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TMI Blog2024 (6) TMI 963X X X X Extracts X X X X X X X X Extracts X X X X ..... the dispute is relevant since counsel for the appellant proposes to file an appropriate application for appointment of Arbitrator under Section 11 of The Arbitration and Conciliation Act, 1996. The objection raised on behalf of the respondents cannot be accepted since the question whether all the parties to the SPA are before the Court in the application filed under Section 11 of The Arbitration and Conciliation Act, 1996 for appointment of arbitrator may only be gone into at the time of hearing of the application as and when it is filed. It would be unwarranted to limit the options available to the appellant at this stage of the proceedings - the appropriate Court will decide the fate of such application as and when the appellant takes necessary steps in terms thereto. Applicability of Section 430 read with Sections 58 and 59 of The Companies Act, 2013, to the suit filed by the appellant - HELD THAT:- The Trial Court rejected the plaint under Order VII Rule 11 (a) and (d) read with Section 151 of The Civil Procedure Code, 1908, which provides for rejection of the plaint where the suit appears from the statement in the plaint to be barred by any law. The Trial Court relied on Claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to submit that the National Company law Tribunal (NCLT)/the National Company Law Appellate Tribunal (NCLAT) would not have jurisdiction to adjudicate on the issues raised in the suit filed by the appellant. 5. Learned counsel appearing for the respondents/ defendants relies on Section 430 read with Sections 58 and 59 of The Companies Act, 2013, to urge that there is a complete bar in the said Act against Civil Courts from entertaining any suit which is within the domain of the NCLT/NCLAT. Counsel further submits that the dispute cannot be referred to arbitration in terms of Clause 8 of the Share Purchase Agreement executed between the parties in 2015 since the appellant is only one of the several Transferors in the Share Purchase Agreement. 6. A brief factual background to the present appeal is required to be stated. The appellant/plaintiff was the owner of a substantial number of shares in M/s. Sunbeam Hospitality Private Limited. The appellant, along with other shareholders of Sunbeam Hospitality, entered into a Memorandum of Understanding (MOU), Share Purchase Agreement (SPA) and a Takeover Agreement with the respondents/defendants for transfer of their shares in favour of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondents, on the other hand, resists the proposal on the ground that the appellant cannot carry such application on his own without the other parties to the SPA. 13. We cannot accept the objection raised on behalf of the respondents since the question whether all the parties to the SPA are before the Court in the application filed under Section 11 of The Arbitration and Conciliation Act, 1996 for appointment of arbitrator may only be gone into at the time of hearing of the application as and when it is filed. It would be unwarranted to limit the options available to the appellant at this stage of the proceedings. We accordingly are of the view that the appropriate Court will decide the fate of such application as and when the appellant takes necessary steps in terms thereto. 14. The next issue is with regard to the applicability of Section 430 read with Sections 58 and 59 of The Companies Act, 2013, to the suit filed by the appellant. 15. The Trial Court rejected the plaint under Order VII Rule 11 (a) and (d) read with Section 151 of The Civil Procedure Code, 1908, which provides for rejection of the plaint where the suit appears from the statement in the plaint to be barre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions deal with refusal of registration of the transfer or transmission of shares/securities and appeal against refusal and rectification of register of companies (as defined in Section 2 (74)) pursuant to certain defaults. It is evident that these provisions would only become relevant once the title to the shares/securities has been decided. 22. The decision-making with regard to the title of the shares is within the domain of the Civil Court and not the NCLT/NCLAT. This would also be clear from the proviso to Section 58 (2), which reads that any contract or arrangement between two or more persons in respect of transfer of securities shall be enforceable as a contract. Moreover, Section 58 (5) (a) and (b) defines the powers of the Tribunal by delineating the orders which may be passed by the Tribunal in respect of directing registration of transfer/transmission by the Company or rectification of the register or even directing the Company to pay damages to the aggrieved party. 23. It is also significant that the respondents objected to the applications filed by the other shareholders before the NCLT under Section 244 of The Companies Act, 2013 on the ground that the said sharehold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 111A of the earlier Act of 1956) where the appellants before the Supreme Court were relegated to a civil suit. In that case, the dispute was not with regard to the forum which would exercise jurisdiction on the subject matter of the dispute. 28. In essence, the above discussion leads us to the view that the Trial Court erred in rejecting the plaint on the ground of Section 430 read with Sections 58 and 59 of The Companies Act, 2013, and for the reasons stated in the impugned order. 29. Clause 8 of the SPA, which provides for reference of the dispute to arbitration and Section 430 read with Sections 58 and 59 of The Companies Act, 2013, contemplate two entirely different implications/consequences. The Trial Court could have referred the dispute to arbitration on the strength of Clause 8 of the SPA, but instead mixed up the two remedies under The Arbitration and Conciliation Act, 1996 and The Companies Act, 2013, to reject the plaint. No litigant can be left without a remedy. In the present case, the stand taken on behalf of the respondents amounts to ousting the appellant from all available and competent fora. The Court certainly cannot be a mute spectator to the conduct of the resp ..... 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