2016 (2) TMI 908 - HC - Companies Law

Forger of documents - scope of the jurisdiction of the CLB - Held that - We do find that the CLB has observed that it has summary jurisdiction and the question of document being forged or the signature being forged or not, cannot be examined in the proceedings of the Company Petition and the CLB has further observed that such an exercise can be undertaken in the civil suit by the Civil Court. The observations made by the CLB on the question of limitation may remain only on the presumptive value but it should not be read to control or to curtail in any manner the jurisdiction of the Civil Court in the above referred two civil suits and further the consequential computation of the period of limitation. Even otherwise also, as rightly observed by the CLB, the question of genuineness of forged document or forged signature could be examined in the proceedings of the Civil suit and there cannot be any dispute that the Civil Court on the said aspects will have wider jurisdiction vis- -vis jurisdiction of the CLB which is a summary jurisdiction. We leave it at that, since the Civil Court is yet to examine the matter in accordance with law. In view of the aforesaid, we find it appropriate to observe that the Civil Court in the proceedings of Civil Suit shall be at liberty to take an independent view of the matter on the basis of material and the evidence produced before it and the observations made by the CLB on the point of limitation shall not operate as a bar upon the power of the Civil Court to examine the controversy in accordance with law.

Summary

Issues:
1. Jurisdiction of the Company Law Board (CLB) regarding forged documents and limitation.
2. Discrepancy in the number of shares held by the petitioner.
3. Power of the Civil Court to examine forged documents and limitation.

Analysis:
1. Jurisdiction of the CLB regarding forged documents and limitation:
The appeals were against the CLB's order dismissing a petition. The appellants argued that the CLB found the question of forged documents beyond its jurisdiction but also ruled the petition barred by limitation. The appellants filed civil suits to address the issue of forged documents. The CLB stated it could not examine forgery issues and that the Civil Court had wider jurisdiction. The CLB found the petition time-barred based on the presumption of genuineness of documents. The High Court noted that if documents were found forged, the limitation period would vary, and the Civil Court would have to make a conclusive declaration regarding forgery.

2. Discrepancy in the number of shares held by the petitioner:
The respondents pointed out a discrepancy in the number of shares held by the petitioner in different statements. The High Court did not delve into this issue as it deemed it inconsequential in light of the observations made regarding the jurisdiction of the Civil Court.

3. Power of the Civil Court to examine forged documents and limitation:
The High Court emphasized that the Civil Court had the authority to independently assess the matter, including the limitation issue, based on evidence presented. It clarified that the observations made by the CLB on limitation should not restrict the Civil Court's jurisdiction. The High Court disposed of the appeals, allowing the Civil Court to make an independent decision on all aspects, including limitation, without being bound by the CLB's observations.

In conclusion, the High Court upheld the CLB's limited jurisdiction on forged documents and limitation issues, highlighted the Civil Court's broader authority to address these matters, and directed the Civil Court to independently evaluate the case without being constrained by the CLB's findings.