CASE NO.: Appeal (civil) 4774-76 of 1996 PETITIONER: Dwarka Prasad Agarwal (D) by Lrs. And Another RESPONDENT: Vs. Ramesh Chandra Agarwala and Others DATE OF JUDGMENT: 07/07/2003 BENCH: CJI., S.B. Sinha & [AR Lakshmanan. JUDGMENT:
J U D G M E N T
W I T H
CIVIL APPEAL NOS.4777-78 OF 1996
SINHA, S.B. :
These appeals involving identical questions of law and facts were
taken up for hearing together and are being disposed of by this common
judgment.
Civil Appeal Nos. 4774-76 of 1996 arise out of the judgments and
orders dated 12.3.1993 and 18.3.1993 passed by the Gwalior Bench of the
Madhya Pradesh High Court in Miscellaneous Petition Nos.1654, 1727 and
1728 of 1991; wherein the legality/validity of three orders passed on
29.5.1991 by the Press and Registration Board purported to be in exercise of
its jurisdiction under Section 8-C of the Press and Registration of Books
Act, 1867 (for short ‘the Act) were questioned by the Respondent No.1
herein.
Civil Appeal Nos. 4777-78 of 1996 arise out of the judgment and
order dated 29.6.1991 passed by the Gwalior Bench of the Madhya Pradesh
High Court arising out of Misc. Appeal Nos. 60-61 of 1988.
Factual matrix of the matter, shortly stated is as under:
Ramesh Chander Agarwal s/o late Dwarka Prasad Agarwal, a partner
of M/s Dwarka Prasad Agarwal and Brothers allegedly upon taking
advantage of his father’s ill-health made an attempt to create a lease in
relation to the right to publish Dainik Bhaskar from Bhopal. According to
late Dwarka Prasad Agarwal, to the best of his knowledge, he did not sign
the said document dated 13.4.1984 and in any event the same was meant to
be applicable only for Bhopal and not for any other place. On 13.4.1985, a
partition/family settlement deed was prepared wherein late Dwarka Prasad
Agarwal was not a signatory. Allegedly, Bishambhar Dayal also did not
agree to the said settlement and did not sign the said purported deed
of family settlement.
Ms. Hemlata Agarwal, eldest daughter of late Dwarka Prasad Agarwal
through his second wife, was made a Joint Managing Director of Bhaskar
Publications and Allied Industries. Ramesh Chander Agarwal being
intrigued thereby tried to increase the equity shares of the company to such
an extent that he gets majority in the equity shares purported to be in total
disregard and violation of the provisions of the Companies Act, 1956. The
said respondent also took alleged forcible possession of the Printing Press on
3.7.1987 which had been leased out by M/s Dwarka Prasad Agarwal and
Brothers (the Firm) to M/s Bhaskar Publications and Allied Industries
Private Limited. Allegedly, late Dwarka Prasad Agarwal and his two
daughters were also physically assaulted by the first respondent leading to
initiation of a proceeding under Section 145 of the Code of Criminal
Procedure. In the said proceedings, the Executive Magistrate directed the
police to open the locks put in the premises of the printing press in presence
of both the parties. However, late Dwarka Prasad Agarwal was not
permitted to run the said printing press.
Thereafter, Ramesh Chander Agarwal filed a declaration before the
District Magistrate, Jabalpur, wherein he allegedly accepted the partnership
of M/s Dwarka Prasad Agarwal and others as owners of the newspaper
Dainik Bhaskar. In terms of the provisions of Section 5 of the Press and
Registration of Books Act read with the rules framed thereunder,
declarations are required to be filed by the owner as also the printer(s) and
publisher(s) thereof. Six declarations were filed; three each by Respondent
No.2 on the purported authority of late Dwarka Prasad Agarwal and three by
the Respondent No.1. Objections to the said declarations were filed by late
Dwarka Prasad Agarwal before the appropriate authority.
By an order dated 6.6.1988, the District Magistrate, Gwalior, in
exercise of his power under Section 8-B of the Act cancelled the said
declarations dated 11.3.1985 filed by Respondent No.1. He preferred an
appeal thereagainst before the Press and Registration Appellate Board, but
the same was ultimately withdrawn.
He in the meanwhile filed a writ petition before the High Court for
stay of the proceedings before the District Magistrate. Although an order of
stay was passed therein but before the same could be communicated the
aforementioned order dated 6.6.1988 was passed. Ramesh Chander
Agarwal, Respondent No.1, then filed another writ petition against the said
order dated 6.6.1988 before the High Court but the same was withdrawn on
the ground that he had in the meanwhile availed alternative remedy of filing
an appeal against the same order. During the pendency of the said appeal
before the Board, yet another writ petition was filed by the first respondent
marked as Writ Petition No.798 of 1988 praying therein for quashing of the
order dated 6.6.1988 whereby the declarations were directed to be filed.
The said appeals filed by Ramesh Chandra Agarwal were dismissed
by the Appellate Board on 29.5.1991 holding as under :
“(a) The document at the top portion is pasted
with thick opaque white paper slips from
both sides, perhaps to cover up and make
unreasonable something which was written
or printed under these slips;
(b) Below the seal of the Deputy Collector and
Executive Magistrate, Bhopal (party super-
imposed) appears a somewhat blurred
impressed of the seal of the Executive
Magistrate, Gwalior;
(c) The printed proforma of A1 is patently of
Bhopal. That proforma does not tally with
the printed form produced by the Appellant
with his application.
Annexure A-1, is only a photocopy of the
original, in the absence of which, the true
effect of these suspicious circumstances (a)
to (c) cannot be correctly assessed.
However, the appellant admits that the
photocopy of the declaration A-1 was
presented by Devinder Tiwari not personally
by him (appellant). This Devinder Tiwari
who, according to the appellant, as a
Director of the Company did not file any
letter of authority on behalf of the Company,
or even from the appellant, to explain why
the declaration was not presented in person
by the appellant”.
xxx xxx xxx xxx xxx
“Nevertheless, there is no reason to differ
from the finding of the District Magistrate,
that Shri S.C. Shukla (Deputy Collector)
Executive Magistrate, not being a District,
Presidency or Sub-Divisional Magistrate
was not competent, in view of Section 5(2)
of the Act, to entertain and authenticate the
declaration dated 11.3.1985, filed by the
appellant.
For all the reasons aforesaid, we would
uphold the order dated 6.6.88 of the District
Magistrate, Gwalior and dismiss the Appeal
No.III filed by Ramesh Chander Agarwal.”
A writ petition was filed by Ramesh Chander Agarwal thereagainst.
Similar writ petitions came to be filed in relation to the orders passed in
respect of other declarations.
By reason of the impugned order dated 12.3.1993, the order of the
Appellate Board dated 29.5.1991 as also that of the District Magistrate,
Gwalior, dated 6.6.1988 were quashed and the Appellate Board was
directed to consider the matter afresh within a period of three months.
Strangely enough, however, the same learned Judge on a review application
filed by the first respondent herein by an order dated 18.3.1993 directed that
the inquiry by the District Magistrate should be deferred if an application is
filed before him till the final outcome of the civil litigations by the
parties.
Late Dwarka Prasad Agarwal, alleging his alleged illegal
dispossession from the printing press, filed a suit for eviction and permanent
injunction in the court of A.D.J., Gwalior, which was registered as Suit
No.1-A of 1988. An application for grant of injunction in terms of Order 39,
Rules 1 and 2 of the Code of Civil Procedure was filed wherein a prayer was
made for grant of temporary injunction against Respondent No.1
restraining him from publishing the newspaper illegally and furthermore not
to indulge in false propaganda and/or to take forcible possession of the
printing press. Respondent No.1, Ramesh Chander Agarwala also filed a
suit against late Dwarka Prasad Agarwal praying therein for a permanent
injunction restraining him from interfering with the working of the press at
Gwalior and not to take possession thereof. He also filed an application for
grant of interim injunction in terms of Order 39, Rules 1 and 2 of the Code
of Civil Procedure.
The First Additional District and Sessions Judge before whom the
matters were pending, disposed of both the applications by a common order
dated 28.5.1988. The court directed maintenance of status quo by the parties
and further directed that Ramesh Chander Agarwal would not interfere with
the working of late Dwarka Prasad Agarwal in the matter of managing the
affairs of the company. However, in his order relating to the application
filed for injunction in Suit No.2-A of 1988 of Respondent No.1, the court
directed the original appellant, late Dwarka Prasad Agarwal not to interfere
in the printing and publishing of the newspaper Dainik Bhaskar from
Gwalior.
Both the parties preferred appeals before the High Court against the
said orders which were marked as M.A. No.60 of 1988 and M.A. No.61 of
1988. The High Court allowed the appeal preferred by Ramesh Chander
Agarwal and dismissed Appeal No.61 of 1988 filed by late Dwarka Prasad
Agarwal holding that the suit for temporary injunction was barred under
Section 10 of the Companies Act.
These appeals were filed by Dwarka Prasad Agarwal (since deceased),
questioning the legality/correctness of the said orders.
The questions, in the aforementioned factual backdrop, which arise
for consideration in these appeals are :
1) Whether the High Court was justified in issuing a direction that
its earlier direction contained in order dated 12.3.1993 directing
the Appellate Board to dispose of the appeal within three
months need not be adhered to, if Ramesh Chander Agarwal
files an application for stay of the inquiry by the District
Magistrate during the pendency of the civil suit?
2) Whether the civil court had any jurisdiction to entertain the
suit ?
Re: Question No.1 :
At the outset, we may observe that when a disputed question as regard
the right of one partner against the other to file a declaration in terms of the
provisions of the Act had arisen for consideration, the High Court was not
correct in issuing a subsequent direction in the review petition. Such a
jurisdiction the High Court did not have. The conflicting rights of the
parties were required to be determined in accordance with law by the
statutory authority. Such a dispute, it goes without saying, should be
determined as expeditiously as possible inasmuch as the dispute involved
rival claims of the parties to the lis to run and manage newspaper business.
In any event, while directing the statutory authority to dispose of the matter
in accordance with law; it does not stand to any reason as to why a party to
the lis was given such liberty so as to file an application for stay of inquiry
by the District Magistrate till the disposal of the civil suit particularly when
the High Court itself was of the opinion that the suit was not maintainable.
We fail to see any reason as to why one party to the lis should be given
unfair advantage over another in the matter of enforcement of statutory
rights under the said Act. The orders of the High Court are, thus,
absolutely contradictory to and inconsistent with each other, and do not
stand a moment’s scrutiny. The impugned orders are, therefore, set aside
with a direction to the Appellate Board to hear out and dispose of the appeal
as expeditiously as possible but not later than three months from the date of
communication of this order. It would be open to the Appellate Board to
consider the question of adequately compensating the appellants herein on
monetary terms in the event it comes to the conclusion that the appeal was
liable to be dismissed.
Re: Question No.2 :
Sections 9 and 10 of the Companies Act are as under :
“Act to override memorandum, articles etc.
9. Save as otherwise expressly provided in the Act –
(a) the provisions of this Act shall have effect
notwithstanding anything to the contrary
contained in the memorandum or articles of
a company, or in any agreement executed by
it, or in any resolution passed by the
company in general meeting or by its Board
of directors, whether the same be registered,
executed or passed, as the case may be,
before or after the commencement of this
Act; and
(b) any provision contained in the
memorandum, articles, agreement or
resolution aforesaid shall, to the extent to
which it is repugnant to the provisions of
this Act, become or be void, as the case may
be.”
“Jurisdiction of Courts.
10. (1) The High Court having jurisdiction
under this Act shall be –
(a) the High Court having jurisdiction in
relation to the place at which the registered
office of the company concerned is situate,
except to the extent to which jurisdiction has
been conferred on any District Court or
District Courts subordinate to that High
Court in pursuance of sub-section (2); and
(b) where jurisdiction has been so conferred, the
District Court in regard to matters falling
within the scope of the jurisdiction
conferred, in respect of companies having
their registered offices in the district.
(2) The Central Government may, by
notification in the Official Gazette and subject to
such restrictions, limitations and conditions as it
thinks fit, empower and District Court to exercise
all or any of the jurisdiction conferred by this Act
upon the Court, not being the jurisdiction
conferred –
(a) in respect of companies generally, by
sections 237, 391, 394, 395 and 397 to 407,
both inclusive;
(b) in respect of companies with a paid-up share
capital of not less than one lakh of rupees,
by Part VII (sections 425 to 560) and the
other provisions of this Act relating to the
winding up of companies.
(3) For the purposes of jurisdiction to wind up
companies, the expression “registered office”
means the place which has longest been the
registered office of the company during the six
months immediately preceding the presentation
of the petition for winding up.”
A bare perusal of the aforementioned provisions leaves no manner of
doubt that thereby the jurisdiction of the civil court has not been ousted. The
civil court, in the instant case, was concerned with the rival claims of the
parties as to whether one party has illegally been dispossessed by the other
or not. Such a suit, apart from the general law, would also be maintainable
in terms of Section 6 of the Specific Relief Act, 1963. In such matters the
court would not be concerned even with the question as to title/ownership of
the property.
In India, it is trite, that a person cannot be forcibly dispossessed
except in accordance with law. [See Lallu Yeshwant Singh (dead) by legal
representatives vs. Rao Jagdish Singh and Others AIR 1968 SC 620 at Page
622].
In Suvvari Sanyasi Apparao and Another vs. Bodderpalli
Lakshminarayana and Another (1962) Supp. 1 SCR 8], this Court upon
considering the Press and Registration of Books Act, 1867 observed that the
matter relating to ownership of the press is a matter of general law and the
Court, thus, must follow that law. It was observed that a declared keeper of
the press is not necessarily the owner thereof so as to be able to confer title
to the press upon another.
The dispute between the parties was eminently a civil dispute and not
a dispute under the provisions of the Companies Act. Section 9 of the Code
of Civil Procedure confers jurisdiction upon the civil courts to determine all
dispute of civil nature unless the same is barred under a statute either
expressly or by necessary implication. Bar of jurisdiction of a civil court is
not to be readily inferred. A provision seeking to bar jurisdiction of civil
court requires strict interpretation. The court, it is well-settled, would
normally lean in favour of construction, which would uphold retention of
jurisdiction of the civil court. The burden of proof in this behalf shall be on
the party who asserts that the civil court’s jurisdiction is ousted. [See
Sahebgouda (dead) by Lrs. and Others vs. Ogeppa and Others [2003 (3)
Supreme 13]. Even otherwise, the civil court’s jurisdiction is not completely
ousted under the Companies Act, 1956.
In R. Prakasam vs. Sree Narayana Dharma Paripalana Yogam [1980
(50) CC 611], it has been held that :
“…The purpose of s.2(11) read with s.10 is only
to enable the shareholders to decide as to which
court they should approach for remedy, in respect
of that particular matter. It is difficult to construe
the definition clause as one conferring jurisdiction,
exclusive or otherwise; and even s.10 refers only
to “the court having jurisdiction under this Act”,
i.e., where such jurisdiction is conferred by the
Act, as under Sections 107, 155, 163(2), 237, 397,
425, etc. In other words, the conferment of
jurisdiction on “the court” is not under s. 10, but
by other provisions of the Act like those
enumerated above. If, on the other hand, Sections
2(11) and 10 are construed as not only nominating
the courts, but also conferring exclusive
jurisdiction on them, the specific provisions in the
other sections conferring jurisdiction on the court
to deal with the matters covered by them will
become redundant. It may be that where the Act
specifies the company court as the forum for
complaint in respect of a particular matter, the
jurisdiction of the civil court would stand ousted to
that extent. This depends, as already noticed, on
the language of the particular provisions (like
Sections 107, 155, 397 and others) and not on
Sections 2(11) and 10…”
Yet again in Maharaja Exports and Another vs. Apparels Exports
Promotional Council [1986 (60) CC 353], the Delhi High Court held :
“Under section 9 of the Code of Civil
Procedure, 1908, civil courts have jurisdiction to
try all suits of a civil nature excepting suits of
which their cognizance is expressly or impliedly
barred. Unlike some statutes, the Companies Act
does not contain any express provision barring the
jurisdiction of the ordinary civil courts in matters
covered by the provisions of the Act. In certain
cases like winding-up of companies, the
jurisdiction of civil courts is impliedly barred.
Where a person objects to the election of
directors and claims a decree for a declaration that
he was one of the directors, there is no provision
which bars the civil court either expressly or by
implication from trying such a suit”
In the present suit also, besides other reliefs,
the plaintiff has sought a declaration that all the 27
members of the existing executive committee are
not entitled to hold the respective offices in view
of the judgment of this court and further that the 18
members of the executive committee who have
retired by rotation are not entitled to continue in
office as members of the executive committee.
The judgment, referred to above, fairly and
squarely applies to the facts of the present case and
there is no reason to oust the jurisdiction of this
court to entertain the present suit. Under these
circumstances, this issue is decided in favour of
the plaintiff and against the defendants.”
In that view of the matter, we are of the opinion that the civil suit was
maintainable. In any event, we fail to understand and rather it is strange as
to how the High Court while rejecting relief to the original plaintiff, (late
Dwarka Prasad Agarwal), granted a similar relief in favour of the first
respondent herein.
The impugned orders are, therefore, set aside. The matters are
remitted to the Collector/High Court for a fresh decision on merits as
expeditiously as possible within a period of three months, keeping in view
the observations made hereinabove. These appeals are allowed with costs.
Counsel’s fee assessed at Rs.25,000/- (Rupees twenty five thousand only).