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2003 Supreme(Cal) 432
High Court Of Calcutta
D. K. SETH, RAJENDRA NATH SINHA
CALCUTTA COSMOPOLITAN CLUB LTD - Appellant
Versus
BHANWARLAL BHANDARI - Respondent
F. M. A. 214 Of 2003
Decided On : 08/27/2003
ANNA MALHOTRA, ASHOK BANERJI, JOYDEEP KAR, PARITOSH SINHA
A suit relating to or arising out of the constitution, incorporation, management, or winding up of a corporation cannot be maintained in the City Civil Court at Calcutta.
Headnote:
COMPANY LAW - JURISDICTION - CITY CIVIL COURT, KOLKATA - SUIT AGAINST A COMPANY - MAINTAINABILITY - CAUSE OF ACTION - SECTION 5(2), 5(4) AND FIRST SCHEDULE ITEM 10(II) OF THE CITY CIVIL COURTS ACT, 1953 - SECTION 2(7) OF THE COMPANIES ACT, 1956 - A suit relating to or arising out of the constitution, incorporation, management, or winding up of a corporation cannot be maintained in the City Civil Court at Calcutta.
Fact of the Case:
The plaintiff-respondent filed a suit in the City Civil Court, Calcutta, seeking an injunction to participate in the annual general meeting (AGM) and extraordinary general meeting (EGM) of the defendant-appellant, a company registered under the Companies Act, 1913. The plaintiff claimed that he was a permanent member of the club and should be allowed to participate in the meetings. The learned Judge, 10th Bench, City Civil Court, Calcutta, granted an injunction in favor of the plaintiff.
Finding of the Court:
The Court held that the City Civil Court, Calcutta, lacked jurisdiction to entertain the suit and that there was no prima facie case for granting an injunction. The Court observed that the cause of action did not arise within the jurisdiction of the City Civil Court, as the notice of the meeting was received by the plaintiff at his office outside the jurisdiction of the Court. Further, the Court held that the suit was not maintainable in the City Civil Court as it related to the management of a corporation, which was excluded from the jurisdiction of the Court under Section 5(4) and Item 10(ii) of the First Schedule of the City Civil Courts Act, 1953.
Issues: 1. Whether the City Civil Court, Calcutta, had jurisdiction to entertain the suit. 2. Whether there was a prima facie case for granting an injunction.
Ratio Decidendi: 1. The City Civil Court, Calcutta, did not have jurisdiction to entertain the suit as the cause of action did not arise within its jurisdiction and the suit related to the management of a corporation, which was excluded from the jurisdiction of the Court under Section 5(4) and Item 10(ii) of the First Schedule of the City Civil Courts Act, 1953. 2. There was no prima facie case for granting an injunction as the plaintiff failed to establish a clear right to participate in the meetings and the balance of convenience did not favor the grant of an injunction.
Final Decision: The appeal was allowed, and the order of the City Civil Court, Calcutta, granting an injunction was set aside.
( 1 ) THIS appeal is directed against the order dated 27th September, 2002 passed by the learned Judge, 10th Bench, City Civil Court, Calcutta in title Suit No. 1430 of 2002, disposing of an application under Order 39 Rules 1 and 2 read with section 151 of the Code of Civil Procedure (CPC ). The plaintiff respondent had sought for an injunction permitting the plaintiff to participate in the Annual General Meeting (AGM) and the Extraordinary General Meeting (EGM) of the defendant/appellant sought to be held on 28th September, 2002. The learned Judge, while disposing of the application for injunction was of the view that the plaintiff had the status of a permanent member of the club as such he should have a chance to participate in the EGM and AGM to be held on 28th September, 2002.
( 2 ) A preliminary objection has been taken by Mr. Ashoke Banerjee, the learned counsel for the respondents, that this appeal is not maintainable on two-fold grounds. First, that the meeting has already been held on 28th september, 2002, and nothing remains to be decided. In support, he refers to the order dated 30th April, 2003 passed in this appeal refusing stay of operation of this order appealed against on the self-same ground that the order has lost its force. The second ground is that the order that was granted is not an order within the meaning of Order 39 Rules 1 and 2, appealable under Order 43. Since no injunction was granted against the appellant restraining him from holding the meeting, it was only a chance to participate was allowed to the plaintiff.
( 3 ) THIS contention has since been opposed on behalf of the appellant on various grounds. One of the grounds is that an application under Order 39 rule 2a CPC has since been filed by the plaintiff alleging the breach of the interim order by preventing the plaintiff from participating in the meeting held on 28th September, 2002, which is in the nature of execution and not a contempt and as such, if the order remains, in that event, the Order 39 Rule 2a would also remain pending. In support of his contention, Mr. Mukherjee had relied on a few decisions to which the reference would be made at an appropriate stage.
( 4 ) HAVING regard to the facts and circumstances of the case, we do not propose to enter into this question in view of the fact that the application under Order 39 Rule 2a is pending and is to be disposed on its merit. We are not supposed to decide any question touching the merit of the said application.
( 5 ) SO far as the other ground raised by Mr. Banerjee with regard to the maintainability of the appeal does not seem to be of any substance. An order under Order 39 Rules 1 and 2 CPC has been made appealable under Order 43 rule 1 (r ). It does not specify the nature of the order. It only specifies an order passed under Order 39 Rules 1 and 2. It is not the case as to how it affects the parties that is relevant. It is the nature and character of the order and in exercise of what jurisdiction such order is or could have been passed that is relevant. It is to be looked into whether this order is passed under the provisions of Order 39 Rules 1 and 2 or not. If one is aggrieved against such order, an appeal can be maintained by him irrespective of the form or mode in which the order is coined.
( 6 ) THAT apart on facts the respondent was not being allowed to participate in the AGM and EGM by the appellants. By reason of the order when the respondent was allowed to participate the natural consequence was that the appellants were restrained from disallowing or preventing or obstructing the respondent from participating in the meeting. It is irrelevant whether the form is mandatory or prohibitory or couched in a manner different to suit a particular need in a particular situation.
( 7 ) MR. Mukherjee for the appellant had contended that this application was filed on 25th September, 2002, and this was directed to be put up on 26th september, 2002. The matter was he
