The Civil Court lacks jurisdiction over matters under the Companies Act, but the distinction between Stand Members and Club Members requires a full trial to determine rights and jurisdiction.

ORDER :

This Civil Revision Petition is filed as against the order passed in I.A.No.4 of 2021 in O.S.No.3962 of 2020 on the file of XIV Assistant City Civil Court, Chennai dated 14.06.2022 wherein the petitioner herein has filed an Interlocutory Application before the trial Court to reject the plaint and the same was dismissed.

2. The brief averments of the petition filed before the trial Court are as follows:

The petitioner is the defendant in the suit and the respondent as plaintiff filed a suit for the relief of declaration to declare the notice dated 29.10.2020 issued to him by the petitioner/defendant is illegal and the same is not binding on the respondent/plaintiff and also for a consequential relief permanent injunction restraining the petitioner/defendant, their men, their servants and others acting on their behalf from removing and prohibiting the respondent/plaintiff's entry in the Madras Race Club including the benefit as a Stand Member SMS 2303, except by due process of law under the bye laws of the petitioner/defendant's Club.

2.1 The petitioner/defendant Club is a company defined under Section 2(20) of the Companies Act, 2013 and the Club is governed by a committee of management which is equivalent of the Board of Directors. The Club has two categories of members namely Club Members and Stand Members. As per Article 4(Amended as Article 7) of the Articles of Association of the Club, the Club members alone are entitled to vote at an Annual General Body meeting of the Club.

2.2 The respondent/plaintiff claiming himself to be a Stand Member of the Club, had filed a petition in C.P.No.31 of 2017 which is pending before the National Company Law Tribunal (hereinafter referred to as “NCLT”). The petitioner/defendant Club brought to the notice of the NCLT that the audit and investigation into the validity of the members of the Club was completed and in that report 924 persons alone were found to be the members of the Club. Subsequently, the NCLT appointed Hon'ble Mr.Justice K.P.Sivasubramaniam to independently conduct an investigation into the genuineness of the members of the Club and also to file a report. As per his report, 635 persons were identified as persons who were not validly admitted as Club members. Hence, the NCLT has directed the petitioner/defendant to rectify its register of members by removing the name of those 635 persons and the same was also complied by the petitioner/defendant. Challenging the said order of NCLT, the appeals in Company Appeal (AT) No.332 of 2019 and Company Appeal (AT) No.367 of 2019 are pending.

2.3 There is no difference between Stand Members and the Club Members as far as the need to satisfy certain requirements and procedures laid down in the Articles of Association for their being admitted to the Club. Each of the Stand Members are elected only by the majority of Club Members. Pursuant to the resolution of the committee of the Club, notice were issued to Stand Members including the respondent/plaintiff requesting them to furnish proof in relation to the validity of their membership.

2.4 The petitioner/defendant granted sufficient time to the respondent/plaintiff to produce the material proof that he became member of the Club in the manner known to the provisions of the Club. The respondent/plaintiff realizing his inability to produce such records is seeking to pre-empt the entire process by virtue of the present suit. The relief sought for in the plaint effectively amounts to a direction to the petitioner/defendant Club not to remove the respondent/plaintiff from the members register and only the NCLT has the jurisdiction to enquire into and pass orders in terms of Section 59 of the Companies Act, 2013. Accordingly, as per Section 430 of the Companies Act, the Civil Court has no jurisdiction in respect of the matters to be adjudicated by the NCLT.

2.5 A challenge cannot lie as against a mere notice. The plaint does not disclose any cause of action and the rights of all the members are