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2022 (8) TMI 1163 - AT - Companies LawOppression and mismanagement - Jurisdiction of NCLT to decide the issue - Principle of natural justice - Transfer application - Jurisdiction of NCLT / its bench - Allegation that forged documents have been filed before the CLB - Appeal is maintainable under Section 421 of the Companies Act, 2013 or not - Whether the Impugned Order dated 31st May, 2021 allowing the Section 8 filed under Section 241 and 242 of the Companies Act is a valid order passed in accordance with the law? HELD THAT:- Company Appeal (AT) No. 31 of 2022: The Acting President has rightly observed that the Bench which has been hearing is competent to decide the Company Petition and there is no occasion for asking for re-assignment of the Petition to a Division Bench that has logistical capability to decide CA-18 of 2019 and complete Company Petition. The bench was fully competent and hence no orders were required to be passed in the above context. We do not find any error in the Impugned Order passed by the Acting President refusing to re-assign the Company Application No. 18 of 2019 and Company Petition. The Acting President has rightly observed that Bench which has been hearing the Company Petition and Company Application has reserved the Orders on some applications and was fully competent to decide the Company Petition. Order dated 31st May, 2021 passed by the Acting President does not require any interference in exercise of our Appellate Jurisdiction. Company Petition No. 144 of 2016 was an Application alleging oppression and mismanagement. The remedy provided under Section 241 to any Member of a Company is a statutory remedy which has been provided to serve particular Objectives. The Tribunal has been conferred with ample power under Section 242, wide enough which encompasses expression “make such order as it thinks fit”. Sub-Section 2 of Section 242 as extracted above provides for, without prejudice to the generality of the powers, different orders which can be passed; The power under Section 242 entrusted to the Tribunal by statute are statutory powers which cannot be exercised by any arbitrator which is appointed in pursuance of any agreement between the parties. The question as to which disputes are arbitrable and which disputes are not arbitrable has come up for consideration before the Hon’ble Supreme Court in large number of cases. A two Member Bench Judgment of Hon’ble Supreme Court in BOOZ ALLEN AND HAMILTON INC. VERSUS SBI HOME FINANCE LTD. & OTHERS [2012 (10) TMI 459 - SUPREME COURT] has occasion to consider the question regarding arbitrability of different nature of disputes. The Hon’ble Supreme Court held that The well recognized examples of non-arbitrable disputes are : (i) disputes relating to rights and liabilities which give rise to or arise out of criminal offences; (ii) matrimonial disputes relating to divorce, judicial separation, restitution of conjugal rights, child custody; (iii) guardianship matters; (iv) insolvency and winding up matters; (v) testamentary matters (grant of probate, letters of administration and succession certificate); and (vi) eviction or tenancy matters governed by special statutes where the tenant enjoys statutory protection against eviction 19 and only the specified courts are conferred jurisdiction to grant eviction or decide the disputes. On looking into the statutory scheme of the Companies Act in light of the ratio of the judgements of Hon’ble Supreme Court it is clear that specific remedy which is specific statutory remedy provided under Section 241, 242 clearly exclude arbitration of such disputes by an arbitrator. It is further noticed that the provisions of Section 430 of the Companies Act clearly exclude the jurisdiction of Civil Court. When there is a clear bar of jurisdiction to be exercised by the Civil Court in respect of any matter which the Tribunal is empowered to determine under the Companies Act, the bar is implicit to the arbitration proceeding on the subject which is covered under Section 241 and 242 - it is clear that the remedy provided under the Companies Act, 241 and 242 is a specific statutory remedy which has to be decided by the Tribunal in accordance with law. The issues which has been raised in Application under Section 241 and 242 are issues which are not arbitrable and the Adjudicating Authority committed error in allowing Section 8 Application filed by the Respondent No. 1. We thus find the Order dated 31st May, 2021 unsustainable due to this reason. The order dated 31.05.2022 allowing application under Section 8 of the Arbitration and Conciliation Act, 1996 is set aside. Further, following directions are issued: a. The Company Petition No. 144 of 2016 be decided by the Adjudicating Authority on merits at an early date preferably within six months of the date on which copy of this order is produced before the Adjudicating Authority. b. Both the parties are retrained from filing any Company Application, Affidavit or Interlocutory Application in the Company Petition No. 144 of 2016 henceforth. c. The Adjudicating Authority shall decide the Company Petition No. 144 of 2016 on the basis of materials already on record. Appeal disposed off.
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