1995 (12) TMI 270 - HC - Companies Law

Summary

Issues Involved:
1. Jurisdiction of the Court
2. Appointment of Advocate-Commissioner
3. Cause of Action

Issue-wise Detailed Analysis:

1. Jurisdiction of the Court:
The primary issue addressed in this judgment is whether the Subordinate Judge at Ramachandrapuram has the jurisdiction to entertain the suit filed by the plaintiff. The petitioner argued that according to Section 10 of the Companies Act, the jurisdiction lies with the High Court or the District Court subordinate to the High Court where the company's registered office is located, which in this case is Madras. The plaintiff countered by citing Section 9 and Section 20 of the Civil Procedure Code, arguing that civil courts have jurisdiction unless expressly barred and that the cause of action arose within the jurisdiction of the Ramachandrapuram court.

The court held that for a civil court to have jurisdiction, it must have jurisdiction over the subject matter, pecuniary jurisdiction, and territorial jurisdiction. The Companies Act, being a special enactment, requires that jurisdiction be conferred by the Central Government through a notification in the Official Gazette. Since the registered office of the first defendant company is in Madras, the High Court of Madras or its subordinate courts have jurisdiction. The court concluded that the Subordinate Judge at Ramachandrapuram does not have territorial jurisdiction as there was no notification conferring such jurisdiction on it.

2. Appointment of Advocate-Commissioner:
The plaintiff had filed an application for the appointment of an Advocate-Commissioner to inspect the registered office of the first defendant company to prevent tampering with evidence. The petitioner challenged this appointment, arguing that it was unnecessary given the limited scope of the plaintiff's claim.

The court, while addressing the jurisdiction issue, held that since the Subordinate Judge at Ramachandrapuram did not have jurisdiction over the matter, the appointment of the Advocate-Commissioner was also without jurisdiction. Consequently, the order appointing the Advocate-Commissioner was set aside.

3. Cause of Action:
The plaintiff claimed that the cause of action arose within the jurisdiction of the Ramachandrapuram court because the money for shares was deposited in a bank at Ramachandrapuram. The court examined whether the cause of action, wholly or in part, arose within the jurisdiction of the Ramachandrapuram court.

The court held that the cause of action must be determined by reading the plaint. The court found that the offer to purchase shares was made to the company's registered office in Madras, and any acceptance or rejection of the offer would occur there. Therefore, the cause of action, if any, arose in Madras, not Ramachandrapuram. The court concluded that the plaintiff did not have a cause of action within the jurisdiction of the Ramachandrapuram court.

Conclusion:
The court held that the Subordinate Judge at Ramachandrapuram had no jurisdiction to entertain the suit. The order appointing the Advocate-Commissioner was set aside, and the plaint was directed to be returned to the plaintiff for filing in the appropriate court with jurisdiction. The revision petition was allowed, and no costs were awarded.