2002 Supreme(Cal) 429

High Court Of Calcutta
A. K. GANGULY, HRISHIKESH BANERJI
BENGAL CLUB LTD - Appellant
Versus
SUSANTA KUMAR CHOWDHARY - Respondent
F. M. A. T.  1960  Of  2002
Decided On : 07/04/2002

The Civil Court has jurisdiction to entertain a suit relating to a company under Section 10 read with Section 2 (11) of the Companies Act, 1956. However, the appropriate Civil Court is the Court within whose local limits the registered office of the company is situate.

Headnote:

COMPANY - JURISDICTION - CIVIL COURT - INJUNCTION - AD INTERIM ORDER - RESTRAINING HOLDING OF ANNUAL GENERAL MEETING (AGM) - COMPANY ACT, 1956, SECTION 10, SECTION 2 (11) - COMPANIES ACT, 1956, SECTION 146 - CIVIL PROCEDURE CODE, 1908, ORDER 39 RULE 3 - CIVIL PROCEDURE CODE, 1908, ORDER 41 RULE 2, RULE 33 - CIVIL PROCEDURE CODE, 1908, ORDER 43 RULE 1 CLAUSE (R) - CIVIL PROCEDURE CODE, 1908, ORDER 7 RULE 11 - TRANSFER OF PROPERTY ACT, 1882, SECTION 52 - BENGAL CLUB LIMITED V. SUSANTA KUMAR CHOUDHARY - [2002] INdCal 2075.

Fact of the Case:

The respondent, a member of the appellant club, filed a suit in the 9th Court of Civil Judge, Senior Division, Alipore, 24 Parganas (South) on 19th June, 2002 praying for declaration and injunction and also praying for an ad interim order of injunction restraining the holding of the Annual General Meeting (AGM) of the said Club in its registered Office on 21st June, 2002. The learned trial Judge passed the ad interim order of Injunction in terms of prayers (a), (b) and (c) of the injunction petition and fixed the matter for service; return on 26th July, 2002.

Finding of the Court:

1. The Civil Court has jurisdiction to entertain the suit under Section 10 read with Section 2 (11) of the Companies Act, 1956. 2. The appropriate Civil Court is the Court within whose local limits the registered office of the company is situate. 3. The learned trial Judge failed to exercise his discretion properly in granting the ex parte ad interim order of injunction. 4. The balance of convenience or inconvenience of issuing such an order was not considered by the learned Judge. 5. The order dated 20th June, 2002 passed by the Court below should be stayed.

Issues: 1. Whether the Civil Court has jurisdiction to entertain the suit under Section 10 read with Section 2 (11) of the Companies Act, 1956? 2. Whether the appropriate Civil Court is the Court within whose local limits the registered office of the company is situate? 3. Whether the learned trial Judge failed to exercise his discretion properly in granting the ex parte ad interim order of injunction? 4. Whether the balance of convenience or inconvenience of issuing such an order was considered by the learned Judge? 5. Whether the order dated 20th June, 2002 passed by the Court below should be stayed?

Ratio Decidendi: 1. Section 10 read with Section 2 (11) of the Companies Act, 1956 confers jurisdiction on the Civil Court to entertain the suit. 2. The appropriate Civil Court is the Court within whose local limits the registered office of the company is situate. 3. The learned trial Judge failed to exercise his discretion properly in granting the ex parte ad interim order of injunction as he did not consider the principles laid down in Morgan Stanley Mutual Fund v. Kartlck Das, (1994) 4 SCC 225, Shiv Kumar Chadha v. Municipal Corporation of Delhi and ors., (1993) 3 SCC 161, and The King v. The General Commissioner for the purpose of Income Tax for the District of Kensington: Ex parte Princess Edmund Polignac, (1917) 1 KB 486. 4. The balance of convenience or inconvenience of issuing such an order was not considered by the learned Judge. 5. The order dated 20th June, 2002 passed by the Court below should be stayed.

Final Decision: The appeal and the stay application were disposed of as follows: 1. The appellant was directed to file its objection to the injunction petition pending before the Court below by 8th July, 2002 and the respondent was directed to file his reply to the said objection by 12th July, 2002. The Court below was directed to make all endeavour to dispose of the injunction petition within a period of fortnight thereafter. The ex parte ad interim order passed on the injunction petition by the Learned Court below on 20th June, 2002 was directed to remain stayed till the disposal of the injunction petition. 2. The Club was permitted to hold AGM on 19th July, 2002 in its registered Office on the basis of the notice dated 24th May, 2002 and in respect of the agenda mentioned in the notice. 3. The Club was directed to issue advertisements in three English Dailies and two Bengali Dailies giving therein the details of the time, venue and the agenda of the AGM to be held on 19th July, 2002 on the basis of this Court's order. 4. The AGM of the Club was directed to be held in accordance with the articles of association of the Club but under the direct supervision of Hon'ble Justice Chittatosh Mookerjee, a former Chief Justice of this court and also of Bombay High Court. 5. Mr. Arabinda Chatterjee and Mr. Rabindranath Dutta, both learned advocates of this Court were appointed to assist Justice Mookerjee. 6. Justice Mookerjee was requested to accept the honorarium of Rs. 15,000=00 for conducting and supervising AGM of the Club at its registered office on 19th July, 2002. The remuneration of the learned advocates was fixed at Rs. 2,500=00 each. All these expenses were to be borne by the Club. 7. The decisions taken in the AGM were directed to be given effect to, but those decisions were to abide by the order to be given by the Court below in the injunction petition or in the suit. 8. There was no order as to costs.