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TMI Blog2019 (3) TMI 963X X X X Extracts X X X X X X X X Extracts X X X X ..... d amounts to suppression of material facts. On this count itself, the application for injunction needs to be dismissed. Proviso to Section 58(2) states provided that any contract or arrangement between two or more persons in respect of transfer of securities shall be enforceable as a contract . This power under Section 58 read with Rule 70(5)(b) that gives the power to the Tribunal to generally decide any question which is necessary or expedient to decide in connection with the application for rectification read with Section 70(4)(a) that gives the power to the Tribunal to pass any interim order including any orders as to injunction or stay makes it clear that it is the Tribunal that has the power to decide all issues in relation to transfer of shares by way of an oral or written contract. The very fact that the Tribunal has been empowered with these powers leads one to the inference that all issues relating to transfer of shares, registration and rectification of register of members and any matter incidental to the same including oppression and mismanagement would be retained by the Tribunal. Under these circumstances, it is of the prima facie view that this High Court does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 5 or any of them, consequent on increase of the authorized capital of the company or otherwise; b) An order of injunction be made restraining the defendants or any of them from issuing or allotting any share or allotting any share in the defendant No.1 or from transacting any business of the said defendant or from in any manner dealing with any of its assets or properties or from convening any meeting of the defendant No. 1 or passing any resolution thereat to deal with, dispose of, alienate, encumber or part with possession of any part or portion of the property of the defendant No. 1 at 10, Middleton Street, Kolkata 700071; c) An ad interim order be made in terms of the prayers above; d) Costs of this application be directed to be paid by the defendants; e) Such further or other order or orders be made and/or direction or directions be given as to this Hon ble Court may seem fit and proper. 2. The factual matrix of the case is that the defendants owed the plaintiffs a huge sum of money to the tune of approximately ₹ 30 crores and they had been reneging on their payments. Ultimately, defendants 2 to 5, who own the entire shareholding in the defendant no. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred to page 77 of the petition, which is the evidence for conduct of the parties as proof of the oral agreement between them. He further referred to page 78, which shows the signed transfer deeds dated 24th December, 2018, bearing signatures of all the shareholders of the defendant no. 1 company. He next referred to page 170 to show the acknowledgment of the debt owed by the defendants to the plaintiffs, amounting to a sum of ₹ 30 crores. Thus, the plaintiffs allege fraud and deceit on the part of the defendants towards the plaintiff and an attempt by them to defeat the oral agreement between the parties. 5. The counsel for the defendants, Mr. Jishnu Chowdhury, submitted that the NCLT petition was filed on 15th February, that is, three days before the institution of the suit before the High Court and the defendants have already claimed the same interim reliefs in the NCLT proceedings as well. He submitted firstly, that the plaintiff had the duty to indicate that an application before the NCLT had already been filed. Instead, they have stated at para 33 of the plaint that steps to initiate a proceeding before NCLT had been taken. Secondly, the plaintiffs were required t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the submission that the plaintiffs were engaging in forum shopping, Mr. Saha submitted that he had filed the suit on an independent cause of action. Thus, the suit was not barred. In this suit, the cause of action stems from a breach of the oral agreement and is governed by the Indian Contract Act, 1872 and the Specific Reliefs Act, 1963 while the cause of action in the application filed before the NCLT arises from a violation of the Companies Act, 2013. He submitted that he seeks enforcement of the agreement before the Court and has sought a negative covenant, which is the prayer for injunction. He also referred to Order II Rule 2 of the Code of Civil Procedure, 1908, which states that a claim can be given up to bring a suit within jurisdiction of the court and, thus, he will not press prayer B in the NCLT proceedings to bring the present suit within the jurisdiction of this court. 8. Mr. Saha further submitted that he has no available remedy under the Companies Act to enforce the oral agreement. He referred to Sections 2(55), 58, 59, 89, 241 and 242 to argue that none of these sections would allow him to enforce the oral agreement between the parties due to the fact that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how that even a non-member could make a joint application under Section 58, 59, 240, 241 and 242 of the Companies Act, 2013. He further submitted that the plaintiff petitioner in spite of his assurance given to this Court on 27th February, 2019 had moved his application for interim reliefs before the NCLT. He submitted that the NCLT by an order dated 5th March, 2019 had refused to grant any interim order and directed exchange of affidavits in the matter. Mr. Banerjee further submitted that the plaintiffs wanted to steal a march on the defendants by moving the interlocutory application on 26th February, 2019 without service on the defendants. He further submitted that if the plaintiffs had not been present in Court on that day the matter would have been heard suppressing the factual aspect that an application seeking similar reliefs had already been filed before the NCLT. 11. At the very outset, I need to point out that this is an application for grant of injunction made on behalf of the plaintiff. There is presently no application under Order 7 Rule 11 of the Code of Civil Procedure, 1908 before me for rejection of the plaint. However, issues raised by the defendants with regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law are meant for imparting justice between the parties and one who comes to the court, must come with clean hands. It can be said without hesitation that a person whose case is based on falsehood has no right to approach the Court. He can be summarily thrown out at any stage of the litigation. A litigant, who approaches the Court, is bound to produce all the documents executed by him which are relevant to the litigation. If he withholds a vital document in order to gain advantage on the other side then he would be guilty of playing fraud on the court. Furthermore, a person who seeks equitable relief from the court must come to the court with clean hands and disclose all facts which are relevant to the case. In my considered view, the statement in the plaint that the plaintiff is intending to file an application before the NCLT, when the truth was that the application had already been filed is a case of misrepresentation and amounts to suppression of material facts. On this count itself, the application for injunction needs to be dismissed. 13. Even if I were to give the benefit of doubt to the plaintiffs on the above issue of suppression, the further hurdle of jurisdiction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... generally decide any question which is necessary or expedient to decide in connection with the application for rectification. 14. As is evident from a bare perusal of Section 430, the jurisdiction of this Court has been ousted specifically with regard to matters that may be decided by the NCLT. Furthermore, it is to be seen that the powers of the NCLT with regard to dealing with matters in relation to Section 58 and 59 are provided for in Rule 70 which are extremely wide. Powers such as (a) passing orders or any interim order including any orders as to injunction or stay, (b) incidental or consequential orders regarding payment of dividend or the allotment of bonus or rights shares, (c) deciding any question relating to the title of any person and (d) generally deciding any question which is necessary or expedient to decide in connection with the application for rectification, are provided therein. Without going into the controversy as to whether an application could be maintained under Section 241 and 242 of the Companies Act, 2013 (as argued by Mr. Jishnu Saha) it is clear that a conjoint application under Section 58, 59, 241 and 242 could have been made by the plaintiff b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tract or arrangement between two or more persons in respect of transfer of securities shall be enforceable as a contract . This power under Section 58 read with Rule 70(5)(b) that gives the power to the Tribunal to generally decide any question which is necessary or expedient to decide in connection with the application for rectification read with Section 70(4)(a) that gives the power to the Tribunal to pass any interim order including any orders as to injunction or stay makes it clear that it is the Tribunal that has the power to decide all issues in relation to transfer of shares by way of an oral or written contract. The very fact that the Tribunal has been empowered with these powers leads one to the inference that all issues relating to transfer of shares, registration and rectification of register of members and any matter incidental to the same including oppression and mismanagement would be retained by the Tribunal. 16. Under these circumstances, I am of the prima facie view that this High Court does not have jurisdiction in the above matter. It is to be noted that the above findings of mine are tentative and I do not wish to further delve into the question of jurisdicti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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