Companies Act - Jurisdiction of Civil Court
Parveen Kr. Aggarwal
(Querist) 07 February 2010
This query is : Resolved
For what kind of cases the jurisdiction of civil court is barred under the Companies Act, 1956 and what kind of matters concerning companies can be tried by a civil court.
Sachin Bhatia
(Expert) 07 February 2010
Section 391 of the Companies Bill, 2009 dealing with the Civil Court's Jurisdiction is extracted below:
391. 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.
Adinath@Avinash Patil
(Expert) 07 February 2010
Civil Courts have no jurisdictionbecause there is provision under Componies Act.
I agree with Sachin.
A V Vishal
(Expert) 07 February 2010
In the first place I disagree with the view of the Ld experts in view of the fact that the Companies Bill, 2009 is still in draft mode and not an act of the parliament. Secondly my opinion is supported by the under mentioned points which needs consideration.
S.9 of CPC- Exclusion of the Jurisdiction of civil Courts
Important Principles laid down by the SC with respect to the exclusion of Jurisdiction of the civil courts.
Dhulabai V. State of M.P AIR 1969,SC(78)
1) "Where the statute gives 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."
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…"
3) "Challenge to the provisions of the particular Act as ultra vires can not be brought before the tribunals constituted under that Act. Even the high court can not go into that question on a revision or reference from the decision of the tribunal."
Can the civil court exercise exclusive jurisdiction over any company related matters?-No-
Civil court has jurisdiction with respect to all suits of a civil nature unless there is an express or implied bar to the Jurisdiction.
Can the company court exercise exclusive jurisdiction over company matters?
S.2(11) r/w S.2(10)
S.2(11) Defines Court- to be courts specified in S.10
S.10 - states that the court having jurisdiction under the Act would be High court or District courts.
When these two sections are read together, they have been interpreted as when the word 'court' is used in the companies Act, s.10 merely explains whether the high court or the district court is conferred jurisdiction for that particular matter.
S.2 (11)being a definition clause does not confer any jurisdiction on any court.
R.Prakashan V. SNDP (1980) 50 Comp Cas.611
Star Tiles V.Govindan Nair-AIR1959Ker.254
M.G.Doshit v.Reliance petrochemicals(1994) 79 Comp Cas830
Panipat woolen and General Mills V.R.L.Kaushik- (1969)39 Comp Cas.249
Vijay M.Sha & others V. Flex industries
Where a remedy has been granted under the statute , would the jurisdiction of the civil courts be impliedly barred? Two different views
1)Avanthi explosives v.Principal subordinate Judge ,Thirupathi (1987) 62 Comp Cas.
2) C.D.S financial services V. BPL(2001)
Exceptions
Even where an alternative remedy is prescribed under the act, the jurisdiction of the civil court is not totally barred- Star Tiles V. Govindan Nair AIR 1959 KER 254
1)Fraud
2) Ultravires act
3) ends of justice requires the intervention of the court.
Following may be noted
Jurisdiction Under s.10 is not Concurrent.
Proceedings taken in a court without jurisdiction will have no validity .
Power of review vested with company court
Curtailment of civil courts jurisdiction By Companies (Second Amendment )Act,2002
Ouster of Civil Courts Jurisdiction-S.10GB
Whether the jurisdiction of the civil courts have been excluded or not is a specific matter which must be decided from case to case depending on the facts and sections of the Companies Act.
