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TMI Blog1996 (10) TMI 430X X X X Extracts X X X X X X X X Extracts X X X X ..... tory provision under which an action in respect of forfeiture of shares lay before the court. Admittedly, the provision regarding forfeiture of shares is provided only in the articles of association of the company. Article 29 of the articles provides that when a member fails to pay any call money on the appointed day, the board may serve a notice requiring the payment and if the notice is not complied with, a resolution may be passed by the board to forfeit the shares. The board has also the authority to cancel the forfeiture of shares on such terms as it thinks fit. Admittedly, there is no provision in the Companies Act, 1956 for a court to entertain a petition regarding forfeiture of shares made under the articles of association. 2. Mr. M.S.K. Sastry, the learned counsel for the appellants has raised the same submissions which were urged before the learned company judge and were negatived. Placing reliance on the definition of court in section 2( 11 ) and section 10 which deals with the jurisdiction of court, it is the argument that in all matters relating to companies, the High Court has the general jurisdiction unless such jurisdiction is specifically conferred on the Dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me suzerainty over all questions that may arise in connection with a company. The Courts are not the only functionaries under the Companies Act to decide matters. Power has been vested within the scheme of the Act also with the other authorities like the CLB or the Central Government. There are provisions in the Act conferring, specifically, powers on the Court in relation to matters provided therein. Some such sections are sections 101, 102, 391 to 394, 433, etc. Similarly, powers have been conferred on the CLB under sections 17, 79 and other provisions. Powers have also been conferred on the Central Government like those in section 235. There is no provision in the Act to enable the High Court to entertain an application relating to forfeiture of shares. It has rightly been pointed out by the learned company judge that section 155 which vested power in the Court to rectify the register of members if the name of any person had been omitted without sufficient cause from the register of members of the company, has since been deleted from 31-5-1991, by the Amendment Act of 1988 and that besides, by the Depositories Ordinance, 1996, section 111 of the Act has been confined to privat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me under the first or the third category of cases. If the appellants have any rights to sue in the matter complained of by them, that can only be by an action under the common law. 6. The law relating to the subject has also been exposed in the similar manner by earlier decisions of this court as also by other High Courts. In Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp. Cas. 63 (Mad.), a learned single judge of the Madras High Court held, negativing an application by the newly elected secretary and treasurer of the company for direction to his predecessor to hand over the records and accounts of the company and for an injunction restraining him from proceeding with his suit challenging the validity of the election, that the application was not maintainable as there is no provision in the Indian Companies Act which gives the company court exclusive jurisdiction in all company matters. In deciding the case, the learned judge differed from the decision in British India Corpn. Ltd. v. Robert Menzies [1936] 6 Comp. Cas. 250 (All.) and held that there is no provision in the Indian Companies Act which gives the company court ( i.e., the court having jurisd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y necessary implication, the civil court shall have jurisdiction under section 9 of the Code of Civil Procedure and that section 2(11) or section 10(1) cannot be understood to exclude the jurisdiction of the civil court in any manner. The learned judge held the petition as liable for dismissal for the only reason that the petitioners were not able to point out any provision of law conferring exclusive power to decide the disputes relating to the removal of directors. 9. Pressing for the opposite view, Mr. Sastry has placed reliance on a decision of a single judge of this court in Nizamabad Corn Products (P.) Ltd. v. Vasudev Dalia [1992] 3 ALT 303. The Court in that case was considering the maintainability of a suit in the civil court to declare a resolution passed in the annual general meeting and the meeting of the board of directors removing a director of a company as illegal and void and for permanent injunction. The learned judge held that the view that the civil court s jurisdiction has not been taken away merely because section 10 confers jurisdiction on the High Court, cannot be correct in view of the specific direction contained in section 10(1)( a ) viz., "except ..... X X X X Extracts X X X X X X X X Extracts X X X X
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