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1994 Supreme(Bom) 202

IN THE HIGH COURT OF BOMBAY
Dr. Saraf B.P., J.
Khetan Industries Pvt. Ltd. others.... Petitioners.
Versus
Manju Ravindraprasad Khetan.... Respondent.
Civil Revision Application No. 597 of 1990, decided on 29-4-1994.
Advocates appeared :
D.S. Parikh R.D. Suvarna, for petitioners.
Pankaj Kowli i/b M/s Mayur Narendra Co., for respondents.

Headnote:Section 284-Civil Procedure Code. 1908, Section 9-Directors of company-Removal of.

       Suit for not be entertained by Civil Court because matter governed by special provisions of Companies Act.

       

JUDGMENT - Dr. SARAF B.P., J.:—Two questions of law arise for consideration in this revision application viz. (1) which is the principal Civil Court for Bombay for the purpose of proceedings for removal of the trustees under Chapter 7 of the Indian Trusts Act, 1882 and whether a civil suit lies for removal of directors of a private limited company incorporated under the Companies Act, 1956.

2. A suit was filed by the respondents against the petitioners (original defendants) in the City Civil Court, at Bombay claiming following reliefs :

“(a) This Hon'ble Court will be pleased to remove the defendants Nos. 3 to 5 from the trusteeship of the defendant No. 2 and be pleased to appoint some other fit and proper person as trustee of the 2nd defendant's trust.

(b) This Hon'ble Court will be pleased to remove the defendants No. 3, 6 and 7 from the post of Directors and be further pleased to appoint some other fit and proper persons as Directors of the defendant No. 1 - Company.

(c) The defendants Nos. 3 to 5 be restrained by a permanent as also interim and ad interim order and injunction of this Hon'ble Court from acting as trustees of defendant No. 2 — trust as also from dealing with or disposing of the assets of defendant No. 2 save and except with permission of the Hon'ble Court. 

(d) The defendants Nos. 3, 6 and 7 be restrained by a permanent as also interim and ad interim order and injunction of this Hon'ble Court from acting as Directors of defendant No. l — Company as also from dealing with or disposing of the assets of the defendant No. l save and except with the permission of the Hon'ble Court.

(e) The defendants be directed to disclose and account for all the dealings done by them in respect of the said sum of Rs. 66 lakhs and accrued interest thereon or any part thereof, being the consideration received from sale of the said Dye House of defendant No. 1.”

3. Defendant No. l in the original suit is Khetan Industries Private Ltd., a company incorporated under the Companies Act, 1956. Defendant No. 2 is “Putra Vadhu Family Trust”, a private trust registered under the Indian Trusts Act. Defendants 3 to 5 are the trustees of the said Trust. Defendants Nos. 6, 7 and also defendant No. 3 are the Directors of defendant No. l company. In para 22 of the plaint it is specifically stated that the suit is for declaration and injunction. Prayers (a) to (d) are deemed to be valued at Rs. 300/- each and Court-fee paid accordingly. It was further stated that other prayers were of consequential nature and no separate Court-fees were payable. It is evident from the above statement in para 22 of the plaint that prayer (e) is only consequential to prayers (a) to (d) set out above. The respondents herein (original plaintiffs) also took out a Notice of Motion for grant of ad interim relief. The defendants (present petitioners) contested the Notice of Motion on the ground, inter alia, of lack of jurisdiction of the Civil Court to entertain and try the said suit. The trial Court, therefore, framed the following preliminary issue :

“Whether this Court has jurisdiction to entertain and try this suit?”

It was contended by the defendants before the trial Court that in view of the provisions of sections 73 and 74 of the Indian Trusts Act the relief claimed in the suit for removal of defendants 3 to 5 from the trusteeship of the trust and for restraining them from functioning as trustees is not maintainable. According to the defendants, the proper forum for such a relief is the High Court which is the principal Civil Court for Bombay. It was also contended that in view of the provisions of the Companies Act, 1956, which deals with the entire gamut of appointment, functioning and removal of directors and more particularly the provisions of section 10 of that Act, no suit is maintainable in a Civil Court for removal of the duly elected directors of a company incorporated under that Act. Anyone seeking removal of the directors has to avail of the specific re






























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