# Nirbhay Kapoor /Plaintiff v. M/s Kamero Technosys Ltd. & Anr

- **Citation:** (2019) 3 ILRA 645
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2018-01-23
- **Case number:** First Appeal No. 427 of 2019
- **Bench:** Surya Prakash Kesarwani
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/nirbhay-kapoor-plaintiff-v-m-s-kamero-technosys-ltd-anr-44889
- **Pages:** 19

## Headnote

A. Company Law-Companies Act 2013 -
Section 430 r/w Section 9 of the C.P.C. &
Order 7 Rule 11 (d) of the C.P.C. -
Jurisdiction of Civil Court is excluded in
cases where the matter in dispute, is
required to be determined by the Tribunal
constituted under the Companies Act,

## Text

_Characters 0–39,989 of 59,856. This is a partial read: ask again with offset=39989 for what follows._

3 All. Nirbhay Kapoor Vs. M/s Kamero Technosys Ltd. & Anr.
645
children.
Court
while
deciding
guardianship and custody of a minor is to
be guided by the observations made by
Court as referred to above. When the case
in hand is examined in the light of
observations made by Court above, the
balance tilts in favour of mother i.e.
defendant-appellant.

16. In the present case, Court below
while
deciding
the
issue
regarding
appointment of guardian of minor and also
custody of minor has clearly omitted to have
a dialogue with the minor and secondly
return a finding regarding paramount interest
of child is best protected in the company of
plaintiff-respondent or defendant-appellant.
Unfortunately, neither parties have given
date of birth of minor. Since Subhas chandra,
father of minor died on 7.10.2012, Court
presumes that the minor child is not less than
8 years of age. Consequently, it was
obligatory upon Court below to have
conversation with minor child and then
assess as to whether minor Kuldeep wants to
stay with his grand father or his mother.
Court below while deciding issue no.3 which
indirectly also relates to paramount interest
of minor child in the company of plaintiffrespondent
or
defendant-appellant
of
necessity, had also to look into the financial
status of parties. However, Court below upon
an erroneous assumption that since Latoori
Singh grandfather of minor is 60 years of age
and suffering from desease, as such, in case
of his untimely death, there would be no one
to look after minor child. As such, appointed
plaintiff-respondent as guardian of minor and
further directed defendant-appellant to hand
over
custody
of
minor
to
plaintiffrespondent. In our view this finding recorded
by Court below, for holding guardianship of
minor in favour of plaintiff-respondent and
also for handing over custody of minor in
favour
of
plaintiff-respondent,
is
unsustainable in law. As already noted
above, Court below was under legal
obligation to decide the status of parties, the
intention of minor in residing with his
mother or grand father and then return a
finding, as to in whose custody the
paramount interest of minor child is best
protected. Court below having failed to
undertake the aforesaid exercise, we are of
the view that it has not exercised jurisdiction
vested in it in accordance with law.

17. Consequently, the present appeal
succeeds and is allowed. The judgement
dated
23.1.2018
and
decree
dated
5.2.2018, passed by Principal Judge,
Family Court, Kasganj, in Suit No. 25 of
2015 (Smt. Sushila Devi Vs. Latoori
Singh) under section 25 of Act 1890, are
set aside. The matter is remanded to Court
below for decision afresh in the light of
observations made in the body of
judgement. Court below shall make an
endeavour to decide the case, preferably
within a period of three months from the
date of presentation of certified copy of
this order by either of the parties. Cost
made easy.
----------

(2019)11ILR A645

APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 01.07.2019

BEFORE
THE HON'BLE SURYA PRAKASH KESARWANI, J.

First Appeal No. 427 of 2019

Nirbhay Kapoor ...Appellant/Plaintiff
Versus
M/s Kamero Technosys Ltd. & Anr.
 ...Respondents/Defendants

Counsel for the Appellant:
646 INDIAN LAW REPORTS ALLAHABAD SERIES
Sri Ashish Kumar Srivastava

Counsel for the Respondents:
Sri Manoj Kumar Srivastava, Sri Nimai Dass, Sri Udai
Chandani, Sri Sundeep Agarwal, Sri Vinod Kant

A. Company Law-Companies Act 2013 -
Section 430 r/w Section 9 of the C.P.C. &
Order 7 Rule 11 (d) of the C.P.C. -
Jurisdiction of Civil Court is excluded in
cases where the matter in dispute, is
required to be determined by the Tribunal
constituted under the Companies Act,
2013. If the dispute falls outside the
jurisdiction of the Tribunal under the
Companies Act 2013, then only the civil
court shall have jurisdiction under Section
9 of the Civil Procedure Code. (Para 23)

B. Jurisdiction - Civil Court - ouster of a
jurisdiction of a Civil Court has to be
considered
having
regard
to
the
contentions
raised
in
the
plaint,
averments disclosing cause of action and
the relief sought for therein, in entirety -
When the plaint read as a whole does
not disclose material facts giving rise to
a
cause
of
action
which
may
be
entertained by a civil court, the plaint
may be rejected in terms of Order 7,
Rule 11 of the C.P.C. (Para 19)

C. Code of Civil Procedura,1908 - Section
9 - Civil suit - Suit before civil court by
an ex-director as an individual under
Section 9 of the C.P.C. - for declaratory
relief of lien and injunction on the basis
of Minutes of Meeting of the then
Directors with respect to the properties
of the defendant Company and five other
companies - Not maintainable. (Para 17)

Held: - Section 430 of the Companies Act
2013 specifically provides that no Civil Court
shall have jurisdiction to entertain any suit or
proceeding in respect of any matter which the
Tribunal
or
the
Appellate
Tribunal
is
empowered to determine by or under the Act
or any other law for the time being in force.
Under Clause (e) and Clause (f) of sub-Section
2 of Section 242, the Tribunal has the power
to terminate, set aside or modify any
agreement, howsoever, arrived at between
the Company and the Managing Director or
any other Director or Manager. (Para 16, 17)
Alleged Minutes of the Meeting drawn by the
Directors
plaintiff-appellant
and
the
defendant-respondent no.2, dated 10.2.2016
relating to property held by the Company in its
own name under Section 187 of the Act fall
within the powers of the Tribunal conferred
under Section 242 of the Act. Suit filed by the
plaintiff was not maintainable under Section 9
of the Civil Procedure Code as it was barred by
the
provisions
of
Section
430
of
the
Companies Act 2013. (Para 17, 24)

First Appeal dismissed (E-5)

List of cases cited: -

1.Shashi Prakash Khemka Vs NEPC Micon (Now
called NEPC India Ltd.) & ors. (Civil Appeal No.
1965-1966 of 2014, decided on 8.1.2019).

2. Madras Bar Association Vs UOI & anr
(2015) 8 SCC 583.

3. Robust Hotel Pvt. Ltd. & ors Vs EIH Ltd. &
anr. (2017)1 SCC 622.

4.Church
of
North
India
Vs
Lavajibhai
Ratanjibhai & ors. (2005) 10 SCC 760.

5.Jitendra Nath Biswas Vs M/s Empire of India
and Ceylone Tea Co. and anr. (1989) 3 SCC 582.

6. SAS Hospitality Pvt. Ltd. Vs Surya
Constructions Pvt. Ltd. & ors 2019 (212)
Company Cases 102.

7.Prasanta Kumar Mitra & ors Vs India Steam
Laundry (P) Ltd. & ors. (APO 112 of 2017
decided on 5.9.2018).

8. Nahar Industrial Enterprises Ltd. Vs Hong Kong
& Shanghai Banking Corp. (2009) 8 SCC 646.

9.Jyoti Ltd & ors. Vs Bharat J. Patel (2015) 14 SCC
566.

10. Dhulabhai & ors Vs The St. of M.P. AIR
1969 SC 78.
3 All. Nirbhay Kapoor Vs. M/s Kamero Technosys Ltd. & Anr.
647
11. Raj. St. Road Transport Corp. & anr Vs
Krishna Kant & ors. (1995) 5 SCC 75.
12. Dwarka Prasad Agarwal Vs Ramesh Chand
Agarwal (2003) 6 SCC 220.
13.Sahebgouda Vs Ogeppa (2003) 6 SCC 151.
14.Dhruv Green Field Ltd. Vs Hukam Singh
(2002) 6 SCC 416.
15.Swamy Atmananda &
ors. Vs Sri
Ramakrishna Tapovanam & ors. (2005) 10
SCC 51.
16. Church of North of India Vs Lavajibhai
Ratanjibhai & ors. (2005) 10 SCC 760.
17. Punjab Wakf Board Vs Sham Singh Harike
(2019) 4 SCC 698

(Delivered by Hon'ble Surya Prakash
Kesarwani, J.)

Controversy

Maintainability of a suit by the
plaintiff - appellant (Ex-director) as
individual under Section 9 of the Civil
Procedure Code for declaratory relief
of lien and injunction on the basis of
Minutes of Meeting of the then
Directors (plaintiff and the defendant -
respondent No.2 and their two guests),
dated 10.2.2016, with respect to the
properties
of
defendant-respondent
no.1
Company
and
five
other
companies, is involved in the present
appeal.

1. Heard Sri Ashish Kumar
Srivastava, learned counsel for
the
plaintiff-appellant and Sri Udai Chandani
and Sri Nimai Dass, learned counsel for
the defendants-respondents.

Facts

2. Briefly stated facts of the present
case are that the plaintiff-appellant was
one of the Directors in the respondent
no.1 Company. The defendant-respondent
No.1 is a Limited Company. It purchased
an immovable property being House
No.19/1, B.L.K.-B, Okhla Industrial Area,
Phase -2, New Delhi (hereinafter referred
to as the "disputed property"). The
plaintiff-appellant and the defendantrespondent
No.2
and
their
family
members
were
Directors
in
six
companies, namely, M/s. Himalayan
Bioxteracts Pvt. Ltd., Kamero Technosys
Ltd., Virat Residency Ltd., Dynacon
Cares Ltd., Dynacon Systems Ltd. and
Duet Marketing Pvt. Ltd. The plaintiffappellant and the defendant-respondent
no.2 and their two guests drawn Minutes
of the Meeting dated 10.2.2016, which is
reproduced below :-

"MINUTES OF THE MEETING OF
THE
DIRECTORS
OF
KAMERO
TECHNOSYS
LIMITED
HELD
ALONGWITH TWO OTHER GUESTS
ON 10/02/2016 AT ROOM NO. 600 OF
VIJAY INTERCONTINENTAL HOTEL AT
12.30 P.M.

The Following person were
present -

1. Nirbhay Kapoor
-
Director Kamero Tecnosys Ltd.

2. Pankaj Kumar Gupta
-
Director of Kamero Technosys Ltd.

3. Brijesh Saxena
-Guest

4. Muqaddar Ali
-Guest

This meeting was convened with
a basic object of finishing the problems
faced by both the directors of Kamero
Technosys Limited in day to day working
of Company and also to find out an
amicable solution for separation of the
both directors from the business done by
both of them jointly. Various decisions
648 INDIAN LAW REPORTS ALLAHABAD SERIES
were
taken
during
the
course
of
discussions held and an amicable solution
was found out for separation of the both
the above named directors of Kamero
Technosys Limited which was acceptable
to both of them. As a token of
remembrance and also acceptance of the
decisions taken in the meeting these are
enumerated below. Both the directors are
signing this document in the presence of
other two guests willingly. Without any
force or coercion and in token of their
acceptance of the decisions taken in the
meeting which they will follow in the best
interest of the Organization as a whole
and for the other director also. The
amicable decisions reached between both
the directors are enumerated below -

1. That the Company Kamero
Technosys Ltd which will be taken over by
Shri Pankaj Kumar Gupta will be made
liability free to the extent of liabilities of
shoe division which was looked after by
Shri Nirbhay Kapoor. In that respect the
liability of Export obligation under EPCG
Scheme, the liability of pending Excise
matters, recovery by DGSND on any
disputed matter of excise if any, clearance
of Creditors of Shoe division and the
Cash Credit limit of Rs 100.00 lacs
alongwith
interest
till
date
of
its
clearance will be paid by Shri Nirbhay
Kapoor. Further, it was also agreed
between both the directors that expenses
of the factory at C-6 Site-1, Panki
Industrial Area, Kanpur up to 31st March
2016 will be borne by both the directors
equally and thereafter if the setup of shoe
division remains there then the expense
part will be borne by both the directors
equally till the setup of shoe division is
removed from C-6 Site-1, Panki Industrial
Area, Kanpur. For the part of above
stated expenses of Excise, DGFT dept. etc
a buffer amount of money will be retained
in Kamero Technosys Ltd from the part of
Shri Nirbhay Kapoor.

2. That Rs 100.00 Lacs of the
cash of the Company held by Shri
Nirbhay Kapoor at the time of dispute in
July, 2012 will be added to his account
(pt. no. 7).

3.
That
the
six
common
Companies will be divided in the
following manner -

Pankaj Kumar Gupta Nirbhay Kapoor
Himalayan
Bioxteracts Pvt. Ltd.
Dynacon Cares Ltd.
Kamero
Technosys
Ltd.
Dynacon Systems Ltd.
Virat Residency Ltd.
Duet Marketing Pvt. Ltd.

4. The matter of immovable
assets in the above six companies was
discussed and it was amicably decided to
find out the valuation of immovable assets
and divide them amongst both the
directors.
Both
the
directors
were
agreeable to this proposition readily.
After discussions with various property
dealers
by
both
the
directors
the
following valuation of the properties was
made which was readily acceptable to
both the directors -

Name of the Property Valuation reached amicably
(Rs in Crores)
1.
C-6,
Panki
Industrial Area, Site -
1, Kanpur
17.00
2. Okhla factory at
Delhi
6.00
3. Land at Rania,
Kanpur Dehat
7.50
4. Property at Sarojini
Nagar, Kanpur
1.25
5.
Flat
at
Lajpat
Nagar, Kanpur
0.30
6. Flat at Jangpura
Extension, Delhi
1.25
3 All. Nirbhay Kapoor Vs. M/s Kamero Technosys Ltd. & Anr.
649
7. Factory at G-116,
Site-3, Panki, Kanpur
1.00
 Total
34.30

5. That the above properties will
be divided amongst both the directors as
mentioned below -

Pankaj Gupta
Valuatio
n
Nirbha
y
Kapoo
r
Valuation
C-6
Site-1,
Panki
17.00
Okhla,
Delhi
6.00
Flat
at
Jangpura ext.
1.25
Land
at
Rania
7.50

Sarojin
i
Nagar,
Kanpu
r
1.25

Flat at
Lajpat
Nagar,
Knp.
0.30

G-116
Site-3,
Panki
Knp
1.00
Total Valuation 18.25
Total
Valuati
on
16.05

It was amicably decided that
both the directors are at their free will to
keep the property or to sale it. In case of
sale of property the other director will
sign the Sale deed without any questions
or hindrance. The proceeds of sale of the
property will go to the credit of the
director who sells his part of property and
will be paid to him. The Long Term
Capital gains, if any, arising on sale will
be borne by the director who is selling his
part of Immovable property and the other
director will in no way be responsible for
that part of expense.

6. The matter of Plant and
machinery owned in the group was
discussed. The Plant & Machinery of
Shoe division was valued at Rs 2.50
Crores by Shri Nirbhay Kapoor which
was readily acceptable to the other
director. The machines of Mould division
was valued at Rs 0.75 Lacs and that of
Adhesive plant and other misc. machines
was valued at Rs. 0.40 Lacs by both the
directors. The machines at G-116 Site-1
factory were valued at Rs 0.07 lacs. It
was amicably decided by both the
directors that the machines of Shoe
division will be taken over by Shri
Nirbhay Kapoor at the above valuation
and the rest machines will be taken over
by Shri Pankaj Kumar Gupta also at the
above valuation. It was also decided that
out of the machines of Shoe division one
desma machine of 18 Stations will be
taken over by Shri Pankaj Kumar Gupta
at a valuation of Rs 0.40 Lacs to which
the other director readily agreed.

7. The final position of payment
between both the directors is placed
below-

Particulars
Pankaj
Kr.
Gupta
Nirbhay Kapoor
Fixed Assets
18.25
16.05
Cash
0.00
1.00
Plant
1.22
2.10
18 Station
0.40
0.00
TOTAL
19.87
19.15

The sum total of the valuation of
the Immovable & movable properties
stated above come to Rs 39.02 Crores
(19.87+19.15). Half share of the sum
total of valuation comes to Rs. 19.51
Crores (39.02/2) i.e. each director's share
of the property comes to Rs 19.51 Crores.
To balance both the director's valuation
650 INDIAN LAW REPORTS ALLAHABAD SERIES
an amount of Rs 0.36 Lacs will be paid by
Shri Pankaj Kumar Gupta to Shri
Nirbhay
Kapoor
(19.87-19.51)(19.5119.15).

8. Besides the above it was also
decided that the proceeds of sale of Land
at Bhadurgrah, Haryana of Rs 1.46
Crores will be divided amongst both the
directors in equal proportion, after
deducting expenses of Rs 4.00 lacs
incurred on its sale and Tax on Long term
capital gains to be calculated as per I.
Tax Act, 1961.

9. It was also decided that the
advance payment of flats made in one of
the Company of Rs 23.00 Lacs approx.
which was received back will be divided
equally amongst both the directors.

10. Both the directors also
readily agreed that the payments received
from Defence Organizations for sale of
Shoes in Kamero Technosys Ltd will go to
the credit of Shri Nirbhay Kapoor and
will be paid to him even after separation.
In the event of payment received being
less than the liabilities then that shortfall
will be borne by Shri Nirbhay Kapoor.

11. It was also readily agreed by
both the directors that any liability of the
common six companies arising of the
period prior to 31st July, 2012 will be
borne equally by both the directors even
after separation.

12. It was also readily agreed
between both the directors that the Brand
"KAMERO" will be the sole property of
Shri Pankaj Kumar Gupta and the brand
"DYNACON" will be the sole property of
Shri Nirbhay Kapoor.

13.
It
was
also
decided
amicably that the shares of both the
directors standing in the name of each
other will be transferred in the name of
the director to whom the Company is
going. It was also decided that the
directors
will
give
resignations
unconditionally from the directorship of
the Company which is going to the other
director.

14. It was also decided that the
director who is resigning will also give a
letter to the Banker of the Company
informing
about
his
unconditional
resignation and also to remove his name
from the Authorized signatory of that
Company.

Finally the meeting concluded
and it was amicably decided that the
process
of
separation
should
be
completed at the earliest."

3. Subsequently, agreement to sell
dated 21.5.2016, was entered by the
defendant-respondent No.1 with someone
for sale of the disputed property for
Rs.5,40,00,000/-. The plaintiff-appellant
asked the defendant-respondents to pay to
him Rs. 8,55,00,000/- in terms of the
Minutes of the Meeting dated 10.2.2016.
Since this amount was not paid, therefore,
the plaintiff-appellant filed O.S. no.79 of
2019 (Nirbhay Kapoor Vs. M/S Kamero
Technosys Ltd And Another) praying for
declaration of lien over assets of three
companies, namely, M/s. Himalayan Bio
Extracts Pvt. Ltd., Kamero Technosys
Ltd. and Virat Residency Ltd. The relief
for permanent injunction was also sought
to restrain the defendant-respondents
from transferring the disputed property.
The aforesaid suit was dismissed by the
impugned order dated 25.3.2019, passed
by
the
Additional
Civil
Judge
(S.D.)/ACMM, 9th, Kanpur Nagar, on the
ground that it is not maintainable in view
of the provisions of Section 430 of the
Companies Act 2013 (hereinafter referred
to as "the Act 2013") read with Order 7
Rule 11 (d) of the C.P.C.
3 All. Nirbhay Kapoor Vs. M/s Kamero Technosys Ltd. & Anr.
651

4. Aggrieved with this order the
plaintiff-appellant has filed the present
appeal under Section 96 of the Civil
Procedure Code.

5. Both the learned counsel for the
parties jointly submit that pure question
of law as to the maintainability of the suit
is involved in the present appeal and,
therefore, without calling for the records
and paper book, the appeal may be finally
heard
on
the
following
question.
Accordingly, this appeal has been heard
on the following question :-

"Whether under the facts and
circumstances, the suit filed by the
plaintiff-appellant was not maintainable
under Section 9 of the Civil Procedure
Code being barred by the provisions of
Section 430 of the Companies Act, 2013"?

Submissions on behalf of the
plaintiff-appellant

6. Sri Ashish Kumar Srivastava,
learned
counsel
for
the
plaintiffappellant submits, as under:

i) That the plaintiff-appellant
was Director and share holder in the
companies in respect of which declaratory
relief was sought in the suit. An
agreement dated 10.2.2016 was entered
between the Directors of the companies
under which with respect to the disputed
property, it was agreed that when the
defendant-respondent no.1, shall sell the
aforesaid property, the proceeds thereof
shall be transferred to the plaintiffappellant. The defendant-respondent no.1
has
sold
the
said
property
for
Rs.5,40,00,000/-
but
has
not
transferred/paid that amount to the
plaintiff-appellant.
This
caused
the
plaintiff-appellant to file the suit in
question i.e. O.S. No.79 of 2019, seeking
a relief for declaration and permanent
injunction against the defendant no.1 -
Company.

ii) The Civil Court was having
jurisdiction to decide the aforesaid suit
and not the NCLT. The bar provided
under Section 430 of the Companies Act,
2013, was not applicable. Section 230 of
the Act, 2013, relates to the proposed
agreement and not covers the agreement
already
entered
and
acted
upon.
Therefore, neither Section 230 nor
Section
231
were
applicable
and
consequently, Section 430 of the Act,
2013, is not attracted on the facts of the
present case. Therefore, the court below
has committed a manifest error of law to
reject the plaint as barred by jurisdiction.

7. In rejoinder, Sri Ashish Kumar
Srivastava, learned counsel for the
plaintiff-appellant submits, as under:-

i) Clause 8 of Section 118 of the
Act
2013,
attracts
only
in
the
circumstances when there is a dispute
with regard to the minutes or the
resolution. In present set of facts, there is
no such dispute. Therefore, this provision
is not attracted on the facts of the present
case.

ii) Section 241 of the Act 2013
is attracted when any member of the
Company makes a complaint. In the
present case, there is no such complaint.
Therefore, neither Section 241 nor
Section 244 are applicable.

iii) The plaint has been rejected
not on the ground of cause of action under
Clause (a) of Order VII Rule 11 CPC but
it has been rejected only invoking Clause

(d) on a finding that the suit is
652 INDIAN LAW REPORTS ALLAHABAD SERIES
barred by Section 430 of the Companies
Act.

iv) The dispute with regard to
properties of the Company can be
adjudicated only in a civil suit. In the
present case the dispute is with regard to
the properties of company. Therefore, the
suit was maintainable and not barred by
Section 430 of the Act 2013. Reliance is
placed on the judgment of the Supreme
Court in Jail Mahal Hotels Private
Limited Vs. Devraj Singh and others
(2016) 1 SCC 423 (para 18).

Submissions on behalf of the
defendants-respondents

8. Sri Nimai Das, learned counsel
for
the
defendants-respondents
submits, as under:

i) As per own averments of the
plaintiff-appellant, in paragraph 5 of the
plaint that he and his family members
resigned from the Companies, namely,
M/s. Himalayan Bioxteracts Pvt. Ltd.,
Kamero
Technosys
Ltd.
and
Virat
Residency
Ltd.
Therefore,
after
resignation the plaintiff-appellant has no
concern or lien of any nature whatsoever
over the properties of the aforesaid
companies.

ii) As per plaint, declaratory
relief has been sought against the
aforesaid three companies but only
Kamero Technosys Ltd. has been made as
defendant in the suit as well as before this
Court as defendant-respondent. The rest
of the two companies against which
declaratory relief and relief of permanent
injunction have been sought were not
parties either in the aforesaid suit No.79
of 2019 or are parties in this appeal.

iii) The reference of paragraph
10 of the plaint made by learned counsel
for the plaintiff-appellant is wholly
irrelevant in as much as the averment
made in paragraph 10 does no give any
cause of action to the plaintiff-appellant
since the plaintiff-appellant has no
concern with the defendant-respondent
no.1 - Company.

iv) Cause of action disclosed in
paragraphs 17 & 18 of the plaint is that
some person came to the plaintiffappellant on 15.1.2019 and requested him
to sign the sale deed being Ex-Director of
the Company so that there may not arise
any dispute in future. On 17.1.2019, the
plaintiff-appellant came to know about
the sale of the properties and on
21.1.2019, the defendant-respondent no.1
has refused to make payment of the sale
proceeds of the properties in question.

v) Clause (a) of the Order VII
Rule 11 C.PC. provides for rejection of
plaint in the event the plaint does not
disclose any cause of action. Since the
plaintiff-appellant has not disclosed any
cause of action with respect to the
disputed property, therefore, the plaint
was rightly rejected under Clause (a) of
Order VII Rule 11 C.P.C.

(vi) The suit was barred by the
provisions
of
Section
430
of
the
Companies Act read with Section 9 C.P.C.
and, therefore, it was rightly rejected in
view of clause (d) of Order VII Rule 11
C.P.C.

vii) The alleged cause of action
for filing the suit is the alleged minutes of
the meeting of the Directors of the
defendant-respondent
no.1-Company,
dated 10.2.2016. Firstly, the said minutes
of the meeting is not in accordance with
the provisions of sub Section 8 of Section
118 of the Act, 2013 and, secondly, in
any case the remedy lies under Section
241(1) of the Act to apply to the Tribunal
under Section 244. Therefore, the suit was
3 All. Nirbhay Kapoor Vs. M/s Kamero Technosys Ltd. & Anr.
653
clearly barred by provisions of Section
430 of the Act inasmuch as the NCLT was
having jurisdiction to decide such type of
dispute.

viii) Powers of the Tribunal has
been provided in Section 242 of the Act
2013. The procedure before the Tribunal
and Appellate Tribunal has been provided
in Section 424 of the Act, 2013.

9. In support of his submissions,
learned
counsel
for
the
defendantrespondent no.1 has relied upon the
judgments of Hon'ble Supreme Court in
Shashi Prakash Khemka Vs. NEPC
Micon (Now called NEPC India Ltd.)
& Others (Civil Appeal Nos. 1965-1966
of 2014, decided on 8.1.2019), Madras
Bar Association Vs. Union of India and
another (2015) 8 SCC 583, Robust
Hotels Private Limited & others Vs.
EIH Limited & another(2017)1 SCC
622, Church of North India Vs.
Lavajibhai Ratanjibhai & Ors (2005)
10 SCC 760, Jitendra Nath Biswas Vs.
M/s. Empire of India and Ceylone Tea
Co. and another (1989) 3 SCC 582 and
the judgment of Delhi High Court in
SAS Hospitality Pvt. Ltd. Vs. Surya
Constructions Pvt. Ltd. & others 2019
(212) Company Cases 102 and the
judgmnts of Calcutta High Court in
Prasanta Kumar Mitra & Ors Vs.
India Steam Laundry (P) Ltd. & Ors.
APO 112 of 2017 decided on 5.9.2018.

Discussion and Findings

10. Before I proceed to examine
rival submissions, it would be appropriate
to reproduce the provisions of Section 9,
Order VII Rule 11 C.P.C. and Section 430
of the Act 2013, as under:-

Civil Procedure Code

"Section 9. Courts to try all civil
suits unless barred-- The Courts shall
(subject
to
the
provisions
herein
contained) have jurisdiction to try all
suits of a civil nature excepting suits of
which their cognizance is either expressly
or impliedly barred.

[Explanation
I].--A
suit
in
which the right to property or to an office
is contested is a suit of a civil nature,
notwithstanding that such right may
depend entirely on the decision of
questions
as
to
religious
rites
or
ceremonies.

[Explanation
II].
For
the
purposes of this section, it is immaterial
whether or not any fees are attached to
the office referred to in Explanation I or
whether or not such office is attached to a
particular place.].

Order VII Rule 11 Rejection of
plaint-- The plaint shall be rejected in the
following cases:--

(a)where it does not disclose a
cause of action;

(b)where the relief claimed is
undervalued, and the plaintiff, on being
required by the Court to correct the
valuation within a time to be fixed by the
Court, fails to do so;

(c)where the relief claimed is
properly valued, but the plaint is returned
upon paper insufficiently stamped, and
the plaintiff, on being required by the
Court to supply the requisite stamp-paper
within a time to be fixed by the Court,
fails to do so;

(d)where the suit appears from
the statement in the plaint to be barred by
any law :

Provided that the time fixed by
the Court for the correction of the
valuation or supplying of the requisite
stamp-paper shall not be extended unless
the Court, for reasons to be recorded, is
654 INDIAN LAW REPORTS ALLAHABAD SERIES
satisfied that the plaintiff was prevented
by any cause of an exceptional nature
form
correcting
the
valuation
or
supplying the requisite stamp-paper , as
the case may be, within the time fixed by
the Court and that refusal to extend such
time would cause grave injustice to the
plaintiff.

Section 430 of the Companies
Act 2013

430 Civil Court Not to Have
Jurisdiction - No civil court shall have
jurisdiction to entertain any suit or
proceeding in respect of any matter which
the Tribunal or the Appellate Tribunal is
empowered to determine by or under this
Act or any other law for the time being in
force and no injunction shall be granted
by any court or other authority in respect
of any action taken or to be taken in
pursuance of any power conferred by or
under this Act or any other law for the
time being in force, by the Tribunal or the
Appellate Tribunal."

11. The Minutes of the Meeting of
the Directors of the defendant-respondent
no.1 - Company alongwith two guests
was drawn on 10.2.2016 to show that by
the aforesaid Minutes of the Meeting the
plaintiff-appellant and the defendantrespondent no.2 admitted to divide six
Companies out of which two were private
and
four
were
limited
Companies,
amongst themselves. This was not the
meeting of the Board of Directors of the
six
Companies
or
the
defendantrespondent no.1 - Company. Such a
meeting is not referable any of the
provisions of the Act 2013, but it relates
to the properties/assets of the Companies.

12. Section 151 and 152 of the Act
2013
provides
for
appointment
of
Directors of the Company. Undisputedly,
directors are not the owners of the
Company. They are merely Officers of the
Company. Duties of Directors is provided
in Section 166 of the Act, 2013, which is
reproduced below:-

"166 Duties of Directors. (1)
Subject to the provisions of this Act, a
director of a company shall act in
accordance with the articles of the
company.

(2) A director of a company
shall act in good faith in order to
promote the objects of the company for
the benefit of its members as a whole,
and in the best interests of the
company,
its
employees,
the
shareholders, the community and for
the protection of environment.

(3) A director of a company
shall exercise his duties with due and
reasonable care, skill and diligence and
shall exercise independent judgment.

(4) A director of a company
shall not involve in a situation in which
he may have a direct or indirect interest
that conflicts, or possibly may conflict,
with the interest of the company.

(5) A director of a company
shall not achieve or attempt to achieve
any undue gain or advantage either to
himself or to his relatives, partners, or
associates and if such director is found
guilty of making any undue gain, he shall
be liable to pay an amount equal to that
gain to the company.

(6) A director of a company
shall not assign his office and any
assignment so made shall be void.

(7) If a director of the company
contravenes the provisions of this section
such director shall be punishable with fine
which shall not be less than one lakh
rupees but which may extend to five lakh
rupees."
3 All. Nirbhay Kapoor Vs. M/s Kamero Technosys Ltd. & Anr.
655

13. Sub-Section (4) of Section 166
mandates in clear terms that a Director of
the Company shall not involve in a
situation in which he may have a direct or
indirect interest that conflicts or possibly
may conflict, with the interest of the
Company.
Sub-Section
(1)
and
(2)
mandates that a director of a Company
shall act in accordance with the articles of
the Company and he shall act in good
faith in order to promote objects of the
Company for the benefits of its members
as a whole, and in the best interest of the
Company, its employees, the community
and for the protection of environment.
Powers of the Board of Directors is
provided in Section 179 and restriction
thereon is provided in Section 180 of the
Act. Perusal of Section 179 would reveal
that the minutes of the meeting, although
was not of Board of Directors; yet in any
event its subject matter can not be
included within the powers conferred
under Section 179 for dividing the
properties/assets of the Company by its
two
directors
amongst
themselves.
Section 187 (1) of the Act 2018, clearly
provides that all investments made or
held by a Company in any property,
security or other asset shall be made or
held by its own name, provided that the
company may hold any shares in its
subsidiary company in the name of any
nominee or nominees of the company, if it
is necessary to do so, to ensure that the
number of members of the subsidiary
company is not reduced below the
statutory limit. Contravention of subsection 1 of Section 187 has been made
punishable under sub-section 4. Section
189 provides for maintaining register of
all contracts or arrangements in which
Directors are interested. It is not the case
of the plaintiff-appellant that the disputed
minutes of the meeting dated 10.2.2016 is
an arrangement under Section 184 or 188
of the Act which has been entered in the
register. Section 230(1) of the Act
provides that in case a compromise or
arrangement is proposed--

(a) between a company and its
creditors or any class of them; or

(b) between a company and its
members or any class of them, then the
Tribunal may, on the application of the
company or of any creditor or member of
the company, or in the case of a company
which is being wound up, of the
liquidator, order a meeting of the creditors
or class of creditors, or of the members or
class of members, as the case may be, to
be called, held and conducted in such
manner as the Tribunal directs. Under
Section 231 of the Act Tribunal has power
to
enforce
the
compromise
or
arrangement under Section 230 of the
Act. The alleged minutes of the meeting
dated 10.2.2016 does not fall under
Section 230 of the Act.

14. Section 241 of the Act
empowers any member of a Company to
apply
to
the
Tribunal
in
certain
circumstances provided such member has
a right to apply under Section 244, for an
order under Chapter XVI and in that
event power has been conferred upon the
Tribunal for appropriate action under
Section 242 of the Act.

15. Sections 241, 242 and 245 of the
Act are relevant, which are reproduced
below:-

"241. Application to Tribunal
for Relief in Cases of Oppression, etc
(1) Any member of a company who
complains that--

(a) the affairs of the company
have been or are being conducted in a
656 INDIAN LAW REPORTS ALLAHABAD SERIES
manner prejudicial to public interest or
in a manner prejudicial or oppressive
to him or any other member or
members or in a manner prejudicial to
the interests of the company; or

(b) the material change, not
being a change brought about by, or in the
interests of, any creditors, including
debenture holders or any class of
shareholders of the company, has taken
place in the management or control of the
company, whether by an alteration in the
Board of Directors, or manager, or in the
ownership of the company's shares, or if it
has no share capital, in its membership, or
in any other manner whatsoever, and that
by reason of such change, it is likely that
the affairs of the company will be
conducted in a manner prejudicial to its
interests or its members or any class of
members,
may apply to the Tribunal, provided such
member has a right to apply under section
244, for an order under this Chapter.

(2)The Central Government, if
it is of the opinion that the affairs of the
company are being conducted in a manner
prejudicial to public interest, it may itself
apply to the Tribunal for an order under
this Chapter.

242. Powers of Tribunal (1) If,
on any application made under section
241, the Tribunal is of the opinion--

(a) that the company's affairs
have been or are being conducted in a
manner prejudicial or oppressive to
any member or members or prejudicial
to public interest or in a manner
prejudicial to the interests of the
company; and

(b) that to wind up the company
would unfairly prejudice such member or
members, but that otherwise the facts
would justify the making of a winding-up
order on the ground that it was just and
equitable that the company should be
wound up, the Tribunal may, with a view
to bringing to an end the matters
complained of, make such order as it
thinks fit.

(2) Without prejudice to the
generality of the powers under subsection (1), an order under that subsection may provide for--

(a) the regulation of conduct of
affairs of the company in future;

(b) the purchase of shares or
interests of any members of the company
by other members thereof or by the
company;

(c) in the case of a purchase of
its shares by the company as aforesaid,
the consequent reduction of its share
capital;

(d) restrictions on the transfer or
allotment of the shares of the company;

(e) the termination, setting
aside
or
modification,
of
any
agreement,
howsoever
arrived
at,
between
the
company
and
the
managing director, any other director
or manager, upon such terms and
conditions as may, in the opinion of the
Tribunal, be just and equitable in the
circumstances of the case;

(f) the termination, setting
aside or modification of any agreement
between the company and any person
other than those referred to in clause
(e): Provided that no such agreement
shall be terminated, set aside or
modified except after due notice and
after obtaining the consent of the party
concerned;

(g) the setting aside of any
transfer, delivery of goods, payment,
execution or other act relating to property
made or done by or against the company
within three months before the date of the
application under this section, which
3 All. Nirbhay Kapoor Vs. M/s Kamero Technosys Ltd. & Anr.
657
would, if made or done by or against an
individual, be deemed in his insolvency to
be a fraudulent preference;

(h) removal of the managing
director, manager or any of the directors
of the company;

(i) recovery of undue gains
made by any managing director, manager
or director during the period of his
appointment as such and the manner of
utilisation of the recovery including
transfer
to
Investor
Education
and
Protection
Fund
or
repayment
to
identifiable victims;

(j)the manner in which the
managing director or manager of the
company may be appointed subsequent to
an order removing the existing managing
director or manager of the company made
under clause (h);

(k) appointment of such number
of persons as directors, who may be
required by the Tribunal to report to the
Tribunal on such matters as the Tribunal
may direct;

(l)imposition of costs as may be
deemed fit by the Tribunal;

(m) any other matter for which,
in the opinion of the Tribunal, it is just
and equitable that provision should be
made.

(3) A certified copy of the order
of the Tribunal under sub-section (1)shall
be filed by the company with the
Registrar within thirty days of the order
of the Tribunal.

(4) The Tribunal may, on the
application
of
any
party
to
the
proceeding, make any interim order
which it thinks fit for regulating the
conduct of the company's affairs upon
such terms and conditions as appear to it
to be just and equitable.

(5) Where an order of the
Tribunal under sub-section (1)makes any
alteration in the memorandum or articles
of a company, then, notwithstanding any
other provision of this Act, the company
shall not have power, except to the extent,
if any, permitted in the order, to make,
without the leave of the Tribunal, any
alteration
whatsoever
which
is
inconsistent with the order, either in the
memorandum or in the articles.

(6) Subject to the provisions of
sub-section (1), the alterations made by
the order in the memorandum or articles
of a company shall, in all respects, have
the same effect as if they had been duly
made by the company in accordance with
the provisions of this Act and the said
provisions shall apply accordingly to the
memorandum or articles so altered.

(7) A certified copy of every
order altering, or giving leave to alter, a
company's memorandum or articles, shall
within thirty days after the making
thereof, be filed by the company with the
Registrar who shall register the same.