Back
IN THE HIGH COURT OF ORISSA AT CUTTACK
BISWANATH RATH, J.
Utkal Chamber of Commerce and Industries Ltd. – Petitioner
Versus
Sanjeev Mahapatra and Others – Respondents
W.P. (C) Nos. 12645, 23128 of 2021
Decided On : 04-10-2021
Companies Act, 2013 - Sections 241, 242, 430, 291, 179 (4) r/w 180 and 59 - Application to Tribunal for relief in cases of oppression, etc. - Civil Court not to have jurisdiction - Office bearers draws salary/remuneration towards their service - Retirement from office - Issue of Oppression of mismanagement by majority share holders against the minority share holders - Whether by an alteration in Board of Directors, or manager - Whether or not he is a member of the company - Alleged in Company Petition by OP-1 and 2 do not pertain to any oppression or mismanagement by majority against any minority. No financial irregularity was ever noticed or agitated upon in any forum speaks of smooth running of organization - Allegations in the Company Petition pertain to power/ jurisdiction/authorities/duties/functions of directors, Executive Committee and office bearers, election, suspension of members, retirement of office bearers and directorial issues accordingly fall beyond scope of Section 241 and 242 - Allegation in Company Petition even if accepted for sake of argument, it disclose a dispute, which is civil kin nature being election dispute and Civil Court has only jurisdiction to try same and not the NCLT as no corporate right is violated - Allegations in Company Petition are all personal in nature and to feed fat to grudge of OP-1 and 2, particularly when they failed in election process to be elected have filed Company Petition under the guise of Section 241 and 242 of Act, 2013 is not maintainable.
Finding of the Court:
Power was fairly wide, but in case of a serious dispute as to title, matter could be relegated to a civil suit - Cause of action has arisen at a stage prior to this enactment - Court are of view that relegating parties to civil suit now would not be appropriate remedy, especially considering manner in which Section 430 of Act is widely worded - Court opinion that in view of subsequent developments - Appropriate course of action would be to relegate appellants to remedy before NCLT under the Companies Act, 2013 - Lapse of time permit appellants to file a fresh petition within a maximum period of two months from today - Court since finds, same are to be left for consideration of NCLT dependent on claim and counter of both parties involved, touching these aspects at this stage of matter will be amounting to encroaching upon jurisdiction of NCLT circumstance - Court is not inclined to enter into any other area and leaves all these open to parties to agitate and get adjudicated by NCLT concerned.
Result: Writ Petitions dismissed.
JUDGMENT :
BISWANATH RATH, J.
1. Writ Petition bearing W.P. (C) No. 12645 of 2021 is filed by the elected executive members of the Company, Utkal Chamber of Commerce and Industrial Limited, W.P. (C) No. 23128 of 2021 has been filed by Utkal Chamber of Commerce and Industrial Limited, as the company involved herein.
2. Bare perusal of the pleadings involving both the writ petitions, it appears, both writ petitions almost run parallel, except very minimal changes maintaining the same framework.
Prayer made in W.P. (C) No. 12645 of 2021 reads as follows:
(i) Issue a writ in the nature of “certiorari” and mandamus” or any other writs, orders/directions quashing the proceeding in C.P. No. 11/CB/2021 pending before the NCLT, Cuttack.
(ii) Pass as such other or further order as this Hon’ble Court may deem fit and proper.
And for such act of kindness, the petitioners as in duty bound shall ever pray.”
3. Similarly, prayer made in W.P. (C) No. 23128 of 2021 reads as follows:
(i) Issue a writ in the nature of “certiorari” and mandamus” or any other writs, orders/directions quashing the proceeding in C.P. No. 11/CB/2021 pending before the NCLT, Cuttack.
(ii) Pass as such other or further order as this Hon’ble Court may deem fit and proper. And for such act of kindness, the petitioners as in duty bound shall ever pray.”
Through both the writ petitions it is again observed that there is almost a common relief sought for.
4. Common background involved in both the cases is that both the cases appear to be aiming with challenge to the initiation of the Company Proceeding No. 11/CB/2021 pending before the National Company Law Tribunal (for short “NCLT”) Cuttack on the premises of issues raised in the Company Act proceeding is pending consideration of the suit bearing C.S. No. 1182 of 2020, both sets of Petitioners claimed, the Company Proceeding in the circumstance is not maintainable. Looking to the nature of dispute and keeping in view a clear undertaking, this Court here also takes into account the prayer in C.S. No. 1182 of 2020 as well as prayer in C.P. No. 11/CTB/202 which runs as follows:
“Under the aforesaid facts and circumstances, this Hon’ble Court may be graciously pleased to award decree in favour of plaintiffs as follows:
(a) Let a decree be passed declaring the Executive Committee is the only and final authority to take decision on confirmation of Balance Sheets, Annual General Meeting and the Office Bearers/directors be part of Executive Committee not a separate body.
(b) Let a decree be passed directing defendants to perform duties in accordance with the Article of Association (AoA) of the Chamber.
(c) Let a decree be passed in favour of the plaintiffs permanently restraining defendants taking decisions of Balance Sheets and AGM.
(d) Any other further or other orders/directions may be passed as this Hon’ble Court may deem fit and proper under the circumstance of the case.
Prayer made in C.P. No. 11/CTB/202:
“In the facts and circumstances, the Petitioners humbly pray for the following reliefs:
(a) A scheme be framed for management and administration of the Company.
(b) Declare the decision of the board of Directors vide resolution dated 12.1.2021 as absolute and binding.
(c) The purported cessation of the Petitioners as Director of the Company be adjudged null and void.
(d) The Petitioners and other Ex-Directors be forthwith reinstated as Director of the Respondent No. 1 Company.
(e) The Respondent Nos. 3-7 be removed as Directors of the Respondent No. 1 Company and be restrained from holding themselves out as Directors of the company.
(f) Mandatory Injunction restraining the Respondents from transferring and movable or immovable property of the company, conducting the affairs of the Company or intermeddling with the a
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
