Home Case Index All Cases Indian Laws Indian Laws + HC Indian Laws - 2019 (7) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (7) TMI 1944 - HC - Indian LawsMaintainability of civil suit u/s 9 of the Civil Procedure Code - suit barred by the provisions of Section 430 of the Companies Act, 2013 or not - HELD THAT - Admittedly, the disputed property was purchased by the defendant-respondent no.1-Company in its own name which is in accordance with the provisions of Section 187 of the Act. Whatsoever may be the nature of the alleged Minutes of the Meeting dated 10.2.2016, but it relates to the affairs of the defendant-respondent-Company which may be complained under Section 241(1)(a) of the Act 2013 by making application before the Tribunal. Under Clause (e) and Clause (f) of sub-Section 2 of Section 242, the Tribunal has the power to terminate, set aside or modify any agreement, howsoever, arrived at between the Company and the Managing Director or any other Director or Manager, upon such terms and conditions as may in the opinion of the Tribunal be just and equitable in the circumstances of the case. The Tribunal has power to terminate, set aside or modify any agreement between the Company or any person other than those referred to in Clause (e). A class of member or members, depositor or depositors may also apply to the Tribunal in the circumstances mentioned in sub-section 1 of Section 245 of the Act. The alleged Minutes of the Meeting drawn by the Directors plaintiff-appellant and the defendant-respondent no.2, dated 10.2.2016 relating to property held by the Company in its own name under Section 187 of the Act fall within the powers of the Tribunal conferred under Section 242 of the Act. Section 430 of the Act specifically provides that no Civil Court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Tribunal or the Appellate Tribunal is empowered to determine by or under the Act or any other law for the time being in force. Under Section 9 of the C.P.C. civil court shall have jurisdiction to try all suits of a Civil nature excepting suits of which their cognizance is either expressly or impliedly barred. Thus, the Civil Court shall have jurisdiction to try all types of suits unless the same is ousted, expressly or by necessary implication - The question of ouster of a jurisdiction of a Civil Court needs to be construed having regard to the Scheme of the Act as also the object and purport it seeks to achieve. A plea of bar to jurisdiction of a civil court has to be considered having regard to the contentions raised in the plaint. The crux of the conclusion is that the jurisdiction of Civil Court is excluded in cases where the matter in dispute is required under the Act 2013 to be determined by the Tribunal. If a matter fall outside the jurisdiction of the Tribunal under the Act 2013, the civil court shall have jurisdiction under Section 9 of the Civil Procedure Code - The Scheme of the Act 2013, exhaustively provides for all matters relating to a Company and its conduct and affairs. Jurisdiction has been exhaustively provided in such matters to Tribunal which is a specialised body constituted under the Act. The matters for which jurisdiction has not been conferred upon the Tribunal, has been provided specifically. In this regard reference may be had to Section 37 of the Act which provides for filing of a suit in certain circumstances. The case of the plaintiff-appellant is not covered by Section 37 of the Act. The question framed is answered in affirmative by holding that under the facts and circumstances of the case the suit filed by the plaintiff-appellant was not maintainable under Section 9 of the Civil Procedure Code as it was barred by the provisions of Section 430 of the Companies Act 2013 - appeal dismissed.
Issues Involved:
1. Maintainability of the suit under Section 9 of the Civil Procedure Code. 2. Applicability of Section 430 of the Companies Act, 2013. 3. Jurisdiction of Civil Courts versus the National Company Law Tribunal (NCLT). Issue-Wise Detailed Analysis: 1. Maintainability of the Suit under Section 9 of the Civil Procedure Code: The plaintiff-appellant, an ex-director, filed a suit under Section 9 of the Civil Procedure Code seeking declaratory relief and a permanent injunction based on the Minutes of Meeting dated 10.2.2016. The suit was dismissed by the Additional Civil Judge (S.D.)/ACMM, Kanpur Nagar, on the ground of being barred by Section 430 of the Companies Act, 2013, and Order VII Rule 11(d) of the CPC. The appellant argued that the Civil Court had jurisdiction as the relief sought pertained to the division of company properties, which is a matter of civil nature. 2. Applicability of Section 430 of the Companies Act, 2013: Section 430 of the Companies Act, 2013, bars the jurisdiction of civil courts in matters which the Tribunal or the Appellate Tribunal is empowered to determine. The court examined whether the issues raised in the suit fell within the jurisdiction of the NCLT. The Minutes of the Meeting dated 10.2.2016, which involved the division of company properties among directors, was not a Board of Directors meeting and did not comply with the provisions of the Companies Act, 2013. The court noted that directors are not owners but officers of the company, and their duties are governed by Section 166 of the Act. The disputed minutes related to the affairs of the company, which could be complained about under Section 241(1)(a) of the Act before the Tribunal. 3. Jurisdiction of Civil Courts versus the National Company Law Tribunal (NCLT): The court emphasized that the jurisdiction of civil courts is excluded in cases where the matter is required to be determined by the Tribunal under the Companies Act, 2013. The Tribunal has the power to enforce compromises or arrangements under Sections 230 and 231, and to address complaints about the conduct of company affairs under Sections 241 and 242. The alleged Minutes of Meeting dated 10.2.2016, which dealt with the division of company properties, fell within the jurisdiction of the Tribunal. The court referenced several Supreme Court judgments to support the principle that civil court jurisdiction is ousted when the matter falls within the purview of a specialized tribunal established under a statute. Conclusion: The court concluded that the suit filed by the plaintiff-appellant was barred by Section 430 of the Companies Act, 2013, as the issues pertained to the conduct and affairs of the company, which fall under the jurisdiction of the NCLT. The plaint was lawfully rejected under Order VII Rule 11(d) of the CPC. Consequently, the appeal was dismissed, affirming that the suit was not maintainable under Section 9 of the CPC due to the statutory bar under Section 430 of the Companies Act, 2013.
|