TMI Blog2007 (2) TMI 320X X X X Extracts X X X X X X X X Extracts X X X X ..... rt, Chennai, on a consideration of the averments and the submissions of learned counsels, dismissed the said application after finding from the perusal of the plaint that there exists a cause of action for the plaintiff to file the suit before the court as the plaintiff was removed from one of the directors of the company by a resolution in July 1999, at Chennai. As against the said order of dismissal, the present CRP has been filed by the defendant. 4. The case of the respondent/plaintiff is that it has invested a sum of Rs. 75 lakhs which constitutes around 25 per cent of the share capital of the first respondent-company and it continues to be the shareholder of 25 per cent shares and holds original share certificates till date. But the plaintiff-company has been fraudulently removed from the board of directors of the first defendant-company in the annual general meeting held on 1-7-1998, by a resolution. The first defendant also clandestinely filed Form 32 with the Registrar of Companies, Chennai, wherein it has been shown that the nominee of the plaintiff-company has resigned, even though there had been no letter of resignation furnished by the plaintiff-company to the firs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irector of the company. He also contended that the Act contains all the provisions with regard to the appointment of directors, removal of directors and the like in sections 252 to 323 of the Act and such acts are purely an internal affairs of the company and any grievance can be addressed only to the Company Law Board. According to him, the allegations contained in the said paragraphs per se falls within the ambit of sections 397 and 398 of the Companies Act, 1956, and the plaintiff ought to have approached the Company Law Board for seeking the reliefs claimed in the plaint and relied on the following decision in support of his contention. 7. In Sri Ramdas Motor Transport Ltd. v. Tadi Adhinarayana Reddy [1997] 90 Comp. Cas. 383 1 , the apex court held that when the Companies Act itself provides for effective remedy, the remedy under writ jurisdiction cannot be resorted to. In the said decision it is also observed that a shareholder has very effective remedies under the Companies Act for prevention of oppression and mismanagement. 8. But the above decision deals with the invocation of writ jurisdiction filed by a shareholder and it deals with oppression and mismanage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Bhanwarlal Bhandari [F.M.A. No. 214 of 2003] wherein the Calcutta High Court laid down that before passing an order the court has to examine as to whether it has jurisdiction or not and has to prima facie satisfy itself that it has jurisdiction on the face of the averments made in the plaint even if not raised. The decision rendered in C.R. No. 51 of 2003 Jai Prakash Industries Ltd. v. Lalit Bhasin [2003] 45 SCL 31, by the Allahabad High Court (Lucknow Bench) is also to the said effect. 15. But in the case on hand, the trial court after adducing sufficient reasons on going through the entire averments contained in the plaint, rejected the I.A., holding that the civil court has jurisdiction and, therefore, the above decisions are also not applicable to the present case. 16. Learned counsel for the revision petitioner also contended that the prayer for declaration that Form 32 filed by the first defendant-company on behalf of the plaintiff is illegal, void and inoperative, filing of Form 32 with the Registrar of Companies is incidental to the change in directorship and a change in the board of directors of the first defendant-company. Therefore, the relief sought f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing reliance on the above judgment, it is contended that the cause of action arose when the alleged resolution dated 1-7-1998, has been passed and at the point of time, the registered office of the company was in Chennai. It is also contended that now the first defendant s-company has been allegedly taken over by the fourth defendant-company as per the submission of the first defendant and the said fourth defendant has been set ex parte in the I.A., before the trial court and therefore the first defendant-company has no locus standi to question the legality of the plaintiff in filing the suit. 21. Learned counsel for the respondent-plaintiff also contended that the first defendant-company filed Form 32 with Registrar of Companies, Chennai, citing that the nominee of the respondent-company as having resigned when there was no letter of resignation from, the respondent/plaintiff nor any consent letter to this effect. This is so done with mala fide intention, in order to do away with the presence of the plaintiff-company. This aspect can be decided only in the trial. 22. The next contention of learned counsel is that the revision petitioner had allegedly transferred the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el also contended that plaint can be rejected only where the suit appears from the statement in the plaint to be barred by any law. But a perusal of the plaint herein would show that the suit is not barred by any law as even as per the Companies Act, 1956, jurisdiction of the civil court is not expressly excluded. Section 9 of the CPC also provides for trying of suits unless it is expressly barred by any other enactment. 28. Learned counsel for the respondent/plaintiff referring to section 10 of the Companies Act as to the jurisdiction of the civil court provided thereunder contended that section 10 of the said Act makes it abundantly clear that the provisions of the Companies Act does not bar the jurisdiction of the civil court. Even, as per section 10 of the said Act, to file an application under sections 397 and 398 of the Companies Act, 1956, the person should be a member holding not less than one-tenth of the issued share capital. This fact of shareholding of the plaintiff has been disputed by the revision petitioner/defendant in its written statement and also in the I.A., to reject the plaint. Since it is disputed question of fact, whether the plaintiff holds share or not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion. 33. It is also submitted that the revision petitioner has fraudulently transferred the share of the respondent/plaintiff-company while the shares are still in the possession of the respondent/plaintiff-company. Further, the revision petitioner also filed Form 32 with mala fide intention and without the consent of the plaintiff-company in order to show that the nominee of the plaintiff-company as having resigned. These acts were done with the sole motive to ensure that the respondent/plaintiff-company has no locus standi prima facie before any court or the Company Law Board, either as a nominee of the plaintiff-company or as a shareholder. 34. Considering the submissions of counsel appearing on either side and the decisions of the various High Courts and the Hon ble Supreme Court relied upon by both sides, I am of the considered view that in the instant case the jurisdiction of the civil court is not ousted since the pleadings in the plaint would reveal that the cause of action has arisen for instituting the suit in Chennai, and there is allegation of misrepresentation, fraud, failure to furnish details, dishonest or mala fide intention, suppression of mater ..... X X X X Extracts X X X X X X X X Extracts X X X X
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