The civil court's jurisdiction is ousted under the statutory bar where a specialized tribunal, empowered to resolve corporate oppression and mismanagement, is already seized of the central controversy, even if the suit alleges fraud or forgery that is incidental to those corporate proceedings.

Headnote:(A) Code of Civil Procedure, 1908 - Order VII Rule 11 - Rejection of plaint - Bar of jurisdiction - Statutory ouster - Whether civil court retains jurisdiction when matters pending before specialized tribunal involve allegations of forgery - Section 430 of the Companies Act provides an absolute bar to civil jurisdiction where the tribunal is empowered to determine the subject matter - Purpose of statutory bar is to prevent parallel proceedings and ensure the tribunal acts as the primary forum for corporate disputes. (Paras 23, 27, 31, 56)

(B) Companies Act, 2013 - Sections 241, 242 and 430 - NCLT Rules, 2016 - Rules 11 and 43 - Powers of tribunal - Adjudication of fraud and forgery - Where allegations of document fabrication are incidental and integral to the complaint of oppression and mismanagement, the tribunal possesses wide powers to evaluate evidence and declare documents invalid - Mere pleading of fraud cannot be used as a device to bypass the specialized forum or create artificial civil jurisdiction. (Paras 41, 42, 50, 54)

(C) Judicial Comity - Parallel proceedings - Courts must avoid conflicting findings in concurrent proceedings - Where a specialized authority is seized of the core controversy, the civil court ought to refrain from exercising jurisdiction, applying the principle of judicial comity to prevent forum shopping and multiplicity of litigation. (Paras 63, 65)

Facts of the case:
A lawsuit was initiated in a civil court seeking a declaration that certain corporate documents, including share transfer agreements and board resolutions, were null and void based on allegations of forgery. Concurrently, a separate petition regarding the same corporate management dispute and accusations of oppressive conduct was already actively pending before the specialized national tribunal. The corporate entity moved to reject the civil plaint, asserting that the civil court lacked subject matter jurisdiction under the statutory bar.

Findings of Court:
The court held that the civil suit was fundamentally an attempt to address matters that were already integral to the proceedings before the specialized tribunal. Because the tribunal is statutorily authorized to grant a wide range of reliefs—including the setting aside of agreements—the civil suit’s purported cause of action is hit by the bar of jurisdiction. The court emphasized that allegations of fraud do not automatically strip the specialized authority of its jurisdiction, especially when such issues are directly related to the regulation of the entity’s affairs.

Issues: Whether a civil court is barred from entertaining a suit seeking a declaration of forgery regarding corporate documents when substantially similar matters are already subject to proceedings before a specialized statutory tribunal.

Ratio Decidendi: The statutory bar excludes civil jurisdiction in all matters the specialized tribunal is empowered to determine. Because the tribunal holds comprehensive powers to inquire into fraud, forgery, and management conduct as part of its summary jurisdiction over corporate affairs, the civil suit is barred under the principle that specific legislative forums hold exclusive authority over the management and internal disputes of corporate bodies.

Result: Petition allowed; the plaint stands rejected.

JUDGMENT

1. The present revision petition is filed challenging the order dated 24.12.2024 (hereafter ‘impugned order’), passed by the learned District Judge, South East District, Saket Court, New Delhi in CS No. 3503/24.

2. Application filed by the petitioner (Defendant No.1) seeking rejection of the plaint under Order VII Rule 11 of the Code of Civil Procedure, 1908 (‘CPC’) was dismissed by the impugned order.

3. The brief facts of the case are as follows:

3.1. The subject suit, being CS No. 3503/2024, is filed by the plaintiffs/ Respondent Nos.1 to 3 seeking declaration of certain documents as non est, null and void claiming that the said documents bore the forged signatures of the plaintiffs. The plaintiffs also sought a decree of permanent injunction restraining the defendants (that is, the petitioner and Respondent Nos. 4 to 11) from acting upon the subject documents. The impugned documents, as mentioned in Clause A of the prayer in the suit, are as under:

i. Document titled as “Shareholders Agreement” dated 30th July 2020;

ii. Form No. SH-1 dated 20th July, 2020 which bears the forged signatures of Mr. Nitin Katiyar (Plaintiff No.3) & Mr. Vikash Kumar Mishra (Plaintiff No.2) [Distinctive Number 10001 to 36520 – Corresponding Certificate No. 11 and registered folio number 01];

iii. Form No. SH-4 dated 30th July, 2020 which bears the forged signatures of Mr. Nitin Katiyar & Mr. Vikash Kumar Mishra [Distinctive Number 10001 to 36520 – Corresponding Certificate No. 11 and registered folio number 01];

iv. Form No. SH-1 dated 20th July, 2020 which bears the forged signatures of Mr. Vivek Kumar Mishra (Plaintiff No.1) & Mr. Vikash Kumar Mishra [Distinctive Number 11001 to 136520 – Corresponding Certificate No. 13 and registered folio number 02]

v. Form No. SH-4 dated 30th July, 2020 which bears the forged signatures of Mr. Vivek Kumar Mishra & Mr. Vikash Kumar Mishra [Distinctive Number 11001 to 136520 – Corresponding Certificate No. 13 and registered folio number 02]

vi. Form No. SH-1 dated 20th July, 2020 which bears the forged signatures of Mr. Vikash Kumar Mishra and Mr. Sujeet Jha [Distinctive Number 210001 to 269670 – Corresponding Certificate No. 15 and registered folio number 03]

vii. Form No. SH-4 dated 30th July, 2020 which bears the forged signatures of Mr. Vikash Kumar Mishra and Mr. Sujeet Jha [Distinctive Number 210001 to 269670 – Corresponding Certificate No. 15 and registered folio number 03]

viii. Form No. SH-1 dated 20th July, 2020 which bears the forged signatures of Mr. Vikash Kumar Mishra and Mr. Sujeet Jha [Distinctive Number 434401 to 454290 – Corresponding Certificate No. 17 and registered folio number 05]

ix. Form No. SH-4 dated 30th July, 2020 which bears the forged signatures of Mr. Vikash Kumar Mishra and Mr. Sujeet Jha [Distinctive Number 434401 to 454290 – Corresponding Certificate No. 17 and registered folio number 05]

x. Undated Receipts for consideration bearing forged signature of Mr. Vivek Kumar Mishra; Mr. Nitin Katiyar; Mr. Sujeet Jha and Mr. Vikash Kumar Mishra.

xi. Board Resolution of the Raphe (Respondent No.4/ Defendant No.9) dated 03rd September, 2020 approving transfer of shares bearing forged signatures of Mr. Vikash Kumar Mishra and Mr. Sujeet Jha;

xii. Board Resolution of the Raph dated 16th July, 2020 for approval of split of share certificate No. 04, 05, 09 and 10 bearing forged signatures of Mr. Vikash Kumar Mishra and Mr. Nitin Katiyar.

3.2. It is the case of the plaintiffs that they are the founders of Respondent No.4 company (Defendant No. 9), which is a research-led, high-tech startup focused on designing, developing and manufacturing world class Unmanned Aerial Vehicle (UAV) for the defence forces of India. It is claimed that in the year 2019, Respondent No. 4 company was in dire need of funds for making the required products for the final phase of a competition, when Respondent Nos. 2 and 3 were introduced to Respondent No.5 (partner of the petitioner firm)/ Defendant N

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2025 Supreme(Online)(Del) 9961

The civil court's jurisdiction is ousted under the statutory bar where a specialized tribunal, empowered to resolve corporate oppression and mismanagement, is already seized of the central controversy, even if the suit alleges fraud or forgery that is incidental to those corporate proceedings.

Cases Referred (2)