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TMI Blog2000 (2) TMI 827X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 35% shares on 6.9.1992 and he was also made one of the Directors of the said company. There was one more Director namely Major Vijay Bhatnagar since expired, his widow Mrs. Asha Bhatnagar respondent No. 2 has been made Director without any shares. 3. The Rajasthan State Tannery Pvt. Ltd. Tonk which was a State Government Enterprise and was established in 1973, was never run properly. Its paid up capital and reserves, etc. were ₹ 1,79,00,000/-, while upto 1985 it had suffered a total loss of ₹ 3,19,000/- and it was closed in 1985. The State Govt. tried to hand over this industry to a private sector, but it could not be given. In 1992, respondent No. 1 offered to take this industry from the State Govt. on the following basis: 1. IDBI DUES-Rs. 88 lacs to be paid TTPL in 14 half yearly installments, with interest @ 15% from the start up of production with one year moratorium. 2. Bank of Baroda-Rs. 75 lacs to be paid as above. 3. Other Creditors-Other creditors including Government of Rajasthan and labour etc. ₹ 30.15 lacs. 4. In pursuance of the aforestated proposal, the State Govt. issued a letter of intent through its Department of Public Enterpriz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d an amount of ₹ 10 lacs is still to be paid, and only after this amount is paid, the transfer of company will be complete. The petitioner started re-construction of this factory in September 1992 with his own skill and ability. Thereafter, since it was running in loss and has been lying closed since then, it has been contended that the petitioner put in hard labour in building of the factory and its machinery which had to be repaired so as to bring factory to the proper shape or re-production. As a result of his efforts, the factory which was closed earlier started its re-production again. The petitioner had invested a sum of ₹ 27,05,641/- in this factory. He also arranged a limit of ₹ 2.5 Crores from Canara Bank by way of Credit Facility as well as ₹ 1 Crore by way of loan from the said Bank. The petitioner gave his personal surety alongwith respondent No. 1 but, despite his efforts the said respondent neither made any investment nor put any labour on the said factory. Since, the factory started reproduction, behavior of respondent No. 1 changed and as a result of his malafide intentions, he wanted to dispose of this factory for a huge amount by involving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel for the petitioner has vehemently contended at the bar that petitioner was one of the Directors of M/s. Raj. State Tannery Tonk having 35% shares in the said company. Hence, the legal right had accrued to him but, the trial Court as well as the appellate court have not taken material aspect into consideration that the petitioner's suit was against other two Directors of the company who were creating hindrance in exercise of his legal rights and were also causing financial loss to him and hence, the dispute do not fal within the ambit of the Companies Act, 1956 (for short the Act of 1956 ) but, within the jurisdiction of the civil courts as so erroneously not considered by the courts below. With regard to agreement executed between' the petitioner and the company, the learned Counsel has contended that it is an irrelevant consideration which could not have been given effect to by the courts below since the petitioner was one of the Directors of the company, he automatically gets legal right and to enforce the same before the civil court in accordance with law. He further contended that his suit was not against the company but was against the other two Directors and henc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preliminary objection to the maintainability of the suit in view of a specific bar contained in Section 9 of the Code of Civil Procedure, 1908 hence, the relief sought for by way of a suit cannot be entertained by the civil courts, the civil courts would obviously have no jurisdiction to entertain the suit. Section 9 C.P.C provides, thus: 9. Courts to try all civil suits unless barred. The Courts shall (subject to the provisions herein contained) have jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred. Explanation (I)-A suit in which the right to property or to an office is contested is a suit of a civil nature, notwithstanding that such right may depend entirely on the decision of questions as to religious rites or ceremonies. Explanation II.-For the purposes of this section, it is immaterial whether or not any fees are attached to the office referred to in Explanation I or whether or not such office is attached to a particular place. 9. I have heard the learned Counsel for the petitioner at length, examined the findings recorded by the courts below with reference to provisions of Section 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the courts below that the petitioner has thus come by way of this revision petition which is now being disposed of finally at the admission stage itself. 10. Prima-facie, I am of the view that in view of the specific provisions of Section 284 of the Act of 1956, which provides adequate mechanism for removal of directors and also safeguards to a director of a company against whom resolution has been drawn up by the Board, since the said alternative remedy was available to the petitioner which admittedly he has not invoked, the petitioner was not entitled to agitate this issue by way of a suit for injunction before the learned trial Court. I am further of the view that right to remove a director by a share holder is available under the Act of 1956 which also lays down the mechanism for exercise of its rights. From the scheme of the said Act, it is also clear as well that matters of internal management of the company which in my considered view should be dealt with in accordance with law and the procedure laid down under the said Act. Hence, the civil courts could not interfere in such matters relating to internal management of the company. I am fortified in my observations f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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