HIGH COURT OF CALCUTTA
Chittatosh Mookerjee, J.
The Mining, Geological & Metallurgical Institute of India & ors.
Vs
Shyamalesh Nath Bhaduri & ors.
Civil Revision No. 650 of 1978
Decided on : April 11, 1978
CITY CIVIL COURT JURISDICTION - CORPORATION - MANAGEMENT - SUIT RELATING TO OR ARISING OUT OF MANAGEMENT - INTERPRETATION OF CITY CIVIL COURT ACT, 1953, SCHEDULE I, ITEM NO. 10(II).
Fact of the Case:
Plaintiff, claiming to be a member of the Mining, Geological and Metallurgical Institute of India (Institute), filed a suit in the City Civil Court, Calcutta, seeking declarations and injunctions related to the Institute's election process and management. The Institute and certain defendants challenged the City Civil Court's jurisdiction, arguing that the suit related to the management of a corporation and thus fell within the exclusion under Item No. 10(ii) of Schedule I of the City Civil Court Act, 1953.
Finding of the Court:
The court held that the Institute, being an incorporated company registered under the Companies Act, was a corporation within the meaning of Item No. 10(ii) of Schedule I of the City Civil Court Act. The court interpreted the expressions 'relating to' and 'arising out of' in Item No. 10(ii) broadly, stating that the City Civil Court lacked jurisdiction in suits where the organizational setup of a corporation was directly or indirectly in dispute.
Issues: 1. Whether the Institute was a corporation within the meaning of Item No. 10(ii) of Schedule I of the City Civil Court Act. 2. Whether the suit related to or arose out of the management of the Institute.
Ratio Decidendi: 1. The court relied on the definition of 'corporation' in Halsbury's Laws of England and Gower's Principles of Modern Company Law to establish that the Institute, as an incorporated company, was a corporation. 2. The court referred to previous decisions interpreting the expressions 'relating to' and 'arising out of' in the context of the City Civil Court Act and held that the suit, which challenged the election process and management of the Institute, directly or indirectly related to the Institute's organizational setup and thus fell within the exclusion under Item No. 10(ii).
Final Decision: The court made the rule absolute, set aside the order of the City Civil Court, and directed the court to return the plaint to be presented to the appropriate court. The court clarified that the prayer for rejection of the plaint under Order 7 Rule 11 of the Code of Civil Procedure was misconceived, and all points relating to the merits of the case were left open.
Shyamalesh Nath Bhaduri claiming to be a member of the Mining, Geological and Metallurgical Institute of India (hereinafter called the Institute) has filed a suit in the City Civil Court at Calcutta against the said Institute, its President, its Hony, Secretary, Hony. Treasurer and two others inter alia for the following reliefs :–
(a) for declaration that the appointment of defendant no. 4 as the Convener, Board of Scrutinisers in terms of the meeting held on 14.10.1977 is invalid, illegal and not in accordance with law as it contravenes the article 38(a) of the Institute;
(b) for a declaration that the seeking of election of the defendant No.3 is illegal, invalid and not in accordance with law as he is already a Council Member of the defendant No. 1;
(c) for a declaration that the seeking of election of the defendant Nos. 5 & 6 is illegal, in valid and not in accordance with law as it contravenes Article 34;
(d) for a declaration that the notice dated 19th October, 1977 is issued by the defendant No. 4 is illegal, inoperative, unenforceable and null and void."
(e) for a declaration that the covering notice dated 12th December, 1977 as well as the circulation of ballot papers are illegal, arbitrary, invalid, inoperative, unenforceable and not in accordance with law;
(f) Re-election of the defendant No. 1 in accordance with the articles of the Institute;
(g) Receiver-cum-Administrator;
(h) Injunction restraining the defendant Nos. 1 to 4 from holding the Annual General Meeting fixed on 20th January, 1978 and declaring or publishing the result of election of the Council of Members of the defendant No.1 for the year 1977-78, 1978-79 and 1979-80.
On the application of the plaintiff-opposite party No. 1, the learned Judge, 4th Bench, City Civil Court at Calcutta has granted an ad interim injunction restraining the defendant Nos. 1 to 4 from publishing the results of the election held at the Annual General Meeting of the Institute dated 20th January, 1978. The defendant No. 1, the Institute, and also the defendant-opposite party No.3 had filed an application before the learned Judge, 4th Bench, City Civil Court. Calcutta under Order 7 Rule 11 of the Code of Civil Procedure, inter alia, praying for the rejection of the plaint and for vacating the above interim order. They pleaded that the instant suit came within the purview of Item No. 10(ii) of the 1st Schedule of the City Civil Court Act, 1953 and therefore, the City Civil Court had no jurisdiction to entertain and try the said suit. The Institute claimed that it was a company incorporated under the Companies Act.
2. The learned Judge, 4th Bench, City Civil Court Calcutta by his Order No.9 dated 16th February, 1978 rejected the aforesaid application under Order 7 Rule 11(d) of the Civil Procedure Code. The learned Judge of the court below observed that it would be very difficult at the present stage to call the defendant No. 1 the Institute, a company within the literal meaning of the Companies Act, 1956 or under the Indian Companies Act, 1913. The learned Judge of the court below further observed that moreover the plaint of the suit showed that the suit had been brought for declaration that the appointment of one of the defendants as the Convener of the Board of Scrutinisers was invalid, illegal and that seeking of the election by the defendants 3, 5, and 6 was also illegal and invalid. Such prayers cannot be strictly and legally said to relate to or arise out of the constitution, incorporation, management and winding up of the defendant No. 1. Therefore, the learned Judge of tile court below while over-ruling the defendants' objection to the jurisdiction of the said court entertaining the suit at the same time left the said point open to be thrashed out again at the time of the final hearing.
3. The defendant No. 1, the Institute, and some other defendants obtained this Rule against the above order dated 16th February, 1978 passed by the learned Judge, 4th Bench, Calcutta City Civ
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