TMI Blog1968 (9) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... ngh Arya who retired by rotation and were also eligible for re-election. The plaintiff sought re-election at the said general meeting and was re-elected as a director of the company. The annual general meeting of the company for the year 1966-67 was scheduled to be held on December 30, 1967. Item No. 3 of the agenda was to elect the directors in place of Shiv Kumar Gupta, Jogi Dass Jain and R. L. Kaushik, who retired by rotation, but were eligible for re-election. The affairs of the company, according to the plaintiff, were not properly managed and he used to criticise the company for that. This was not liked by Shiv Kumar Gupta, one of the directors. Accordingly, he manipulated and included the name of the plaintiff amongst the directors who were to retire by rotation. In fact, his name was maliciously included amongst the directors who were liable to retire by rotation. He was re-elected in the annual general meeting held on September 30, 1965, and was not one of the oldest directors and was, consequently, not liable for retirement by rotation. The plaintiff had, thus, been excluded from holding office of director of the company. In place of the plaintiff, Mohan Singh, defendant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble in the civil court in view of the specific provisions contained in section 10 of the Act. The jurisdiction under the Act, according to the defendants, was vested in this court, except to the extent where the powers had been delegated to the district courts under section 10(2) of the Act. The Central Government, by notification dated May 29, 1959, had delegated certain powers to the district courts. No delegation was made in the matter relating to the election of the directors. Under the Act, the jurisdiction to try matters relating to the Act was vested in thi3 court. The learned judge, vide her order dated 13th May, 1968, came to the conclusion that the plaintiff was seeking a declaration that he was entitled to remain the director of the company and, under section 34 of the Specific Relief Act, there was provision for giving such a declaration. It was only the civil court that could decide matters regarding title to any legal character or right to any property. The Act did not provide for any such remedy. The plaintiff was not seeking any relief under sections 10(2), 203, 285 and 398 of the Act. On these findings, it was held that the trial judge had jurisdiction to try the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in regard to matters falling within the scope of the jurisdiction conferred, in respect of companies having their registered offices in the district. . (2) The Central Government may, by notification in the Official Gazette and subject to such restrictions, limitations and conditions as it thinks fit, empower any District Court to exercise all or any of the jurisdiction conferred by this Act upon the court, not being the jurisdiction conferred ( a )in respect of companies generally, by sections 237, 391, 394, 395 and 397 to 407, both inclusive ; ( b )in respect of companies with a paid up share capital of not less than one lakh of rupees, by Part VII (sections 425 to 560) and the other provisions of this Act relating to the winding up of companies......".... The notification issued under section 10(2) of the Act states that the Central Government has empowered all the district courts in India, except the district courts in the State of Jammu and Kashmir, to exercise the jurisdiction conferred upon the court by the various sections of the Act specified in the said notification. These provisions and the notification only point out that the matters relating to a company a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon such terms and conditions as may, in the opinion of the court, be just and equitable in all the circumstances of the case". He contended that in paragraph 10 of the plaint, the plaintiff had stated that, since the affairs of the company were progressively worsening on account of the mismanagement of the company and a lot of other illegal acts on account of which he and other shareholders of the company were liable to immensely suffer, therefore, he was entitled to protect his own interests and those of other shareholders and the election of defendants Nos. 2 and 6 as directors, in the meeting held on December 30, 1967, was illegal and the said board of directors was not entitled to act and manage the affairs of the company. Counsel argued that the allegations made in paragraph 10 would show that the plaintiff could make an application under section 398 and get a relief from the company court under section 402 of the Act. In the first place, this argument loses sight of the actual relief claimed by the plaintiff in the plaint. As already mentioned above, the plaintiff was claiming a decree for a declaration that he was the director of the company and that the election held o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show that the jurisdiction of the civil courts was impliedly barred to try a case covered by the provisions of the Companies Act. In the first place, as I have already mentioned above, learned counsel could not show that the present case was covered by the provisions of the companies Act. In the second place, even assuming that the company court could grant the relief asked for in the plaint, only one of the learned judges constituting the Bench in Nava Samaj Ltd.'s case ( supra ) was of the view that the company court had the exclusive jurisdiction to take cognisance of the matters covered by the Companies Act. The other learned judge, however, took a contrary view. Dixit C. J., in that authority, observed : "The plain effect of the above provisions is that the power and jurisdiction to deal with such matters as are covered by the Act itself has been given to the courts specified in section 10(1) with respect to any matter relating to a company, other than an offence against the Act..............The courts nominated under the Act have exclusive jurisdiction to take cognisance of the matters covered by the Companies Act". The other learned judge, Pandey J., however, held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particularly in cases where allegations of misfeasance and non-feasance are being made against the liquidators, as in the present case. Section 235 of the Act of 1913 confers on the court the power to assess and award damages against delinquent company officers or liquidators, and one of the prayers in the present suit is that the contesting defendants should be debited with damages for acts of misfeasance and non-feasance. This is a very special provision which I think can only be exercised by the court under the Act and not by an ordinary civil court. The position is summed up in the well known dictum of Willes J. in Wolverhampton New Waterworks Co. v. Hawkesford [1859] 6 C.B.N.S. 336, 356 as under : 'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law ; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, and the party suing has his election to pursue either that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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