second respondent has also set out various facts, which, according to him, show that the other directors of the company including the chairman, formed into one group to oust the second respondent from the board of directors and that they had thus infringed the rights of the minority arbitrarily and with mala fide intentions. It is also alleged in the plaint that the second respondent was excluded by all the other directors who joined into a kind of an illegal arrangement to siphon off the funds of the company with a view to damage the interest of the shareholders. There were also certain interlocutory orders passed in the suit.

( 5 ) IT was at that stage that th

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