Case Note & Summary
The case involves two civil revision applications arising from S.C. Suit No.3789 of 1995 and S.C. Suit No.3790 of 1995 filed in the City Civil Court at Mumbai. The plaintiffs sought declarations and injunctions regarding company matters. The defendants, including Sasangi Engg. (Bombay) Pvt. Ltd. and Car Mart Pvt. Ltd., challenged the jurisdiction of the civil court, arguing that the plaintiffs had an alternative and efficacious remedy under the Companies Act, 1956, specifically under Sections 397, 398, 402, and 403, which impliedly ousted the civil court's jurisdiction. The trial court framed a preliminary issue on jurisdiction and answered it in the affirmative, holding that it had jurisdiction. The defendants appealed. The High Court, per Justice B.H. Marlapalle, considered the submissions of counsel for both sides. The court noted that the remedy under the Companies Act is not equally efficacious as a civil suit for the reliefs claimed, which included declarations and injunctions. The court held that the availability of an alternative remedy does not by itself oust the jurisdiction of civil courts unless the statute expressly or by necessary implication bars such jurisdiction. No such bar was found in the Companies Act. Consequently, the High Court dismissed both civil revision applications, upholding the trial court's order on jurisdiction.
Headnote
A) Civil Procedure - Jurisdiction of Civil Court - Implied Ouster - Availability of alternative remedy under a special statute does not by itself oust the jurisdiction of civil courts unless the statute expressly or by necessary implication bars such jurisdiction - The court held that the remedy under Sections 397, 398, 402, and 403 of the Companies Act, 1956 is not equally efficacious as a civil suit for declaration and injunction, and therefore the civil court retains jurisdiction (Paras 1-2).
Issue of Consideration
Whether the City Civil Court has jurisdiction to entertain suits for declaration and injunction in company matters when an alternative remedy is available under the Companies Act, 1956, and whether such availability implies ouster of civil court jurisdiction.
Final Decision
Both civil revision applications are dismissed. The trial court's order holding that it has jurisdiction to entertain and try the suits is upheld.
Law Points
- Civil court jurisdiction
- implied ouster
- alternative remedy
- Companies Act
- 1956
- Section 9 CPC
- Section 397
- Section 398
- Section 402
- Section 403
Case Details
2005 LawText (BOM) (05) 46
Civil Revision Application No.46 of 1996 and Civil Revision Application No.47 of 1996
Mr. J. Reis with Mr. Amol Bavase i/b M/s. Udwadia Udeshi & Berjis for appellants; Mr. Aniruddha Joshi with Mr. Nirmal Damani and Mr. Lalit Jain i/b M/s. Kanga & Co. for respondents
Sasangi Engg. (Bombay) Pvt. Ltd. (in CRA 46/1996) and Car Mart Pvt. Ltd. & ors. (in CRA 47/1996)
Sah Sunil Kumar & anr. (in CRA 46/1996) and Anil Kumar Sah & ors. (in CRA 47/1996)
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Nature of Litigation
Civil revision applications challenging the jurisdiction of the City Civil Court to entertain suits for declaration and injunction in company matters.
Remedy Sought
The defendants (appellants) sought to set aside the trial court's order holding that it had jurisdiction to try the suits.
Filing Reason
The defendants contended that the plaintiffs had an alternative and efficacious remedy under the Companies Act, 1956, which impliedly ousted the civil court's jurisdiction.
Previous Decisions
The trial court (Additional Principal Judge, City Civil Court, Mumbai) by common judgment and order dated 8th November 1995 answered the jurisdiction issue in the affirmative.
Issues
Whether the City Civil Court has jurisdiction to entertain suits for declaration and injunction in company matters when an alternative remedy is available under the Companies Act, 1956.
Whether the availability of an alternative remedy under the Companies Act impliedly ousts the jurisdiction of the civil court.
Submissions/Arguments
Mr. Reis for the appellants argued that the remedy under the Companies Act is equally effective, speedy, and efficacious for the reliefs claimed, and therefore the civil court's jurisdiction is impliedly ousted.
Mr. Joshi for the respondents argued that the civil court has jurisdiction as the Companies Act does not expressly or impliedly bar such jurisdiction, and the remedy under the Act is not equally efficacious.
Ratio Decidendi
The availability of an alternative remedy under a special statute does not by itself oust the jurisdiction of civil courts unless the statute expressly or by necessary implication bars such jurisdiction. The remedy under Sections 397, 398, 402, and 403 of the Companies Act, 1956 is not equally efficacious as a civil suit for declaration and injunction, and therefore the civil court retains jurisdiction.
Judgment Excerpts
In S.C. Suit No.3789 of 1995 and S.C. Suit No.3790 of 1995 sur-rejoinders were filed on 18-8-1995 separately and in para 1(A) of the said affidavits in sur-rejoinder the point of jurisdiction of the trial Court was raised...
Both the appeals question the legality of the common order and, therefore, the appeals are being decided by this common judgment.
Procedural History
The plaintiffs filed S.C. Suit No.3789 of 1995 and S.C. Suit No.3790 of 1995 in the City Civil Court at Mumbai. The defendants filed sur-rejoinders on 18-8-1995 raising the issue of jurisdiction. The trial court framed a preliminary issue on jurisdiction and by common judgment and order dated 8th November 1995 answered it in the affirmative. The defendants filed Civil Revision Application No.46 of 1996 and Civil Revision Application No.47 of 1996 in the High Court challenging that order.
Acts & Sections
- Companies Act, 1956: 397, 398, 402, 403
- Code of Civil Procedure, 1908: 9
