Allowed

Smt.Penumatsa Appala Narasamma v. Managing Director

Telangana HC8 Oct 2014CMA/768/2010

Case brief

AI extract

What is this about?

Civil Miscellaneous Appeal challenging an order returning the plaintiff's plaint for lack of jurisdiction. The court held that a suit seeking declaration of entitlement to a deceased husband's shares falls under succession law, not company law, thus the District Court retains jurisdiction.

What did the court decide?

The Civil Miscellaneous Appeal is allowed; the impugned order setting aside the plaint is set aside; the suit disposed of as per law.

Smt.Penumatsa Appala Narasamma Vs Managing… — Succession and Inheritance | Telangana HC (2014)

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THE HON’BLE SRI JUSTICE K.C.BHANU AND THE HON’BLE SMT JUSTICE ANIS

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CIVIL MISCELLANEOUS APPEAL No. 768 of 2010 JUDGMENT :

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(per the Hon’ble Sri Justice K.C.Bhanu)

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1. The Civil Miscellaneous Appeal is directed against the order dated 18.08.2010 in I.A. No.1136 of 2009 in O.S. No.7 of 2008 on the file of the I Additional District Judge, West Godavari at Eluru.

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2. Heard both sides.

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3. Appellant no.1 herein filed the aforesaid suit seeking a declaration that she is entitled to the shares mentioned in the plaint schedule and for consequential mandatory injunction directing the respondents/defendants to transfer the plaint schedule shares that are in the name of her late husband Penumatsa Somaraju in her name. During pendency of the suit, the first respondent/third defendant filed the aforesaid interlocutory application under Order XIV Rule 2 read with Section 151 of the Code of Civil Procedure, 1908 (for short, ‘CPC’) to return the plaint for presentation before proper Court on the ground that the court below has no jurisdiction to entertain the suit. Vide impugned order, the Court below returned the plaint under Order VII Rule 10 CPC for presentation before proper Court by following the procedure laid down under Order

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VII Rule 10-A CPC on the ground that under Section 10 of the Companies Act, 1956, the District Court has no jurisdiction over the subject matter of the plaint.

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4. During pendency of this appeal, the appellant no.1 was reported died, and so, appellant no.2 was brought on record as her legal representative as per order dated 21.09.2012 in CMAMP No.1626 of 2012.

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5. Section 10 of the Companies Act, 1956 reads thus:

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“Jurisdiction of Courts:

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(1) The Court having jurisdiction under this Act shall be -

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(a) the High Court having jurisdiction in relation to the place at which the registered office of the company concerned is situate, except to the extent to which jurisdiction has been conferred on any District Court or District Courts subordinate to that High Court in pursuance of sub-section (2); and

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(b) where jurisdiction has been so conferred, the District Court in regard to matters falling within the scope of the jurisdiction conferred, in respect of companies having their registered offices in the district.

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(2) The Central Government may, by notification in the official Gazette and subject to such restrictions, limitations and conditions as it thinks fit, empower any District Court to exercise all or any of the jurisdiction conferred by this Act upon the Court, not being the jurisdiction conferred-

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(a) in respect of companies generally, by

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sections 237, 391, 394, 395 and 397 to 407, both inclusive;

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(b) in respect of companies with a paidup share capital of not less than one lakh of rupees, by Part VII (sections 425 to 560) and the other provisions of this Act relating to the winding up of companies.

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(3) For the purposes of jurisdiction to wind up companies, the expression ‘registered office’ means the place which has longest been the registered office of the company during the six months immediately preceding the presentation of the petition for winding up.”

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In certain circumstances, when jurisdiction is conferred by Notification, the High Court and the District Court can exercise the jurisdiction conferred by the Companies Act. As the registered office of the third defendant company is located in Mumbai, the Court below came to the conclusion that the High Court of Mumbai has got jurisdiction to entertain certain matters relating to the Companies Act. But, at the same time, the allegations in the plaint have to be taken into consideration for the purpose of deciding the jurisdiction. The prayer sought for, in the suit is to declare that the plaintiff alone is entitled to shares mentioned in the plaint schedule. The schedule relates to share certificates of Mahindra and Mahindra Limited, Mumbai. So, when the plaintiff is seeking a declaration that she alone is entitled for estate of her deceased husband, that declaration cannot be decided

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by the Company Court. Such a declaration can only be resolved by the Civil Court. Therefore, the Court below has got jurisdiction to decide whether the plaintiff is entitled to succeed the properties of her deceased husband, as her husband died in testate. Accordingly, the impugned order is set aside. The Court below is directed to dispose of the suit in accordance with law.

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4. The Civil Miscellaneous Appeal is, accordingly, allowed. No costs. Miscellaneous Petitions pending, if any, in the appeal shall stand closed.

(K.C.BHANU, J.)

(ANIS, J.)

08.10.2014 DRK

THE HON’BLE SRI JUSTICE K.C.BHANU AND THE HON’BLE SMT JUSTICE ANIS

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CIVIL MISCELLANEOUS APPEAL No. 768 of 2010 (per the Hon’ble Sri Justice K.C.Bhanu)

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08.10.2014

Smt.Penumatsa Appala Narasamma v. Managing Director

Case brief

What is this about?

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Smt.Penumatsa Appala Narasamma v. Managing Director

Case brief

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