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TMI Blog2023 (4) TMI 879X X X X Extracts X X X X X X X X Extracts X X X X ..... two individual alleging that the plaintiffs personal right got affected by a person whose membership in the company is not beyond doubt, suit under section 34 of the specific relief act is not barred in the present context specially when plaintiff averred in the plaint that they are not allowed to enter into the premises of the company and thereby they prayed for enforcement of their civil right rather than right as director. In view of settled proposition of law that ouster of civil court jurisdiction cannot be readily inferred and consolidating all previous judgment, apex court in CHURCH OF NORTH OF INDIA VERSUS LAVAJIBHAI RATANJIBHAI ORS [ 2005 (5) TMI 636 - SUPREME COURT ] has laid down the principles relating to the exclusion of jurisdiction of civil court stating that The Civil Court will have no jurisdiction in relation to a matter whereover the statutory authorities have the requisite jurisdiction. On the other hand, if a question arises, which is outside the purview of the Act or in relation to a matter, unconnected with the administration or possession of the trust property, the Civil Court may have jurisdiction. In this case, having regard to the nature of the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that the defendants are obliged to disclose to the plaintiffs, the day to day cash balances in relation to the business run in the name of the opposite party no. 1 along with a decree for discloser of accounts and a decree for perpetual injunction. 3. The defendants /petitioners had filed written statement in the said suit denying all material allegations. Long after filing the written statement the defendants/petitioner took out said application under order VII Rule 11 on the allegation that the court below had no jurisdiction to entertain the suit since the said suit is barred under section 430 of the Companies Act, 2013. The plaintiffs/opposite parties filed written objection against the said application and it was heard by Learned Court below in presence of both the parties and upon hearing the said prayer was rejected by the order impugned. 4. Mr. Nilanjan Bhattacharjee learned counsel appearing on behalf of the petitioner submits that the court below failed to appreciate that if there are disputes between the directors of a company, said disputes should be referred to the Tribunal and the Tribunal only has the jurisdiction to decide such dispute between the directors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deal with paragraph wise allegations leveled in the plaint. 6. Mr. Bhattacharjee further submits that NCLT has every power to determine each and every issue alleged in the plaint and to pass orders under section 242(2), 420, 450 of the Companies Act. The Companies Act 2013 is a code under which the execution provision i.e. section 424(3) is there for execution of the order passed by the Tribunal as has been prayed by the plaintiff in the said plaint before the court below in the said suit. In this context he further contended that section 241 of the Act cannot be given a restricted meaning. It is essential to apply the doctrine of reading down to make the provisions under chapter XVI of the Act purposeful. Under the new act of 2013, the intention of the legislature is to vest the power of adjudication to the Tribunal under section 242 read with section 241. He further contented that the phrase member of the company in section 241 means and include person not only member of the company in strict sense but also person who bears the character of a member or have substantial interest in the internal affairs of the company and it comes under the jurisdiction of section 241 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dey further argued that the provision laid down in section 213 of the Companies Act apply within a very restricted zone upon fulfillment of the conditions as are prescribed under clause (b) of the said section which contemplates certain eventualities that may entitle a specific class of people to approach NCLT and present suit was not triggered by any of such eventualities. Mr. Dey further submits that section 216 provides for investigation into the ownership of a company when it appears to the Central Government that there is a reason so to do and it does not have any connection with the case made out by the plaintiffs or with the adjudication of the issues involved. Similarly section 241 deals with prevention of oppression and mismanagement in a company. The provision laid down therein can be taken resort to by a member of a company only in those cases that may come within the ambit of sub clauses (a) and (b) of subsection (1) of section 241. The case made out in the plaint pertaining to the said suit is not contemplated under sub section (1) of section 241 nor had the plaintiffs fulfilled the qualification to approach the NCLT under the said section. The reliefs contemplated in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1969) 39 Camp Cas 249 (PH) where the validity and regularity of the general meeting of a company and election of the directors were challenged and question arose as to whether civil courts had jurisdiction to try such suit and the answer given by the court was in the affirmative. He also referred Marikar (Motors) and another Vs. M.I. Ravi Kumar and others, reported in 1981 SCC Online Ker 283: (1982) 52 Comp Cas 362 where question arose whether an annual general meeting of a company convened in violation of section 166 of the Companies Act can be tried by a civil court on the ground that the Companies Act is complete and self-contained code and only the Tribunal is competent to resolve the dispute between a company and its members and the Act excludes the jurisdiction of the ordinary courts in such matters. Kerala High court was pleased to reject such contention and did not accept the contention that the Companies Act is a complete and self-contained code and held, the Act does not oust the jurisdiction of civil courts to deal with the disputes raised by the plaintiffs. 11. In this context his further argument is that it is well settled that the Tribunal can entertain proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct the valuation within a time to be fixed by the Court, fails to do so; (c) where the relief claimed is properly valued, but the plaint is written upon paper insufficiently stamped, and the plaintiff, on being required by the Court to supply the requisite stamp-paper within a time to be fixed by the Court, fails to do so; (d) where the suit appears from the statement in the plaint to be barred by any law: (e) Where it is not filed in duplicate; (f) where the plaintiff fails to comply with the provisions of rule 9: Provided that the time fixed by the Court for the correction of the valuation or supplying of the requisite stamp-paper shall not be extended unless the Court, for reasons to be recorded, is satisfied that the plaintiff was prevented by any cause of an exceptional nature for correcting the valuation or supplying the requisite stamp-paper, as the case may be, within the time fixed by the Court and that refusal to extend such time would cause grave injustice to the plaintiff. 14. Needless to say that clause (d) of Rule 11 of order VII applies only when the Suit appears from the statement in the plaint to be barred by any law. It is only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of Reading Down , an internal aid to construct the word in a statute to give reasonable meaning, the word member refers in section to 241 of the Act should not be read in isolation or in strict meaning and it should be read down along with section 242 of the Act. Accordingly he further submits that the phrase member of a company in section 241 means and includes person not only member of the company in strict sense but also who bears the character of a member or have substantial interest in the internal affairs of the company. 17. Even for the time being if the aforesaid argument of the petitioner is accepted, then also the question as to whether defendant no. 2 comes within the definition of the member of a company under section 241 can only be adjudicated on perusal of documentary or oral evidence to be adduced by the parties and the plaint cannot be thrown away at the threshold construing that defendant no. 2 comes within the definition of member of the company under section 241 of the Act. 18. Apart from that plaintiff in paragraph 7 has alleged specifically that Kasinath Seth and aforesaid defendant no. 2 Manoj Seth are running a parallel business just siphoning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the principles relating to the exclusion of jurisdiction of civil court which are as follows :- 40.. In Dhulabhai v. State of M.P. [(1968) 3 SCR 662 : AIR 1969 SC 78] Hidayatullah, C.J. summarised the following principles relating to the exclusion of jurisdiction of civil courts: (SCR pp. 682 B-H-683 A-C) (1) Where the statute gives a finality to the orders of the special tribunals, the civil courts' jurisdiction must be held to be excluded if there is adequate remedy to do what the civil courts would normally do in a suit. Such provision, however, does not exclude those cases where the provisions of the particular Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure. (2) Where there is an express bar of the jurisdiction of the court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the civil court. Where there is no express exclusion the examination of the remedies and the scheme of the particular Act to find out the intendment becomes ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n act to consolidate and amend the law relating to companies. The normal civil remedies associated with action lies in civil courts. If not prescribed in the act, plea of bar to jurisdiction of a civil court may not be considered having regards to the contentions raised in the plaint and for this purpose reliefs sought in the plaint must be considered in their entirety on the basis of factual averment made in the plaint. In fact what was observed in the judgment as the main guiding factor is that the court has to consider in substance and not merely in form about the nature of the claim made in the suit and the underline object in seeking the real relief therein. In view of above and considering the averments made in the plaint, it appears that the suit is apparently in between director and a person whose appointment is put on hold by the Company Law Bench, Kolkata and as relief relates to decree for declaration of right of plaintiffs as individual and for decree for account for non-payment of remuneration along with injunction, an appointment of accounts commissioner and receiver, I find that the suit is not barred under section 430 of the companies act 2013. In view of above C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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