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2025 Supreme(Online)(Mad) 66812
THE HIGH COURT OF JUDICATURE AT MADRAS Order reserved on : 04.08.2025 Order pronounced on : 29.08.2025 CORAM THE HON'BLE MR. JUSTICE P.B.BALAJI CRP.No.2034 of 2025 & CMP.No.11846 of 2025 Chettinad Cement Corporation Limited, Rani Seethai Hall Building 603, Anna Salai, Chennai – 600 006. ..Petitioner Vs.
1.MAM Ramaswamy Chettiar Charitable Trust Represented by its Trustee Mr.A.C.Muthiah, Chettinad House, Raja Annamalaipuram, Chennai – 600 028.
2.M.A.M.R.Muthiah
3.Geetha Muthiah ..Respondents Prayer: Civil Revision Petition filed under Article 227 of Constitution of India, to set aside the order dated 14.02.2025 passed by the II Additional City Civil Court, Chennai in I.A.No.2 of 2023 in O.S.No.8652 of 2021.
For Petitioner : Mr.R.Jawaharlal for Mr.T.Balaji For Respondents : Mr.Ravi Senior Counsel for Mrs.S.Indumathi for R1 No appearance for RR2 and 3
A non-member cannot claim remedies under the Companies Act, yet has recourse in civil courts until probate is determined; jurisdictional bars under the Companies Act do not warrant automatic rejection of the plaint.
Headnote:(A) Companies Act, 2013 - Sections 430 and 241 - Civil Revision Petition - The dismissal of the application for rejection of plaint upheld on grounds of jurisdiction and maintainability - Court highlights that non-members lack standing to file claims under the Companies Act but can seek civil remedy until probate is determined. (Paras 2, 8-19)
(B) Civil Procedure Code - Order VII Rule 11 - The criteria for rejection of plaint was addressed, emphasizing the necessity of a cause of action to maintain a suit. (Paras 8, 19)
Facts of the case:
The petitioner contested the trial court's dismissal of his application for rejection of a plaint, claiming a jurisdictional bar under the Companies Act, arguing the plaintiff lacks standing.
Findings of Court:
The Court affirmed the trial court's order, stating the plaintiff's current non-member status does not abrogate the right to pursue civil action pending probate results.
Issues: The case revolved around jurisdictional authority under the Companies Act regarding non-members' ability to pursue lawsuits.
Ratio Decidendi: The court concluded that while jurisdiction may be limited, the plaintiff retains the right to seek resolution through civil proceedings pending probate validation.
Result: The Civil Revision Petition is dismissed.
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ORDER
The 1st defendant in O.S.No.8652 of 2024, aggrieved by the dismissal of his application in I.A.No.2 of 2023, is before this Court with the above revision.
2.I have heard Mr.R.Jawaharlal, learned counsel for Mr.T.Balaji, learned counsel for the petitioner and Mr.Ravi, learned Senior Counsel for Mrs.S.Indumathi, learned counsel for the respondents 2 and 3.
3.The learned counsel for the petitioner would submit that the Trial Court has erroneously dismissed the application filed for rejection of the plaint under Order VII Rule 11 of CPC. The fulcrum of the argument of the learned counsel for the petitioner is that there is a clear bar under Section 430 of the Companies Act and the suit ought not to have been allowed to continue to be on file. The learned counsel for the petitioner, taking me through the various dates on which the provisions of the Companies Act, 2013 , came into force, would contend that the suit has been admittedly filed after of the Companies Act was notified. He would also refer to Section 465 of the Companies Act, which came into force on 30.01.2019, repealing the entire earlier Act of 1956. He also pointing out that the plaintiff was not a shareholder and no shares were transferred in his name and in view of Section 2 (55), the plaintiff is a rank outsider and would be entitled to transfer of shares only if he succeeds in the probate petition.
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4.The learned counsel for the petitioner would also contend that the remedy of the petitioner can be only before the National Company Law Tribunal (hereinafter called as NCLT) and refer to the fact that a similarly placed person, who moved NCLT was unsuccessful. He would therefore state that there is absolutely no cause of action for the suit and the plaintiff is only indulging in forum shopping, which is not permissible. He would therefore state that the Trial court has clearly fell in error in dismissing the application for rejecting the plaint. He would also place reliance on the following decisions:
1. Binapani Kar Chowdhury Vs. Sri Satyabrata Basu and Another ( (2006) 10 SCC 442 ).
2. Sardesai Engineering Private Limited and Others Vs. Mahadeo Appasaheb Jagtap and Others (CRP.No.141 of 2022 dated 22.01.2024).
3. Jithendra Parlapalli Vs. Wirecard India Private Limited (2023 SCC Online NCLAT 1435).
4.Dahiben Vs. Arvindbhai Kalyanji Bhanusali (died) through LRs and Others (2020 7 SCC 366).
5. Viji Joseph Vs. P.Chander and Others (2019 SCC Online Mad 10424).
5.Per contra, Mr.S.Ravi, learned Senior Counsel appearing for the 1st respondent would state that the Trial Court has rightly stuck to the principles of going only by the plaint and plaint averments and testing the same for the purposes of deciding the application seeking rejection of the plaint and having found that the plaint, discloses a cause of action and cannot be rejected at the threshold, the Trial Court has dismissed the Order VII Rule 11 of CPC petition seeking rejection of the plaint. He would therefore state that there is no infirmity in the order of the Trial Court.
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6.Meeting the argument of the learned counsel for the petitioner with regard to the bar of Section 430 operating that the remedy available is only under Section 2 41 and 242, the learned Senior Counsel for the 1st respondent would submit that under 41 , only a member is entitled to move NCLT. He would also take me through (55) of the Act and he would contend that when the Tribunal is not competent to try the present suit at the instance of a non member admittedly, then the suit is certainly maintainable. He would also place reliance on the decision of the Bombay High Court in CDS Financial Services (Mauritius) Limited Vs. BPL Communications Limited and Others, reported in 2001 SCC Online Bom 1112.
7.I have carefully considered the submissions advanced by the learned counsel for the petitioner and the learned Senior Counsel for the 1st respondent. I have also gone through the plaint as well as the order of the Trial Court, dis
