Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

1994 (4) TMI 267

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... 3, 6 and 7 from the post of directors and be further pleased to appoint some other fit and proper persons as directors of the defendant No. 1 company. ( c )The defendant Nos. 3 to 5 be restrained by a permanent as also interim and ad interim order and injunction of this Hon'ble Court from acting as trustees of defendant No. 2 trust as also from dealing with or disposing of the assets of the defendant No. 2 save and except with permission of the Hon'ble Court. ( d )The defendant Nos. 3, 6 and 7 be restrained by a permanent as also interim and ad interim order and injunction of this Hon'ble Court from acting as directors of defendant No. 1 company as also from dealing with or disposing of the assets of the defendant No. 1 save and except with the permission of the Hon'ble Court. ( e )The defendant be directed to disclose and account for all the dealings done by them in respect of the said sum of Rs. 66 lakh and accrued interest thereon or any part thereof, being the consider- ation received from sale of the said dye house of defendant No. 1." 3. Defendant No. 1 in the original suit is Khetan Industries (P.) Ltd., a company incorporated under the Companies Act, 1956. Def .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ction 73 of the Indian Trusts Act, the power to remove trustees and appoint- ment of new trustees is vested exclusively in the principal civil court of original jurisdiction. According to the learned counsel, such court for Bombay is the Bombay High Court. The city civil court, according to the petitioners, is not the principal civil court of original jurisdiction for Bombay. It is a court of limited pecuniary Jurisdiction. The principal civil court is the High Court only. In support of this contention reliance is placed on a decision of this Court in Chatrabhuj Mavji Merchant v. Sumati Morarjee 1991 (4) Bom. CR 289. So far as the second contention is concerned, the submission of the counsel is that the appointment and removal of the directors is specifically governed by the provisions of the Companies Act that being so, the specific remedy provided under that Act has to be availed of by a person seeking relief on that score and no suit can lie to the civil court in that regard. In support of this contention reliance is placed on the decision of the Supreme Court in Dhulabhai v . State of MP AIR 1969 SC 78. 6. The learned counsel for the respondents (original plaintiffs .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... is concerned, the ordinary civil jurisdic-tion is vested in the High Court. The territory covered by the High Court's ordinary original civil jurisdiction includes villages of the Bombay Suburban District and Thane District. The Bombay City Civil Court Act, 1948, in terms, speaks of the city court being 'an additional civil court for Greater Bombay'. It is not the principal court as referred to in the Trusts Act. Reference to the principal court in the Trusts Act clearly implies that breach of trust suits have to be instituted in and tried by the principal court. Suits of the nature of breach of private trusts for declaration and injuction are not maintainable in the city court under the Bombay City Civil Court Act. The decision of this Court in P.R. Geglani ( supra ) was also referred to in the above decision and explained. I have carefully perused the above decision. In my opinion, the above controverysy is no more res integra in view of the above decision. Following the same, I hold that the principal civil court of original jurisdiction for Greater Bombay is the High Court of Judicature at Bombay and not the city civil court. The civil ourt of limited pecuniary jurisdictio .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... the representations is not sent as aforesaid because they were received too late or because of the company's default, the director may (without prejudice to his right to be heard orally) require that the representations shall be read out at the meeting: Provided that the copies of the representations need not be sent out and the representations need not be read out at the meeting if, on the application either of the company or of any other person who claims to be aggrieved, the Company Law Board is satisfied that the rights conferred by this sub-section are being abused to secure needless publicity for defamatory matter, and the Company Law Board may order the company's costs on the application to be paid in whole or in part by the directors notwithstanding that he is not a party to it. (5) A vacancy created by the removal of a director under this section may, if he had been appointed by the company in general meeting or by the Board in pursuance of section 262, be filled by the appointment of another director in his stead by the meeting at which he is removed, provided special notice of the intended appointment has been given under sub-section (2). A director so appointed sh .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... at being so, as no suit is maintainable for seeking reliefs specified in prayers ( a ) to ( d ) , no civil suit is maintainable for relief sought for in prayer ( e ) also. 12. To sum up the discussion, the city civil court at Bombay is not the principal civil court of original jurisdiction for Bombay and, as such, it has no jurisdiction to decide suit seeking reliefs by way of removal of trustees. It has also no jurisdiction to entertain a suit for removal of directors of a limited company as it relates to the internal management of the company which is governed by the provisions of the Companies Act, specifically made in that behalf. 13. In the result, this revision application is allowed. The impugned order is set aside. The preliminary issues framed by the trial court in regard to its jurisdiction is answered in the negative, i.e., the city civil court has no jurisdiction to entertain and try the suit in question. This revision application is allowed but with no order as to costs. On the prayer of the learned counsel for the respondent the operation of this order is prayed for a period of eight weeks from today. Application allowed. - - TaxTMI - TMITax - Co .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates