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High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE K. VENKATARAMAN
The Aruvipuram Dharma Paripalan Yogam & Others
Versus
K. Karunakaran
C.R.P. (PD) No.4420 of 2011 & M.P.No.1 of 2011
Decided On :Decided on : 14-12-2011
The court analyzed the provisions of Section 10GB of the Companies Act, 1956, which prohibits civil courts from entertaining suits related to the administration or affairs of a company. The court also considered Rule 71 of the Rules of the SNDP Yogam, which provides for the resolution of disputes through arbitration and specifies the jurisdiction of courts for litigation involving the Yogam. The court concluded that the suit was not maintainable in the court where it was filed due to lack of jurisdiction and the availability of alternative remedies.
Fact of the Case:
The respondent filed a suit against the petitioners claiming to be a member of the Chennai Sree Narayana Dharma Paripalanam (SNDP) Union. The respondent sought various reliefs, including a declaration that the second petitioner has no right to function as General Secretary of the first petitioner. The petitioners filed a civil revision petition seeking to strike off the plaint on various grounds, including lack of jurisdiction of the court where the suit was filed. The court analyzed the jurisdiction issue, the applicability of Section 10GB of the Companies Act, and the provisions of the SNDP Yogam Rules. The court held that the suit was not maintainable in the court where it was filed and struck off the plaint.
Finding of the Court:
The court analyzed the jurisdiction issue, the applicability of Section 10GB of the Companies Act, and the provisions of the SNDP Yogam Rules. The court held that the suit was not maintainable in the court where it was filed and struck off the plaint.
Ratio Decidendi: The court held that the suit was not maintainable in the court where it was filed due to lack of jurisdiction and other legal grounds.
Result: The court allowed the civil revision petition and struck off the plaint. The court directed the lower court to delete the suit from its file. The respondent was not precluded from initiating proceedings in other forums as per the applicable rules.
1. The present civil revision petition is filed seeking to dismiss and strike off the suit in O.S.No.8038 of 2011 pending on the file of the learned XVI Assistant Judge, City Civil Court, Chennai.
2. The defendants in the said suit are the petitioners herein and the plaintiff thereon is the respondent.
3. The respondent has laid the said suit against the petitioners claiming to be the member of the Chennai Sree Narayana Dharma Paripalanam (SNDP) Union, making several allegations against the second petitioner and as well as the third petitioner. In the said suit, the respondent has taken out two applications in I.A.Nos.17417 and 17418 of 2011 for interim injunction restraining petitioners 2 and 3 from in any manner dealing or encumbering or alienating the suit property and for interim injunction restraining the second petitioner herein from in any manner representing / functioning as General Secretary of the first petitioner respectively. By an order dated 31.10.2011, interim injunction was granted in both the applications by the said Court. The present civil revision petition has been filed, as stated already, to strike off the plaint.
4. The present civil revision petition was filed on the following grounds viz.,
(a) The Court where the suit has been filed, has no jurisdiction to entertain the suit and pass interim orders.
(b) Section 10GB of the Companies Act, 1956 expressly prohibits civil Courts to entertain the suits pertaining to the administration or affairs of the company.
(c) The relief that has been sought for in the suit would disclose that the respondent is seeking to restrain the elected directors and administrators viz., petitioner 2 and 3 herein from functioning and representing the first petitioner company without even challenging their election and appointment. Hence, the suit is not maintainable in law.
(d) The suit is barred under Section 11 C.P.C.
(e) Rule 71 of the Rules of the SNDP Yogam provides for resorting disputes pertaining to constitution of branches of the first petitioner company and conduct of election to an arbitrator.
(f) The members of the company have agreed with regard to the territorial jurisdiction for referring the disputes between them pertaining to conduct of election. In view of the same, the suit filed before the City Civil Court at Chennai is not maintainable.
5. On behalf of the respondent, the following contentions have been put forth viz., (a) The remedy of the petitioners, if aggrieved over the order of interim injunction granted by the trial Court, is to file an application for vacating the order of interim injunction or to file a civil miscellaneous appeal against the said order and the civil revision petition before this Court is not maintainable.
(b) The petitioners without filing vakalat and without filing a counter in the applications for interim injunction, have straight away approached this Court by filing the present civil revision petition under Article 227 of the Constitution of India, which is not sustainable / maintainable. This Court cannot see the merits and de-merits of the matter in issue, which has to be considered only by the trial Court, where the suit is pending.
6. Learned counsel appearing for the petitioners relied on the following decisions:-
(i) A.I.R. 1995 SUPREME COURT 1766 -M/s.Angile Insulations v. M/s. Davy Ashmore India Ltd. And another.
(ii) A.I.R. 1996 MADRAS 140 - Sri.Suryanarayana Paper and Boards Private Limited and other v. V.Padmakumar and 2 others.
(iii) A.I.R. 2002 SUPREME COURT 2402 -M/s.Shriram City Union Finance Corporation Ltd., v. Rama Mishra
(iv) A.I.R. 2002 MADRAS 396 -M/s.Consolidated M/s.Gujarat Carbon and Industries Ltd., and another.
(v)A.I.R. 2005 MADRAS 72 - Suguna Poultry Farm Ltd and others v. Arul Mariamman Textiles Ltd. and others
(vi)A.I.R. 2006 SUPREME COURT 1474 -Kishore Kumar Khaitan and Anr. v. Praveen Kumar singh
(vii)2010 (4) CTC 690 - Southern and Rajamani Transport Private Limited v. R.Srini
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