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Issues involved: Application for admission of an appeal from the order refusing to stay proceedings under Sections 397 and 398 of the Companies Act, 1956.
Summary: 1. The appellant sought a stay on proceedings under Sections 397 and 398 of the Companies Act, 1956, arguing that a suit had been filed prior to the company petition and the matters in controversy were essentially the same. The appellant contended that the Company Court did not have exclusive jurisdiction under Section 10 of the Civil P. C. due to the prior institution of the suit. 2. The Court noted that the causes of action in the two matters were different, with allegations of oppression and mismanagement by the Guhas in the company petition. It was observed that the controversy in both matters was not essentially the same. 3. Section 397 was considered a special code by itself, as established by previous court decisions. While the Allahabad High Court had a different view on civil court jurisdiction, it was emphasized that if relief could only be granted under Sections 397 and 398, it could not be circumvented by initiating proceedings in a civil court. 4. The Court found that the Trial Judge was correct in not granting a stay under Section 10 of the Civil P. C. The operation of the order was not stayed pending the appeal, except for admitting the memorandum of appeal. 5. Orders from specific dates were to be consolidated, and a single set of documents was to be filed within a month. Notice of appeal was waived, and the settlement of the index was dispensed with. Certified copies of orders were to be included in the Paper Book, with liberty granted for supplementary filing if necessary. 6. The costs of the application were to be considered costs in the appeal.
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