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TMI Blog2017 (4) TMI 575X X X X Extracts X X X X X X X X Extracts X X X X ..... tive reliefs are Section 392 of the Companies Act, 1956 and the Rule 86 of the Companies (Court) Rules, 1959. In view thereof, since in this company application, the applicants are inter alia praying for an injunction in respect of the property in question against the parties on the premise that there is a dispute about title in respect of the property in question between the applicants and the respondent no.3 is not maintainable before the Company Court, Rule 86 of the Companies (Court) Rules, 1959 is not attracted. Reliance placed by the learned counsel for the applicants on Rule 86 of the Companies (Court) Rules, 1959 is totally misplaced. In my view, the Companies Act, 1956 being a self-contained code, all the proceedings which can be entertained by the Company Court are specifically prescribed therein. The Company Court cannot entertain any other proceedings which are not prescribed under the provisions of the Companies Act, 1956 or the Companies Act, 2013. This company application inter alia praying for an injunction and for taking various documents on record is not maintainable and is beyond the jurisdiction of this Court. Company Court cannot exercise jurisdiction in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ants that the objective of the said scheme was to pay off the depositors of the respondent no.2 by selling off the assets of the respondent no.2 described in paragraph 2 of the affidavit-in-support of the company application including the 6050 sq.yards of land (being 4840 sq. yards in Khasra No.669 and 1210 sq.yards in Khasra No.668) at Village Neb Sarai. 5. The Company Court appointed a Managing Committee comprising of seven members including Ex-Prothonotary and Senior Master of this Court with a direction to take various steps to implement the said scheme of compromise and/or arrangement sanctioned by this Court. 6. In so far as the property in question is concerned, the said property was permitted to be sold by the said committee by an order dated 10th August 2001 passed by this Court. It is the case of the applicants that the said committee was permitted to invite new bids for the said land. The said land was sold to the respondent no.3 who is a sole proprietor of M/s.Sukh Shanti Associates. Learned counsel for the applicants placed reliance on clause 6 of the agreement to sell entered into between the respondent no.1-committee and the respondent no.3 and would submit tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te his nominee for the purpose of execution of the sale deed in respect of the said property or any part thereof. He submits that the respondent no.1-committee submitted various reports before the Company Court from time to time seeking various directions and placing on record various steps taken by the committee in implementation of the scheme sanctioned by this Court. 12. Learned counsel invited my attention to the completion report of the sale of the agricultural land in question submitted by the respondent no.1-committee before this Court. It is submitted that the entire agricultural land which was agreed to be sold on the terms and conditions of the agreement to sell dated 2nd January 2004 had been sold but the amount realised come to ₹ 14.7 crores on the basis of the actual area of the land which was available on site. In the said report, it was recorded that sale of the said agricultural land had been completed under the agreement to sell executed and the full amount of consideration had been paid by L. B. Ltd. Depositors Managing Committee. The Managing Committee had also executed power of attorney in favour of the respondent no.3 for doing various acts, deeds and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a decided on 14th May 1974 in Company Appeal No.17 of 1973 and more particularly paragraph 12 thereof. He also placed reliance on the judgment of the Rajasthan High Court in the case of Mehtab Chand Golcha Vs. Official Liquidator, Golcha Properties (P) Ltd. (in liquidation) decided on 19th October 1979 in S.B.C. Application No.15 of 1979 and more particularly paragraph 13 in support of the submission that the Company Court has an ample power to issue appropriate direction under Section 392 of the Companies Act, 1956 and to supervise the carrying out of the compromise or arrangement. He submits that the Company Court has also powers to make such modifications in the compromise or arrangement as it may consider necessary for the proper working of the compromise or arrangement. 17. It is submitted by the learned counsel for the applicants that the applicants have grievance and cause of action against the respondent no.1-committee. He submits that in so far as the prayer clause (a) is concerned, the said relief is prayed against the respondent no.3 also not in his individual capacity but as a constituted attorney of the respondent no.1. He submits that agreement to sell execut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crore inclusive of interest. The respondent no.3 agreed to pay the said deficit amount to the respondent no.1 within a period of three months from the date of the said order. This Court accordingly ordered that the respondent no.3 shall pay a further sum of ₹ 1.25 crore to the respondent no.1-committee on or before 15th April 2008 and only upon such deposit of the balance amount of consideration, the respondent no.1-committee will proceed to execute the necessary documents in favour of the respondent no.3 to complete the transaction and not otherwise. The respondent no.3 has accordingly paid the full consideration to the respondent no.1-committee. The applicant nos.2 to 6 herein were the respondent nos.3 to 7 in the said company application No.592 of 2007 in which this Court passed the said order dated 17th January 2008. The applicants, however, did not appear in the said proceeding before this Court. It is submitted that the respondent no.3 had withheld some payment in view of the fact that the area agreed to be sold by the respondent no.1 to the respondent no.3 was found less than the agreed area. 22. It is submitted by the learned counsel for the respondent no.3 that o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and submits that in so far as the prayer clause (a) which is for a declaration that the respondent no.1- committee or any other their constituted attorneys including the respondent no.3 herein are not entitled to disturb the alleged peaceful right, title and possession of the applicant nos.2 to 6 is concerned, the said relief itself is a substantive relief which cannot be granted in this company application in a disposed petition which was filed under Sections 391 to 393 of the Companies Act, 1956. He submits that the applicants seek determination of rival claims of the applicants and the respondent no.3 in respect of the property in question which cannot be decided by the Company Court. 26. In so far as the prayer clause (b) by which the applicants have prayed for an order to take the copies of various documents alleged to have been executed by the respondent no.1 on record is concerned, it is submitted that some of those documents are disputed by the respondent no.3 and those documents which are alleged to have been executed in favour of the applicants unilaterally are not binding upon the respondent no.3. No such documents can be taken on record in this company applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in this application can exercise the jurisdiction only if (i) relief relates to the scheme sanctioned by the Company Court; (ii) relief relates to the companies incorporated under the provisions of the Companies Act, 1956; (iii) if the application is made by a party interested in the affairs of the Company or in the scheme of the company; and (iv) if the application is made for the purpose of carrying out the scheme of compromise or arrangement of the company. 28. It is submitted that none of the prayers in the company application do satisfy the aforesaid criteria. It is submitted that the applicants are indirectly seeking that the termination of the agreement entered into between the applicants and the respondent no.3 be set aside by seeking such reliefs which cannot be granted by this Court. He submits that the applicants were not the parties to the scheme and are third parties. Claim of the possession made by the applicants is disputed by the respondent no.3. It is submitted by the learned counsel that there is no provision for recording of compromise or to take the documents unilaterally executed by the parties on record. No such reliefs can be granted in law. 29. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereafter the respondent no.3 had been put in possession of the said land. It is not in dispute that the respondent no.3 thereafter paid deficit amount of ₹ 1.25 crore inclusive of interest in respect of the property in question to the respondent no.1. It is the case of the respondent no.3 that the applicants did not agree to pay the deficit amount. 33. It is not in dispute that the respondent no.3 has thereafter terminated the agreement entered into between the applicant nos.2 to 6 and the respondent no.3 to which the respondent no.1 was also a party. It is not in dispute that the applicant nos.2 to 6 have not challenged the said termination notice issued by the respondent no.3 till date. It is however the case of the applicants that the termination of the agreement between the applicant nos.2 to 6, the respondent no.1 and the respondent no.3 has been withdrawn by the respondent no.1 committee now and they claim to be in possession of the property in question. The respondent no.1 committee has already sold the property of the respondent no.2 under the said sanctioned scheme. Pursuant to the order passed by this Court on 17th January 2008, the respondent no.1 committee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s company application inter alia praying for an injunction and for taking various documents on record is not maintainable and is beyond the jurisdiction of this Court. 37. Kerala High Court in the case of Rajendra Menon Vs.Cochin Stock Exchange Ltd.(supra) has held that only such matters specified in the Companies Act, 1956 or in the Rules can be dealt with by the Company Court. The jurisdiction of ordinary Civil Court can be regarded as impliedly barred in respect of those matters specified in the Act to be dealt with by the Company Court. In my view, the judgment of the Kerala High Court squarely applies to the facts of this case. I am in agreement with the views expressed by the Kerala High Court. 38. Gujarat High Court in the case of Agarwal Mittal Concast Pvt. Ltd. (supra) has held that no claim or question arises for adjudication under the provisions of the Companies Act. The Company Court or the official liquidator is in no way concerned with the dispute between the purchaser at Court auction and the seller of electricity which dispute has arisen after completed sale and after the property in the premises has passed to the purchaser. In the facts of this case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... member or creditor or in the case of a company being wound up, its liquidator, can move the Court under Section 392. On the other hand, the legislature uses the expression 'any person interested in the affairs of the company' which has wider denotation than a member or creditor or liquidator of a company. It is held that the Court can suo motu act to take an action as contemplated under Section 392(1) or it may act on an application of any person interested in the company's affairs order its winding up. 41. Learned counsel for the applicants and the respondent no.3 relied upon different paragraphs of the said judgment of the Supreme Court. In my view, rival claims made by the applicant nos.2 to 6 on one hand and the respondent no.3, on the other hand, in respect of the property in question and the applicants seeking an injunction against the respondent no.1 and the respondent no.3 in whatever capacity may not come within the purview of the principles laid down by the Supreme Court in the case of S.K.Gupta Anr. Vs. K.P. Jain Anr. (supra). The reliefs sought by the applicants are substantive reliefs for determination of title of the nominee of the original purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rally executed by the applicants or in favour of the applicants by a third party to which the respondent no.3 is not a party or signatory thereto. There is no provision under the Companies Act, 1956 for taking such documents on record in company application in support of the rival claims made by the applicants against the respondent no.3. The said prayer is also thus without jurisdiction and is not maintainable. Admittedly, the applicants were not parties to the scheme sanctioned by this Court. The respondent no.3 has disputed the claim of possession made by the applicants in these proceedings. This Court thus cannot adjudicate upon the claims of the applicants in these proceedings which were for sanction of the scheme of compromise and/or arrangement under the Companies Act, 1956. In my view, the company application is thus not maintainable. 45. In my view, the Company Court cannot exercise jurisdiction in this case also for the reasons that (a) reliefs sought do not relate to the scheme sanctioned by this Court but seeks declaration of civil rights i.e. injunction against the auction purchaser of the property and indirectly seeking determination of title of the applicants; (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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