w w w . L a w y e r S e r v i c e s . i n



Satya Narayan S/o Jugal Kishore Somani v/s Jiyajeerao Cotton Mills Limited, Gwalior & Another


Company & Directors' Information:- P A S COTTON MILLS PRIVATE LIMITED [Active] CIN = U17111TN2005PTC058104

Company & Directors' Information:- V R A COTTON MILLS PRIVATE LIMITED [Active] CIN = U15311PB1997PTC020061

Company & Directors' Information:- JIYAJEERAO COTTON MILLS LIMITED [Under Liquidation] CIN = U17301MP1901PLC000055

Company & Directors' Information:- C A V COTTON MILLS PRIVATE LIMITED [Active] CIN = U17115TZ1987PTC002014

Company & Directors' Information:- V K S M COTTON MILLS LIMITED [Active] CIN = U17111TZ1998PLC008682

Company & Directors' Information:- P K COTTON MILLS PRIVATE LIMITED [Active] CIN = U17111DL2004PTC130281

Company & Directors' Information:- K P G COTTON MILLS PRIVATE LIMITED [Active] CIN = U17115TZ1993PTC004509

Company & Directors' Information:- D B V COTTON MILLS PRIVATE LIMITED [Active] CIN = U17115TZ1982PTC001145

Company & Directors' Information:- SOMANI AND COMPANY PRIVATE LIMITED [Amalgamated] CIN = U28920MH1943PTC003811

Company & Directors' Information:- S S COTTON MILLS PRIVATE LIMITED [Active] CIN = U17115PB1997PTC019918

Company & Directors' Information:- J R COTTON MILLS PRIVATE LIMITED [Strike Off] CIN = U17111TN1996PTC034302

Company & Directors' Information:- D C H COTTON MILLS PRIVATE LIMITED [Strike Off] CIN = U17111TZ1997PTC008130

Company & Directors' Information:- L D COTTON MILLS PRIVATE LIMITED [Strike Off] CIN = U17291MH2014PTC256832

Company & Directors' Information:- A D COTTON MILLS PVT LTD [Active] CIN = U99999MH1970PTC014837

Company & Directors' Information:- SATYA COTTON MILLS PRIVATE LIMITED [Strike Off] CIN = U17121AP2007PTC052583

Company & Directors' Information:- V P K COTTON MILLS PRIVATE LIMITED [Strike Off] CIN = U17111TZ2000PTC009530

    Company Appeal No. 2 of 2013

    Decided On, 07 August 2013

    At, High Court of Madhya Pradesh

    By, THE HONOURABLE MR. JUSTICE BRIJ KISHORE DUBE & THE HONOURABLE MR. JUSTICE M.K. MUDGAL

    For the Appellant/applicant: V.K. Bhardwaj, Senior Advocate, Anand V. Bhardwaj, Advocate. For the Respondents: R1, J. D. Suryavanshi, Vivek Dalal, Advocates.



Judgment Text

Brij Kishore Dube, J:

1. This is a third round of litigation/appeal under Section 483 of the Companies Act, 1956 (for short 'the Act') which has been preferred by the appellant herein/applicant against the impugned order dated 28.02.2013 passed on I.A.No.11342/2010 by the learned Company Judge in Company Petition No.4/1997 (M/s. J.C. Mills v. BIFR) whereby the same has been dismissed.

2. No exhaustive statement of facts of the case are required to be narrated for the purpose of disposal of this appeal. Suffice it to say that the appellant, Satya Narayan Somani filed an application, I.A.No.11342/2010 for seeking permission under Section 446 (2) of Companies Act, 1956 to file the civil suit for declaration and injunction against the respondent No.1 being M/s. Jiyajeerao Cotton Mills Limited (in liquidation). The application was firstly considered in the pending Company Petition No.4/1997 by the learned Company Judge and vide order dated 28.01.2011, the same was dismissed. Being aggrieved by the aforesaid order, the appellant preferred an appeal being Company Appeal No.2/2011 which was allowed by a Division Bench of this Court vide order dated 18.08.2011 by passing a common order alongwith Company Appeal No.1/2011 and remanded the matter back, thereafter, the learned Company Judge again dismissed I.A.No.11342/2010 vide order dated 14.10.2011. Being aggrieved thereof again by the order dated 14.10.2011, the appellant preferred an appeal being Company Appeal No.11/2011, which was allowed by a Division Bench of this Court vide order dated 31.08.2012 and the matter was again remanded back for deciding it afresh. Thereafter, the matter was heard by the learned Company Judge and vide the impugned order dated 28.02.2013 again dismissed I.A.No.11342/2010, hence, this appeal.

3. Shri V.K. Bhardwaj learned senior counsel appearing on behalf of the appellant/applicant contended that the impugned order is illegal, incorrect and deserves to be set-aside. According to him, the learned Company Judge while passing the impugned order relied upon the order dated 02.02.2008 passed by the District Judge, Ujjain in Civil Suit No.28A/2007 (State of M.P. v. Official Liquidator, J.C. Mills Factory Agra Road, Ujjain) wherein the order dated 5.11.2004 passed in Company Case No.4/1997 was relied upon. The order dated 5.11.2004 passed in Company Case No.4/1997 is the subject-matter of Misc. Appeal No.1052/2004 in which a Division Bench of this Court ordered to maintained status-quo vide order dated 27.08.2007 and again on 30.04.2008. It is further submitted that the Civil Suit No.28A/2007 which was dismissed by the Trial Court vide order dated 02.02.2008 for non-obtaining the leave to file the civil suit and the same was affirmed by a Division Bench of this Court at Indore in in First Appeal No.366/2008 vide judgment dated 02.02.2010. The present application was filed by the appellant for seeking leave to file the civil suit against the Official Liquidator and others, on the basis of Kabuliyatnama submitted with the application, therefore, the same could not have been dismissed on the ground that the alleged suit was dismissed for want of taking permission to file the suit. It is further submitted that the appellant came to seek permission to file civil suit, the Company Judge is not competent to decide the question of title as the same is required to be adjudicated by the competent Civil Court. The jurisdiction of the Civil Court is not ousted under the Act. In this regard, learned counsel placed reliance on four judgments which are as under:-

(i) Narendra Nath Saha and another v. Official Receiver, High Court Calcutta and another, AIR 1968 Calcutta 394;

(ii) Ammonia Supplies Corporation (P) Ltd., v. Modern Plastic Containers Pvt. Ltd. and others, (1998) 7 SCC 105;

(iii) Dwarka Prasad Agarwal (D) by Lrs. and another v. Ramesh Chander Agarwal and others, (2003) 6 SCC 220;

(iv) National Organic Chemical Industries Ltd. v. Miheer H. Mafatlal and another, (2004) 12 SCC 356.

4. Learned senior counsel further submits that jurisdiction of the Company Judge is limited and if any order is passed in disregard of the mandatory provisions of law, the order would be without jurisdiction. In this regard, learned counsel placed reliance in the case of Bakemans Industries Private Limited v. New Cawnpore Flour Mills and others, (2008) 15 SCC 1. It is further submitted that the Company Judge has to look into the interest of the Public at large. In this regard, he cited the decision of Apex Court in IBA Health (India) Private Limited v. Info-Drive Systems SDN. BND., (2010) 10 SCC 553. It is further submitted that the appellant is a journalist by profession having no personal interest in the property which belongs to the State of Madhya Pradesh, but the State Government is sitting tight over the matter and is doing nothing, therefore, permission to file civil suit may be granted. In this regard, learned senior counsel placed reliance upon Smt. Jatan Kanwar Golcha v. M/s. Golcha Properties Private Ltd., AIR 1971 SC 374.

5. Shri J.D. Suryavanshi, counsel appearing on behalf of the respondent No.1 and Shri Vivek Dalal, learned counsel for the auction purchaser argued in support of the impugned order and prayed for dismissal of the appeal.

6. Shri Vivek Dalal, learned counsel further submits that the property in question was owned by M/s. Jiyajeerao Cotton Mills Limited (in liquidation) and the same was sold by the Official Liquidator to M/s. Neminath Developers vide sale deed dated 25.09.2007 for a consideration of र21.76 Crores and the possession of the property in question had been duly handed over to the auction purchaser, M/s. Neminath Developers. The present appellant has no locus-standi to file the application as the title of the Company stood already decided by different Courts upto the Hon' ble Apex Court.

7. We have given our anxious consideration to the above arguments advanced before us by the learned counsel for the parties.

8. On a perusal of the record, it is transpired that earlier the State of Madhya Pradesh filed a civil suit for declaration and permanent injunction and recovery of possession against Official Liquidator, M/s. J.C. Mills Ltd. and M/s. Neminath Developers in respect of the land bearing Survey Nos.1563/1, 1563/2, 1563/3 and 1564 situated at Patwari Halka No.24, Ujjain. The civil suit was dismissed by the Trial Court vide judgment and decree dated 02.02.2008 passed in Civil Suit No.28-A/2007 on the ground that the civil suit was not maintainable before the civil Court in view of Section 446 of the Companies Act without leave of the Company Court. Being aggrieved thereof, the State of Madhya Pradesh filed First Appeal No.366/08 before this Court at Indore, the same was dismissed vide the judgment dated 02.02.2010. Against which, an SLP was preferred before the Apex Court, the same was also dismissed. The order dated 02.02.2008 passed in Civil Suit No.28A/2007 by the Trial Court attained finality. Thereafter, no further steps have been taken by the State of Madhya Pradesh.

9. So far as, the order dated 05.11.2004 passed in Company Case No.4/1997 is concerned, it is revealed from the record that in the aforesaid properties of the Company, i.e, M/s. Jiyajeerao Cotton Mills Limited (in liquidation) situated at Ujjain as well as at Gwalior were questioned and by the aforesaid order, it was found that the properties in question belongs to the Company. The relevant para No. 17 of order dated 05.11.2004 reads as under:-

"17. As discussed above the State Government has no right over the said property and the lands belong to the company and the lands are of the company. As regards the property of company at Ujjain, there is no objection by the State Government regarding its title. However, objection was raised by the Collector District Ujjain. This objection was uncalled for. Application of the State Government is therefore dismissed. The properties, which have been taken over by official Liquidator after winding up proceedings and are in control of official Liquidator shall be deemed to be the properties of the company. Other applications are accordingly disposed of."

10. The State of Madhya Pradesh by preferring Misc. Appeal No.1052/2004 challenged the validity of the order dated 05.11.2004 passed in Company Case No.4/1997. This Court considered the matter on interlocutory application and passed an order on 27.08.2007 and again on 30.04.2008 directing the parties to maintain status-quo.

11. From a bare perusal of the record of Misc. Appeal No.1052/2004, it is apparent that the property of company in liquidation situated at Ujjain has not been questioned in the aforesaid appeal, therefore, the submission of the learned counsel for the auction purchaser that the order dated 5.11.2004 passed by the Company Judge with regard to the property situated at Ujjain had attained finality seems to be prima-facie reasonable.

12. The ownership right in respect of property in question was claimed by Hari Singh and Yaswant Singh but they could not get success and property in question was sold by the Official Liquidator of Company in liquidation to M/s. Neminath Developers by registered sale deed dated 25.09.2007.

13. In Narendra Nath Saha (supra), liquidation proceedings of Company in liquidation were pending before the Calcutta High Court. Suit for ejectment and mesne profits against company represented by Official Receiver filed in City Civil Court. In such circumstances, it has been held that suit although would be triable by High Court by virtue of Section 446 (2) of the Companies Act, the jurisdiction of the City Civil Court to entertain and try the suit is not ousted. In Ammonia Supplies Corporation (P) Ltd., (supra), it has been held by the Apex Court that there is nothing under the Companies Act expressly barring the jurisdiction of the civil court, but the jurisdiction of the "court" as defined under the Act exercising its powers under various sections where it has been invested with exclusive jurisdiction, the jurisdiction of the civil court is impliedly barred. The jurisdiction of the "court" under Section 155, to the extent it has exclusive jurisdiction, the jurisdiction of the civil court is impliedly barred. For what is not covered as aforesaid the civil court would have jurisdiction. Similarly even under Section 446(1), its words itself indicate the jurisdiction of the civil court is not excluded. The words "except by leave of the court" itself indicate on leave being given the civil court would have jurisdiction to adjudicate ones right. Of course discretion to exercise such power is with the "court". Similarly under Section 446(2), "court" is vested with powers to entertain or dispose of any suit or proceedings by or against the company. In Dwarka Prasad Agarwal (D) by Lrs., (supra), the Hon' ble Apex Court considered the jurisdiction of Civil Court vis-a-vis Company Court and held that jurisdiction of Civil Court to try a suit for eviction and injunction is not ousted by the provisions of Companies Act. In National Organic Chemical Industries Ltd. (supra), the Hon' ble Apex Court considered the jurisdiction of Company Court under Sections 391 and 394 of the Companies Act. In Bakemans Industries Private Limited (supra), the Hon' ble Apex Court in para Nos.44 and 76 observed as under:-

"44. Clause (11) of Section 2 of the Companies Act, 1956 provides for the definition of "the court". In A. Ramaiya's Guide to the Companies Act, 16th Edn., 2004, the learned author opines that the jurisdiction of the assets of the Company Court those matters it has no jurisdiction.

76. If the jurisdiction of a Company Judge is limited, any substantial deviation and departure therefrom would result in unfairness. When an order is passed

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in total disregard of the mandatory provisions of law, the order itself would be without jurisdiction. .............." 14. In Iba Health (India) Private Limited (supra), the Apex Court held that the Company Court, at times, has not only to look into the interest of the creditors, but also the interests of the public at large. In Smt. Jatan Kanwar Golcha (supra), the Apex Court observed that it is well settled that a person who is not a party to the suit may prefer an appeal with the leave of the Appellate Court and such leave should be granted if he would be pre-judicially effected by the judgment. 15. The above mentioned judgments on which reliance has been placed by learned senior counsel appearing on behalf of the appellant are not applicable to the facts and circumstances of the present case. 16. In view of the aforesaid, having carefully gone through the impugned order dated 28.02.2013 passed in Company Petition No.4/1997 by the learned Company Judge, we do not find any perversity or illegality or arbitrariness in it and in our considered opinion, the learned Company Judge rightly dismissed the application of the appellant being I.A.No.11342/2010. 17. Consequently, we do not find any merit in the appeal and the same is hereby dismissed. Appeal dismissed.
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