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RAJASTHAN HIGH COURT BENCH AT JAIPUR
Narendra Singh Dhaddha, J.
M/s Rudraksh Ceramic Word Private Limited - Appellant
Versus
Vijay Kumar Khandelwal & Ors. - Respondents
S.B. Civil First Appeal No. 774 of 2020
Decided On : 24-01-2023
CIVIL PROCEDURE - INJUNCTION - The court upheld the trial court's dismissal of the plaintiff's suit for mandatory and permanent injunction, interpreting Order 7 Rule 11 (D) CPC and Section 430 of the Companies Act, which mandates that disputes between company directors must be adjudicated by the National Company Law Tribunal, not in civil court.
Fact of the Case:
The plaintiff filed a civil suit seeking mandatory and permanent injunction against the defendants, who filed an application under Order 7 Rule 11 (D) CPC, leading to the dismissal of the suit by the trial court on the grounds of jurisdiction.
Finding of the Court:
The court found that the trial court correctly interpreted the plaintiff's claims as involving a dispute between company directors, which falls under the jurisdiction of the National Company Law Tribunal as per Section 430 of the Companies Act.
Issues: Whether the trial court erred in dismissing the plaintiff's suit based on the application under Order 7 Rule 11 (D) CPC, and whether the matter should have been adjudicated in civil court or by the National Company Law Tribunal.
Ratio Decidendi: The court held that the trial court did not err in its decision, as the nature of the dispute clearly indicated that it was a matter for the National Company Law Tribunal, thus affirming the dismissal of the suit.
Result: The Civil First Appeal was dismissed, and the stay application was also dismissed.
ORDER
1. This Civil First Appeal under Section 96 of the Code of Civil Procedure, 1908 has been filed by the appellant-plaintiff (for short 'the plaintiff') against the order dated 29.10.2020 passed by Additional District Judge No.3, Bharatpur in Original Civil Suit No.05/2020 whereby the application filed by the respondents-defendants (for short 'the defendants') under Order 7 Rule 11 (D) read with Section 151 CPC has been allowed and the plaintiff's suit for mandatory and permanent injunction has been dismissed.
2. Learned counsel for the plaintiff submits that plaintiff filed a civil suit against the defendants in which plaintiff sought the relief of mandatory and permanent injunction against the defendants. Learned counsel for the plaintiff also submits that defendants had filed an application under Order 7 Rule 11 (D) CPC. The said application has wrongly been allowed by the trial court vide order dated 29.10.2020 and dismissed the suit filed by the plaintiff. Learned counsel for the plaintiff also submits that trial court wrongly came to the conclusion that plaintiff wanted to seek relief with regard to adjudication of disputes between the Directors in Company matters. Learned counsel for the plaintiff also submits that for deciding the application under Order 7 Rule 11 (D) CPC, the trial court had to consider the averments made in the plaint and not the defence of the defendants. Learned counsel for the plaintiff also submits that the question of jurisdiction can be decided after leading evidence by the parties. So, order of the trial court be set aside.
3. Learned counsel for the plaintiff has placed reliance upon the following judgments : (1) Om Prakash Choudhary Vs. Dr. Kailash Garg & Ors. reported in 2013 (3) RLW 2763 and (2) P. V. Guru Raj Reddy & Anr. Vs. P. Neeradha Reddy & Ors. reported in (2015) 8 SCC 331.
4. None has appeared on behalf of the defendants.
5. I have considered the arguments advanced by learned counsel for the plaintiff and perused the impugned order.
6. Trial court in its order clearly stated that plaintiff in plaint specifically mentioned that there is a dispute between Directors of Company. So, as per Section 430 of Companies Act, matter is triable by National Company Law Tribunal. So, in my considered opinion, trial court has not committed any error in dismissing the suit under Order 7 Rule 11 (D) CPC. So, present appeal filed by the plaintiff being devoid of merit, is liable to be dismissed.
7. The Civil First Appeal stands dismissed.
8. Stay application also stands dismissed.
Disputes between company directors are to be adjudicated by the National Company Law Tribunal as per Section 430 of the Companies Act, and not in civil courts.
The main legal point established in the judgment is the relevance of the averments in the plaint for deciding an application under Order 7, Rule 11 of CPC and the availability of an alternate remedy ....
The jurisdiction of the civil Court can be excluded under specific statutory provisions, and the application under Order 7 Rule 11 of CPC is to be decided based on the averments in the plaint.
A civil suit seeking an injunction against claims governed by the NCLT is barred if the matter pertains to financial recovery, falling under the exclusive jurisdiction of the NCLT according to statut....
A trial court's order must be reasoned and address all objections raised; failure to do so results in substantial injustice.
(1) It is plaint averment that is required to be primarily considered at stage of considering application under Order VII Rule 11(d) of CPC.(2) Plea with respect to Order II Rule 2 of CPC has to be e....
The dismissal of the original suit nullifies any interim orders, and the appellate court's decision to set aside the trial court's civil imprisonment directive was correct.
Mere plea of Order II Rule 2 of CPC taken up by the petitioners as defendants in the trial Court was not with respect to filing of the suit on the same cause of action, but, Order II Rule 2 of CPC wa....
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