IN THE HIGH COURT OF MADHYA PRADESH AT INDORE BEFORE HON'BLE SHRI JUSTICE SANJEEV SACHDEVA &

HON'BLE SHRI JUSTICE PRANAY VERMA MISCELLANEOUS APPEAL No. 717 of 2023 KANHAIYALAL KEWALRAMANI (THR LRS) & OTHERS Versus PARMANAND KEWALRAMANI & OTHERS Appearance:

Shri Divyakant Lahoti and Rahul Maheshwari - Advocates for Appellant.

Shri Vijayesh Atre - Advocate for respondent.

Pronounced on : 29.11.2024

ORDER

Per: Justice Sanjeev Sachdeva

1. Appellant impugns order dated 15.12.2022, whereby the Plaint of the Suit filed by the Appellant seeking specific performance of the agreement to execute share transfer deed has been returned to be presented to the Company Law Tribunal on an application under Order 7 Rule 11 CPC.

2. Subject Suit has been filed by the predecessor of Appellant No. 1, 3 & 4 and Appellant No. 2 contending that the Plaintiffs and Defendants 1 to 5 to the Suit are shareholders in Defendant No. 9 Company M/s Medilux Laboratories (P) Ltd. It is contended that there was infighting between the shareholders and likelihood of the business closing. Defendants 1 to 5 have filed an insolvency petition before the National Company Law Tribunal.

3. As per the Plaint, said defendants, conveyed their decision to exit from the Indian Operations including their shareholding in M/s Medilux Laboratories (P) Ltd., which proposal was accepted by the Plaintiffs. It is contended that both the parties had decided (in the year 2014) to amicably divide the holdings on mutually agreed terms, and the “Oral Agreement” inter-alia included stage wise process and conduct, to be performed by the parties so that the businesses are divided in such a way that plaintiffs get control of Medilux Laboratories (P) Ltd. and the defendants get control of other Companies or properties as per the respective valuations. It is contended that the oral agreement was confirmed by subsequent meetings dated 24.05.2016 and 06.01.2017 and exchange of email dated 09.01.2017. It is further contended that Plaintiffs were ready and willing to perform their part of the contract, however defendants avoided execution of the transfer documents, consequently the subject suit was filed seeking specific performance of the agreement to transfer the shares and for execution of the transfer documents.

4. Defendants 1 to 5 in their written statement denied that any concluded agreement was arrived at. It is contended that the discussion were non- conclusive and the settlement was to take place not only against Indian operations but also across businesses outside India as well. It is contended that the terms were not finalised and even the valuations were not agreed upon for the transfer/exchange of assets/companies.

5. Subject application under Order 7 rule 11 CPC was also filed by Defendant No. 2 contending that the plaint did not disclose any cause of action and that the Suit is barred in view of Section 430 of the Companies Act, 2013 besides being barred by limitation. It is contended in the application that the relief of purchase of shares which is squarely and directly covered under the provisions of section 241 read with 242 of the Companies Act and Section 430 of the Companies Act, ousts the jurisdiction of the civil Court to entertain any suit or proceeding in respect of any matter to which the National Company Law Tribunal is empowered to determine by or under the Companies Act, 2013.

6. The Commercial Court by the Impugned order dated 15.12.2022, allowed the application under Order 7 rule 11 CPC and returned the Plaint of the Suit to be presented to the Company Law Tribunal. The Commercial Court has held that the Suit is barred under section 430 of the Companies Act.

7. Reference maybe had to Section 430 of the Companies Act, 2013 which reads as under:

“430. Civil court not to have jurisdiction.—

No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Tribunal or the Appellate Tribunal is empowered to determine by or under this Act or a