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1995 (3) TMI 331 - SC - Companies LawWhether the use of the words civil court in sub-section (1) excludes the application of section 9A to the CLB? Held that - The appeal is allowed. Section 9A(2) of the Special Court Act speaks of the transfer of every suit claim or other legal proceeding (other than an appeal) does not exclude the application or appeal made under the provisions of section 111 of the Companies Act from the purview of section 9A(1) of the Special Court Act. The judgment and order of the CLB under appeal is set aside. The application of the Canara Bank pending before the CLB shall stand transferred to the Special Court constituted under the provisions of the Special Court (Trial of Offences Relating to Transactions in Securities) Act.
Issues Involved:
1. Exclusive jurisdiction of the Special Court under the Special Court Act, 1992. 2. Jurisdiction of the Company Law Board (CLB) under Section 111 of the Companies Act, 1956. 3. Interpretation of Section 9A of the Special Court Act. 4. Definition and scope of the term "Court" in the context of Section 9A. 5. Transfer of proceedings from CLB to the Special Court. Issue-wise Detailed Analysis: 1. Exclusive jurisdiction of the Special Court under the Special Court Act, 1992: The appeal raised the question of the exclusive jurisdiction of the Special Court constituted under the Special Court (Trial of Offences relating to Transactions in Securities) Act, 1992. The Canara Bank's application before the CLB was argued to be transferred to the Special Court by virtue of Section 9A(2) of the Special Court Act. 2. Jurisdiction of the Company Law Board (CLB) under Section 111 of the Companies Act, 1956: The CLB, in its order, held that its jurisdiction to deal with matters relating to securities provided by the Companies Act, 1956, was not affected by the Special Court Act. The CLB stated that it was not a Court within the meaning of the Companies Act nor a civil court, and thus its jurisdiction was unaffected by Section 9A(2). 3. Interpretation of Section 9A of the Special Court Act: Section 9A of the Special Court Act, introduced by the Special Court (Trial of Offences Relating to Transactions in Securities) Amendment Ordinance, 1994, was analyzed. Sub-section (1) empowered the Special Court to exercise jurisdiction, powers, and authority as exercisable by any civil court in relation to any matter or claim arising out of transactions in securities entered into between the stated dates in which a notified person was involved. Sub-section (2) mandated the transfer of such matters pending before any court to the Special Court. Sub-section (3) debarred any court other than the Special Court from exercising jurisdiction in such matters. 4. Definition and scope of the term "Court" in the context of Section 9A: The term "Court" in Section 9A was interpreted to include not only courts of civil judicature but also other curial bodies acting judicially. The judgment referenced the decision in Harinagar Sugar Mills Ltd. v. Shyam Sundar Jhunjhunwala, which distinguished between courts and tribunals, noting that tribunals exercising judicial functions could be considered courts in the context of certain statutes. The judgment concluded that the CLB, performing functions under Section 111 of the Companies Act, acted judicially and thus fell within the broader meaning of "Court" under Section 9A. 5. Transfer of proceedings from CLB to the Special Court: The judgment concluded that the application of the Canara Bank pending before the CLB should be transferred to the Special Court. It was held that the CLB, being a curial body acting judicially, was encompassed within the term "Court" under Section 9A(1) of the Special Court Act. Consequently, the application stood transferred to the Special Court, and the CLB's order was set aside. Conclusion: The appeal was allowed, and the application of the Canara Bank pending before the CLB was ordered to be transferred to the Special Court constituted under the Special Court (Trial of Offences Relating to Transactions in Securities) Act. The transfer petition was dismissed, and there was no order as to costs.
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