1995 (8) TMI 259 - HC - Companies Law

Summary

Issues: Jurisdiction of the High Court under section 10 of the Companies Act, 1956; Dispute regarding allotment of shares and payment discrepancy; Consumer Forum's decision on maintainability of complaint; Interpretation of relevant sections of the Companies Act; Applicability of civil court jurisdiction in company-related disputes.

Analysis:

The petition was filed under section 10 of the Companies Act, 1956, concerning the allotment of shares by the petitioner in Rajasthan Tubes Mfg. Co. Ltd. The petitioner applied for 12000 shares but was considered for only 1200 shares, leading to a payment discrepancy of Rs. 60,000. The Consumer Forum, citing the decision in Morgan Stanley Mutual Fund v. Kartick Das, held that the petitioner did not fall under the consumer category, rendering the complaint non-maintainable.

The jurisdiction of the High Court under section 10 of the Act was examined in detail. It was highlighted that the Act provides for various forums to address disputes, including Company Court, Company Law Board, Registrar of Companies, Central Government, and Criminal Courts. The Court emphasized that jurisdiction under section 10 cannot be assumed unless specifically provided by the Act or its rules.

The judgment delved into the provisions of the Companies Act, particularly sections 61, 63, and 73(2)(b), to determine the appropriate forum for redressal. It was clarified that civil court jurisdiction is applicable in certain disputes, and the High Court's jurisdiction as a Company Court is limited to matters specified under the Act or related rules.

The judgment extensively quoted Rule 11 of the Company (Court) Rules, listing various applications that could be made to the High Court. It emphasized that the High Court's jurisdiction is defined by the Act and cannot be extended beyond the specific provisions related to company matters.

Further, the judgment discussed the interpretation of the Act by referring to precedents such as Nava Samaj Ltd. v. Civil Judge and emphasized that civil courts have jurisdiction unless expressly or impliedly barred. The principle that civil court jurisdiction is not to be considered as impliedly excluded was reiterated based on legal precedents.

The judgment also analyzed the alleged breach of section 61 of the Act, highlighting the civil and criminal liabilities specified therein. The court referred to the Consumer Protection Act and the definition of a consumer to determine the applicability of consumer rights in the case of share allotment disputes.

Ultimately, the High Court concluded that it did not have jurisdiction under section 10 of the Companies Act in the present case and dismissed the petition accordingly. The judgment underscored the importance of adhering to the specific jurisdictional provisions outlined in the Act and rules governing company-related disputes.