2023 (4) TMI 879
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....s parties also claimed interalia a decree for declaration to the effect that the defendants are obliged to disclose to the plaintiffs, the day to day cash balances in relation to the business run in the name of the opposite party no. 1 along with a decree for discloser of accounts and a decree for perpetual injunction. 3. The defendants /petitioners had filed written statement in the said suit denying all material allegations. Long after filing the written statement the defendants/petitioner took out said application under order VII Rule 11 on the allegation that the court below had no jurisdiction to entertain the suit since the said suit is barred under section 430 of the Companies Act, 2013. The plaintiffs/opposite parties filed written objection against the said application and it was heard by Learned Court below in presence of both the parties and upon hearing the said prayer was rejected by the order impugned. 4. Mr. Nilanjan Bhattacharjee learned counsel appearing on behalf of the petitioner submits that the court below failed to appreciate that if there are disputes between the directors of a company, said disputes should be referred to the Tribunal and the Tribunal only ....
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.... 146, rule 150 and other relevant rules which are appropriate to deal with paragraph wise allegations leveled in the plaint. 6. Mr. Bhattacharjee further submits that NCLT has every power to determine each and every issue alleged in the plaint and to pass orders under section 242(2), 420, 450 of the Companies Act. The Companies Act 2013 is a code under which the execution provision i.e. section 424(3) is there for execution of the order passed by the Tribunal as has been prayed by the plaintiff in the said plaint before the court below in the said suit. In this context he further contended that section 241 of the Act cannot be given a restricted meaning. It is essential to apply the doctrine of "reading down" to make the provisions under chapter XVI of the Act purposeful. Under the new act of 2013, the intention of the legislature is to vest the power of adjudication to the Tribunal under section 242 read with section 241. He further contented that the phrase "member of the company" in section 241 means and include person not only member of the company in strict sense but also person who bears the character of a member or have substantial interest in the internal affairs of the co....
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.... of a civil court. 9. Mr. Dey further argued that the provision laid down in section 213 of the Companies Act apply within a very restricted zone upon fulfillment of the conditions as are prescribed under clause (b) of the said section which contemplates certain eventualities that may entitle a specific class of people to approach NCLT and present suit was not triggered by any of such eventualities. Mr. Dey further submits that section 216 provides for investigation into the ownership of a company when it appears to the Central Government that there is a reason so to do and it does not have any connection with the case made out by the plaintiffs or with the adjudication of the issues involved. Similarly section 241 deals with prevention of oppression and mismanagement in a company. The provision laid down therein can be taken resort to by a member of a company only in those cases that may come within the ambit of sub clauses (a) and (b) of subsection (1) of section 241. The case made out in the plaint pertaining to the said suit is not contemplated under sub section (1) of section 241 nor had the plaintiffs fulfilled the qualification to approach the NCLT under the said section. T....
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....ported in (1969) 39 Camp Cas 249 (PH) where the validity and regularity of the general meeting of a company and election of the directors were challenged and question arose as to whether civil courts had jurisdiction to try such suit and the answer given by the court was in the affirmative. He also referred Marikar (Motors) and another Vs. M.I. Ravi Kumar and others, reported in 1981 SCC Online Ker 283: (1982) 52 Comp Cas 362 where question arose whether an annual general meeting of a company convened in violation of section 166 of the Companies Act can be tried by a civil court on the ground that the Companies Act is complete and self-contained code and only the Tribunal is competent to resolve the dispute between a company and its members and the Act excludes the jurisdiction of the ordinary courts in such matters. Kerala High court was pleased to reject such contention and did not accept the contention that the Companies Act is a complete and self-contained code and held, the Act does not oust the jurisdiction of civil courts to deal with the disputes raised by the plaintiffs. 11. In this context his further argument is that it is well settled that the Tribunal can entertain pr....
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....o be fixed by the Court, fails to do so; (c) where the relief claimed is properly valued, but the plaint is written upon paper insufficiently stamped, and the plaintiff, on being required by the Court to supply the requisite stamp-paper within a time to be fixed by the Court, fails to do so; (d) where the suit appears from the statement in the plaint to be barred by any law: (e) Where it is not filed in duplicate; (f) where the plaintiff fails to comply with the provisions of rule 9: Provided that the time fixed by the Court for the correction of the valuation or supplying of the requisite stamp-paper shall not be extended unless the Court, for reasons to be recorded, is satisfied that the plaintiff was prevented by any cause of an exceptional nature for correcting the valuation or supplying the requisite stamp-paper, as the case may be, within the time fixed by the Court and that refusal to extend such time would cause grave injustice to the plaintiff." 14. Needless to say that clause (d) of Rule 11 of order VII applies only when the Suit appears from the statement in the plaint to be barred by any law. It is only where on the face of the plaint a suit appears to ....
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....rd in a statute to give reasonable meaning, the word "member" refers in section to 241 of the Act should not be read in isolation or in strict meaning and it should be read down along with section 242 of the Act. Accordingly he further submits that the phrase "member of a company" in section 241 means and includes person not only member of the company in strict sense but also who bears the character of a member or have substantial interest in the internal affairs of the company. 17. Even for the time being if the aforesaid argument of the petitioner is accepted, then also the question as to whether defendant no. 2 comes within the definition of the member of a company under section 241 can only be adjudicated on perusal of documentary or oral evidence to be adduced by the parties and the plaint cannot be thrown away at the threshold construing that defendant no. 2 comes within the definition of 'member' of the company under section 241 of the Act. 18. Apart from that plaintiff in paragraph 7 has alleged specifically that Kasinath Seth and aforesaid defendant no. 2 Manoj Seth are running a parallel business just siphoning of funds as well as private personal withdrawer from the su....
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....court which are as follows :- "40.. In Dhulabhai v. State of M.P. [(1968) 3 SCR 662 : AIR 1969 SC 78] Hidayatullah, C.J. summarised the following principles relating to the exclusion of jurisdiction of civil courts: (SCR pp. 682 B-H-683 A-C) "(1) Where the statute gives a finality to the orders of the special tribunals, the civil courts' jurisdiction must be held to be excluded if there is adequate remedy to do what the civil courts would normally do in a suit. Such provision, however, does not exclude those cases where the provisions of the particular Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure." "(2) Where there is an express bar of the jurisdiction of the court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the civil court. Where there is no express exclusion the examination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result of the inquiry may be decisive. In the latter case it....