Case Note & Summary
The appeal arises from an order dated 11 November 2019 passed by the City Civil Court, Greater Bombay, in Notice of Motion No.1182 of 2019 in SC Suit No.4321 of 2013. The dispute involves family and corporate issues stemming from the death of Yogesh Maneklal on 16 March 2010. The plaintiff, Ashutosh Yogesh Maneklal, and defendant No.1, Lina Y. Maneklal, are mother and son, with defendant No.2 being another son. Defendant No.4, Maneklal Enterprises Private Ltd., is a company owning Manek Mahal. The plaintiff filed a suit seeking declaration and injunction regarding the company's assets and management. Defendant No.1 took out a notice of motion seeking permission to withdraw fixed deposits of defendant No.4 with Bank of Baroda to pay statutory dues, including property tax and income tax. The trial court allowed the motion, permitting defendant No.1 to liquidate the fixed deposits and pay the dues, subject to furnishing an undertaking. The plaintiff appealed, arguing that the order was passed without jurisdiction and that defendant No.1 had no authority to deal with company assets. The High Court examined the background, including the will dispute and the company's financial position. It noted that the fixed deposits were maturing and that non-payment of statutory dues would attract penalties. The court held that the trial court's order was a discretionary interim order, and the balance of convenience favored allowing payment of statutory dues to prevent further liability. The court directed defendant No.1 to file an undertaking to indemnify the company if the suit is decided against her. The appeal was dismissed, and the interim applications were disposed of.
Headnote
A) Civil Procedure - Interim Relief - Balance of Convenience - Code of Civil Procedure, 1908, Order 39 Rules 1 and 2 - The court considered whether the trial court's order permitting defendant No.1 to liquidate fixed deposits of defendant No.4 company to pay statutory dues was proper. Held that the balance of convenience lies in allowing payment of statutory dues to prevent further liability, while protecting the plaintiff's interests by requiring an undertaking. (Paras 1-29) B) Company Law - Directors' Powers - Payment of Statutory Dues - Companies Act, 2013, Section 179 - The court examined the authority of directors to manage company affairs, including payment of statutory dues. Held that directors have the power to pay statutory dues in the ordinary course of business, and the trial court's order was within its discretion. (Paras 20-25) C) Family Law - Succession - Will Dispute - Indian Succession Act, 1925, Section 63 - The background involved a dispute over the will of late Yogesh Maneklal, leading to litigation between family members. The court noted that the suit is pending and the interim order does not decide the final rights. (Paras 3-5)
Issue of Consideration
Whether the trial court was justified in allowing defendant No.1 to withdraw fixed deposits of defendant No.4 company to pay statutory dues pending suit.
Final Decision
The appeal is dismissed. The order dated 11 November 2019 passed by the City Civil Court, Greater Bombay, in Notice of Motion No.1182 of 2019 in SC Suit No.4321 of 2013 is upheld. The appellant is directed to file an undertaking as directed by the trial court. Interim applications are disposed of.
Law Points
- Interim relief
- balance of convenience
- irreparable injury
- statutory dues
- fixed deposits
- company assets
- family dispute
- corporate dispute
