TMI Blog2012 (8) TMI 1091X X X X Extracts X X X X X X X X Extracts X X X X ..... orce their civil rights on the basis of the Memorandum of Understanding and hence, the ordinary civil courts have got jurisdiction. - C.R.P.(PD) No. 2009 and 2833 of 2012 And M.P. Nos. 1 and 1 of 2012 - - - Dated:- 31-8-2012 - R. S. Ramanathan, J. For the Petitioners : M. Venkatachalapathy, S. Xavier Felix For the Respondent : T. V. Ramanujan, R. Venkatavaradhan ORDER Defendants 1 and 2 in O.S.No.410 of 2011 on the file of the I Additional District Munsif, Salem are the revision petitioners in C.R.P. PD No.2009 of 2012. Defendants 2 and 3 in O.S.No.862 of 2010 on the file of the I Additional District Munsif, Salem are the revision petitioners in C.R.P. PD No.2833 of 2012. 2. C.R.P. PD No.2009 of 2012 is filed to strike off the plaint in O.S.Nos.410 of 2011 and C.R.P. PD No.2833 of 2012 is filed to set aside the order dated 28.1.2011 passed in I.A.No.1876 of 2010 in O.S.No.862 of 2010 on the file of the I Additional District Munsif, Salem. Respondents 1 and 2 in both the revisions filed the suit in O.S.No.410 of 2011 to declare the notice dated 19.4.2011 calling for the Board Meeting as sham and nominal as the notice is illegal and against the terms of the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 296 of the Companies Act and the Board Meeting has to be convened to obtain sanction for approval of certain contracts in which the Directors are interested and therefore, if the convening of the Board Meetings are restrained by an order of injunction, that would affect the administration of the Company and under the Companies Act, the Tribunal and the Company Law Board are the authorities to deal with all matters relating to Company and in the absence of any Tribunal, the court has to be approached and as far as the Companies Actis concerned, the court is the court as defined under section 2(11) and 10 of the Companies Act which is the High Court or District Court and therefore, the suit filed by respondents 1 and 2 before the Munsif Court is not maintainable. In support of his contention, the learned Senior Counsel relied upon the following judgments:- 1. Santosh Poddar Another V. Kamalkumar Poddar Others (CDJ 92 BHC 317) 2. M/S.Ammonia Supplies Corporation (P) LTD. v. M/S.Modern Plastic Containers Pvt. Ltd. (AIR 1998 SC 3153) 3. Canara Bank v. Nuclear Power Corporation of India Ltd. (1995 SUPP. (3) SCC 81) 4. K.Venkat Rao v. M/S.Rockwool (India) Limited, Hyde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rstanding dated 17.4.2010 and for further declaration that they should not go back from the terms of the memorandum of understanding or should not do any act which amounts to violating the terms of the memorandum of understanding and in O.S.Nos.410 of 2011, they also seek for declaration that the notice calling for the Board Meeting which is against the memorandum of understanding is illegal and in respect of the prayers sought for in the above two suits, those reliefs cannot be said to be coming within the exclusive jurisdiction of the Company Court and therefore, the suits are maintainable. He further submitted that section 10GB of the Companies Act, though states that no civil court has jurisdiction to entertain any suit or proceedings, the said section does not exclude the jurisdiction of a civil court in its entirety and the jurisdiction of the civil court is excluded only in respect of any matter which the Tribunal or the appellate authority constituted by the Act is empowered to determine by or under the Companies Act and or in law for time being in force and therefore, in respect of any matter which does not fall within the exclusive domain of the Company Court, the same ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 6 CB (NS) 336) wherein it is held as under:- There are three classes of cases in which a liability may be established by statute. There is that class where there is a liability existing at common law, and which is only re-enacted by the statute with a special form of remedy; there, unless the statute contains words necessarily excluding the common law remedy, the plaintiff has his election of proceeding either under the statute or at common law. Then there is a second class, which consists of those cases in which a statute has created a liability, but has given no special remedy for it; there the party may adopt an action of debt or other remedy at common law to enforce it. The third class is where the statute creates a liability not existing at common law, and gives also a particular remedy for enforcing it.... With respect to that class it has always been held, that the party must adopt the form of remedy given by the statute. 8. Further, in the judgment rendered in Dhulabhai v. State of M.P. (AIR 1969 SC 78), various guidelines are given by the Supreme Court in respect of matters which can be tried by the civil court, and the guidelines are as follows:- (1) Wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e it is a relevant enquiry. (7) An exclusion of the jurisdiction of the civil court is not readily to be inferred unless the conditions above set down apply. 9. In the judgment in Rajasthan SRTC v. Krishna Kant ((1995) 5 SCC 75), the following principles are laid down by the Supreme Court:- 35. We may now summarise the principles flowing from the above discussion: (1) Where the dispute arises from general law of contract, i.e., where reliefs are claimed on the basis of the general law of contract, a suit filed in civil court cannot be said to be not maintainable, even though such a dispute may also constitute an 'industrial dispute' within the meaning of Section 2(k) or Section 2-A of the Industrial Disputes Act, 1947. (2) Where, however, the dispute involves recognition, observance or enforcement of any of the rights or obligations created by the Industrial Disputes Act, the only remedy is to approach the forums created by the said Act. (3) Similarly, where the dispute involves the recognition, observance or enforcement of rights and obligations created by enactments like Industrial Employment (Standing Orders) Act, 1946 -- which can be called ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an alternative dispute-resolution mechanism to the workmen, a mechanism which is speedy, inexpensive, informal and unencumbered by the plethora of procedural laws and appeals upon appeals and revisions applicable to civil courts. Indeed, the powers of the courts and tribunals under the Industrial Disputes Act are far more extensive in the sense that they can grant such relief as they think appropriate in the circumstances for putting an end to an industrial dispute. 10. After analysing all those judgments, in the decision reported in (2009) 4 SCC 299, the Honourable Supreme Court held as follows:- An assumption on the part of this Court that all such cases would fall only under the Industrial Disputes Act or sister laws and thus, the jurisdiction of the civil court would be barred, in our opinion, may not be the correct interpretation of Premier Automobiles Ltd. v. Kamlekar Shantaram Wadke of Bombay ((1976) 1 SCC 496) which being a three-Judge Bench judgment and having followed Dhulabhai v. State of M.P. (AIR 1969 SC 78), which is a Constitution Bench judgment, is binding on us. 11. Therefore, from the reading of the above judgment, it is clear that whenever a person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conferred by the Act, as under Sections 107, 155, 163(2), 237, 397, 425, etc. In other words, the conferment of jurisdiction on the court is not under Section 10, but by other provisions of the Act like those enumerated above. If, on the other hand, Sections 2(11) and 10 are construed as not only nominating the courts, but also conferring exclusive jurisdiction on them, the specific provisions in the other sections conferring jurisdiction on the court to deal with the matters covered by them will become redundant. It may be that where the Act specifies the company court as the forum for complaint in respect of a particular matter, the jurisdiction of the civil court would stand ousted to that extent. This depends, as already noticed, on the language of the particular provisions (like Sections 107, 155, 397 and others) and not on Sections 2(11) and 10... 14. Therefore, we will have to see whether the civil courts have got jurisdiction to entertain the plaint having regard to the allegations in the plaint and also the prayers prayed for in those two suits. 15. As stated supra, the allegations in both the suits are in respect of enforcement of memorandum of understanding en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound, let me consider the judgments relied by the revision petitioners. In Maharaja Exports v. Apparels Export Promotion Council (CDJ 1985 Delhi High Court 189), it is held that the civil court has got jurisdiction in respect of matters which are not coming within the exclusive jurisdiction of the court and in the said judgment it is held as follows:- Section 10 of the Companies Act defines the jurisdiction 'of the court to entertain the suits in such like matters. The definition of the 'court' in clause (II) of Section 2 and Section 10 of the Companies Act, 1956, dealing with jurisdiction of courts, read together enables the shareholders to decide as to which court they should approach for remedy in respect of a particular matter. This provision does not purport to invest the Company Court with the jurisdiction over every matter arising under the Act. In view of the elaborate provisions contained in the 1956 Act in regard to management and conduct of a company's affairs, including even important internal matters of administration, the scope for interference by the civil court may have become more limited, but the power has not at all been taken' away. It h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the judgment reported in CDJ 1992 BHC 317 (Bombay), after quoting sections 2(11) an 10 of the Companies Act, it has been held as follows:- When both these sections are read together it is apparent that whenever in the Companies Act the term 'the Court' is used, the Court which is referred to is the Court as set out in section 10. When under the Companies Act a section refers to an application to a Court on any matter relating to a Company other than an offence under the Companies Act, section 10 provides that the Court having jurisdiction under the Act shall be the High Court, except to the extent to which such jurisdiction is conferred on any District Court by a Notification issued by the Central Government under section 10(2). So that whenever there is any reference under the Companies Act to any proceedings before a Court under that Act, (other than proceedings relating to an offence under the Act) the Court which will have jurisdiction shall be the High Court or, if there is the requisite Notification, the District Court. 12. There are number of sections under the Companies Act where such mention is made of proceedings before a Court. For example, under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nothing under the Companies Act expressly barring the jurisdiction of the civil court and only in cases where certain powers are conferred on the Company Court, the jurisdiction of the civil court is impliedly barred. 20. In the judgment reported in CDJ 2001 APHC 477, it is also held that the jurisdiction of the High Court under section 10 is a wide one. But, the High Court, however, does not have a general or residuary jurisdiction to deal with all the questions arising within the Companies Act and in that judgment the High Court was dealing with the provisions of section 283 of the Companies Act and in that context, it was held in that judgment that section 283 (1)(f) creates a statutory liability under the Companies Act which is not contemplated under the common law and in respect of such matters, the application would lie only before the Company Court and ordinary civil court has no jurisdiction. 21. In the judgment reported in 1995 Supp. (3) SCC 81, the Honourable Supreme Court was considering the scope of section 9-A of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 and having regard to the provisions of that section, it was held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sdiction of the Company Court as referred to above, the Company Court alone has got jurisdiction and the ordinary civil court has no jurisdiction and in respect of other matters, the ordinary civil court's jurisdiction is not excluded. 26. Further, under section 122 of the Companies Act, a contract with the Company to take up and pay debentures of the Company, may be enforced by a decree of specific performance and specific performance suit can be filed only before the civil court and therefore, it cannot be contended that in respect of all matters relating to Companies, only the Company Court has got jurisdiction and civil courts have no jurisdiction. 27. As stated supra, in the decision reported in (2010) 11 SCC 1, the Honourable Supreme Court dealt with the scope of section 10GB of the Companies Act, and declared that Parts I-B and I-C of the Act viz., section 10FD to 10GF as presently structured are unconstitutional and they can be made operational by making suitable amendments, in that judgment. Admittedly, the amendments or suggestions laid down in that judgment are not carried out as on date and therefore, as per the judgment of the Honourable Supreme Court, sectio ..... 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