9911796707
TMI Blog2019 (7) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purposes of jurisdiction to be the same as for the purposes of court fees. The plaintiffs have valued the relief of declaration with consequential relief claimed in the suit, for the purposes of court fees and jurisdiction, at ₹ 2 crores and paid appropriate court fees thereon - It is not in dispute that the Court of minimum pecuniary jurisdiction for entertaining a suit, valuation whereof is in excess of ₹ 2 crores, is this Court. The present suit is not for declaration qua liability of the plaintiffs for the debts of the defendant, for it to be said that the maximum liability of each of the plaintiffs as member of the defendant under the Memorandum and Articles of Association having been pegged at ₹ 100/-, the statement required to be made by a plaintiff under Section 7(iv)(c) supra cannot be of a valuation of more than ₹ 100/- - Thus no merit is found in the contention qua valuation, for seeking rejection of the plaint. Jurisdiction of this Court - Bar as created under Section 430 of the Companies Act, 2013 - HELD THAT:- The grievance in the present suit, though may have its genesis in the complaints of the plaintiffs of mismanagement, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Court on 2nd November, 2018 when the following order was passed thereon:- 7. The application under Order VII Rule 11 of the CPC runs into about 93 pages and such a bulky application itself is an indication that no ground for rejection of the plaint at the threshold is made out. 8. Be that as it may, the counsel for the applicant/defendant has been heard. The counsel has handed over a synopsis of one page containing three heads (I) breach of sub-rule (a) of Order VII Rule 11 of CPC; (II) breach of sub-rule (b) of Order VII Rule 11 of CPC; and, (III) breach of sub-rule (d) of Order VII Rule 11 of CPC. 9. The said synopsis is taken on record. 10. The counsel for the applicant/defendant has argued that the plaint does not disclose any cause of action. It is argued that the five plaintiffs have instituted this suit impugning the notice to show cause dated 6th October, 2018 issued to the plaintiffs calling upon the plaintiffs to show cause why action should not be taken against them for misconduct as members of the applicant/defendant. It is argued that the said Show Cause Notice has been issued in accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a majority, whether not each step taken towards termination requires decision of the majority in a Committee convened for that purpose; (iv) what will be the procedure followed pursuant to the Notice to show cause issued; and, (v) who will hear the plaintiffs. 15. The counsel for the applicant/defendant states that he has only yesterday received new Bye-laws of the applicant/defendant and needs time to study the same. 16. I have also enquired from the counsel for the plaintiffs, whether the plaintiffs have taken any such ground impugning the decision of the applicant/defendant. 17. The counsel for the plaintiffs replies in the negative. 18. List for further consideration on 28th January, 2019. 19. The Joint Registrar to ensure that the suit is ripe for framing of issues and for hearing of all pending applications on 28th January, 2019. 20. At this stage, the counsel for the applicant/defendant states that he gives up the ground of lack of cause of action for rejection of the plaint and be heard on the other two grounds. 21. The counsel for the applicant/defendant has next contende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the General Committee which held office during the period 2015-2017; (v) accordingly several members of the Club had written to the present General Committee for action against the said members of the previous General Committee but to no avail except for appointing of an auditing concern to carry out investigation; (vi) the investigation report confirmed the irregularities, mismanagement and misappropriation by the members of the previous General Committee; (vii) again, the members of the Club sought action on the basis of the report but to no avail except for appointing another Committee; (viii) the plaintiffs have been continuously petitioning for action against the members of the erring Committee and upon no action being taken, wrote to the Serious Fraud Investigation Office (SFIO) on 20th August, 2018 to investigate; and, (ix) notices dated 6th October, 2018 were served on the plaintiffs, to show cause why disciplinary action should not be taken against them for complaining to SFIO. 7. The counsel for the defendant, as aforesaid, during the hearing on 2nd November, 2018 withdrew lack of cause of action as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he relief claimed in the suit, it is pleaded (i) the pecuniary jurisdiction of the subject matter of the suit being ₹ 100/-, the Court of minimum pecuniary jurisdiction competent to entertain the suit is the Court of the Civil Judge and not this Court; and, (ii) while it is open to the plaintiffs to declare a higher valuation for the purposes of calculation of court fees, the valuation of a suit for the purposes of assessment of pecuniary jurisdiction cannot be enhanced at the ipse dixit of the plaintiffs. It is argued, that under the Memorandum and Articles of Association of the defendant, the liability of past member of the defendant for the debts and liabilities of the defendant is not to exceed ₹ 100/-; the valuation of the suit for the purposes of jurisdiction cannot be more than ₹ 100/-. 10. The plaintiffs, in their reply to the application, qua bar of the jurisdiction of this Court as the Civil Court and the remedy of the plaintiffs being before the NCLT only, have pleaded (i) that the plaint does not disclose oppression/mismanagement as contemplated under the Companies Act; (ii) the plaintiffs are only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first take up the ground of valuation. 14. Order VII Rule 11(b) of the CPC permits rejection of the plaint where the relief claimed is undervalued and the plaintiff, on being required by the Court to correct the valuation within the time to be fixed by the Court, fails to do so. 15. The suit as aforesaid is for the reliefs of declaration and permanent injunction. 16. The Court Fees Act, 1870, in Section 7(iv)(c) thereof provides that in a suit to obtain a declaratory decree or order where consequential relief is claimed, the plaintiff shall set out in the plaint the amount at which he values the relief sought and the amount of court fees payable shall be computed thereon. 17. Section 8 of the Suits Valuation Act, 1887 provides that in suits other than those referred to in Section 7(v), (vi), (ix) and (x)(d), the value as determined for the computation of court fees and the value for the purposes of jurisdiction shall be the same. 18. The present suit, where the plaintiffs as a consequence of declaration are seeking permanent injunction, qualifies under Section 7(iv)(c) as a suit for declaratory decree and consequential relief and in acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the plaintiffs give to their membership and once the statute has conferred a discretion on a plaintiff, it is not for the Court to interfere with such discretion. 23. Thus no merit is found in the contention qua valuation, for seeking rejection of the plaint. 24. The only other ground for rejection is, of the jurisdiction of this Court being barred by Section 430 of the Companies Act, 2013. 25. Though during the hearing on 2nd November, 2018 there was no clarity about the constitution of the defendant, as is also evident from the order of that date reproduced above, but the pleadings show both plaintiffs and the defendant to admit the defendant to be a company within the meaning of Companies Act, 1956 and the plaintiffs to be the members of the defendant. Section 241 of the Companies Act, 2013 entitles a member of a company who complains that the affairs of the company are being conducted in a manner prejudicial to public interest or in a manner prejudicial or oppressive to him or any other member or members or in a manner prejudicial to the interests of the company, to apply to the NCLT. Thus the remedy for the grievance of mismanagement and oppression w ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
