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HIGH COURT OF CALCUTTA
R. DAYAL, P.K. SAMANTA, JJ.
Inter Sales - Appellant
Versus
Reliance Industries Ltd. - Respondent
F.M.A.T. 232 of 1998 and F.M.A. No. 1634 of 1998
Decided on : Feb 27, 1998
{'KEYWORD': 'Companies Act, 1956 - Jurisdiction - City Civil Court - Issue of duplicate share certificates', 'SUBJECT': 'Jurisdiction of the City Civil Court to adjudicate disputes relating to issue of duplicate share certificates under the Companies Act, 1956', 'ACT SECTION LIST': ['Companies Act, 1956 - Section 2(11), Section 10, Section 84(4)'], 'SUMMARY': "The court held that the City Civil Court has jurisdiction to adjudicate disputes relating to issue of duplicate share certificates under the Companies Act, 1956. The court found that the Act does not provide for adjudication of such disputes by the Company Court and that the definition of 'the court' in Section 2(11) read with Section 10 does not confer exclusive jurisdiction on the Company Court. The court also held that a part of the cause of action for the reliefs claimed in the suit had arisen within the jurisdiction of the City Civil Court, as the plaintiff had sent the shares to the defendants at Bombay for effecting transfer and it was the duty of the defendants to send the same back to the plaintiff at Calcutta."}
Fact of the Case:
The plaintiff purchased 2,000 equity shares of the defendant company and sent them to the company for transfer in his name. The company acknowledged receipt of the shares and intimated the plaintiff that the shares had been transferred and despatched to his address. However, the plaintiff did not receive the shares and apprehended that they had been lost in transit or wrongfully obtained by some persons of the defendant company. The plaintiff filed a suit in the City Civil Court seeking a declaration of title to the shares, mandatory injunction directing the defendants to transfer the shares or issue duplicate share certificates, and other reliefs.
Finding of the Court:
The court held that the City Civil Court has jurisdiction to adjudicate disputes relating to issue of duplicate share certificates under the Companies Act, 1956. The court found that the Act does not provide for adjudication of such disputes by the Company Court and that the definition of 'the court' in Section 2(11) read with Section 10 does not confer exclusive jurisdiction on the Company Court. The court also held that a part of the cause of action for the reliefs claimed in the suit had arisen within the jurisdiction of the City Civil Court, as the plaintiff had sent the shares to the defendants at Bombay for effecting transfer and it was the duty of the defendants to send the same back to the plaintiff at Calcutta.
Issues: 1. Whether the City Civil Court has jurisdiction to adjudicate disputes relating to issue of duplicate share certificates under the Companies Act, 1956? 2. Whether a part of the cause of action for the reliefs claimed in the suit had arisen within the jurisdiction of the City Civil Court?
Ratio Decidendi: 1. The court found that the Companies Act, 1956 does not provide for adjudication of disputes relating to issue of duplicate share certificates by the Company Court. 2. The court held that the definition of 'the court' in Section 2(11) read with Section 10 of the Act does not confer exclusive jurisdiction on the Company Court. 3. The court found that a part of the cause of action for the reliefs claimed in the suit had arisen within the jurisdiction of the City Civil Court, as the plaintiff had sent the shares to the defendants at Bombay for effecting transfer and it was the duty of the defendants to send the same back to the plaintiff at Calcutta.
Final Decision: The court allowed the appeal, set aside the order of the City Civil Court, and directed the City Civil Court to proceed to dispose of the injunction application expeditiously according to law. The parties were directed to maintain status quo with respect to the shares in question till the disposal of the injunction application.
R. Dayal, J.
1. THIS appeal is directed against the order dated 23-12-1997, passed by the City Civil Court at Calcutta, rejecting the application filed by the plaintiff-appellant under Order 39, Rules 1 and 2 read with Section 151 of the Code of Civil Procedure, 1908 ('the Code') on the ground that the matter relates to loss of equity shares and consequential reliefs and in view of the provisions of Section 84 of the Companies Act, 1956 ('the Act') and the provisions of the City Civil Courts Act, particularly, item 10 of the First Schedule, such type of matter is not triable in the City Civil Court but is under the exclusive jurisdiction of this court, that is, the High Court.
2. WE have heard Shri P.P. Banerjee, Advocate for the appellant and Shri P.C. Sen, Advocate on behalf of the respondents, Shri Banerjee submits that the Act does not provide for adjudication of the dispute that has arisen between the parties and the jurisdiction of the City Civil Court vested in it by Section 9 of the Code is not ousted by any provision in the Act. On the other hand, Shri Sen submits that a combined reading of Sections 2(11), 10 and 84 of the Act would show that it is the Company Court that has jurisdiction with respect to any matter relating to a company and since the subject-matter of the suit relates to a company, it is the Company Court that has the exclusive jurisdiction to deal with the matter. In order to appreciate the controversy involved, it would be beneficial to refer to the cause of action pleaded by the plaintiff-appellant in the civil suit. The plaintiff has pleaded to have purchased 2,000 equity shares of respondent No. 1-company in July, 1997, and thereafter to have sent the same along with duly signed and stamped transfer deeds to respondent No. 2 with the request to transfer the same in the name of the plaintiff and send back the share certificates to its office. The defendant-company received the shares through defendant No. 3 vide acknowledgement memo dated 4-8-1997, and intimated the plaintiff through defendant No. 3 that the aforesaid shares had been duly transferred in the name of the plaintiff and despatched to the address of the plaintiff on 24-9-1997. The plaintiff enquired in the local post office whether the registered cover alleged to have been addressed to the plaintiff, was lying undelivered or returned but the postal authority informed that they had not received any cover addressed to the plaintiff. Thereafter, the plaintiff, vide letter dated 25-11-1997, intimated the matter to the defendants and requested them to enquire into the matter from the post office from where the registered cover had been posted. The plaintiff has further pleaded that it apprehends that the shares have been lost either in transit or some persons of the defendant-company having vested interest, after getting possession wrongfully, were trying to make illicit gain in an unauthorised manner. The plaintiff has prayed for a decree of declaration that the plaintiff is the lawful owner of 2,000 shares of defendant No. 1-company and that the defendants are bound to transfer the same or issue duplicate share certificates in the name of the plaintiff. Mandatory injunction is also sought directing the defendants to make over the duly transferred 2,000 shares in the name of the plaintiff or to issue duplicate share certificates to the plaintiff in respect of the shares. Even though relief of declaration of title is sought, yet, having regard to the admission that the company has transferred the shares in its books, the real dispute is about the issue of duplicate shares.
Section 84(4), makes provision, inter alia, for issue of a duplicate certificate as under :
"(4) Notwithstanding anything contained in the articles of association of a company; the manner of issue or renewal of a certificate or issue of a duplicate thereof, the form of a certificate (original or renewed) or of a duplicate thereof, the particulars to be entered in th
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