1993 Supreme(Del) 604

High Court Of Delhi
AMMONIA SUPPLIES CORPORATION PRIVATE LIMITED - Appellant
Versus
MODERN PLASTIC CONTAINERS PRIVATE LIMITED - Respondent
Civil 94 of 1984
Decided On : 10/11/1993

Headnote:CIVIL PROCEDURE CODE 1908 - Section 9 — Suit for adjudication of title of shares of a company is not barred by Section 155 Companies Act-therefore Suit is maintainable.

       COMPANIES ACT - Section 155 — Jurisdiction under — is of summery nature-to provide remedy in non controversial matters-Scope of jurisdiction-discussed.

       Held:

       The object of Section 155, in our view, is to provide remedy in non controversial matters or in matters where a quick decision is necessary and can be rendered in order to obviate irreparable injury to a party. Section 155, is ordinarily not intended for settling controversies necessitating a regular investigation and in such cases the Company Court can decline to entertain petitions in exercise of its discretionary power and say that since serious disputes are involved, the proper forum for their adjudication is a civil court. Section 155(3) only shows that question relating to title can also be examined by the Company court but that is also possible without detailed examination of complicated questions of fact and law, requiring extensive oral and documentary evidence and it cannot be inferred from Section 155(3) that the remedy is not summary. It would depend on tacts of each case. It "is not necessary in every case where the question relating to title may be involved that there has to be a detailed examination and determination of oral and documentary evidence. The question is not whether the Company court has no jurisdiction but is that can the court in its discretion decline to exercise it where disputed find complicated questions are involved requiring examination of extensive oral and documentary evidence. We do not think that a respondent would be able to oust the jurisdiction of the Company Court by a mere assertion in the reply about fraud or forgery or want of consideration. In such a case the Company court can and certainly would examine whether the said assertion is being made only with a view to oust the jurisdiction of the company court or assertions are such which would require detailed examination of the evidence. In the former case the company court would proceed with the adjudication of a petition under Section 155. In the later case the Company court would be justified in exercise of its discretion to reject the petition and relegate the parties to a regular civil suit. It has to be borne in mind that the power to rectify the register of members is discretionary and so also the power to decide questions relating to title as is apparent from bare reading of Sub-section (3) of Section 155 of the Act. We do not agree with the contention that jurisdiction of wide amplitude would be rendered fruitless and nugatory and purpose behind introducing Section 155 would be defeated if it is held that the Company court exercises summary jurisdiction under Section 155 of the Act. Further, in our view, the procedure by which a party can come to court and file an application seeking rectification of register, by a petition and not summons for judgment, is not relevant for determining the nature of the jurisdiction the company court exercises. A long line of decisions has clinched the issue and in our view the matter is no more rest integra and is covered by the decision of the Supreme Court in the case of Public Passenger Services Ltd(Supra) holding that the court may refuse relief under Section 155 in exercise of the discretionary jurisdiction and relegate the parties to a suit where by reason of its complexity or otherwise the matter can be more conveniently decided in a suit. We may also notice two other judgments cited by learned counsel for the petitioner; one of Kerala High Court in Mathew Michael and Ors. v. Teekoy Rubbers (India) Ltd., Palai, and Anr., reported in (1983) 54 Company Cases 88 and other of Madras High Court in Mrs. E.V. Swaminathan v. K.M.M.A. Industries and Roadways Pvt. Ltd and Ors., reported in (1993) 76 Company Cases 1. As both the decisions are primarily based on the judgment of Gujrat High Court, which has been discussed by us hereinbefore, it is not necessary to again separately deal with these cited decisions. In our view the law has been correctly laid down by this court in the case of Punjab Distilling Industries Ltd. (Supra). The contrary view expressed in Harnam Singh (supra) is not correct.

       Conclusions:

       1) The jurisdiction exercised by the Company Court under Section 155 of the Act is discretionary and summary in nature.

       2) In exercise of discretionary and summary jurisdiction the Company Court can decline to entertain petition involving disputed and complicated questions requiring examination of extensive oral and documentary evidence.

       3) The remedy of suit for adjudication of disputes relating to title to shares is not barred.