In the earlier issue we have discussed about Section 10 of the Companies Act and in the present issue also we shall proceed with the same section which deals with the Jurisdiction of Courts.
Query # 1 In case of offense punishable under section 113 of the Companies Act, 1956, whether cause of action would arise at place where the registered office of the Company is situated?
Decided Case Law : Zee Telefilms Ltd Vs State of Andhra Pradesh
Facts of the Case : The Complainant purchased certain shares of the petitioner Company at Hyderabad. He sent the said shares to the registered office of the petitioner Company at Mumbai for effecting the transfer of the said shares in his name. The Company did not deliver the said shares duly transferred in his name in spite of reminders and legal notice. Therefore the Complainant filed Complaint before court of Hyderabad against the petitioner company and its Directors for the offense punishable under section 113.
Clarification : Held that mere fact that the Complainant purchased the shares of Company at Hyderabad was of no consequence. Though Complainant ordinarily resided at Hyderabad and the notices were sent from Hyderabad requiring the accused petitioners to send share certificates duly transferring the same in the name of the complainant. But admittedly the registered office of the company was situated at Mumbai. Thus it was held that the court of Hyderabad had no jurisdiction to entertain the complaint.
Conclusion : In case of an offense punishable under section 113, the cause of action would arise at the place where the registered office of the Company is situated.
Query # 2 : Whether civil court has the jurisdiction to entertain the suit in respect of a dispute under section 283 of the Companies Act, 1956?
Decided Case Law : Vitthalrao Narayanarao Patil Vs Maharashtra State Seeds Corpn Ltd
Clarification : From the very language of section 10, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of the affairs of the Company, except such disputes in respect of which powers have explicitly been conferred on the district court by the Central Government.
Conclusion : Civil Court does not have jurisdiction to entertain suit in respect of a dispute referred under section 283 of the Companies Act, 1956.