P L D 1968 Supreme Court 381 (PLP)

HAMOODUR RAHMAN, 1.‑This appeal by special leave arises out of an order of a learned Single Judge of the High Court of East Pakistan in a revision petition filed under section 115 of the Code of Civil Procedure. This petition was, unfortunately, rejected summarily by a laconic order to the effect that "the application is rejected." Leave to appeal was granted in this case as it was felt that the case before the High Court was not one which could have been rejected so summarily, without even assigning any reason, for, it did prima facie raise a substantial question of law which apparently found some support from an earlier decision of a Division Bench of the same High Court in the case of Alhaj Muhammad Islam Khan v. Alhaj Abdur Rahim Choudhury and others (P L R 8 Dacca 639). The circumstances in which the revisional application was filed in the High Court may briefly be stated as follows :‑ The respondent No. 1 had started a Company in the name of Messrs Abdul Jabbar & Company Limited, with its head office at Sir Iqbal Road, Khulna, to carry on business in the export and import of jute. He was the Managing Director of the Company and had absolute power with regard to its adminis tration and management, under the Articles of Association. Unfortunately, on the 10th February 1964, he was placed under detention under the East Bengal Public Safety Ordinance. During the period of his detention the respondent No. 3 manufactured a resignation letter which purported to have been written by the respondent No. 1, resigning from the post of Managing Director and on the basis there of reconstituted the Company and changed its name to Messrs Chalna Fibre Company Limited, for depriving the respondent No. 1 of his rightful control of the Company. After his release from detention, the respondent No. 1 coming to know of the mischief filed a suit in the Court of a Munsif at Khulna praying for the following reliefs :‑ (a) That a decree be passed declaring that the plaintiff is still the Managing Director of Messrs A. Jabbar & Company Limited, with its office at Sir lqbal Road, Khulna, and has right to carry on business in the said name as usual. (b) That a decree be passed that the reconstitution of Messrs A. Jabbar & Company Limited, by co‑opting defendants Nos. 2, 4 and 5 as directors and its change of name to Messrs Chalna Fibre Company Limited, and change in Memorandum and Articles of Association is illegal and inoperative and not binding upon the plaintiff. (c) That a permanent injunction be issued against the defendants Nos. 2 to 5 restraining them from carrying on jute business in the name of Messrs Chalna Fibre Company Limited and or in the name of Messrs A. Jabbar & Company Limited, in its alleged reconstituted form. (d) That a temporary injunction be granted in the line indicated in para. (c) above. In this suit he also prayed for an ad interim injunction during the pendency of the suit. The ad interim injunction was granted after notice to the defendants in the suit in spite of their objection that the trial Court had no jurisdiction to entertain the suit as the reliefs claimed therein were in substance for reliefs under the Companies Act. These reliefs could only be granted by the High Court which alone had exclusive jurisdiction in the matter under section 3 of the Companies Act. The suit was, according to them, really a device to evade the provisions of the Companies Act and was as such not maintainable. The same objections were also raised in the suit and the issue as to jurisdiction was tried as a preliminary issue. It was held by the trial Court that since the reliefs claimed in the suit could not be obtained under the Companies Act the suit being a suit of a civil nature was duly maintainable and triable by it under section 9 of the Code of Civil Procedure and the explanation appended thereto. The suit was, in its view, really a suit in which a right to an office was in contest. During the pendency of the suit, it appears, the appellants had also gone up in appeal from the order of ad interim injunction granted by the learned Munsif, but this appeal was dismissed by the Subordinate Judge, Khulna on the ground that it was not maintainable, because, in the view of the learned Subordinate Judge. "In the garb of declarations as mentioned above the matter cannot be taken out of the provisions of the Companies Act. Section 3 of the Act provides that High Court will have juris diction over the Company formed and registered under this Act. Earliest objection as to jurisdiction was taken by the defendants before the trial Court who overruled the contentions. In my view this is a fit case to be dealt under the Companies Act. Having arrived at such a conclusion, I must hold that this Court has no jurisdiction to bear the appeal." This order of the learned Subordinate Judge, Khulna was placed before the learned Munsif during the trial of the prelimi nary issue but the learned Munsif took the view that these observations were merely in the nature of an obiter dictum and, therefore, not binding upon him. Hence the appellants came up to the High Court In revision, from the order of the learned Munsif on the preliminary issue but the revision petition, as already stated, was dismissed summarily. The appellants before us have strenuously contended that such summary dismissal was unjustified in the present case and, therefore, the matter should be sent back to the High Court for disposal in accordance with law. Having heard the learned counsel for the parties we have, however, come to the conclusion that though the order of the High Court gave no reason whatso ever, the dismissal of the revisional application was correct, for, the learned Munsif was right in his conclusion that he had jurisdiction to entertain the suit. The learned counsel for the appellants has placed strong reliance on the decision of the High Court in the case of Alhaj Muhammad Islam Khan but it has to be pointed out that on facts !bat case was clearly distinguishable. What had happened in that case was that a person had filed a suit for the recovery of a sum of Rs. 5,500 which was allegedly deposited with Haji Muhammad Islam Khan for the purchase of 100 shares in a Company proposed to be promoted by the latter. It was alleged that although the proposal was subsequently abandoned the money was not being returned. During the trial of the case, however, it transpired that the Company in which the said person wanted to purchase the shares, had actually been started and had functioned for nearly three years when it was put into voluntary liquidation. Hence, it was held, that the suit was not maintain able as the plaintiff in that suit had really "tried to evade the provisions of the Companies Act, by framing the suit as one for recovery of money deposited with one of the promoters of the Company." In actual fact the position was that the claimant had already become a share‑holder of the Company and as such could not ask for a refund of the amount until the Company had been wound up and its creditors paid off by the liquidator. In the present case the position is different, for, there is no provision in the Companies Act under which the respondent No. 114 could seek the reliefs he claimed in the suit. Section 38 of the Companies Act has clearly no application whatsoever, for, that section deals with the rectification of the share register. There was no question here of the rectification of any share register. His name had not been removed from the share register. All that had been done, according to the plaint, was that his fictitious resignation had been accepted, some others co‑opted as directors and the same of the Company changed. He alleged that these had been done fraudulently and illegally during his detention. AI that he wanted, therefore, was a declaration as to his status a the Managing Director of the Company. In other words, his allegation was that he had been fraudulently removed from his office of Managing Director and that he could only be restored to the said office if he obtained a declaration from a competent Court that the removal was fraudulent. The next relief claimed was that the reconstitution and the change of name with consequent change in the Memorandum and Articles of Association were all illegal. Sections 10, 11, 12 and 20 of the Companies Act provide for changes in the name of the Company, the Memorandum and Articles of Association thereof. If the procedure prescribed therein is . not followed, the change can be challenged as being illegal, but there is no provision in the Companies Act for obtaining this relief. This relief again could, therefore, be only obtained by way of suit. It is thus clear that the suit, out of which this appeal arises, was not hit by the provisions of section 3 of the Companies Act. It was a civil suit and was, therefore, under section 9 of the Code of Civil Procedure, triable by a civil Court unless its cognisance was expressly or impliedly barred. We have not been able to discover anything in the Companies Act from which such a bar can be spelled out in respect of a suit of this nature. There is no allegation here that the name of the respondent No. 1 was removed from the share register. All that he alleges is that on the basis of the forged letter of resignation produced by the respondent Serajul Islam, a new board of Directors had been appointed and the name of the Company changed. This was the manner of the reconstitution complained of. There was no question here of any new Company being floated but all that had been done was that the name of an existing Company had been altered. It is true that under section 24 of the Companies Act a certificate of incorporation granted by the Registrar is conclusive evidence of the fact that the requirements of the Companies Act in respect of registration and matters precedent and incidental thereto have been complied with and that the association is a Company authorised to be registered under this Act. But this does not mean that even a certificate obtained fraudulently cannot ' be got cancelled or set aside. The conclusiveness attaches only to a validly obtained certificate and not to any and every kind of certificate granted by the Registrar. If the respondent No. 1 succeeds in the suit, the question will then arise as to whether the entry of the new name and the certificate of incorporation granted on . its basis by the Registrar was a valid certificate or not. If the change was illegally made then the certificate, would have inevitably to be held to be invalid and cancelled by the Registrar who will then strike out the entry and restore the original certificate of incorporation. In these circumstances, we are clearly of the view that the suit filed by the respondent No. 1 was in every way competent and was not hit by any of the provisions of the Companies Act. It is a well‑settled rule that the ouster of jurisdiction of a civil Court in respect of a civil suit is not to be readily inferred. Unless that jurisdiction has been either expressly or impliedly taken away by some other law it will continue to vest in the civil Court. No such ouster has been established in the present case. The learned Munsif was clearly right in the view he took and the Revision from his order was bound to fail. This appeal must, therefore, fail and is accordingly, dismissed with costs. If the‑hearing of the suit had been stayed that stay order will stand vacated and the suit should be heard with as much' expedition as possible. Before parting with this case we cannot help observing that if the learned Judge in the High Court had even briefly indicated his reasons for rejecting the revisional application, all the time, C energy and money spent in getting this appeal ready, heard and disposed of by this Court might have been saved. K. B. A. Appeal dismissed.