The Hindu Business Line : HC ruling on civil courts jurisdiction

Chennai March 14 The Madras High Court has held that Section 10 of the Companies Act did not bar jurisdiction of civil courts to try cases pertaining to allegations of misrepresentation as to resignation of directors, fraud in transferring shares, willful default in furnishing details, suppression of fact as to change of registered office etc.

Hearing a civil revision petition by Spices Valley Estates Ltd, Chennai, challenging rejection of application by XIII Asst Judge, City Civil Court, Chennai, Mr Justice S. Ashok Kumar, ruled that jurisdiction of civil court was not ousted since cause of action had arisen for instituting suit in Chennai and there were several allegations which were disputed question of facts which had to be necessarily determined and adjudicated only by civil courts.

According to respondent, T.C. Forexpress Ltd (formerly Synergy Forexpress Ltd), revision petitioner filed Form 32 with Registrar of Companies, Chennai, citing that nominee of respondent-company as having resigned when there was no letter of resignation from respondent. This was so done with malafide intention, it was alleged.

The plaint could be rejected only where suit appeared from statement in plaint to be barred by any law. But a perusal of plaint would show that suit was not barred by any law even as per Companies Act, jurisdiction of civil court was not expressly excluded. Section 9 of CPC also provided for trying of suits unless it was expressly barred by any other enactment, counsel for respondent Mr M. Arvind Subramanian, contended.

The Judge said even to file a petition; before Company Law Board, plaintiff company should be a member holding not less than 1/10 of issued share capital. In this case, even shareholding of plaintiff had been disputed by revision petitioner. For all these reasons, it was clear that issues involved in this matter required adjudication of civil court, and therefore, dismissal of interlocutory application by trial court did not warrant any interference.

The CRP was dismissed.

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