1985 (1) TMI 253 - HC - Companies Law

Summary

Issues Involved:
1. Maintainability of the suit and application for injunction.
2. Non-joinder of necessary parties.
3. Validity of the service of the order of ad interim injunction.
4. Legality of the twenty-fifth annual general meeting of the respondent company.
5. Jurisdiction of the City Civil Court, Bombay.
6. Waiver of objection regarding jurisdiction.
7. Entitlement to an order of injunction based on the ad interim injunction.

Detailed Analysis:

1. Maintainability of the Suit and Application for Injunction:
The respondent company raised an objection regarding the maintainability of the suit and the application for injunction on the ground that the reliefs sought by the petitioner could only be obtained in the suit instituted before the City Civil Court at Bombay. The learned District Munsif, Coimbatore, initially granted an ad interim injunction but later recalled it upon realizing that a caveat had been lodged by the respondent company. The District Judge, Coimbatore, upon appeal, found that since the City Civil Court, Bombay, had no jurisdiction to entertain the suit, the petitioner could not be granted the relief of injunction based on the ad interim injunction granted by the City Civil Court, Bombay.

2. Non-joinder of Necessary Parties:
The respondent company also objected to the suit on the ground of non-joinder of necessary parties, specifically the directors of the company. This objection was raised in the counter filed by the respondent company, but the judgment does not provide a detailed analysis of this issue, indicating that it might not have been a decisive factor in the final decision.

3. Validity of the Service of the Order of Ad Interim Injunction:
The respondent company contended that there was no proper and valid service of the order of ad interim injunction passed by the City Civil Court, Bombay. However, the learned District Munsif, Coimbatore, found that the respondent company was put on notice and served with the order of ad interim injunction, which prohibited the conduct of the twenty-fifth annual general meeting scheduled for September 29, 1983.

4. Legality of the Twenty-fifth Annual General Meeting of the Respondent Company:
The petitioner argued that the twenty-fifth annual general meeting held on September 29, 1983, was illegal as it was held in contravention of the order of ad interim injunction. The learned District Munsif, Coimbatore, initially agreed with this view, finding that the meeting and the business transacted thereat were in violation of the injunction order. However, the District Judge, Coimbatore, on appeal, found that since the City Civil Court, Bombay, subsequently vacated the ad interim injunction and dismissed the suit for lack of jurisdiction, the meeting and its proceedings could not be deemed illegal or invalid.

5. Jurisdiction of the City Civil Court, Bombay:
The principal question was whether the City Civil Court, Bombay, had jurisdiction to entertain the suit filed by P. J. Joseph. The City Civil Court, Bombay, found that it had no jurisdiction as no part of the cause of action arose within its territorial limits. This finding was based on the fact that the respondent company did not carry on any business in Bombay, and the notices for the meeting were posted from Coimbatore. The High Court of Bombay confirmed this finding, leading to the conclusion that any orders passed by the City Civil Court, Bombay, were inoperative and void.

6. Waiver of Objection Regarding Jurisdiction:
The petitioner argued that the objection regarding jurisdiction was waived by the respondent company. However, the record showed that the respondent company had raised and persisted in its objection to the jurisdiction of the City Civil Court, Bombay, from the earliest possible stage. The Supreme Court's decision in Kiran Singh v. Chaman Paswan was cited to emphasize that a defect in territorial jurisdiction strikes at the very authority of the court and cannot be cured by consent of parties. The court found no waiver of the objection in this case.

7. Entitlement to an Order of Injunction Based on the Ad Interim Injunction:
The petitioner sought an injunction based on the ad interim injunction granted by the City Civil Court, Bombay. However, since the City Civil Court, Bombay, and subsequently the High Court of Bombay, found that the court lacked jurisdiction and vacated the ad interim injunction, the basis for the petitioner's claim was nullified. The court concluded that the petitioner could not rely on an invalid order to claim relief.

Conclusion:
The civil revision petition was dismissed with costs, as the petitioner could not establish entitlement to an injunction based on an ad interim injunction granted by a court lacking jurisdiction. The proceedings of the twenty-fifth annual general meeting were deemed valid, and the objections regarding jurisdiction and waiver were resolved in favor of the respondent company.