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Rajasthan High Court · body

2016 DIGILAW 177 (RAJ)

Gaurav Jain v. Ajaya Anchlia

2016-01-30

MOHAMMAD RAFIQ

body2016
ORDER This revision petition has been jointly preferred by plaintiff-petitioners Gaurav Jain and Gaurav Mathur (for short, 'the revisionists'), assailing order dated 03.08.2015 passed by Additional Civil Judge (West), Jaipur Metropolitan, and order dated 05.01.2016 passed by learned Additional Sessions Judge No.17, Jaipur Metropolitan. By first of these orders, application filed by defendant-respondents under Order 7 Rule 11(d) read with Section 151 of Code of Civil Procedure, has been allowed and civil suit filed by plaintiff-petitioners against defendant-respondents seeking declaration, perpetual injunction and monthly mesne profit, has been dismissed as barred by law. By second order, appeal filed by revisionists against aforesaid order, has been dismissed and order passed by the trial court has been upheld. The revisionists filed the suit stating that defendants have committed forgery in the management of the Jaipur Investment Limited company. Defendants have changed share holding of said company from time to time as per their own convenience and that they appointed Directors of said company contrary to rules and regulations. It was prayed that declaration be made that share allotment return on the basis of rights of 1990 of the Jaipur Investment Limited Company is correct. Action of defendants in enhancing issued share capital and share holdings of said company from Rs.3,50,000/-(in the year 1965) to Rs.7,00,000/-by way of rights issue by adopting current procedure and on that basis showing increased share capital to the extent of Rs.1,50,000/-, without issuing the right share, be declared illegal and void-ab-initio. Defendants be restrained from working as Directors, auditors, representatives etc. of the company and be further restrained from parting with possession, selling or otherwise alienating the same by way of lease, agreement or sale and changing the character of properties, and they be further restrained from raising any construction on Plot No.S-5, Kabir Marg, Bani Park, Jaipur. A further declaration was sought to the effect that since the company has not been revived in accordance with law despite order of this court dated 21.03.1990 and that all the unauthorized filings, prepared with forgery, which have wrongly been placed on record of the Registrar of Companies, Jaipur, and displayed on Internet on the Portal M.C.A. of defendants no.10 and 11, be declared void-ab-initio. Defendant-respondents filed an application under Order 7 Rule 11 (d) of the CPC contending that the suit was barred by provisions contained in Sections 268, 430 and 480 of the Companies Act as the subject matter of the dispute lies within the jurisdiction of Company Tribunal as per provisions of Sections 241 and 242 of the Companies Act. The suit, being barred by law, is liable to be dismissed by virtue of provisions contained in Order 7 Rule 11(d) of the CPC. Learned trial court accepted the application and dismissed the suit. Learned appellate court also upheld the aforesaid order of the trial court. Hence this revision petition. Shri Rajendra Jain, learned counsel for the revisionists, has argued that learned courts below have erred in law in dismissed the suit as being not maintainable and barred by law. Learned courts below could not have dismissed the suit without assigning any reason by recourse to Order 7 Rule 10 of the CPC. This amounts to abduction of jurisdiction on the part of the courts below. It is bounden duty of the appellate court to assign reasons for invoking Order 7 Rule 10 of the CPC, by first declaring reasons for not upholding non-maintainability of the civil suit and then directing the court below to itself follow the procedure prescribed by law especially in respect of rejection of suit under CPC like provisions of Order 7 Rule 11 (d) of the CPC to return the plaint. The appellate court has also not examined various case law cited before it. No finding has been given either by trial court or appellate court on the allegation of the revisionists that defendants have committed forgery by changing share holdings from time to time and also appointing Directors of the company, even though the company was not yet revived despite order of this court dated 21.03.1990, which was not existing and defunct. Learned counsel, in this connection, referred to Para 11 of the plaint. Learned counsel in support of his arguments has cited judgments of the Supreme Court in Horil Vs. Keshav and Another – Civil Appeal No.776/2012, dated 21.01.2012, Smt. Badami (deceased) by her L.R. Vs. Bhali – Civil Appeal No.1723/2008 decided on 22.05.2012 and Vaish Aggarwal Panchayat Vs. Inder Kumar and Others – Civil Appeal No.2089/2015 decided on 25.08.2015. Learned counsel in support of his arguments has cited judgments of the Supreme Court in Horil Vs. Keshav and Another – Civil Appeal No.776/2012, dated 21.01.2012, Smt. Badami (deceased) by her L.R. Vs. Bhali – Civil Appeal No.1723/2008 decided on 22.05.2012 and Vaish Aggarwal Panchayat Vs. Inder Kumar and Others – Civil Appeal No.2089/2015 decided on 25.08.2015. I have bestowed my thoughtful consideration to the submissions made by learned counsel for revisionists, perused the material on record and considered the cited precedents. Learned trial court has, in the impugned order, taken note of provisions of Section 268 of the Companies Act, which inter alia provides that that no appeal shall lie in any court or other authority and no civil court shall have any jurisdiction in respect of any matter in respect of which the Tribunal or the Appellate Tribunal is empowered by or under this Chapter and no injunction shall be granted by any court or other authority in respect of any action taken or proposed to be taken in pursuance of any power conferred by or under this Chapter. Learned trial court also noted Section 430 of the Companies Act, which inter alia provides that no civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Tribunal or the appellate Tribunal is empowered to determine by or under this Act or any other law for the time being in force and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or any other law for the time being in force by the Tribunal or the Appellate Tribunal. Similarly, Section 480 of the Companies Act provides that the Tribunal shall notwithstanding anything contained in any other law for the time being in force have jurisdiction to entertain or dispose of any suit or proceeding by or against the company, any claim made by or against the company including claims by or against any of its branches in India. Learned trial court noted that the revisionists have, in the plaint, alleged forgery committed by the defendants in changing the shareholdings of the company and appointment of Board of Directors of the Jaipur Investment Limited Company. Learned trial court noted that the revisionists have, in the plaint, alleged forgery committed by the defendants in changing the shareholdings of the company and appointment of Board of Directors of the Jaipur Investment Limited Company. Sections 241 and 242 of the Companies Act provide a remedy for redressal of such grievances before the Tribunal. Section 480 of the Act has provided for the scope of jurisdiction of the Tribunal. Learned trial court, therefore, held that the suit was barred by Order XXIII Rule 3-A of the CPC and therefore was liable to be rejected as per Order 7 Rule 11 (d) of the CPC. The appellate court has also noted that if so far the Company Tribunal has not been constituted as per Rule 268 of the Companies Act, still the Company Law Board, under the Act of 1966, would discharge such functions. The Supreme Court in the relied case of Horil, supra, was dealing with a case where a decree was passed by the Assistant Collector, Class-I, in a suit under Sections 176, 178 and 182 of the U.P. Zamindari Abolition & Land Reforms Act. Appellant filed civil suit with prayer that the said decree be declared fraudulent, inoperative and not binding upon him. Defendants in written statement questioned the maintainability of the suit. Reliance was placed on Rule 3-A of Order XXIII of the CPC, which inter alia provided that no suit shall lie to set aside a decree on the ground that compromise on which the decree is based, was not lawful. In that case, the Supreme Court held that revenue courts are neither equipped nor competent to effectively adjudicate on allegations of fraud that has overtones of criminality and the courts really skilled and experienced to try such issues are the courts constituted under the Code of Civil Procedure. Under Section 9 of the CPC the civil court has inherent jurisdiction to try all types of civil disputes unless its jurisdiction is barred expressly or by necessary implication, by any statutory provision and conferred on any other tribunal or authority. Under Section 9 of the CPC the civil court has inherent jurisdiction to try all types of civil disputes unless its jurisdiction is barred expressly or by necessary implication, by any statutory provision and conferred on any other tribunal or authority. It was therefore observed by the Supreme Court that there was nothing in Order XXIII Rule 3-A of the CPC to bar the institution of a suit before the civil court even in regard to decrees or orders passed in suits and/or proceedings under different statutes before a court, tribunal or authority of limited and restricted jurisdiction. Such are not the facts of the present case. Herein specific provision of Companies Act itself provides that remedy against action complained of in view of old Act, inasmuch as provisions of Companies Act itself expressly bars jurisdiction of the civil court. In Vaish Aggarwal Panchayat, supra, another judgment relied on behalf of the revisionists, it was held by the Supreme Court that the statement in the plaint without addition or subtraction must show that it is barred by any law to attract application of Order 7 Rule 11 of the CPC. In that case, a suit for declaration was filed by petitioner Society for declaring the judgment and decree dated 19.09.1998 passed in earlier civil suit passed by learned Civil Judge (Senior Division), Kurukshetra, and subsequent sale-deed dated 30.01.2001 and mutation, as illegal, null and void with consequential relief of permanent injunction. Defendants filed application under Order 7 Rule 11 of the CPC for rejection of plaint on the ground that the suit was barred by law, as according to the defendants, the suit was also barred by constructive res judicata. The Supreme Court held that no amount of evidence can be looked into. The issues on merit of the matter which may arise between the parties would not be within the realm of the court at that stage. All issues shall not be the subject-matter of an order under the said provision. The suit cannot be held to have been barred by limitation. This case is entirely distinguishable on facts and cannot be said to extend any help to the revisionists. All issues shall not be the subject-matter of an order under the said provision. The suit cannot be held to have been barred by limitation. This case is entirely distinguishable on facts and cannot be said to extend any help to the revisionists. The question that arose for consideration by the Supreme Court in Smt. Badami, supra, was whether the judgment and decree passed by learned Sub-Judge, Kaithal in Civil Suit No.1422/1973, is to be declared as a nullity being vitiated by fraud and manifest illegality being writ large. The facts of that case are also distinguishable from the facts of present case and that judgment is not of any help to the revisionists. In view of above, revision petition fails and same is dismissed. Stay application, filed therewith, is also dismissed.