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TMI Blog1985 (1) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... pany well in advance. While matters stood thus, on September 28, 1983, one P. J. Joseph, who held two shares in the respondent company, instituted S. C. Suit No. 5658 of 1983, before the City Civil Court, Bombay, against the respondent company, the petitioner herein, as well as other directors and obtained an ad interim injunction restraining the respondent company and its directors from holding the twenty-fifth annual general meeting of the company on September 29, 1983. It further appears that the plaintiff in S.C. Suit No. 5658 of 1983, City Civil Court, Bombay, reached Coimbatore in the morning of September 29, 1983, and served the order of ad interim injunction on the petitioner in his house at about 11 a.m. and, thereafter, proceeded to the place where the twenty-fifth annual general meeting of the respondent company was scheduled to be held and informed the chairman and secretary of the company at about 11.20 a.m. about the ad interim injunction order passed by the City Civil Court at Bombay and also served the order of ad interim injunction on the secretary of the company and the chairman for the meeting, Mr. Desai. Though it is claimed that thereafter there was some discus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and notice only was ordered on the injunction application returnable by November 7, 1983. Thereafter, the respondent company filed its counter. In the counter filed by the company, it raised an objection regarding the maintainability of the suit as well as the application for injunction on the ground that the reliefs prayed for therein can be obtained by the petitioner only in the suit instituted before the City Civil Court at Bombay. An objection was also taken that owing to the non-joinder of necessary parties, namely, the directors of the company, the suit is bad. Yet another objection that was raised was that the suit had not been instituted by the petitioner in a representative capacity and that there was no proper and valid service of the order of ad interim injunction passed by the City Civil Court at Bombay on the respondent company. The proceedings of the twenty-fifth annual general meeting held on September 29, 1983, were claimed to be quite in order, valid as well as legal. The illegality or otherwise of the twenty-fifth annual general meeting of the respondent company held on September 29, 1983, was a matter, according to the respondent, to be decided only by that cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bombay on January 12, 1984, on certain notices of motion taken out by the respondent company in S. C. Suit No. 5658 of 1983, City Civil Court, Bombay, on the ground that that order had a material bearing on the point arising for decision in the appeal. Though that application was opposed by the petitioner herein, the learned District Judge felt that since the documents were only certified copies of court proceedings, no prejudice will be caused to the petitioner and directed the reception of the orders of the City Civil Court, Bombay, as additional evidence in the appeal and marked them as exhibits B4 and B5. Dealing with the merits of the appeal, the learned District Judge found that though an ex parte order of ad interim injunction was granted by the City Civil Court, Bombay, on September 28, 1983, the very same court had, later, on the notice of motion by the respondent company, found that it had no jurisdiction to entertain the suit in S. C. Suit No. 5658 of 1983, that the injunction application filed by P. J. Joseph as well as the contempt application filed by him had been dismissed and further that the plaint itself had been directed to be returned on the finding that no p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g or to the business transacted thereat. Strong reliance in this connection was placed by the learned counsel upon the decision of the Supreme Court in Kiran Singh v. Chaman Paswan, AIR 1954 SC 340. The learned counsel further submitted that in this case pointedly objection had been raised by the respondent company to the jurisdiction of the City Civil Court at Bombay, and on the upholding of such an objection, any order passed in the interregnum alone cannot be treated as valid as the said court ab initio lacked jurisdiction to entertain the suit instituted by P. J. Joseph and the objection regarding the jurisdiction had not in any manner been waived or given up by the respondent company. Thus, the principal question that arises for consideration is, whether the petitioner is prima facie entitled to an order of injunction as prayed for by him based on the order of ad interim injunction granted by the City Civil Court, Bombay, on September 28, 1983, in the suit instituted by P. J. Joseph against the respondent company, the petitioner and other directors as well. There is now no dispute before this court that the respondent company was put on notice and also served with an ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se as that order was passed by a court having no jurisdiction and no action for contempt for disobedience of that order would also lie. It was on the aforesaid reasoning and conclusions that the City Civil Court, Bombay, vacated the ad interim injunction granted by it in favour of P. J. Joseph in Notice of Motion No. 5053 dated September 28, 1983, on the Notice of Motion No. 6054 dated September 20, 1983, taken out by the respondent company. Notice of Motion No. 5326 dated October 3, 1983, taken out by P. J. Joseph for punishing the respondent company and its directors for having disobeyed the order of ad interim injunction was dismissed. A certified copy of the order of the Bombay High Court dated February 24, 1984, was produced by the learned counsel for the respondent company before this court to show that the High Court had also confirmed the dismissal of the Notices of Motion No. 5053 dated September 28, 1983, and No. 6054 dated September, 20, 1983, by the City Civil Court, Bombay. As regards the Notice of Motion No. 5326 dated October 3, 1983, for contempt, the High Court observed that it was unnecessary to take any action or pass any orders save and except to confirm the tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that, an argument was raised before the Supreme Court that the appeal should be heard free from the limitations under section 100, Code of Civil Procedure, as a first appeal against the judgment of the Sub-Court, as the decree and judgment passed by the District Court was a nullity. Alternatively, it was contended that even if the decree and judgment of the District Court were valid, the appellants had suffered prejudice within the meaning of section 11 of the Suits Valuation Act, 1887, and the decree was, therefore, liable to be set aside with a direction that the appeal should be heard by the High Court on merits as a regular appeal. In setting out the general principles applicable when a court entertains a suit or an appeal over which it has no jurisdiction, the Supreme court pointed out as follows (at page 342): "It is a fundamental principle well-established that a decree passed by a court without jurisdiction is a nullity, and that its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. A defect of jurisdiction, whether it is pecuniary or territorial, or whether it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt of Bombay referred to earlier. Besides, a complaint of having committed contempt of the order of ad interim injunction by disobeying the same had been thrown out by the very same court, as even according to it, such orders will have no effect on the company. The rejection of the application for contempt has also been affirmed by the High Court of Bombay. Under these circumstances, it is not clear as to how the petitioner can claim that the proceedings of the twenty-fifth annual general meeting held on September 29, 1983, are either illegal or invalid as being in contravention of the order of ad interim injunction passed by a competent court. When the City Civil Court at Bombay, which issued the ad interim injunction order had declared, though subsequently, that such an order will have no binding effect on the respondent company, because the court had no jurisdiction to entertain the suit and has also dismissed the application for contempt laid against the respondent company and others for disobedience of its order of ad interim injunction, it appears to me that the petitioner, who was a party to those proceedings and who will be bound by the orders passed by the City Civil Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any. The decisions relied on by the learned counsel for the petitioner cannot, therefore, have any application at all in this case. It is now necessary to consider the objections based on the distinction between total lack of competence and lack of local jurisdiction. If [there is total lack of competence in a court to entertain the suit, then there is no difficulty at all, because any order or adjudication made by such a court would be a nullity. Even if the objection is based upon want of jurisdiction on the ground of either pecuniary or territorial jurisdiction, in view of the decision of the Supreme Court in Kiran Singh v. Chaman Paswan, AIR 1954 SC 340, it seems to me that such a defect would also strike at the very authority of the court to pass a decree and it cannot be cured by consent of parties. Even on the assumption that there could be waiver of the objection in a manner recognised by law, in this case, there is no question of waiver at all, for, the respondent had clearly raised an objection regarding the jurisdiction of the City Civil Court at Bombay to entertain the suit and had persisted in that objection, which resulted in the court coming to the conclusion t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ood. The argument that the subsequent order passed by the City Civil Court at Bombay would not make the original order non-est or void cannot be countenanced. If the court had no jurisdiction at all to entertain the suit, anything done by it, by assuming such jurisdiction, would be totally without competence on its part to do so and merely because such incompetence is discovered subsequently, that would not render the intermediate acts valid and binding till the date of discovery of such incompetence. To accept this argument would lead to a very strange situation in that orders passed by a court, incompetent to entertain the proceedings, would be valid between the date when the proceedings are entertained and the discovery of its incompetence and would not be either binding or operative, after the date of discovery of the incompetence of the court. Either the court is competent or it is incompetent to entertain suits and pass orders. The acceptence of the argument of the learned counsel would render the same court competent up to a particular stage of the proceedings and make it incompetent at the subsequent stages. Under those circumstances, this argument of the learned counsel fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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