MADHYA PRADESH HIGH COURT AT INDORE BENCH
J.K.Maheshwari, J.
R.R.Home Developers Pvt.Ltd. and Others - Appellant
Versus
Rajendra Jain - Respondent
Civil Rev. No. 236 of 2012
Decided On : 26-03-2013
Companies Act - Jurisdiction of Civil Court - Section 9, Section 10 - Summary of Acts and Sections: The court discussed the jurisdiction of the Civil Court in relation to matters governed by the Companies Act, specifically focusing on the provisions of section 9 and section 10 of the Companies Act. The court examined various judgments and legal principles to determine that the jurisdiction of the Civil Court is not automatically ousted by the commencement of the Companies Act. It emphasized that the exclusion of the jurisdiction of the Civil Court cannot be readily accepted unless expressly or impliedly barred by the provisions of the statute.
Fact of the Case:
The suit was filed to declare the meeting of the Board of Directors as null and void, to declare certain forms as null and void, and to restrain the commencement of the meetings of the Board of Directors. The applicants sought to dismiss the suit for want of remedy under the Companies Act.
Finding of the Court:
The court found that the jurisdiction of the Civil Court is not automatically ousted by the commencement of the Companies Act. It held that the Civil Court has jurisdiction to try all suits of a civil nature unless expressly or impliedly barred, and that the jurisdiction of the Civil Court is not completely ousted under the Companies Act.
Issues: The issues involved the jurisdiction of the Civil Court in relation to matters governed by the Companies Act, specifically whether the jurisdiction of the Civil Court is impliedly barred by the provisions of the Companies Act.
Ratio Decidendi: The court relied on various legal principles and judgments to establish that the jurisdiction of the Civil Court is not automatically ousted by the commencement of the Companies Act, and that the exclusion of the jurisdiction of the Civil Court cannot be readily accepted unless expressly or impliedly barred by the provisions of the statute.
Final Decision: The court dismissed the revision filed by the applicants, upholding the trial court's rejection of the application under Order 7, Rule 11 of the Civil Procedure Code filed by the defendants/applicants.
Challenging the order dated 29-11-2012 passed by the XXI Additional District Judge, Indore in Civil Suit No. 42-A/12, rejecting the application filed by applicants under Order 7, Rule 11 read with section 151 of Civil Procedure Code to dismiss the suit for want of having remedy under the Companies Act, this Revision has been preferred.
2. On perusal of the order impugned it appears that in the application filed by the applicants, it is stated that the suit has been filed to declare the meeting of the Board of Directors as null and void and to declare the Form Nos. 32 and 33 as null and void and to restrain the commencement of the meetings of the Board of Directors. It is further stated that as per section 9 of the Companies Act, 1956 (hereinafter referred to as 'Companies Act'), the District Court can hear and decide the matter as specified in section 10 of the Companies Act. The trial Court on perusal of the Clause 28-B of the suit that a prayer for permanent injunction has also been made which can only be granted by the Civil Court and in the light of the judgment of Hon'ble the Apex Court in the case of Dwarka Prasad Agarwal vs. Ramesh Chander Agarwal, (2003) 6 SCC 220 the jurisdiction of Civil Court is not expressly or impliedly barred, therefore rejecting the application filed by the applicants, suit has been maintained.
3. Learned counsel appearing on behalf of the applicants has strenuously urged that looking to the averments of the Civil Suit and the prayer as made subject-matter of the suit is governed by the provisions of the Companies Act. As per section 10 of the Companies Act, the Court means a Court dealing with any matter relating to Company have jurisdiction under the Act. In the matter of removal of the Directors and to declare such meeting invalid which affects mismanagement of the Company, an application may be filed before the Company Law Board or Tribunal as per section 398 of the Act. However, the jurisdiction of the Civil Court is impliedly barred therefore the trial Court committed an error to reject such an application and not to dismiss the suit filed by the respondent/plaintiff. In such circumstances, the order passed by the learned trial Court be set aside allowing this revision.
4. Per contra Shri Baheti, learned counsel appearing on behalf of the respondent has contended that as per the judgment of the Hon'ble Apex Court in Dwarka Prasad Agarwal (supra), it has been held that the jurisdiction of the Civil Court is not expressly barred in company matter, therefore, the trial Court has rightly rejected the application filed by the applicants under Order 7, Rule 11 read with section 151 of Civil Procedure Code. In such circumstances, it is urged that the revision filed by the applicants may be dismissed.
5. In the sequel of facts of this case, on search one judgment of the M. P. High Court deciding the said issue in unequivocal terms was found. In the case of Nava Samaj Ltd. Nagpur vs. Civil Judge, Class-I, Rajnandgaon, reported in 7966 MPLJ 335 = AIR 1966 M.P. 286, Justice P. B. Dixit, has taken a view that after commencement of Companies Act, jurisdiction of the Civil Court is excluded, while Justice K. L. Pandey dissenting with the said view held that the Civil Court's jurisdiction is not ousted until it is impliedly or expressly barred. Thus, considering the issue as involved is of larger interest regarding the jurisdiction of the Civil Court, after commencement of the Companies Act. However, learned senior counsel Shri A. K. Chitale, present in Court has been appointed as Amicus Curiae to assist this Court.
6. Shri A. K. Chitale learned senior counsel referring the definition of the Court specified in section 2(11) of the Companies Act as well as section 10 and also sections 397, 398, 399 and 402 of the Companies Act and also in reference to section 9 of Civil Procedure Code, contended that even after commencement of the Companies Act, the jurisdiction of the Civil Court is not automaticall
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