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2005 (8) TMI 386 - HC - Companies Law

Issues Involved:
1. Jurisdiction of the Courts at Coimbatore.
2. Representation of shareholders by D-6.
3. Material irregularity in the impugned order.

Detailed Analysis:

1. Jurisdiction of the Courts at Coimbatore:
The first defendant company, Chennimalai Yarns Private Limited, has its factory premises at Chennimalai and its registered office at Coimbatore. Defendants argued that since the disputed Resolution dated 15-5-1998 emanated from Chennimalai, only Erode District has jurisdiction. However, the Trial Court granted permission to file the suit in Coimbatore, pointing out that some directors reside in Coimbatore. The Court held that the jurisdiction of Coimbatore Courts is not ousted because part of the business activities and the head office are in Coimbatore. Under section 20(b) CPC, the Court may grant leave to file the suit where some defendants reside within its jurisdiction. The cause of action includes a bundle of facts, and since part of the cause of action arose in Coimbatore, the objection to jurisdiction was dismissed.

2. Representation of Shareholders by D-6:
Plaintiff filed I.A. No. 452/1998 to implead D-6 in his representative capacity for all shareholders, arguing that it was impractical to implead all shareholders individually. Defendants contended that D-6 was biased and could not represent all shareholders. The Trial Court allowed the application, stating that the representative capacity of D-6 could be determined at trial. The Court found no material evidence showing D-6's bias or support for the plaintiff. Under Order 1, rule 8, CPC, the Court must direct notice to opposite parties when permission is granted. The objection regarding the representative capacity of D-6 was dismissed, but the parties could raise it during evidence.

3. Material Irregularity in the Impugned Order:
Defendants argued that the Trial Court erred in taking cognizance of the suit and that the impugned order suffered from serious infirmity. The Court found no material irregularity in the Trial Court's orders. The permission to file the suit in Coimbatore and to sue D-6 in a representative capacity was deemed proper. The revisions were dismissed, and the impugned orders were confirmed.

Conclusion:
The orders dated 16-8-1999, in I.A. Nos. 452, 453/1998 in O.S. No. 541/1998, were confirmed, and the revision petitions were dismissed. The suit was directed to proceed expeditiously, with all contesting defendants required to file their written statements within two months.

 

 

 

 

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