2020 (12) TMI 1348 - SCH - Companies Law

Jurisdiction of Civil Court - validity of a sale deed - Section 430 of the Companies Act 2013 - HELD THAT - There is no error in the finding that the suit which was filed for a declaration in regard to the invalidity of the sale deeds was properly instituted before the civil court and there was no occasion to transfer the appeal to the National Company Law Tribunal - Section 430 of the Companies Act 2013 bars the jurisdiction of a civil court to entertain a suit or proceeding in respect of any matter which the tribunal or the appellate tribunal is empowered to determine under the Act or any other law for the time being in force. The jurisdiction to decide the validity of a sale deed would fall within the ambit of the civil court. Hence, the impugned order of the High Court is agreed upon - SLP disposed off.

Summary

Issues: Jurisdiction of Civil Court vs. National Company Law Tribunal under Companies Act 2013

In this judgment by the Supreme Court of India, the primary issue revolved around the jurisdiction of a civil court versus the National Company Law Tribunal under Section 430 of the Companies Act 2013. The court examined whether a suit challenging the validity of sale deeds should be entertained by a civil court or transferred to the National Company Law Tribunal.

The court held that the suit filed for a declaration regarding the invalidity of sale deeds was properly instituted before the civil court. It emphasized that Section 430 of the Companies Act 2013 restricts the jurisdiction of a civil court in matters that the tribunal or appellate tribunal is empowered to decide. The validity of a sale deed falls within the purview of the civil court, affirming the High Court's decision dated 5 February 2020.

However, the petitioner's counsel sought clarification that the order would not hinder the petitioner from seeking remedies under the Companies Act 2013 for disputes falling within its scope. The court granted this clarification, allowing the petitioner to pursue suitable remedies under the Companies Act 2013 if independent grievances arise. The District Judge was directed to ensure the prompt disposal of the pending First Appeals, RCA Nos 153 and 154 of 2015, by 31 August 2021.

Ultimately, the Special Leave Petition was disposed of, and any pending applications were also resolved by the court. The judgment clarified the jurisdictional boundaries between civil courts and the National Company Law Tribunal under the Companies Act 2013, ensuring the appropriate forum for resolving disputes related to sale deeds and other matters falling within the Act's purview.