TMI Blog2001 (11) TMI 913X X X X Extracts X X X X X X X X Extracts X X X X ..... g run by Mr. J.K. Gupta and Mr. J.M. Goyal till 1994 when the company transferred its share to the extent of 60 per cent to Havell India Ltd. ( HIL ) and 40 per cent of shares remained with it, memorandum of association and articles of association, according to the aforesaid shares, were prepared and got registered with the Registrar of Companies, Punjab, HP and Chandigarh on 26-9-1994. Article 91 of articles of association provides that the Board of directors of Standard Electrical Ltd. shall consist of five directors, out of which the HIL and its nominees shall be entitled to three nominees directors and the remaining two directors shall be the nominees of Mr. J. K. Gupta and his nominees. It further provides that both HIL and Mr. J K Gupta, nominees would be engaged in the management of the company. The quorum of the meeting of the Board of directors was provided under article 5 and, according to it, quorum in any meeting of the Board of directors shall be minimum one nominee director of HIL and its nominees and one nominee director of Mr. J.K. Gupta and his nominees and it was also agreed that all matters shall be decided by majority vote. Mr. Anil Gupta became the managing dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese resolutions have been allegedly passed as a measure of oppression by the majority shareholders over the minority shareholders and without any authority and also against the provisions of memorandum of association. 4. Defendant No. 4 filed an application in the court of Civil Judge (Senior Division), Jalandhar where the suit is pending under order 7, rules 10 and 11 read with section 151 for rejection of plaint, inter alia, contending that the jurisdiction of civil court is expressly and impliedly barred under the Act, especially when company petition filed by the applicants is pending before the CLB. Upon contest by the plaintiffs, trial court held that no section of the Act was quoted by the counsel for the applicants whereby jurisdiction of civil court is expressly barred to try the civil suit and, thus, dismissed the application. Hence, this civil revision. 5. Mr. H.L. Sibal, senior advocate appearing on behalf of petitioners, contended that in the plaint respondents have tried to make out a case of oppression by majority over minority on the basis of allegations levelled in para 9 onwards of the plaint. It is contended that whole tenor of the plaint is showing tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , State of Kerala v. N. Ramaswami Iyer Sons AIR 1966 SC 1738 and J.K. Cotton Spg. Wvg. Mills Co. Ltd. v. State of Uttar Pradesh AIR 1961 SC 1170 to content that time and again, hon ble Apex Court has held that where complete code is provided for redressal of grievance, jurisdiction of civil court is barred because when there is a Special Act, then Special Act governs against the General Act. 6. On the other hand, Mr. R.K. Chhibber, senior advocate appearing on behalf of the respondents, contended that sections 397, 398 and 408 do not confer exclusive jurisdiction on the CLB to grant relief against oppression because the scope of these sections is to provide convenient remedy against acts amounting to oppression. In this regard, he has placed reliance upon Wood v. Odessa Water Works Co. [1889] 42 CD 636, Panipat Woollen General Mills Co. v. R.L. Kaushik ILR [1968] Punj. Har. 609, Nava Samaj Ltd. v. Civil Judge, Class I, Rajnandgaon AIR 1966 MP 286, Muni Lal Peshwalla v. Balwant Rai Kumar AIR 1965 Punj. 24, Wolver Hampton New Water Works Co. v. Hawkesford [1859] 65 BNS 356, Pradip Kumar Sarkar v. Luxmi Tea Co. Ltd. [1990] 67 Comp. Cas. 491 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r or members, but that otherwise the facts would justify the making of a winding up order on the ground that it was just and equitable that the company should be wound up ; the Company Law Board may, with a view to bringing to an end the matters complained of, make such order as it thinks fit." 9. Section 398 provides applications to the CLB for relief in cases of mismanagement. Sub-section (1) provides : " Application to Company Law Board for relief in cases of mismanagement. (1) Any member of a company, who complains ( a )that the affairs of the company are being conducted in a manner prejudicial to public interest or in a manner prejudicial to the interests of the company ; or ( b )that a material change (not being a change brought about by, or in the interest of, any creditors including debenture holders, or any class of shareholders, of the company has taken place in the management or control of the company, whether by an alteration in its Board of directors or manager or in the ownership of the company s shares, or if it has no share capital, in its membership, or in any other manner whatsoever, and that by reason of such change, it is likely that the affairs of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount as the Central Government may deem reasonable, for the payment of any costs which the Company Law Board dealing with the application may order such member or members to pay to any other person or persons who are parties to the application." 11. Section 400 of the Act provides that on applications filed under sections 397 and 398, notice shall be given to the Central Government for taking into consideration the representations, if any, made to it by that Government before passing a final order under that section, whereas section 402 deals with powers of the CLB on applications filed under section 397 or 398. The section reads as follows : "402. Power of Company Law Board on application under section 397 or 398. Without prejudice to the generality of the powers of the Company Law Board under section 397 or 398, any order under either section may provide for ( a )the regulation of the conduct of the company s affairs in future ; ( b )the purchase of the shares or interests of any members of the company by other members thereof or by the company ; ( c) in the case of a purchase of its shares by the company as aforesaid, the consequent reduction of its share capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 397 or 398 is appealable to the High Court under section 10F which reads, thus : " Appeals against the order of the Company Law Board. Any person aggrieved by any decision or order of the Company Law Board may file an appeal to the High Court within 60 days from the date of communication of the decision or order of the Company Law Board to him on any question of law arising out of such order : Provided that the High Court may, if it is satisfied that appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding 60 days." 15. A conjoint reading of above quoted sections clearly shows that the Act provides in itself a complete code for redressal of any grievance in regard to oppression or mismanagement of any company. It is not in dispute that under the Act, it is nowhere specifically provided that jurisdiction of civil court is barred from entertaining any cause of action arising out of dispute under the Act. Time and again, overriding effect of a special law over the general law, where there is no specific bar under the special law for invoking general law, has come up before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of all the matters therein or have only summary jurisdiction ? The Apex Court answered the question in the affirmative in favour of the court under the Act and held that the jurisdiction of civil court is impliedly barred. 20. Jurisdiction of civil court vis-a-vis Tribunals/Boards and other statutory authorities created for redressal of grievances under the special acts came up for consideration in S. Vanthanamuthraja s case ( supra ), Allahabad Bank s case ( supra ) and Punjab State Electricity Board s case ( supra ) before the hon ble Apex Court, wherein it was held that where a relief can be redressed under the provisions of special Act, jurisdiction of civil court is impliedly barred though not specifically provided under the Act. 21. If the issue raised in the present civil revision is examined in light of law laid down by the Apex Court in the above referred cases, the only conclusion which could be drawn is that the Act provides a complete code for redressal of the grievance. The only distinction arises when section 399 is taken into consideration which provides that in the case of a company having a share capital, not less than one hundred members of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
