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2019 (7) TMI 1944 - HC - Indian Laws


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.

 

 

 

 

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