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2012 Supreme(Mad) 3714
High Court of Judicature at Madras
R.S. RAMANATHAN
K. Saravanan & Another
Versus
Cosmopolis Properties Pvt. Ltd, Rep By its Managing Director, Salem & Others
C.R.P.(PD)No.2009 & 2833 of 2012, M.P.Nos.1 & 1 of 2012
Decided On : 31-08-2012
For the Appearing Parties:M. Venkatachalapathy, Senior Counsel for S. Xavier Felix, R2, T.V. Ramanujan, Senior Counsel for R. Venkatavaradhan, M.V. Venkataseshan, Advocates.
The civil courts have jurisdiction to entertain suits of civil nature unless expressly or impliedly barred by statute, and the ouster of civil court's jurisdiction is not to be readily inferred.
Headnote:
Companies Act - Jurisdiction of Civil Court - Sections 2(11), 10, 10GB - Summary of Acts and Sections
Fact of the Case:
The defendants filed civil revision petitions to strike off the plaint in O.S.Nos.410 of 2011 and to set aside the order in O.S.No.862 of 2010. The plaintiffs sought declarations and injunctions related to a memorandum of understanding and company matters.
Finding of the Court:
The court found that the civil courts have jurisdiction to entertain suits of civil nature unless expressly or impliedly barred by statute. The relief sought by the plaintiffs did not fall within the exclusive jurisdiction of the Company Court.
Issues: Jurisdiction of Civil Court in Company Matters, Interpretation of Sections 2(11), 10, 10GB of the Companies Act
Ratio Decidendi: The civil courts have jurisdiction to entertain suits of civil nature unless expressly or impliedly barred by statute. The relief sought by the plaintiffs did not fall within the exclusive jurisdiction of the Company Court.
Final Decision: The civil revision petitions were dismissed, and the ordinary civil courts were found to have jurisdiction. No costs were awarded.
1. Defendants 1 and 2 in O.S.No.410 of 2011 on the file of the I Additional District Munsif, Salem are the revision petitioners in C.R.P. PD No.2009 of 2012. Defendants 2 and 3 in O.S.No.862 of 2010 on the file of the I Additional District Munsif, Salem are the revision petitioners in C.R.P. PD No.2833 of 2012.
2. C.R.P. PD No.2009 of 2012 is filed to strike off the plaint in O.S.Nos.410 of 2011 and C.R.P. PD No.2833 of 2012 is filed to set aside the order dated 28.1.2011 passed in I.A.No.1876 of 2010 in O.S.No.862 of 2010 on the file of the I Additional District Munsif, Salem.Respondents 1 and 2 in both the revisions filed the suit in O.S.No.410 of 2011 to declare the notice dated 19.4.2011 calling for the Board Meeting as sham and nominal as the notice is illegal and against the terms of the memorandum of understanding dated 17.4.2010 and for permanent injunction restraining the defendants in the suit from conducting any Board Meeting in respect of any subject covered under the memorandum of understanding dated 17.4.2010. Respondents 1 and 2 in C.R.P. PD No.2833 of 2012 filed the suit in O.S.No.862 of 2010 for declaration that the acts of defendants 1 to 3 in going back upon and violating the memorandum of understanding is illegal and arbitrary and for permanent injunction restraining defendants 1 to 3 from selling or transferring their shares in the first plaintiff company to any other person and for mandatory injunction to direct defendants 1 to 3 to comply with their commitment as per the memorandum of understanding.
3. Mr.M.Venkatachalapathy, learned Senior Counsel appearing for the revision petitioners in C.R.P.PD No.2009 of 2012 submitted that as per the provisions of section 2(11) and 10 of the Companies Act, 1956, in respect of Company matters, the court is the High Court when the cause of action arose within the jurisdiction of the city of Madras and in any other place, the District Court and therefore, the suits filed before the Munsif Court is not maintainable and the Munsif Court has no jurisdiction to entertain the matters relating to Company and therefore, the suits are liable to be struck off. The learned Senior Counsel further submitted that having regard to the provisions of section 10GB of the Companies Act, the civil courts have no jurisdiction to entertain any suits or proceedings in respect of any matters which the Tribunal or the appellate authority is empowered to determine by or under the Companies Act or any other law for the time being in force and no injunction shall be granted by any court and therefore, submitted that the Munsif Court has no jurisdiction to entertain these two suits. The learned Senior Counsel further elaborated the arguments by submitting that in the suit in O.S.No.410 of 2011, respondents 1 and 2/plaintiffs seek for declaration that the notice dated 19.4.2011 calling for the Board Meeting is sham and nominal and it is against the terms of memorandum of understanding and also seek for injunction from conducting any Board Meeting and the Companies Act provides for convening of the Board Meetings and as per the Companies Act, Board Meetings are to be convened as per the provisions of sections 295 and 296 of the Companies Act and the Board Meeting has to be convened to obtain sanction for approval of certain contracts in which the Directors are interested and therefore, if the convening of the Board Meetings are restrained by an order of injunction, that would affect the administration of the Company and under the Companies Act, the Tribunal and the Company Law Board are the authorities to deal with all matters relating to Company and in the absence of any Tribunal, the court has to be approached and as far as the Companies Act is concerned, the court is "the court" as defined under section 2(11) and 10 of the Companies Act which is the High Court or District Court and therefore, the suit filed by respondents 1 and 2 before the Munsif Court is not maintainable. In supp
