Section 51
SERVICE
OF DOCUMENTS ON COMPANY
v.
Reliance Industries Ltd.
RIPU
Section 2(11) read with sections 10 and 84 of the Companies Act, 1956, and section 9 of the Code of Civil Procedure, 1908 - Court - Meaning of - Certificates reported to have been despatched by registered post by respondent-company at Bombay, were not received by appellant at Calcutta - When approached for consequential reliefs and issue of duplicate shares, City Civil Court, Calcutta, held that matter was under exclusive jurisdiction of Company Court - Whether all matters under Act are within exclusive jurisdiction of Court mentioned in section 10 Held, no - Whether it is only where Act provides for adjudication by ‘the Court’, Court would mean ‘the Court’ as defined in section 2(11) - Held, yes - Whether since no machinery has been provided in Act for adjudication of dispute relating to issue of duplicate shares, jurisdiction of Civil Court vested under section 9 of Code will not get ousted - Held, yes
Section 53 of the Companies Act, 1956 -
Service of documents on members by company - Whether section 53 raises a
presumption about service of document sent by registered post but that presumption
is rebuttable - Held, yes - Whether where document sent by registered post had
not been delivered to addressee company could claim that it stood discharged
from its obligation - Held, no - Whether presumption of service arises only
where registered post has been properly addressed and there is no presumption
that registered post is properly addressed - Held, yes
Section 10, read with section 53, of the
Companies Act, 1956 - Court - Jurisdiction - Plaintiff at Calcutta sent share
certificates for registration to company having registered office at Bombay -
Share certificate were not received back at Calcutta - Suit filed at Calcutta -
Company contended that no part of cause of action arose in West Bengal -
Whether since it remained to be considered by Court as to whether registered
post had been properly addressed, Civil Court, Calcutta, had jurisdiction to
deal with civil suit in question - Held, yes
The appellant purchased 2,000 equity shares of
the respondent-company and sent them from
On appeal, the respondent also contended that
the
A perusal of the legal provisions of sections
84(4) and 2(11) of the Companies Act and rule 4(3) of the Companies (Issue of
Share Certificates) Rules, 1960, would show that as provided by section 84(4),
the manner of issue of duplicate share certificates may be prescribed by rules
and the manner has, in fact, been provided by rule 4(3). However, no machinery
has been provided in the Act for adjudication of a dispute with respect to
issue of duplicate shares. Section 2(11) does not specify the powers of the
All matters under the Act are not within the
exclusive jurisdiction of the Court mentioned in section 10. Therefore, the
Court as defined in section 2(11), read with section 10 did not have the
jurisdiction to decide the subject-matter of the suit from which the present
appeal had arisen and as such the jurisdiction of the Civil Court vested under
section 9 of the Code did not get ousted by the Act.
As regards section 53 and territorial jurisdiction
of the
In the result, the appeal was allowed. The
order of the City Civil Court was set aside and the City Civil Court was
directed to proceed to dispose of the injunction application expeditiously
according to law.
Asansol Electric Supply Co. v. Chuntlal Daw 75
CWN 704 and Hirendra Bhadra v. Titwn Engg.
P.P. Banerjee and Tapas Sinha for the
Applicant. P.C. Sen, Soumen Sen,
Supratik Banerjee and S.K. Samanta for the Respondent.
Dayal, J. - This appeal is directed against order dated 23-12-1997 passed by the
City Civil Court at Calcutta rejecting the application filed by the
plaintiff-appellant under order 39, rules 1 and 2, read with section 151, of
the Code of Civil Procedure, 1908 (‘the Code’) on the ground that the matter
relates to loss of equity shares and consequential reliefs and in view of the
provisions of section 84 of the Companies Act, 1956 (‘the Act’) and the
provisions of the City Civil Courts Act, particularly, item 10 of the First
Schedule, such type of matter is not triable in the City Civil Court but is
under the exclusive jurisdiction of this Court, that is, the High Court.
2. We
have heard P.P. Banerjee, advocate for the appellant and P.C. Sen, advocate on
behalf of the respondents. Shri Banerjee submits that the Act does not provide
for adjudication of the dispute that has arisen between the parties and the
jurisdiction of the city civil court vested in it by section 9 of the Code is
not ousted by any provision in the Act. On the other hand, Shri Sen submits
that a combined reading of sections 2(11), 10 and 84 of the Act would show that
it is the company court that has jurisdiction with respect to any matter
relating to a company and since the subject-matter of the suit relates to a
company, it is the company court that has the exclusive jurisdiction to deal
with the matter.
3. In order
to appreciate the controversy involved, it would be beneficial to refer to the
cause of action pleaded by the plaintiff-appellant in the civil suit. The
plaintiff has pleaded to have purchased 2,000 equity shares of respondent No. 1
- company in July 1997 and thereafter to have sent the same along with duly
signed and stamped transfer deeds to respondent No. 2 with the request to
transfer the same in the name of the plaintiff and sent back the share
certificates to its office. The defendant-company received the shares through
defendant No. 3 vide acknowledgement memo dated 4-8-1997 and intimated the
plaintiff through defendant No. 3 that the aforesaid shares had been duly
transferred in the name of the plaintiff and despatched to the address of the
plaintiff on 24-9-1997. The plaintiff enquired in the local post office whether
the registered cover, alleged to have been addressed to the plaintiff, was
lying undelivered or returned back but the postal authority informed that they
had not received any cover addressed to the plaintiff. Thereafter, the
plaintiff, vide letter dated 25-11-1997, intimated the matter to the defendants
and requested them to enquire the matter from the post office from where the
registered cover had been posted. The plaintiff has further pleaded that it
apprehends that the shares have been lost either in transit or some persons of
the defendant-company having vested interest, after getting possession
wrongfully, were trying to make illicit gain in an unauthorised manner. The
plaintiff has prayed for a decree of declaration that the plaintiff is the
lawful owner of 2,000 shares of defendant No. 1 - company and that the
defendants are bound to transfer the same or issue duplicate share certificates
in the name of the plaintiff. Mandatory injunction is also sought directing the
defendants to make over the duly transferred 2,000 shares in the name of the plaintiff
or to issue duplicate share certificates to the plaintiff in respect of the
shares. Even though relief of declaration of title is sought, yet, having
regard to the admission that the company has transferred the shares in its
books, real dispute is about the issue of duplicate shares.
4. Section 84(4) makes
provision, inter alia, for issue of a duplicate certificate as under :
“(4) Notwithstanding anything contained in the
articles of association of a company, the manner of issue or renewal of a certificate
or issue of a duplicate thereof, the form of a certificate (original or
renewed) or of a duplicate thereof, the particulars to be entered in the
register of members or in the register of renewed or duplicate certificates,
the form of such registers, the fee on payment of which, the terms and
conditions, if any (including terms and conditions as to evidence and indemnity
and the payment of out-of-pocket expenses incurred by a company in
investigating evidence) on which a certificate may be renewed or a duplicate
thereof may be issued, shall be such as may be prescribed.”
4.1 The expression ‘the Court’
is defined in section 2(11) as under :
“(11) ‘the Court’ means,—
(a) with respect to any matter relating to a company (other than
any offence against this Act), the Court having jurisdiction under this Act
with respect to that matter relating to that company, as provided in section
10;
(b) with respect to any offence against this Act, the Court of a
Magistrate of the First Class or, as the case may be, a Presidency Magistrate,
having jurisdiction to try such offence;”
5. Reference
was also made during arguments to rule 4(3) of the Companies (Issue of Share
Certificates) Rules, 1960 (‘the Rules’), which reads as under :
“(3) No duplicate share certificate shall be
issued in lieu of those that are lost or destroyed, without the prior consent
of the board or without payment of such fees, if any, not exceeding Rs. 2 and
on such reasonable terms, if any, as to evidence and indemnity and the payment
of out-of-pocket expenses incurred by the company in investigating evidence, as
the board thinks fit.”
6 A perusal
of the aforesaid legal provisions would show that as provided by section 84(4),
manner of issue of duplicate share certificates may be prescribed by rules and
the manner has, in fact, been provided by rule 4(3). However, no machinery has
been provided in the Act for adjudication of a dispute with respect to issue of
duplicate shares. Section 2(11) does not specify the powers of the company
court. It only defines the expression ‘the Court’ occurring in the statute,
with reference to any matter relating to a company as meaning the Court having
jurisdiction under the Act with respect to the matter as provided in section
10. Section 10 specifies the Court which has jurisdiction under the Act. In
respect of certain matters, with respect to which conditions specified in
clause (b) of section 10(1) are fulfilled, such Court is the District Court of
the district in which the registered office of the company is situate. But
where no notification has been issued under section 10(2), or in respect of
such matters as are not covered under clause (b), such court is the High Court
having jurisdiction in relation to the place at which the registered office of
the company concerned is situate. To fall within the jurisdiction of the Court,
as defined in section 2(11) read with section 10, the matter should be such as
is provided by the Act to be adjudicated by ‘the Court’. In respect of matters
regarding which the Act does not provide for adjudication by the Court, the
adjudicating authority cannot mean ‘the Court’ as defined by section 2(11). It
is only where the Act provides for adjudication by ‘the Court’, the Court would
mean ‘the Court’ as defined in section 2(11). The definition clause cannot be
given the interpretation that whenever there is a dispute relating to a
company, it is the company court as defined in section 2(11) that will have the
jurisdiction. Similar view was taken by a Division Bench of this Court in
Asansol Electric Supply Co. v. Chuntlal Daw 75 CWN 704 :
“Section 2(11) is the definition section of
the words “the Court”. Therefore whenever the words ‘the Court’ are mentioned
in the provisions of the Act, the same will mean the Court having jurisdiction
under the Act with respect to that matter relating to a company as provided in
section 10. Section 10 refers to the High Court as the Court having
jurisdiction under the Act. The cumulative effect of section 2(11) and section
10 is that the expression ‘the Court’ occurring in any provision of the Act
will mean the High Court. It does not mean that in all matters the High Court
will have jurisdiction and the civil court will not have jurisdiction in
respect of any matter relating to a company . . . .
In our view, on a proper construction of the
provisions of section 2(11) and section 10, it must be held that the Act does
not altogether exclude the jurisdiction of the civil court.”
7. Reliance
has, however, been placed on behalf of the respondents on the decision
rendered by a learned Single Judge of this Court in Hirendra Bhadra v. Titwn
Engg. Co. (P.) Ltd. 80 CWN 242 where, having regard to the controversy
involved, it was held that the matters “which have been alleged against the
petitioner are all matters under the Companies Act and that being so, it is
only the Court which has been mentioned in section 10 of the Act that has
jurisdiction to entertain any suit”. As observed earlier, it has already been
held by a Division Bench of this Court, with which we are in respectful
agreement, that all matters under the Act are not within the exclusive
jurisdiction of the Court mentioned in section 10.
8. We,
therefore, hold that the Court as defined in section 2(11), read with section
10, does not have the jurisdiction to decide the subject-matter of the suit
from which the present appeal has arisen and as such, the jurisdiction of the
civil court vested under section 9 of the Code does not get ousted by the Act.
9. The
learned counsel for the respondent also submits, in alternative, that the city
civil court, Calcutta, does not have the jurisdiction because all the
defendants reside or work at Bombay, that is, outside the jurisdiction of
Courts in West Bengal and also because no part of the cause of action arose
within West Bengal. It is no doubt true that all the defendants reside or work
at Bombay. The question for decision, therefore, is whether any part of the
cause of action arose within West Bengal. The case of the plaintiff is that the
shares were sent by the plaintiff from Calcutta to the defendants at Bombay
for effecting transfer in the name of the plaintiff and it was the duty of the
defendants to send the same back to the plaintiff at Calcutta and to deliver
the same at Calcutta and since the defendants failed to deliver the same at
Calcutta, need arose for seeking the declaration prayed for and a direction for
issue of duplicate share certificates and so a part of the cause of action for
the reliefs sought by the plaintiff, particularly, the issue of duplicate share
certificates arose at Calcutta. In support of the argument, reference has been
made by the learned counsel to section 53 of the Act which provides that a
document may be served by a company on any member thereof either personally, or
by sending it by post to him to his registered address, or if he has no
registered address in India, to the address, if any, within India supplied by
him to the company for the giving of notices to him. Sub-section (2)(a) of that
section provides that where a document is sent by post, service thereof shall
be deemed to be effected by properly addressing, prepaying and posting a letter
containing the document, provided that where a member has intimated to the
company in advance that documents should be sent to him under a certificate of
posting or by registered post with or without acknowledge-ment due and has
deposited with the company a sum sufficient to defray the expenses of doing so;
service of the document shall not be deemed to be effected unless it is sent in
the manner intimated by the member. The learned counsel submits that the duty
of delivering the share certificates after effecting the transfer was duly
discharged by the defendant-company by sending the same by registered post and
since the registered cover was delivered to the post office at Bombay, no part
of the cause of action arose in West Bengal. However, we are unable to persuade
overselves to agree with this submission. Section 53 raises a presumption about
service of a document sent by registered post but that presumption is
rebuttable. As such, where a document has been sent by registered post, and for
some reason the same has not been delivered to the addressee, it cannot be said
that the company stood discharged from its obligation and no right remained
with the addressee. The question whether a part of the cause of action arose
within the jurisdiction of the Court in West Bengal is to be determined with
reference to the allegations made in the plaint and if from the allegations so
made, an obligation arises in favour of the plaintiff and against the defendants,
there can be no doubt that a part of the cause of action for the reliefs
claimed has arisen within the jurisdiction of the Court in West Bengal. Furthermore,
the presumption arises only where the registered post has been properly
addressed. This is a question which remains to be considered by the Court.
There is no presumption that the registered post was properly addressed.
Therefore, we are of the view that a part of the cause of action arose within
the jurisdiction of the city civil court, Calcutta and, therefore, that Court
has the jurisdiction to deal with the civil suit from which this appeal has
arisen.
10. We
make it clear that the question as to territorial jurisdiction of the city
civil court was raised by the learned counsel for the respondents and both the
learned counsel wanted us to deal with this question. It is for this reason
that we have dealt with this question, even though the question was not raised
before the city civil court.
11. In
the result, we allow the appeal, set aside the order of city civil court, and
direct the city civil court to proceed to dispose of the injunction application
expeditiously according to law. Parties shall maintain status quo with respect
to the shares in question till the disposal of the injunction application.
Parties shall appear before that Court on 16-3-1998. There shall no order as to
costs.
[1970]
40 COMP. CAS. 203 (PAT)
HIGH COURT OF
v.
Raghunath Sahay
KANHAIYAJI, J.
MAY 10, 1968
Jagdish
Panday and Kali Pathak for the petitioner.
Kanhaiyaji,
J.—This application
is directed against an order passed by Sri S.C. Chakravarty, District Judge,
Purnea, in Miscellaneous Appeal No. 78 of 1966, confirming an order dated the
25th June, 1966, passed by the Munsif, Katihar, in Miscellaneous Case No. 108
of 1965, refusing to set aside the decree obtained by opposite party No.1.
The
plaintiff-opposite party No. 1 filed a Money Suit No. 310 of 1964 for
realisation of Rs. 3,404,68 paise for non-delivery of a consignment booked from
The
suit was instituted on the 3rd August, 1964. The order dated the 21st
September, 1964, shows that summons was served on defendant No. 2, but it was
not issued against defendant No. 1 as conveyance charge was not filed. Later
on, the summons on defendant No. 1 was issued, but it returned un-served. The
plaintiff-opposite party again filed requisites and fresh summons was issued,
and as noted in the order dated the 22nd March, 1965, the summons was duly served.
By the same order the learned munsif directed the plaintiff to file a card.
Registered post card was served on defendant No. 2, but it returned unserved on
defendant No. 1, the petitioner. The witnesses examined on behalf of the
petitioner have denied the service of notice. Witness No.1, on behalf of the
plaintiff, is the bailiff of the
Mr.
Jagdish Panday, learned counsel appearing for the petitioner, submitted that the
provisions of Order 29, rule 2(b), of the Code of Civil Procedure, do apply
only to corporations and not to the companies and, hence, there was no due
service of summons on the petitioner. Secondly, he submitted that even if the
case made out in the petition that the petitioner got knowledge on the 20th
July, 1965, be false, it was the duty of the court to find out the actual date
on which the petitioner got the knowledge and in case it was found that the
petitioner got the knowledge within 30 days of the ex parte decree, the
application should have been allowed. Thirdly, he submitted that the summons
cannot be taken to have been served under the provisions of Order 5, rule10, of
the Code of Civil Procedure. He relied on an English case, Baroness Wenlock v.
River Dee Company,
for the proposition of law that a corporation is created by an Act of
Parliament and companies are not corporations. Order 29, rule 2, of the Code of
Civil Procedure, is as follows :
"Subject
to any statutory provision regulating service of process, where the suit is
against a corporation, the summons may be served—
(a) on
the secretary, or on any director, or other principal officer of the
corporation, or
(b) by leaving it or sending it by post
addressed to the corporation at the
registered office, or if there is no registered office then at the place where
the corporation carries on business."
The
word "corporation" has been used in the Code of Civil Procedure with
reference to section 34 of the Indian Companies Act. Under that section when a
company is registered, the Registrar of Companies certifies under his hand the
fact of such registration. The effect of incorporation is that the company
becomes a body corporate having perpetual succession and a common seal. It also
refers to corporation established by an Act of Parliament. This is obvious
because Order 29 of the Code of Civil Procedure refers to corporations while
Order 30 of the Code of Civil Procedure, refers to firms and there is no
specific provision for companies registered under the Indian Companies Act. It
is not disputed that the petitioner is a company incorporated under the Indian
Companies Act, having its registered office at 134/4, Mahatma Gandhi Road, and
the summons had been affixed at the office of the petitioner. Therefore, the
courts below have not committed any error in holding that the service of
summons had been duly effected on the petitioner. The contention of Mr. Pandey
is that when the court ordered that summons be served by registered post under
the provisions of Order 5, rule 20A, of the Code of Civil Procedure, it amounts
to a finding by the court that there was no service of summons on the
defendant. Order 5, rule 20A, of the Code of Civil Procedure, it is not
applicable in this case. It only applies when summons is returned unserved. The
order of the learned munsif for service of summons by registered post was under
the provisions of Order 5, rule10, of the Code of Civil Procedure (Patna
Amendment). It was in addition to the mode of service laid down in the Order.
The facts of the case of Mahabir Prosad Bhagai v. Balkishun Das ,
relied on by Mr. Panday, are entirely different. In that case the scope of
Order 5, rule 13, and Order 30, rule 3, has been considered and there is no
discussion of Order 5, rule 29, of the Code of Civil Procedure. The case of Sri
Srinivasa Oil and Rice Mills v. Parepalli Veeranjaneyulu has correctly said that the calling in aid of
Order 5, rule 20A, for service by post is conditioned upon the contingency
arising " when summons is returned unserved".
In
Order 5, rule10, of the Code of Civil Proceduce, a proviso has been added,
which permits the court to send the summons to the defendant by post in
addition to the mode of service laid down in the rule. This provision is
permissive and not mandatory. When the court finds that summons has been duly
served it was not essential to wait for service cf summons by registered post.
Another
point involved in the case is the question of limitation. Both the courts below
have found that the date of knowledge given by the petitioner in paragraph No.
7 of the application as 20th July, 1965, was wrong and could not be acted upon.
The courts below have considered the evidence of both the parties in detail and
have held as stated above. In my judgment it is not necessary for the courts to
find out the actual date of the knowledge of the petitioner when they find, as
a fact, that the date of knowledge asserted by the petitioner is wrong. In this
view of the matter, I must hold that the application was barred by time and the
finding of the court below is not vitiated.
For
the aforesaid reasons, I am of the view that interference is not called for.
Therefore, the petition is dismissed, but without costs.