[1] Though served, nobody appears for the respondents. By this petition, the petitioner has challenged the order dated 26.02.2004 passed by learned Civil Judge (S.D.), Vadodara below application Exh.125 filed under section 9 of the C.P.C. in Special Civil Suit No. 722 of 1995.
[2] Mr.Shah, learned advocate for the petitioner took this Court to the relevant provisions of the Companies Act. It is further submitted that learned Trial Court has committed error in holding that section 111 of the Companies Act is applicable and as per this section, Civil Court ha no jurisdiction to try the suit filed by the company or against the company and that only Company Law Board can redress the grievance. Therefore, it is requested to allow this petition.
[3] Heard learned advocate for the petitioner. It is admitted fact that respondent no.1 is a company incorporated under the provisions of the Companies Act. Respondent no.1 is public company limited and not a public by virtue of provision of section 43A of the Companies Act and consequently, section 111 of the Companies Act would not apply to the suit.
Section 111 of the Companies Act reads as under : “111. Power to refuse registration and appeal against refusal.
“(1) If a company refuses, whether in pursuance of any power of the company under its articles or otherwise, to register, the transfer of, or the transmission by operation of law of the right to, any shares or interest of a member in, or debentures of, the company, it shall, within two months from the date on which the instrument of transfer, or the intimation of such transmission, as the case may be, was delivered to the company, send notice of the refusal to the transferee and the transferor or to the person giving intimation of such transmission, as the case may be, giving reasons for such refusal.
(2) The transferer or transferee, or the person who gave intimation of the transmission by operation of law, as the case may be, may appeal to the Company Law Board against any refusal of the company to register the transfer or transmission, or against any failure on its part within the period referred to in subsection (1), either to register the transfer or transmission or to send notice of its refusal to register the same.
(3) An appeal under subsection (2) shall be made within two months of the receipt of the notice of such refusal or, where no notice has been sent by the company, within four months from the date on which the instrument of transfer, or the intimation of transmission, as the case may be', was delivered to the company.
(4) If (a) the name of any person (i) is, without sufficient cause, entered in the register of members of a company, or (ii) after having been entered in the register, is, without sufficient cause, omitted therefrom; or (b) default is made, or unnecessary delay takes place, in entering in the register the fact of any person having become, or ceased to be, a member [including a refusal under subsection (1)], the person aggrieved, or any member of the company, or the company, may apply to the Company Law Board for rectification of the register.
(5) The Company Law Board, while dealing with an appeal preferred under subsection (2) or an application made under sub section (4) may, after hearing the parties, either dismiss the appeal or reject the application, or by order (a) direct that the transfer or transmission shall be registered by the company and the company shall comply with such order within ten days of the receipt of the order; or (b) direct rectification of the register and also direct the company to pay damages, if any, sustained by any party aggrieved.
(6) The Company Law Board, while acting under subsection (5), may, at its discretion make (a) such interim orders, including any orders as to injunction or stay, as it may deem fit and just; (b) such orders as to costs as it thinks fit; and (c) incidental or consequential orders regarding payment of dividend or the allotment of bonus or rights shares.
(7) On any application under this section, the Company Law Board (a) may decide any question relating to the title of any person who is a party to the application to have his name entered in, or omitted from, the register; (b) generally, may decide any question which it is necessary or expedient to decide in connection with the application for rectification.
(8) The provisions of subsections (4) to (7)shall apply in relation to the rectification of the register of debentureholders as they apply in relation to the rectification of the register of members.
(9) If default is made in giving effect to the orders of the Company Law Board under this section, the company and every officer of the company who is in default shall be punishable with fine which may extend to one thousand rupees, and with a further fine which may extend to one hundred rupees for every day after the first day after which the default continues.
(10) Every appeal or application to the Company Law Board under subsection (2) or subsection (4) shall be made by a petition in writing and shall be accompanied by such fee as may be prescribed.
(11) In the case of a private company which is not a subsidiary of a public company, where the right to any shares or interest of a member in, or debentures of, the company is transmitted by a sale thereof held by a court or other public authority, the provisions of subsections (4) to (7) shall apply as if the company were a public company: Provided that the Company Law Board may, in lieu of an order under subsection (5), pass an order directing the company to register the transmission of the right unless any member or members of the company specified in the order acquire the right aforesaid within such time as may, be allowed for the purpose by the order, on payment to the purchaser of the price paid by him therefore or such other sum as the Company Law Board may determine to be a reasonable compensation for the right in all the circumstances of the case.
(12) If default is made in complying with any of the provisions of this section, the company and every officer of the company who is in default, shall be punishable with fine which may extend to fifty rupees for every day during which the default continues.
(13) Nothing in this section and section 108, 109 or 110 shall prejudice any power of a private company under its articles to enforce the restrictions contained therein against the right to transfer the shares of such company.
(14) In this section "company" means a private company and includes a private company which had become a public company by virtue of section 43A of this Act.”
This Court is in agreement with the submission of learned advocate for the petitioner that respondent no.1 is public company limited and is not public by virtue of provisions of section 43A of the Companies Act and so provisions of section 111 of the Companies Act will not be applicable to the case of the petitioner and suit is maintainable and that Civil Court has jurisdiction to try the suit.
[5] In view of above, the petition is allowed. Order dated 26.02.2004 passed by learned Civil Judge (S.D.), Vadodara below application Exh.125 filed under section 9 of the C.P.C. in Special Civil Suit No. 722 of 1995 is hereby quashed and set aside. Special Civil Suit No.722 of 1995 is restored to its original file / stage.
Rule is made absolute to the aforesaid extent.
(M.D.SHAH, J.)
satish