2009 Supreme(Mad) 549

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE M. VENUGOPAL
Shanita Holdings SDN & Another
Versus
Shanita Hotel Trichy Pvt. Limited & Another
C.R.P.(PD).No.3911 of 2008 and M.P.No.1 of 2008
Decided on: 13-02-2009

The supervisory jurisdiction under Article 227 of the Constitution of India has to be sparingly resorted to by this Court.

Headnote:

CIVIL REVISION - COMPANY - JURISDICTION - SHARE CAPITAL - INJUNCTION - FRAUD - BALANCE SHEET - COMPANY LAW BOARD - COMPANIES ACT - CIVIL PROCEDURE CODE - ARBITRABLE DISPUTE - MAINTAINABILITY OF SUIT - INTERIM INJUNCTION - EX PARTE ORDER - REASONS - APPEALABILITY - ORDER 39 RULE 3A CPC - SUPERVISORY JURISDICTION - ARTICLE 227 OF THE CONSTITUTION OF INDIA - LIBERTY TO RAISE CONTENTIONS.

Fact of the Case:

The petitioners/R2 and R3/D2 and D3 have filed this civil revision petition as against the order dated 11.06.2008 in I.A.8812/08 in O.S.3737/08 passed by the learned XV Assistant City Civil Judge, in granting ad interim injunction till 17.06.2008, on an application filed by the first respondent/petitioner/plaintiff under Or.XXXIX R.1 and 2 of the Civil Procedure Code.

Finding of the Court:

The civil revision petition is dismissed, leaving the parties to bear their own costs. It is open to the petitioners/R2 and R3/D2 and D3 to work out their remedies as per the Civil Procedure Code. Consequently, the connected miscellaneous petition is also dismissed.

Issues: 1. Whether the trial Court has jurisdiction to decide on the issue inasmuch as the same issue is pending before the Company Law Board Bench, Southern Region, Chennai in C.P.94/07? 2. Whether the trial Court ought not to have passed the interim order of injunction in respect of allotment of shares since the first respondent/petitioner/plaintiff has filed Form 2 for the allotment of 5,87,000 shares and the Form FCGPR with the Reserve Bank of India along with the Certificate issue by the Statutory auditor of the Company and the Company Secretary stating that it has allotted 5,87,000 shares to the first revision petitioner and that in the normal course of business the second revision petitioner has been approached by Ramesh, Mahendran and S.Sriharan who travelled to Kualalumpur several times to initiate him to invest in the fast growing hospitality market in South India and on the recommendation of the said S.Sriharan and after visiting Chennai the Board of Directors of the first Civil Revision petitioner has decided to invest in Hotel Business in India and it approached S.Sriharan a friend of the second respondent/first defendant and when the second revision petitioner met the second respondent, he has been an employee of Tourism and Development Corporation of Tamilnadu and that the second revision petitioner has agreed to use the first revision petitioners name Shanitha and suggested that the Company be incorporated under the name and style of Shanita Hotels Trichy Pvt. Limited and as per the advise of the second respondent/first defendant his wife Arulmozhi and son Raja have incorporated the Company and they are the subscribers of the Memorandum and Articles of Association of the first respondent/petitioner/Plaintiffs Company each subscribing 500 shares of Rs.100/-each and that the first revision petitioner has projected an application to the Bank Negara, Malaysia on 30.09.2004 to invest a sum of Rs.75,858,298/-which is 100% in the share capital of the Company and the first revision petitioner in the year 2004-2005 has brought in a sum of Rs.3.82 crores and an amount of Rs.2.05 crores during the year 2005-2006 and that for the two remittances, the ICICI Bank Limited has issued the Certificate of Foreign Inward Remittance for a sum of Rs.38,202,247.19 and a sum of Rs.21,541,700.11 and later, the Company has filed a declaration in Form FCGPR to Foreign Exchange Department, Reserve Bank of India, Chennai stating that 5,87,000 equity shares of Rs.100/- each has been allotted to the first civil revision petitioner and that the Certificate from the Statutory Auditor of the Company, N.C.Rajagopal & Co. dated 31.01.2006 certifying that 5,87,000 equity shares has been allotted by the Company to the first civil revision petitioner and also a Certificate has been obtained from Practicing Company Secretary V.Suresh dated 31.01.2006 certifying that the first civil revision petitioner has been allotted 5,87,000 equity shares of Rs.100/- each and that all the requirements of the provisions of the Companies Act has been complied with and that the Company is eligible to issue shares under these regulations, etc., and that the respondents 1 and 2 in collusion with his wife Arulmozhi and son A.Raja, S.Sriharan is in creating and falsifying the document to suit their requirement and cheat the revision petitioners of their own investment in the company and that the Company has manipulated the Registers of Members of the Company as if the revision petitioners name have not been entered in the Register of Members and therefore, it is not entitled to maintain the company petition before the company Law Board and moreover, the contention of the Company that amounts have been remitted by the first civil revision petitioner is only towards loan and not towards share capital is contrary to the documents and records of the Company and added further, the trial Court has not acted as per Or.XXXIX R.3 A of the Civil Procedure Code by not hearing the matter within 30 days from the date of passing of the order and that the order has been passed on 06.06.2008 and in short, the trial Court has failed to comply with the requirement of the mandate prescribed under the Civil Procedure Code.

Ratio Decidendi: 1. The trial Court has jurisdiction to decide on the issue inasmuch as the same issue is pending before the Company Law Board Bench, Southern Region, Chennai in C.P.94/07. 2. The trial Court ought not to have passed the interim order of injunction in respect of allotment of shares since the first respondent/petitioner/plaintiff has filed Form 2 for the allotment of 5,87,000 shares and the Form FCGPR with the Reserve Bank of India along with the Certificate issue by the Statutory auditor of the Company and the Company Secretary stating that it has allotted 5,87,000 shares to the first revision petitioner.

Final Decision: The civil revision petition is dismissed, leaving the parties to bear their own costs. It is open to the petitioners/R2 and R3/D2 and D3 to work out their remedies as per the Civil Procedure Code. Consequently, the connected miscellaneous petition is also dismissed.