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Bombay High Court
Rao Saheb Manilal Gangaram … vs Western India Theatres Limited on 1 January, 1800
Equivalent citations: 1963 33 CompCas 826 Bom
Author: Shah
Bench: Shah

JUDGMENT

Shah, J.

1. I am afraid that this suit will have to be dismissed on the preliminary issue that is raised on behalf of defendant No 1 company is consequence of a notice given by it to the plaintiffs and the issue is as to whether this court has jurisdiction to entertain this suit. The reason why this issue is raised is that the subject-matter of the suit has been valued by the plaintiffs at Rs. 1,300 and obviously therefore, this court will have no jurisdiction to entertain this suit.

2. The suit is filed by the plaintiffs for rectification of the register of members maintained by the defendant No. 1 company alleging that the latter had wrongfully refused to register in their names certain shares in respect of which they had submitted to the company a duly completed transfer from. It is not necessary for me to set out the various allegations that have been made by the plaintiffs in the plaint in support of their contention that they are entitled to call upon defendant No. 1 company to rectify the register of members and register the transfer of the shares in question in their names. It is enough for the present to indicate that the value of the shares which are the subject matter of the suit is fixed at Rs 1,200 and the relief claimed in prayer (b) of the plaint which is only an interim relief is valued at Rs. 100 and on his valuation of the aggregate amount of Rs 1,300, the plaintiffs claim that this court in exercise of its ordinary original civil jurisdiction is competent to entertain and decide the suit. In the course of the plaint it is undoubtedly stated that the relief claimed in the suit is one under section 155 of the Companies Act, 1956 which deals with rectification of register of members.

3. It is contended on behalf of the defendant No 1 company that the remedy under section 155 of the Companies Act, 1956 is by an application that the rules made by the Supreme Court in exercise of the powers given to it by the Companies Act provide for a petition for the purpose of getting a relief under section 155 of the Companies Act, that the present proceeding not being in the nature of a petition does not fall under section 155 of the Companies Act and that, therefore the relevant provision of the Code of Civil Procedure will apply for the purpose of determining as to whether the present suit is cognizable by this court or not. Mr. Gupte learned counsel for the plaintiffs on the other hand urged that the word “court” as used in section 155 of the Companies Act, 1965 was defined in the Companies Act itself to mean the High Court for the purpose of the relief contemplated by that section and that therefore it was immaterial whether the proceeding adopted for the purpose of that relief was either by way of a petition or a suit, Mr. Gupte further urged that in any event, I should treat the suit as a petition and proceed to decide the respective contentions of the parties.

4. Now it is clear to my mind that even for the relief contemplated by section 155 of the Companies Act, 1956 a suit would be a primary remedy under the general law. The relief which is contemplated by that section is one which would be available at common law as well because after all, relief at common law would be one which would arise by assertion of a right on the part of one party and denial thereof by the others. In this case the plaintiffs claimed that by reason of the transfer of the shares belonging to defendants Nos 2 and 3 they were entitled to have their names registered in the register of members maintained by defendant No 1 company. Defendant No 1 company refused to recognise this right on several grounds mentioned in its written statement. Here, therefore was case in which the plaintiffs asserted a right which the defendant No 1 company declined to accept. This would naturally give rise to a remedy would be by an action. THe provision made in section 155 of the Companies Act, 1956 for a procedure by way of an application is only a provision for a summary procedure. The object of this provision is not to whittle down or abrogate the procedure by way of a suit for getting the relief contemplated by that section. By reason of the provision made in section 155, it is open to the aggrieved party to avail of the procedure laid down by that section and proceed by way of an application or by such proceeding as may be laid down by the Supreme Court in the Rules made by it. Generally speaking, this procedure is resorted to by persons aggrieved by the refusal of the directors of a company to rectify the register and enter the name of the transferee in place of the name of the transferor of shares in the register of members. but it is recognised by a long line of judicial decisions that the court is not bound to give the relief under that section in that proceeding if it finds that complicated questions of facts and law are involved. It has got the power to direct the party concerned to a civil court and to file a proper action for the purpose of securing the relief which he seeks in the summary proceeding. This direction is given by the court in exercise of its discretion because it is the civil court which has got the jurisdiction to decide all such matters in the first instance and it is only by way of a summary remedy that a party can proceed by an application or a petition under section 155 of the Companies Act, 1956. A reference may be made in this connection to Mohideen Pichai v Tinnevelly Mills Co (1) A I R 1928 Mad. 517. and Popel’s Insurance Co. Ltd. v Wood & Co (2) [1961] 31 Comp. Cas. 61. Mr Gupte himself quite frankly and fairly did not dispute the proposition that the procedure laid down in section 155 of the Companies Act, 1956 was only a summary procedure and that the relief provided for in that section was available also at common law in a common law action. His only contention however was that the word “court” as defined in the Companies Act meant only the High Court and that therefore although instead of a petition a suit had been filed in this particular case, it should not make any difference so far as the jurisdiction of this court was concerned. I am afraid this contention cannot be accepted. As a summary proceeding by way of an application or petition under section 155 of the Companies Act, 1956, this court can well be approached for the purpose of the necessary relief but for the purpose of getting the same relief in a regular suit which can by no stretch of imagination be said to be a summary proceeding the relevant provisions of the Civil Procedure Code and the questions both of territorial as well as pecuniary jurisdiction of the court in which the suit was valued in this case at more than Rs 25,000 this court would certainly have jurisdiction to entertain it, but it would not entertain it as a court exercising its jurisdiction under the Companies Act, but as a court in exercise of its ordinary original civil jurisdiction. This is precisely the difference between the “High Court” so far as proceedings under section 155 of the Companies Act, 1956 is concerned and the “High Court” which would entertain the suit in which the relief contemplated by that section is asked for. In my opinion, therefore this suit valued as it is at only Rs. 1,300 does not fall within the scope of the pecuniary jurisdiction of this court. Such a suit is exclusively tribal by the City Civil Court and since the provisions contained in rules 10 and 11 of Order VII of the Civil Procedure Code do not apply to the High Court by virtue of the Provisions of rule 3 of Order XLIX of that Code, the only alternative that is left to me is to dismiss the suit.

5. I cannot also accept Mr. Gupte’s contention that I should treat this suit as a petition under section 155 of the Companies Act, 1956. There is a fundamental objection to my doing it and that is as I have already observed above that the petition would be entertained by the High Court exercising its jurisdiction under the Companies Act, whereas the suit would be entertained by the High Court in exercise of its ordinary original civil jurisdiction. The two jurisdiction being entirely different and inasmuch as while dealing with this suit I am not exercising any jurisdiction conferred on this High Court by the Companies Act, I am afraid I cannot treat the present suit as a petition under section 155 of the Companies Act, 1956. In the result the suit is dismissed.

6. Suit dismissed.


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