9911796707
TMI Blog2001 (11) TMI 959X X X X Extracts X X X X X X X X Extracts X X X X ..... e question involved in the matter referred the matter to Full Bench by an order dated 17-10-2001. Facts. 3. The petitioner herein by reason of the impugned notices was declared to have ceased to be a director of the first respondent-company with effect from 21-7-2001 in terms of section 283(1)( f ) of the Companies Act, 1956 ( the Act ) on the ground that he had failed to deposit the call money of the shares. The said decision was communicated to him by notice dated 30-8-2001 by the first respondent. 3.1 The company petition was filed praying that this Court declare the notice dated 30-8-2001 as also another notice dated 30-8-2001 issued by the respondent-company to the petitioner as illegal, ultra vires the articles of association of the respondent-company and the provisions of sections 283 and 292, null and void. 3.2 Section 283 of the Act provides for certain contingencies on occur-rence of which the office of the director shall become vacant. Submissions 4. Mr. Kodanda Ram, the learned counsel appearing on behalf of the petitioner would submit that having regard to the definition of Court as contained in section 2(11) as also the provisions contained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so conferred, the District Court in regard to matters falling within the scope of the jurisdiction conferred, in respect of companies having their registered offices in the district. (2) The Central Government may, by notification in the Official Gazette and subject to such restrictions, limitations and conditions as it thinks fit, empower any District Court to exercise all or any of the jurisdiction conferred by this Act upon the Court, not being the jurisdiction conferred ( a )in respect of companies generally, by sections 237, 391, 394, 395 and 397 to 407 both inclusive; ( b )in respect of companies with a paid-up share capital of not less than one lakh of rupees, by Part VII ( sections 425 to 560 ) and the other provisions of this Act relating to the winding up of companies. (3) For the purposes of jurisdiction to wind up companies, the expression registered office means the place which has longest been the registered office of the company during the six months immediately preceding the presentation of the petition for winding up." [Emphasis Supplied] 5.2 Section 283(1)( f ) reads thus: "The office of a director shall become vacant if ( a )to ( e )****** ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. 6.4 Clause ( a ) of section 2(11) excludes only offences against the Act in relation whereto the Court of a Magistrate of the First Class or a Presidency Magistrate having jurisdiction is the proper Court. In the aforementioned backdrop, the question raised in this application has to be answered. There cannot be any doubt that in view of the provisions contained in section 9 of the code ouster of jurisdiction of Civil Court is not inferred. It may be ousted only expressly or by necessary implication. ( See C.V. Ratnam v. Union of India 2001 (6) ALD 35.) 6.5 The disqualification in terms of section 283(1)( f ) is a statutory one. It may be true that the disqualification incurred is automatic, but such disqualification is subject to the fulfilment of the conditions precedent there for. 6.6 A director who is said to have ceased to be a director on his alleged failure to pay the call money is entitled to content that the jurisdictional fact leading to incurring such disqualification did not occur. The petitioner has incurred a liability or is divested of some right only in terms of the said Act. Rights and obligations created under a statute for the first time shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led an application before the District Judge at Kanpur praying for supply of the names and addresses of the Corpn., observed: "....As has been pointed out by the learned District Judge, it is a fundamental principle of legal administration that where the law requires something to be done there must be in existence a Court that can directly order it to be done. It is well understood in all systems of civilised jurisprudence that where there is a right there is a remedy. It is conceded on behalf of the applicant that Mr. Menzies had the right to demand and to be furnished with a copy of the register of the members of the Corporation. But if the argument of the applicant is pressed to its logical consequence it follows that there was no remedy available to Mr. Menzies for the enforcement of this right. It is needless to say that we cannot credit the legislature with an omission of this description." (p. 255) Whether the contingency resulting in vacation of Office by operation of statute occurred or not is always a question of fact. In the event there exists any dispute on the said issue, the same is required to be resolved by a Court of law. 6.11 A director of a company has a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration this particular aspect of the case that section 283 of the Act is not one of the sections in respect of which jurisdiction has been conferred on Civil Court. The view that merely because section 10 of the Act confers jurisdiction on the High Court the jurisdiction of the Civil Court has not been taken away cannot be correct in view of the specific direction contained in section 10(1)( a ) viz., "except to the extent to which jurisdiction has been conferred on any District Court in pursuance of sub-section (2)". Sub-section (2) reveals that section 283 is not one of the sections in respect of which jurisdiction has been conferred on Civil Courts. 6.13 In Avanthi Explosives (P.) Ltd. s case ( supra ), M. Jagannatha Rao, J. (as His Lordship then was) upon considering the provisions of section 10 vis- -vis the powers of a Civil Court observed : "In my view, section 10 of the Act only proceeds to enumerate or specify the Court having jurisdiction under this Act wherever such jurisdiction is conferred on the Court by the other provisions of the Act. Powers are conferred by the Act not only on Courts but also on other authorities like the Central Government, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. Therefore, the jurisdiction of the Civil Court to entertain and try these two suits will be governed by the provisions of the Civil Procedure Code read with the Suit Valuation Act and the Bombay Court Fees Act. 6.15 In our opinion, section 2(11) read with section 10 must be construed so as to give it a purposeful meaning. 6.16 Section 283(1)( f ) creates a statutory liability under the Companies Act which is not contemplated under a common law. A statutory right or a statutory disqualification created under a special statute in our considered opinion leave no manner of doubt that an application in relation thereto would lie before a Company Court. Automatic cessation of Office of director of a company has a direct nexus with the function of the company itself. It is not a case where the Court is required to deal with a transaction by and between a company and the third party. We are, therefore, of the opinion that Company Court has the requisite jurisdiction to entertain the application. As at presently advised, we need not go into the question as to whether the jurisdiction of the Civil Court is ousted or not. 6.17 The doctrine of Ubi Jus Ibi Remedium which has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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