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2012 (8) TMI 1091 - HC - Companies LawExclusive jurisdiction of the Company Court - Held that - Having regard to the allegations made in the plaint, the plaintiffs are seeking the relief on the basis of the Memorandum of Understanding entered into between the parties and that cannot be brought within the exclusive jurisdiction of the Company Court and the rights under the Memorandum of Understanding are common law rights and therefore, such rights can be enforced in the ordinary civil courts. Though in the plaint the main prayer is to declare that the notice dated 19.4.20.2011 calling for the Board Meeting as illegal, that is also based on the Memorandum of Understanding and in short, the plaintiffs want to enforce the Memorandum of Understanding and filed the suits restraining the defendants and their men from acting contrary to the Memorandum of Understanding and therefore, the reliefs sought for do not come within the exclusive jurisdiction of the Company Court and the plaintiffs want to enforce their civil rights on the basis of the Memorandum of Understanding and hence, the ordinary civil courts have got jurisdiction.
Issues Involved:
1. Jurisdiction of the District Munsif Court to entertain suits related to company matters. 2. Applicability of Section 10GB of the Companies Act, 1956. 3. Enforcement of the Memorandum of Understanding (MoU) in civil courts. Issue-wise Detailed Analysis: 1. Jurisdiction of the District Munsif Court to entertain suits related to company matters: The primary contention was whether the District Munsif Court had jurisdiction to entertain suits related to company matters as per Sections 2(11) and 10 of the Companies Act, 1956. The petitioners argued that such matters should be exclusively dealt with by the High Court or District Court as defined under the Companies Act. The Court, however, emphasized that civil courts have jurisdiction to try all suits of civil nature unless expressly or impliedly barred by statute. The Court cited several judgments, including those from the Supreme Court, to assert that the jurisdiction of civil courts is presumed unless explicitly excluded by law. It was noted that the civil court's jurisdiction is not readily inferred to be ousted unless the conditions set by the statute apply. The Court concluded that the reliefs sought in the suits did not fall within the exclusive jurisdiction of the Company Court and could be entertained by the District Munsif Court. 2. Applicability of Section 10GB of the Companies Act, 1956: The petitioners contended that the civil courts had no jurisdiction to entertain suits or proceedings in respect of matters that the Tribunal or the appellate authority is empowered to determine under the Companies Act, as per Section 10GB. However, the Court clarified that Section 10GB had not been notified and its implementation was stayed by the Supreme Court in the case of Union of India v. Madras Bar Association ((2010) 11 SCC 1). Consequently, Section 10GB could not be invoked to bar the jurisdiction of the civil courts. The Court reiterated that unless the statute expressly bars the jurisdiction of the civil courts, they retain the authority to adjudicate such matters. 3. Enforcement of the Memorandum of Understanding (MoU) in civil courts: The suits in question sought to enforce the terms of a Memorandum of Understanding (MoU) dated 17.4.2010. The Court noted that the reliefs sought in the suits were based on the enforcement of the MoU, which is a matter of common law rights and not exclusively within the jurisdiction of the Company Court. The Court cited various judgments to support the view that civil courts have jurisdiction over disputes arising from common law rights unless specifically barred by statute. The Court concluded that the plaintiffs were seeking to enforce their civil rights based on the MoU, and such rights could be enforced in ordinary civil courts. Conclusion: The civil revision petitions were dismissed, affirming that the District Munsif Court had jurisdiction to entertain the suits related to the enforcement of the MoU. The Court held that the reliefs sought did not fall within the exclusive jurisdiction of the Company Court and that the civil courts retained jurisdiction unless expressly barred by statute. The connected miscellaneous petitions were also dismissed.
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