Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

Home Case Index All Cases Companies Law Companies Law + HC Companies Law - 2016 (8) TMI HC This

  • Login
  • Cases Cited
  • Referred In
  • Summary

Forgot password       New User/ Regiser

⇒ Register to get Live Demo



 

2016 (8) TMI 826 - HC - Companies Law


Issues Involved:
1. Maintainability of the Company Petition.
2. Jurisdiction of the Company Law Board (CLB) under Sections 58 and 59 of the Companies Act, 2013.
3. Examination of the genuineness of documents and signatures.
4. Relegation to Civil Court for adjudication.
5. Interim relief and deposit of ?47,50,000/-.
6. Impact on the functioning of Alliance University.

Detailed Analysis:

1. Maintainability of the Company Petition:
The appeal was directed against the order of the CLB, which found the petition maintainable but directed the petitioner to approach the competent Civil Court for resolving the controversial issue before approaching the CLB for the main Company Petition. The CLB disposed of Company Application No. 1/2015, denying the appellant's request to forward the papers to a forensic expert and other reliefs.

2. Jurisdiction of the Company Law Board (CLB) under Sections 58 and 59 of the Companies Act, 2013:
The appellant argued that the CLB had the power to decide the principal question of transfer of shares and all incidental aspects, including the genuineness of signatures and validity of the transfer. The appellant contended that the CLB abdicated its duty by relegating the matter to the Civil Court. The respondents argued that the CLB's jurisdiction is summary, and it cannot undertake a full-fledged trial to examine the genuineness of documents, which is better suited for the Civil Court.

3. Examination of the genuineness of documents and signatures:
The appellant sought forensic examination of signatures on the transfer documents, claiming the signatures were genuine. Respondents Nos. 2 and 3 filed a criminal complaint alleging forgery, and a handwriting expert's report before the Police Authority supported their claim. The CLB found that the documents were fabricated and signatures forged, leading to the filing of a charge-sheet. Consequently, the CLB directed the appellant to establish the genuineness of the documents in the Civil Court.

4. Relegation to Civil Court for adjudication:
The CLB's decision to relegate the appellant to the Civil Court was based on the finding that it lacked the jurisdiction to examine the title and genuineness of the documents under Sections 58 and 59 of the Companies Act, 2013. The Court upheld this decision, noting that the power to examine the title was expressly omitted in the 2013 Act, which was available under Section 111 of the Companies Act, 1956. The Court emphasized that the Civil Court is the appropriate forum for such detailed examination and declaration.

5. Interim relief and deposit of ?47,50,000/-:
Pending the appeal, the Court directed respondents Nos. 1 to 3 to deposit ?47,50,000/- with the Court to balance the rights of both parties. The amount was deposited, and the Court ordered that the interim relief would remain in effect until the appellant approached the Civil Court. The Court clarified that the deposited amount should be returned to respondents Nos. 2 and 3 upon filing an undertaking to redeposit it if directed by the CLB or any other competent forum.

6. Impact on the functioning of Alliance University:
The Court addressed concerns about the potential impact of the dispute on the functioning of Alliance University. It was clarified that the inter se dispute between the parties should not hinder the administration or educational activities of the University. The Court emphasized the need to protect the interests of the students and staff, ensuring that the University's operations remain unaffected by the ongoing litigation.

Conclusion:
The appeal was dismissed, and the Court upheld the CLB's decision to relegate the appellant to the Civil Court for establishing the genuineness of the documents. The Court found no error or perverse exercise of discretion by the CLB. The interim relief was vacated, and the deposited amount was ordered to be returned with the condition of redeposit if directed by the competent forum. The Court ensured that the functioning of Alliance University would not be adversely affected by the dispute.

 

 

 

 

Quick Updates:Latest Updates