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Issues: Jurisdiction of the High Court under the Companies Act
Analysis: The judgment by Justice Mudholkar addresses the jurisdictional issue raised regarding applications under section 155 of the Companies Act (1 of 1956). The primary objection raised was that the High Court lacked jurisdiction to entertain these applications. The argument presented was based on the provisions of section 10 of the Companies Act, 1956, which determine the jurisdiction of courts in matters related to the Act. It was highlighted that the High Court having jurisdiction over the registered office of the company is the competent court, unless empowered otherwise by the Central Government. The crux of the jurisdictional debate revolved around a notification issued in 1925 by the then Government of the Central Provinces and Berar, conferring jurisdiction upon the District Court at Nagpur for matters under the Indian Companies Act, 1913. The contention was that this notification continued to be in force and thus, the District Court at Nagpur should have jurisdiction over the applications. The argument was supported by reference to section 645 of the Companies Act of 1956, which deals with the saving of orders, rules, etc., in force at the commencement of the Act. Justice Mudholkar analyzed the provisions of section 645 and emphasized that while the section does not expressly mention notifications, it pertains to orders made under the previous law continuing under the new Act. However, it was noted that the order made by the local Government under the Act of 1913 could not have been made under the Act of 1956 by any authority except the Central Government. Therefore, the notification conferring jurisdiction on the District Court at Nagpur could not be deemed valid under the Companies Act of 1956. Moreover, a reference was made to section 24 of the General Clauses Act, which was deemed to be a general provision that must yield to the specific provisions of the Companies Act, 1956. Justice Mudholkar ultimately overruled the preliminary objection, asserting that the High Court had the jurisdiction to entertain the applications and proceed with the case on its merits. Additionally, the issue of a temporary injunction against the non-applicants was discussed, with the assurance from the respondent's counsel that no meeting of shareholders would be held until the court's decision, leading to the decision not to issue a temporary injunction. In conclusion, the judgment clarified the jurisdictional authority of the High Court under the Companies Act, emphasizing the specific provisions of the Act over general laws and past notifications, thereby establishing the High Court's jurisdiction to hear and decide on the applications under section 155 of the Companies Act.
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