2026 Supreme(Cal) 8

IN THE HIGH COURT AT CALCUTTA CIRCUIT BENCH AT JALPAIGURI
ARINDAM MUKHERJEE, UDAY KUMAR, JJ.
Merico Tea Estates Limited - Appellant
Vs.
Mukesh Kumar Agarwal & Ors. - Respondent
FMAT 4 of 2026 With CAN 1 of 2026
Decided On : 22-05-2026

A civil court is barred from intervening in internal corporate governance, such as the removal of a director under statutory procedures. A director's status is functional rather than equity-dependent, and any grievance regarding such matters must be brought before the specialized tribunal empowered by the relevant statute.

Headnote:(A) Companies Act, 2013 - Sections 2(34), 169, 241, 242, 244(1), 430 - Code of Civil Procedure, 1908 - Order XXXIX Rules 1 and 2, Section 9 - Internal corporate governance - Jurisdictional bar on Civil Courts - Removal of director - Statutory procedure - Ex parte ad-interim injunction - Remedy of waiver.

(B) Jurisdictional threshold: The bar under section 430 of the governing statute is mandatory and absolute, precluding civil courts from entertaining suits or granting injunctions in respect of matters assigned to the exclusive domain of the specialized tribunal. (Paras 16, 52-54)

(C) Functional status of directorship: An individual appointed to a board holds a position of status defined by function, independent of proprietary interests or qualification shares, subjecting them to the statutory ouster mechanisms provided under the relevant enabling act. (Paras 19, 35-37)

(D) Equitable constraints: A court is mandated to weigh the 'triple test' of prima facie case, balance of convenience, and irreparable injury before granting interlocutory relief. An order that fails to record analytical findings on these parameters constitutes a material irregularity and an abuse of judicial discretion. (Paras 72-80)

Facts of the case:
An appeal was preferred against an ex parte ad-interim injunction granted by a lower court, which had restrained a company from proceeding with the statutory removal of an individual from its board of directors. The respondent claimed that as a non-shareholder investor, they were not subject to the internal disciplinary procedures of the company and that the civil suit was maintainable due to an alleged breach of a separate commercial agreement.

Findings of Court:
The court held that the statutory ouster of a board member is an internal administrative process strictly regulated by law. The civil court erred by failing to recognize the absolute threshold bar and by not applying the rigorous criteria required for granting equitable injunctions in commercial matters.

Issues: Whether a civil court possesses the jurisdiction to grant an injunction restraining an internal board proceeding under a specific statute when the dispute arises from an unexecuted business agreement, and whether the absence of equity holdings confers standing to bypass the specialized tribunal.

Ratio Decidendi: The court maintained that the statutory framework for corporate management provides an exclusive mechanism for resolving disputes, which cannot be bypassed via civil litigation. Given the existence of a statutory waiver mechanism for aggrieved parties, the civil court’s intervention was legally precluded, and the injunctive order lacked the requisite analytical foundation of the 'triple test'.

Result: Appeal allowed; the impugned ad-interim order of temporary injunction is quashed and set aside.