Tej Prakash S Dangi and ors Vs Coromandal Pharmaceuticals Ltd and anr - Citation 426631 - Court Judgment

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			'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
			'appealno' => 'Company Petition No. 5 of 1996',
			'appellant' => 'Tej Prakash S. Dangi and ors.',
			'authreffered' => '',
			'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
			'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
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			'counselplain' => 'M.V. Suresh, Adv.',
			'counseldef' => 'Rajendar Desh Mukh, Adv.',
			'court' => 'Andhra Pradesh',
			'court_type' => 'HC',
			'decidedon' => '1996-08-20',
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			'judgement' => '<p style="text-align: justify;">T.N.C. Rangarajan, J.</p><p style="text-align: justify;">1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p style="text-align: justify;">2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p style="text-align: justify;">3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p style="text-align: justify;">4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p style="text-align: justify;">5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p style="text-align: justify;">6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p style="text-align: justify;">7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p style="text-align: justify;">'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p style="text-align: justify;">8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p style="text-align: justify;">9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p style="text-align: justify;">10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p style="text-align: justify;">11. No costs.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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		'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
		'appealno' => 'Company Petition No. 5 of 1996',
		'appellant' => 'Tej Prakash S. Dangi and ors.',
		'authreffered' => '',
		'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
		'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
		'caseanalysis' => null,
		'casesref' => '',
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		'counselplain' => 'M.V. Suresh, Adv.',
		'counseldef' => 'Rajendar Desh Mukh, Adv.',
		'court' => 'Andhra Pradesh',
		'court_type' => 'HC',
		'decidedon' => '1996-08-20',
		'deposition' => '',
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		'judge' => 'T.N.C. Rangarajan, J.',
		'judgement' => '<p>T.N.C. Rangarajan, J.</p><p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p>11. No costs.<p></p><p>',
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	'title_for_layout' => 'Tej Prakash S Dangi and ors Vs Coromandal Pharmaceuticals Ltd and anr - Citation 426631 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '426631',
			'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
			'appealno' => 'Company Petition No. 5 of 1996',
			'appellant' => 'Tej Prakash S. Dangi and ors.',
			'authreffered' => '',
			'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
			'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
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			'counselplain' => 'M.V. Suresh, Adv.',
			'counseldef' => 'Rajendar Desh Mukh, Adv.',
			'court' => 'Andhra Pradesh',
			'court_type' => 'HC',
			'decidedon' => '1996-08-20',
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			'judgement' => '<p style="text-align: justify;">T.N.C. Rangarajan, J.</p><p style="text-align: justify;">1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p style="text-align: justify;">2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p style="text-align: justify;">3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p style="text-align: justify;">4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p style="text-align: justify;">5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p style="text-align: justify;">6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p style="text-align: justify;">7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p style="text-align: justify;">'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p style="text-align: justify;">8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p style="text-align: justify;">9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p style="text-align: justify;">10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p style="text-align: justify;">11. No costs.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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		'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
		'appealno' => 'Company Petition No. 5 of 1996',
		'appellant' => 'Tej Prakash S. Dangi and ors.',
		'authreffered' => '',
		'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
		'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
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		'counselplain' => 'M.V. Suresh, Adv.',
		'counseldef' => 'Rajendar Desh Mukh, Adv.',
		'court' => 'Andhra Pradesh',
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		'decidedon' => '1996-08-20',
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		'judge' => 'T.N.C. Rangarajan, J.',
		'judgement' => '<p>T.N.C. Rangarajan, J.</p><p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p>11. No costs.<p></p><p>',
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company - forfeiture of shares - sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111a, 155, 209 (4), 283, 391 (2) and 398 of companies act, 1956, companies (amendment) act, 1988, sick industrial companies (special provisions) act, 1985, rules 9 and 11 of companies (court) rules, 1959 and section 482 of criminal procedure code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for articles prescribes that challenge against forfeiture be filed before board which forfeits shares by its resolution - nothing in companies act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before company court.....

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	'title_for_layout' => 'Tej Prakash S Dangi and ors Vs Coromandal Pharmaceuticals Ltd and anr - Citation 426631 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '426631',
			'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
			'appealno' => 'Company Petition No. 5 of 1996',
			'appellant' => 'Tej Prakash S. Dangi and ors.',
			'authreffered' => '',
			'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
			'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
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			'counselplain' => 'M.V. Suresh, Adv.',
			'counseldef' => 'Rajendar Desh Mukh, Adv.',
			'court' => 'Andhra Pradesh',
			'court_type' => 'HC',
			'decidedon' => '1996-08-20',
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			'judge' => 'T.N.C. Rangarajan, J.',
			'judgement' => '<p style="text-align: justify;">T.N.C. Rangarajan, J.</p><p style="text-align: justify;">1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p style="text-align: justify;">2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p style="text-align: justify;">3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p style="text-align: justify;">4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p style="text-align: justify;">5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p style="text-align: justify;">6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p style="text-align: justify;">7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p style="text-align: justify;">'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p style="text-align: justify;">8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p style="text-align: justify;">9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p style="text-align: justify;">10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p style="text-align: justify;">11. No costs.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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		'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
		'appealno' => 'Company Petition No. 5 of 1996',
		'appellant' => 'Tej Prakash S. Dangi and ors.',
		'authreffered' => '',
		'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
		'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
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		'court' => 'Andhra Pradesh',
		'court_type' => 'HC',
		'decidedon' => '1996-08-20',
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		'judge' => 'T.N.C. Rangarajan, J.',
		'judgement' => '<p>T.N.C. Rangarajan, J.</p><p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p>11. No costs.<p></p><p>',
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	'title_for_layout' => 'Tej Prakash S Dangi and ors Vs Coromandal Pharmaceuticals Ltd and anr - Citation 426631 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '426631',
			'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
			'appealno' => 'Company Petition No. 5 of 1996',
			'appellant' => 'Tej Prakash S. Dangi and ors.',
			'authreffered' => '',
			'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
			'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
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			'counselplain' => 'M.V. Suresh, Adv.',
			'counseldef' => 'Rajendar Desh Mukh, Adv.',
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			'judgement' => '<p style="text-align: justify;">T.N.C. Rangarajan, J.</p><p style="text-align: justify;">1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p style="text-align: justify;">2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p style="text-align: justify;">3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p style="text-align: justify;">4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p style="text-align: justify;">5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p style="text-align: justify;">6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p style="text-align: justify;">7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p style="text-align: justify;">'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p style="text-align: justify;">8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p style="text-align: justify;">9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p style="text-align: justify;">10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p style="text-align: justify;">11. No costs.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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		'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
		'appealno' => 'Company Petition No. 5 of 1996',
		'appellant' => 'Tej Prakash S. Dangi and ors.',
		'authreffered' => '',
		'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
		'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
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		'judgement' => '<p>T.N.C. Rangarajan, J.</p><p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p>11. No costs.<p></p><p>',
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t.n.c. rangarajan, j.1. this petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the deccan chronicle, dated january 11, 1996, is void and that the petitioners continued to be the holders of the shares. 2. it is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. it is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. in the.....

Judgment:

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			'id' => '426631',
			'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
			'appealno' => 'Company Petition No. 5 of 1996',
			'appellant' => 'Tej Prakash S. Dangi and ors.',
			'authreffered' => '',
			'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
			'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
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			'counselplain' => 'M.V. Suresh, Adv.',
			'counseldef' => 'Rajendar Desh Mukh, Adv.',
			'court' => 'Andhra Pradesh',
			'court_type' => 'HC',
			'decidedon' => '1996-08-20',
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			'judgement' => '<p style="text-align: justify;">T.N.C. Rangarajan, J.</p><p style="text-align: justify;">1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p style="text-align: justify;">2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p style="text-align: justify;">3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p style="text-align: justify;">4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p style="text-align: justify;">5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p style="text-align: justify;">6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p style="text-align: justify;">7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p style="text-align: justify;">'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p style="text-align: justify;">8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p style="text-align: justify;">9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p style="text-align: justify;">10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p style="text-align: justify;">11. No costs.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
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		'judgement' => '<p>T.N.C. Rangarajan, J.</p><p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p>11. No costs.<p></p><p>',
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		'pubs' => '[1997]89CompCas270(AP)',
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		'respondent' => 'Coromandal Pharmaceuticals Ltd. and anr.',
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	(int) 0 => '<p>T.N.C. Rangarajan, J.',
	(int) 1 => '<p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. ',
	(int) 2 => '<p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. ',
	(int) 3 => '<p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. ',
	(int) 4 => '<p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. ',
	(int) 5 => '<p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. ',
	(int) 6 => '<p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. ',
	(int) 7 => '<p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : ',
	(int) 8 => '<p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' ',
	(int) 9 => '<p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). ',
	(int) 10 => '<p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. ',
	(int) 11 => '<p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. ',
	(int) 12 => '<p>11. No costs.<p>',
	(int) 13 => '<p>'
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T.N.C. Rangarajan, J.

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	'title_for_layout' => 'Tej Prakash S Dangi and ors Vs Coromandal Pharmaceuticals Ltd and anr - Citation 426631 - Court Judgment | ',
	'desc' => array(
		'Judgement' => array(
			'id' => '426631',
			'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
			'appealno' => 'Company Petition No. 5 of 1996',
			'appellant' => 'Tej Prakash S. Dangi and ors.',
			'authreffered' => '',
			'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
			'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
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			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'M.V. Suresh, Adv.',
			'counseldef' => 'Rajendar Desh Mukh, Adv.',
			'court' => 'Andhra Pradesh',
			'court_type' => 'HC',
			'decidedon' => '1996-08-20',
			'deposition' => '',
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			'judge' => 'T.N.C. Rangarajan, J.',
			'judgement' => '<p style="text-align: justify;">T.N.C. Rangarajan, J.</p><p style="text-align: justify;">1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p style="text-align: justify;">2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p style="text-align: justify;">3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p style="text-align: justify;">4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p style="text-align: justify;">5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p style="text-align: justify;">6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p style="text-align: justify;">7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p style="text-align: justify;">'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p style="text-align: justify;">8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p style="text-align: justify;">9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p style="text-align: justify;">10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p style="text-align: justify;">11. No costs.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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$title_for_layout = 'Tej Prakash S Dangi and ors Vs Coromandal Pharmaceuticals Ltd and anr - Citation 426631 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '426631',
		'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
		'appealno' => 'Company Petition No. 5 of 1996',
		'appellant' => 'Tej Prakash S. Dangi and ors.',
		'authreffered' => '',
		'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
		'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'M.V. Suresh, Adv.',
		'counseldef' => 'Rajendar Desh Mukh, Adv.',
		'court' => 'Andhra Pradesh',
		'court_type' => 'HC',
		'decidedon' => '1996-08-20',
		'deposition' => '',
		'favorof' => null,
		'findings' => null,
		'judge' => 'T.N.C. Rangarajan, J.',
		'judgement' => '<p>T.N.C. Rangarajan, J.</p><p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p>11. No costs.<p></p><p>',
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	(int) 1 => '<p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. ',
	(int) 2 => '<p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. ',
	(int) 3 => '<p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. ',
	(int) 4 => '<p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. ',
	(int) 5 => '<p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. ',
	(int) 6 => '<p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. ',
	(int) 7 => '<p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : ',
	(int) 8 => '<p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' ',
	(int) 9 => '<p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). ',
	(int) 10 => '<p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. ',
	(int) 11 => '<p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. ',
	(int) 12 => '<p>11. No costs.<p>',
	(int) 13 => '<p>'
)
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1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares.

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	'title_for_layout' => 'Tej Prakash S Dangi and ors Vs Coromandal Pharmaceuticals Ltd and anr - Citation 426631 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '426631',
			'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
			'appealno' => 'Company Petition No. 5 of 1996',
			'appellant' => 'Tej Prakash S. Dangi and ors.',
			'authreffered' => '',
			'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
			'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'M.V. Suresh, Adv.',
			'counseldef' => 'Rajendar Desh Mukh, Adv.',
			'court' => 'Andhra Pradesh',
			'court_type' => 'HC',
			'decidedon' => '1996-08-20',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => 'T.N.C. Rangarajan, J.',
			'judgement' => '<p style="text-align: justify;">T.N.C. Rangarajan, J.</p><p style="text-align: justify;">1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p style="text-align: justify;">2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p style="text-align: justify;">3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p style="text-align: justify;">4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p style="text-align: justify;">5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p style="text-align: justify;">6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p style="text-align: justify;">7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p style="text-align: justify;">'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p style="text-align: justify;">8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p style="text-align: justify;">9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p style="text-align: justify;">10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p style="text-align: justify;">11. No costs.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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			'pubs' => '[1997]89CompCas270(AP)',
			'ratiodecidendi' => '',
			'respondent' => 'Coromandal Pharmaceuticals Ltd. and anr.',
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		'id' => '426631',
		'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
		'appealno' => 'Company Petition No. 5 of 1996',
		'appellant' => 'Tej Prakash S. Dangi and ors.',
		'authreffered' => '',
		'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
		'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'M.V. Suresh, Adv.',
		'counseldef' => 'Rajendar Desh Mukh, Adv.',
		'court' => 'Andhra Pradesh',
		'court_type' => 'HC',
		'decidedon' => '1996-08-20',
		'deposition' => '',
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		'judge' => 'T.N.C. Rangarajan, J.',
		'judgement' => '<p>T.N.C. Rangarajan, J.</p><p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p>11. No costs.<p></p><p>',
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		'pubs' => '[1997]89CompCas270(AP)',
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		'respondent' => 'Coromandal Pharmaceuticals Ltd. and anr.',
		'sub' => 'Company',
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	(int) 0 => '<p>T.N.C. Rangarajan, J.',
	(int) 1 => '<p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. ',
	(int) 2 => '<p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. ',
	(int) 3 => '<p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. ',
	(int) 4 => '<p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. ',
	(int) 5 => '<p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. ',
	(int) 6 => '<p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. ',
	(int) 7 => '<p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : ',
	(int) 8 => '<p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' ',
	(int) 9 => '<p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). ',
	(int) 10 => '<p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. ',
	(int) 11 => '<p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. ',
	(int) 12 => '<p>11. No costs.<p>',
	(int) 13 => '<p>'
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2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice.

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	'title_for_layout' => 'Tej Prakash S Dangi and ors Vs Coromandal Pharmaceuticals Ltd and anr - Citation 426631 - Court Judgment | ',
	'desc' => array(
		'Judgement' => array(
			'id' => '426631',
			'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
			'appealno' => 'Company Petition No. 5 of 1996',
			'appellant' => 'Tej Prakash S. Dangi and ors.',
			'authreffered' => '',
			'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
			'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'M.V. Suresh, Adv.',
			'counseldef' => 'Rajendar Desh Mukh, Adv.',
			'court' => 'Andhra Pradesh',
			'court_type' => 'HC',
			'decidedon' => '1996-08-20',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => 'T.N.C. Rangarajan, J.',
			'judgement' => '<p style="text-align: justify;">T.N.C. Rangarajan, J.</p><p style="text-align: justify;">1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p style="text-align: justify;">2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p style="text-align: justify;">3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p style="text-align: justify;">4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p style="text-align: justify;">5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p style="text-align: justify;">6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p style="text-align: justify;">7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p style="text-align: justify;">'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p style="text-align: justify;">8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p style="text-align: justify;">9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p style="text-align: justify;">10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p style="text-align: justify;">11. No costs.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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$title_for_layout = 'Tej Prakash S Dangi and ors Vs Coromandal Pharmaceuticals Ltd and anr - Citation 426631 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '426631',
		'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
		'appealno' => 'Company Petition No. 5 of 1996',
		'appellant' => 'Tej Prakash S. Dangi and ors.',
		'authreffered' => '',
		'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
		'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'M.V. Suresh, Adv.',
		'counseldef' => 'Rajendar Desh Mukh, Adv.',
		'court' => 'Andhra Pradesh',
		'court_type' => 'HC',
		'decidedon' => '1996-08-20',
		'deposition' => '',
		'favorof' => null,
		'findings' => null,
		'judge' => 'T.N.C. Rangarajan, J.',
		'judgement' => '<p>T.N.C. Rangarajan, J.</p><p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p>11. No costs.<p></p><p>',
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	(int) 1 => '<p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. ',
	(int) 2 => '<p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. ',
	(int) 3 => '<p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. ',
	(int) 4 => '<p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. ',
	(int) 5 => '<p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. ',
	(int) 6 => '<p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. ',
	(int) 7 => '<p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : ',
	(int) 8 => '<p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' ',
	(int) 9 => '<p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). ',
	(int) 10 => '<p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. ',
	(int) 11 => '<p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. ',
	(int) 12 => '<p>11. No costs.<p>',
	(int) 13 => '<p>'
)
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3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable.

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	'title_for_layout' => 'Tej Prakash S Dangi and ors Vs Coromandal Pharmaceuticals Ltd and anr - Citation 426631 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '426631',
			'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
			'appealno' => 'Company Petition No. 5 of 1996',
			'appellant' => 'Tej Prakash S. Dangi and ors.',
			'authreffered' => '',
			'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
			'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'M.V. Suresh, Adv.',
			'counseldef' => 'Rajendar Desh Mukh, Adv.',
			'court' => 'Andhra Pradesh',
			'court_type' => 'HC',
			'decidedon' => '1996-08-20',
			'deposition' => '',
			'favorof' => null,
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			'judge' => 'T.N.C. Rangarajan, J.',
			'judgement' => '<p style="text-align: justify;">T.N.C. Rangarajan, J.</p><p style="text-align: justify;">1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p style="text-align: justify;">2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p style="text-align: justify;">3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p style="text-align: justify;">4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p style="text-align: justify;">5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p style="text-align: justify;">6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p style="text-align: justify;">7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p style="text-align: justify;">'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p style="text-align: justify;">8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p style="text-align: justify;">9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p style="text-align: justify;">10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p style="text-align: justify;">11. No costs.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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		'appealno' => 'Company Petition No. 5 of 1996',
		'appellant' => 'Tej Prakash S. Dangi and ors.',
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		'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
		'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
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		'counselplain' => 'M.V. Suresh, Adv.',
		'counseldef' => 'Rajendar Desh Mukh, Adv.',
		'court' => 'Andhra Pradesh',
		'court_type' => 'HC',
		'decidedon' => '1996-08-20',
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		'judge' => 'T.N.C. Rangarajan, J.',
		'judgement' => '<p>T.N.C. Rangarajan, J.</p><p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p>11. No costs.<p></p><p>',
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		'pubs' => '[1997]89CompCas270(AP)',
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		'respondent' => 'Coromandal Pharmaceuticals Ltd. and anr.',
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	(int) 0 => '<p>T.N.C. Rangarajan, J.',
	(int) 1 => '<p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. ',
	(int) 2 => '<p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. ',
	(int) 3 => '<p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. ',
	(int) 4 => '<p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. ',
	(int) 5 => '<p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. ',
	(int) 6 => '<p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. ',
	(int) 7 => '<p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : ',
	(int) 8 => '<p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' ',
	(int) 9 => '<p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). ',
	(int) 10 => '<p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. ',
	(int) 11 => '<p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. ',
	(int) 12 => '<p>11. No costs.<p>',
	(int) 13 => '<p>'
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4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court.

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	'title_for_layout' => 'Tej Prakash S Dangi and ors Vs Coromandal Pharmaceuticals Ltd and anr - Citation 426631 - Court Judgment | ',
	'desc' => array(
		'Judgement' => array(
			'id' => '426631',
			'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
			'appealno' => 'Company Petition No. 5 of 1996',
			'appellant' => 'Tej Prakash S. Dangi and ors.',
			'authreffered' => '',
			'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
			'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'M.V. Suresh, Adv.',
			'counseldef' => 'Rajendar Desh Mukh, Adv.',
			'court' => 'Andhra Pradesh',
			'court_type' => 'HC',
			'decidedon' => '1996-08-20',
			'deposition' => '',
			'favorof' => null,
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			'judge' => 'T.N.C. Rangarajan, J.',
			'judgement' => '<p style="text-align: justify;">T.N.C. Rangarajan, J.</p><p style="text-align: justify;">1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p style="text-align: justify;">2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p style="text-align: justify;">3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p style="text-align: justify;">4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p style="text-align: justify;">5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p style="text-align: justify;">6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p style="text-align: justify;">7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p style="text-align: justify;">'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p style="text-align: justify;">8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p style="text-align: justify;">9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p style="text-align: justify;">10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p style="text-align: justify;">11. No costs.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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$title_for_layout = 'Tej Prakash S Dangi and ors Vs Coromandal Pharmaceuticals Ltd and anr - Citation 426631 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '426631',
		'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
		'appealno' => 'Company Petition No. 5 of 1996',
		'appellant' => 'Tej Prakash S. Dangi and ors.',
		'authreffered' => '',
		'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
		'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'M.V. Suresh, Adv.',
		'counseldef' => 'Rajendar Desh Mukh, Adv.',
		'court' => 'Andhra Pradesh',
		'court_type' => 'HC',
		'decidedon' => '1996-08-20',
		'deposition' => '',
		'favorof' => null,
		'findings' => null,
		'judge' => 'T.N.C. Rangarajan, J.',
		'judgement' => '<p>T.N.C. Rangarajan, J.</p><p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p>11. No costs.<p></p><p>',
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	(int) 1 => '<p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. ',
	(int) 2 => '<p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. ',
	(int) 3 => '<p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. ',
	(int) 4 => '<p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. ',
	(int) 5 => '<p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. ',
	(int) 6 => '<p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. ',
	(int) 7 => '<p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : ',
	(int) 8 => '<p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' ',
	(int) 9 => '<p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). ',
	(int) 10 => '<p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. ',
	(int) 11 => '<p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. ',
	(int) 12 => '<p>11. No costs.<p>',
	(int) 13 => '<p>'
)
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5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act.

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	'title_for_layout' => 'Tej Prakash S Dangi and ors Vs Coromandal Pharmaceuticals Ltd and anr - Citation 426631 - Court Judgment | ',
	'desc' => array(
		'Judgement' => array(
			'id' => '426631',
			'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
			'appealno' => 'Company Petition No. 5 of 1996',
			'appellant' => 'Tej Prakash S. Dangi and ors.',
			'authreffered' => '',
			'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
			'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'M.V. Suresh, Adv.',
			'counseldef' => 'Rajendar Desh Mukh, Adv.',
			'court' => 'Andhra Pradesh',
			'court_type' => 'HC',
			'decidedon' => '1996-08-20',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => 'T.N.C. Rangarajan, J.',
			'judgement' => '<p style="text-align: justify;">T.N.C. Rangarajan, J.</p><p style="text-align: justify;">1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p style="text-align: justify;">2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p style="text-align: justify;">3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p style="text-align: justify;">4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p style="text-align: justify;">5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p style="text-align: justify;">6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p style="text-align: justify;">7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p style="text-align: justify;">'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p style="text-align: justify;">8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p style="text-align: justify;">9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p style="text-align: justify;">10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p style="text-align: justify;">11. No costs.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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		'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
		'appealno' => 'Company Petition No. 5 of 1996',
		'appellant' => 'Tej Prakash S. Dangi and ors.',
		'authreffered' => '',
		'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
		'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
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		'citingcases' => '',
		'counselplain' => 'M.V. Suresh, Adv.',
		'counseldef' => 'Rajendar Desh Mukh, Adv.',
		'court' => 'Andhra Pradesh',
		'court_type' => 'HC',
		'decidedon' => '1996-08-20',
		'deposition' => '',
		'favorof' => null,
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		'judge' => 'T.N.C. Rangarajan, J.',
		'judgement' => '<p>T.N.C. Rangarajan, J.</p><p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p>11. No costs.<p></p><p>',
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		'respondent' => 'Coromandal Pharmaceuticals Ltd. and anr.',
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	(int) 0 => '<p>T.N.C. Rangarajan, J.',
	(int) 1 => '<p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. ',
	(int) 2 => '<p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. ',
	(int) 3 => '<p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. ',
	(int) 4 => '<p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. ',
	(int) 5 => '<p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. ',
	(int) 6 => '<p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. ',
	(int) 7 => '<p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : ',
	(int) 8 => '<p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' ',
	(int) 9 => '<p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). ',
	(int) 10 => '<p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. ',
	(int) 11 => '<p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. ',
	(int) 12 => '<p>11. No costs.<p>',
	(int) 13 => '<p>'
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6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court.

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	'title_for_layout' => 'Tej Prakash S Dangi and ors Vs Coromandal Pharmaceuticals Ltd and anr - Citation 426631 - Court Judgment | ',
	'desc' => array(
		'Judgement' => array(
			'id' => '426631',
			'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
			'appealno' => 'Company Petition No. 5 of 1996',
			'appellant' => 'Tej Prakash S. Dangi and ors.',
			'authreffered' => '',
			'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
			'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'M.V. Suresh, Adv.',
			'counseldef' => 'Rajendar Desh Mukh, Adv.',
			'court' => 'Andhra Pradesh',
			'court_type' => 'HC',
			'decidedon' => '1996-08-20',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => 'T.N.C. Rangarajan, J.',
			'judgement' => '<p style="text-align: justify;">T.N.C. Rangarajan, J.</p><p style="text-align: justify;">1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p style="text-align: justify;">2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p style="text-align: justify;">3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p style="text-align: justify;">4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p style="text-align: justify;">5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p style="text-align: justify;">6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p style="text-align: justify;">7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p style="text-align: justify;">'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p style="text-align: justify;">8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p style="text-align: justify;">9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p style="text-align: justify;">10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p style="text-align: justify;">11. No costs.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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$title_for_layout = 'Tej Prakash S Dangi and ors Vs Coromandal Pharmaceuticals Ltd and anr - Citation 426631 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '426631',
		'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
		'appealno' => 'Company Petition No. 5 of 1996',
		'appellant' => 'Tej Prakash S. Dangi and ors.',
		'authreffered' => '',
		'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
		'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'M.V. Suresh, Adv.',
		'counseldef' => 'Rajendar Desh Mukh, Adv.',
		'court' => 'Andhra Pradesh',
		'court_type' => 'HC',
		'decidedon' => '1996-08-20',
		'deposition' => '',
		'favorof' => null,
		'findings' => null,
		'judge' => 'T.N.C. Rangarajan, J.',
		'judgement' => '<p>T.N.C. Rangarajan, J.</p><p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p>11. No costs.<p></p><p>',
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	(int) 1 => '<p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. ',
	(int) 2 => '<p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. ',
	(int) 3 => '<p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. ',
	(int) 4 => '<p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. ',
	(int) 5 => '<p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. ',
	(int) 6 => '<p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. ',
	(int) 7 => '<p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : ',
	(int) 8 => '<p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' ',
	(int) 9 => '<p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). ',
	(int) 10 => '<p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. ',
	(int) 11 => '<p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. ',
	(int) 12 => '<p>11. No costs.<p>',
	(int) 13 => '<p>'
)
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7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows :

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	'title_for_layout' => 'Tej Prakash S Dangi and ors Vs Coromandal Pharmaceuticals Ltd and anr - Citation 426631 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '426631',
			'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
			'appealno' => 'Company Petition No. 5 of 1996',
			'appellant' => 'Tej Prakash S. Dangi and ors.',
			'authreffered' => '',
			'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
			'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'M.V. Suresh, Adv.',
			'counseldef' => 'Rajendar Desh Mukh, Adv.',
			'court' => 'Andhra Pradesh',
			'court_type' => 'HC',
			'decidedon' => '1996-08-20',
			'deposition' => '',
			'favorof' => null,
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			'judge' => 'T.N.C. Rangarajan, J.',
			'judgement' => '<p style="text-align: justify;">T.N.C. Rangarajan, J.</p><p style="text-align: justify;">1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p style="text-align: justify;">2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p style="text-align: justify;">3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p style="text-align: justify;">4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p style="text-align: justify;">5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p style="text-align: justify;">6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p style="text-align: justify;">7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p style="text-align: justify;">'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p style="text-align: justify;">8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p style="text-align: justify;">9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p style="text-align: justify;">10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p style="text-align: justify;">11. No costs.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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		'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
		'appealno' => 'Company Petition No. 5 of 1996',
		'appellant' => 'Tej Prakash S. Dangi and ors.',
		'authreffered' => '',
		'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
		'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
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		'citingcases' => '',
		'counselplain' => 'M.V. Suresh, Adv.',
		'counseldef' => 'Rajendar Desh Mukh, Adv.',
		'court' => 'Andhra Pradesh',
		'court_type' => 'HC',
		'decidedon' => '1996-08-20',
		'deposition' => '',
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		'judge' => 'T.N.C. Rangarajan, J.',
		'judgement' => '<p>T.N.C. Rangarajan, J.</p><p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p>11. No costs.<p></p><p>',
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		'pubs' => '[1997]89CompCas270(AP)',
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		'respondent' => 'Coromandal Pharmaceuticals Ltd. and anr.',
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	(int) 0 => '<p>T.N.C. Rangarajan, J.',
	(int) 1 => '<p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. ',
	(int) 2 => '<p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. ',
	(int) 3 => '<p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. ',
	(int) 4 => '<p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. ',
	(int) 5 => '<p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. ',
	(int) 6 => '<p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. ',
	(int) 7 => '<p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : ',
	(int) 8 => '<p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' ',
	(int) 9 => '<p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). ',
	(int) 10 => '<p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. ',
	(int) 11 => '<p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. ',
	(int) 12 => '<p>11. No costs.<p>',
	(int) 13 => '<p>'
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'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.'

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	'title_for_layout' => 'Tej Prakash S Dangi and ors Vs Coromandal Pharmaceuticals Ltd and anr - Citation 426631 - Court Judgment | ',
	'desc' => array(
		'Judgement' => array(
			'id' => '426631',
			'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
			'appealno' => 'Company Petition No. 5 of 1996',
			'appellant' => 'Tej Prakash S. Dangi and ors.',
			'authreffered' => '',
			'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
			'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'M.V. Suresh, Adv.',
			'counseldef' => 'Rajendar Desh Mukh, Adv.',
			'court' => 'Andhra Pradesh',
			'court_type' => 'HC',
			'decidedon' => '1996-08-20',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => 'T.N.C. Rangarajan, J.',
			'judgement' => '<p style="text-align: justify;">T.N.C. Rangarajan, J.</p><p style="text-align: justify;">1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p style="text-align: justify;">2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p style="text-align: justify;">3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p style="text-align: justify;">4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p style="text-align: justify;">5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p style="text-align: justify;">6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p style="text-align: justify;">7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p style="text-align: justify;">'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p style="text-align: justify;">8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p style="text-align: justify;">9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p style="text-align: justify;">10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p style="text-align: justify;">11. No costs.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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$title_for_layout = 'Tej Prakash S Dangi and ors Vs Coromandal Pharmaceuticals Ltd and anr - Citation 426631 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '426631',
		'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
		'appealno' => 'Company Petition No. 5 of 1996',
		'appellant' => 'Tej Prakash S. Dangi and ors.',
		'authreffered' => '',
		'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
		'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'M.V. Suresh, Adv.',
		'counseldef' => 'Rajendar Desh Mukh, Adv.',
		'court' => 'Andhra Pradesh',
		'court_type' => 'HC',
		'decidedon' => '1996-08-20',
		'deposition' => '',
		'favorof' => null,
		'findings' => null,
		'judge' => 'T.N.C. Rangarajan, J.',
		'judgement' => '<p>T.N.C. Rangarajan, J.</p><p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p>11. No costs.<p></p><p>',
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	(int) 1 => '<p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. ',
	(int) 2 => '<p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. ',
	(int) 3 => '<p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. ',
	(int) 4 => '<p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. ',
	(int) 5 => '<p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. ',
	(int) 6 => '<p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. ',
	(int) 7 => '<p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : ',
	(int) 8 => '<p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' ',
	(int) 9 => '<p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). ',
	(int) 10 => '<p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. ',
	(int) 11 => '<p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. ',
	(int) 12 => '<p>11. No costs.<p>',
	(int) 13 => '<p>'
)
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8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA).

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	'title_for_layout' => 'Tej Prakash S Dangi and ors Vs Coromandal Pharmaceuticals Ltd and anr - Citation 426631 - Court Judgment | ',
	'desc' => array(
		'Judgement' => array(
			'id' => '426631',
			'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
			'appealno' => 'Company Petition No. 5 of 1996',
			'appellant' => 'Tej Prakash S. Dangi and ors.',
			'authreffered' => '',
			'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
			'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'M.V. Suresh, Adv.',
			'counseldef' => 'Rajendar Desh Mukh, Adv.',
			'court' => 'Andhra Pradesh',
			'court_type' => 'HC',
			'decidedon' => '1996-08-20',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => 'T.N.C. Rangarajan, J.',
			'judgement' => '<p style="text-align: justify;">T.N.C. Rangarajan, J.</p><p style="text-align: justify;">1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p style="text-align: justify;">2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p style="text-align: justify;">3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p style="text-align: justify;">4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p style="text-align: justify;">5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p style="text-align: justify;">6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p style="text-align: justify;">7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p style="text-align: justify;">'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p style="text-align: justify;">8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p style="text-align: justify;">9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p style="text-align: justify;">10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p style="text-align: justify;">11. No costs.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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			'prhistory' => '',
			'pubs' => '[1997]89CompCas270(AP)',
			'ratiodecidendi' => '',
			'respondent' => 'Coromandal Pharmaceuticals Ltd. and anr.',
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		'id' => '426631',
		'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
		'appealno' => 'Company Petition No. 5 of 1996',
		'appellant' => 'Tej Prakash S. Dangi and ors.',
		'authreffered' => '',
		'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
		'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'M.V. Suresh, Adv.',
		'counseldef' => 'Rajendar Desh Mukh, Adv.',
		'court' => 'Andhra Pradesh',
		'court_type' => 'HC',
		'decidedon' => '1996-08-20',
		'deposition' => '',
		'favorof' => null,
		'findings' => null,
		'judge' => 'T.N.C. Rangarajan, J.',
		'judgement' => '<p>T.N.C. Rangarajan, J.</p><p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p>11. No costs.<p></p><p>',
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		'pubs' => '[1997]89CompCas270(AP)',
		'ratiodecidendi' => '',
		'respondent' => 'Coromandal Pharmaceuticals Ltd. and anr.',
		'sub' => 'Company',
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		'circuit' => null
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	(int) 0 => '<p>T.N.C. Rangarajan, J.',
	(int) 1 => '<p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. ',
	(int) 2 => '<p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. ',
	(int) 3 => '<p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. ',
	(int) 4 => '<p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. ',
	(int) 5 => '<p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. ',
	(int) 6 => '<p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. ',
	(int) 7 => '<p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : ',
	(int) 8 => '<p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' ',
	(int) 9 => '<p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). ',
	(int) 10 => '<p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. ',
	(int) 11 => '<p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. ',
	(int) 12 => '<p>11. No costs.<p>',
	(int) 13 => '<p>'
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9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act.

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	'title_for_layout' => 'Tej Prakash S Dangi and ors Vs Coromandal Pharmaceuticals Ltd and anr - Citation 426631 - Court Judgment | ',
	'desc' => array(
		'Judgement' => array(
			'id' => '426631',
			'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
			'appealno' => 'Company Petition No. 5 of 1996',
			'appellant' => 'Tej Prakash S. Dangi and ors.',
			'authreffered' => '',
			'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
			'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'M.V. Suresh, Adv.',
			'counseldef' => 'Rajendar Desh Mukh, Adv.',
			'court' => 'Andhra Pradesh',
			'court_type' => 'HC',
			'decidedon' => '1996-08-20',
			'deposition' => '',
			'favorof' => null,
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			'judge' => 'T.N.C. Rangarajan, J.',
			'judgement' => '<p style="text-align: justify;">T.N.C. Rangarajan, J.</p><p style="text-align: justify;">1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p style="text-align: justify;">2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p style="text-align: justify;">3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p style="text-align: justify;">4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p style="text-align: justify;">5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p style="text-align: justify;">6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p style="text-align: justify;">7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p style="text-align: justify;">'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p style="text-align: justify;">8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p style="text-align: justify;">9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p style="text-align: justify;">10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p style="text-align: justify;">11. No costs.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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$title_for_layout = 'Tej Prakash S Dangi and ors Vs Coromandal Pharmaceuticals Ltd and anr - Citation 426631 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '426631',
		'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
		'appealno' => 'Company Petition No. 5 of 1996',
		'appellant' => 'Tej Prakash S. Dangi and ors.',
		'authreffered' => '',
		'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
		'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'M.V. Suresh, Adv.',
		'counseldef' => 'Rajendar Desh Mukh, Adv.',
		'court' => 'Andhra Pradesh',
		'court_type' => 'HC',
		'decidedon' => '1996-08-20',
		'deposition' => '',
		'favorof' => null,
		'findings' => null,
		'judge' => 'T.N.C. Rangarajan, J.',
		'judgement' => '<p>T.N.C. Rangarajan, J.</p><p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p>11. No costs.<p></p><p>',
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	(int) 1 => '<p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. ',
	(int) 2 => '<p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. ',
	(int) 3 => '<p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. ',
	(int) 4 => '<p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. ',
	(int) 5 => '<p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. ',
	(int) 6 => '<p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. ',
	(int) 7 => '<p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : ',
	(int) 8 => '<p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' ',
	(int) 9 => '<p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). ',
	(int) 10 => '<p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. ',
	(int) 11 => '<p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. ',
	(int) 12 => '<p>11. No costs.<p>',
	(int) 13 => '<p>'
)
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10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed.

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	'title_for_layout' => 'Tej Prakash S Dangi and ors Vs Coromandal Pharmaceuticals Ltd and anr - Citation 426631 - Court Judgment | ',
	'desc' => array(
		'Judgement' => array(
			'id' => '426631',
			'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
			'appealno' => 'Company Petition No. 5 of 1996',
			'appellant' => 'Tej Prakash S. Dangi and ors.',
			'authreffered' => '',
			'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
			'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'M.V. Suresh, Adv.',
			'counseldef' => 'Rajendar Desh Mukh, Adv.',
			'court' => 'Andhra Pradesh',
			'court_type' => 'HC',
			'decidedon' => '1996-08-20',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => 'T.N.C. Rangarajan, J.',
			'judgement' => '<p style="text-align: justify;">T.N.C. Rangarajan, J.</p><p style="text-align: justify;">1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p style="text-align: justify;">2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p style="text-align: justify;">3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p style="text-align: justify;">4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p style="text-align: justify;">5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p style="text-align: justify;">6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p style="text-align: justify;">7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p style="text-align: justify;">'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p style="text-align: justify;">8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p style="text-align: justify;">9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p style="text-align: justify;">10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p style="text-align: justify;">11. No costs.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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			'pubs' => '[1997]89CompCas270(AP)',
			'ratiodecidendi' => '',
			'respondent' => 'Coromandal Pharmaceuticals Ltd. and anr.',
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		'id' => '426631',
		'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
		'appealno' => 'Company Petition No. 5 of 1996',
		'appellant' => 'Tej Prakash S. Dangi and ors.',
		'authreffered' => '',
		'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
		'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'M.V. Suresh, Adv.',
		'counseldef' => 'Rajendar Desh Mukh, Adv.',
		'court' => 'Andhra Pradesh',
		'court_type' => 'HC',
		'decidedon' => '1996-08-20',
		'deposition' => '',
		'favorof' => null,
		'findings' => null,
		'judge' => 'T.N.C. Rangarajan, J.',
		'judgement' => '<p>T.N.C. Rangarajan, J.</p><p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p>11. No costs.<p></p><p>',
		'observations' => null,
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		'prhistory' => '',
		'pubs' => '[1997]89CompCas270(AP)',
		'ratiodecidendi' => '',
		'respondent' => 'Coromandal Pharmaceuticals Ltd. and anr.',
		'sub' => 'Company',
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		'circuit' => null
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	(int) 0 => '<p>T.N.C. Rangarajan, J.',
	(int) 1 => '<p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. ',
	(int) 2 => '<p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. ',
	(int) 3 => '<p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. ',
	(int) 4 => '<p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. ',
	(int) 5 => '<p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. ',
	(int) 6 => '<p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. ',
	(int) 7 => '<p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : ',
	(int) 8 => '<p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' ',
	(int) 9 => '<p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). ',
	(int) 10 => '<p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. ',
	(int) 11 => '<p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. ',
	(int) 12 => '<p>11. No costs.<p>',
	(int) 13 => '<p>'
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11. No costs.

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	'title_for_layout' => 'Tej Prakash S Dangi and ors Vs Coromandal Pharmaceuticals Ltd and anr - Citation 426631 - Court Judgment | ',
	'desc' => array(
		'Judgement' => array(
			'id' => '426631',
			'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
			'appealno' => 'Company Petition No. 5 of 1996',
			'appellant' => 'Tej Prakash S. Dangi and ors.',
			'authreffered' => '',
			'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
			'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'M.V. Suresh, Adv.',
			'counseldef' => 'Rajendar Desh Mukh, Adv.',
			'court' => 'Andhra Pradesh',
			'court_type' => 'HC',
			'decidedon' => '1996-08-20',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => 'T.N.C. Rangarajan, J.',
			'judgement' => '<p style="text-align: justify;">T.N.C. Rangarajan, J.</p><p style="text-align: justify;">1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p style="text-align: justify;">2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p style="text-align: justify;">3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p style="text-align: justify;">4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p style="text-align: justify;">5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p style="text-align: justify;">6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p style="text-align: justify;">7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p style="text-align: justify;">'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p style="text-align: justify;">8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p style="text-align: justify;">9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p style="text-align: justify;">10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p style="text-align: justify;">11. No costs.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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$title_for_layout = 'Tej Prakash S Dangi and ors Vs Coromandal Pharmaceuticals Ltd and anr - Citation 426631 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '426631',
		'acts' => '<a href="/act/51006/companies-act-1956-complete-act">Companies Act, 1956</a> - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; <a href="/act/50902/code-of-criminal-procedure-1973-complete-act">Code of Criminal Procedure (CrPC) , 1973</a> - Sections 482',
		'appealno' => 'Company Petition No. 5 of 1996',
		'appellant' => 'Tej Prakash S. Dangi and ors.',
		'authreffered' => '',
		'casename' => 'Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr.',
		'casenote' => 'Company - forfeiture of shares - Sections 2 (11), 10, 10 (2), 17, 79, 101, 111, 111 (4), 111A, 155, 209 (4), 283, 391 (2) and 398 of Companies Act, 1956, Companies (Amendment) Act, 1988, Sick Industrial Companies (Special Provisions) Act, 1985, Rules 9 and 11 of Companies (Court) Rules, 1959 and Section 482 of Criminal Procedure Code, 1973 - forfeiture of shares of petitioner for reason of dishonour of cheque issued by him in lieu of share certificates - such forfeiture challenged - provisions for Articles prescribes that challenge against forfeiture be filed before Board which forfeits shares by its resolution - nothing in Companies Act provides for entertainment of such challenge - petitioners unable to indicate section under which petition was required to be filed before Company Court - matter within jurisdiction Civil Court - held, petition challenging forfeiture not maintainable for want of provisions.


 -  -  It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'M.V. Suresh, Adv.',
		'counseldef' => 'Rajendar Desh Mukh, Adv.',
		'court' => 'Andhra Pradesh',
		'court_type' => 'HC',
		'decidedon' => '1996-08-20',
		'deposition' => '',
		'favorof' => null,
		'findings' => null,
		'judge' => 'T.N.C. Rangarajan, J.',
		'judgement' => '<p>T.N.C. Rangarajan, J.</p><p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. </p><p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. </p><p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. </p><p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. </p><p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. </p><p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. </p><p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : </p><p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' </p><p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). </p><p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. </p><p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. </p><p>11. No costs.<p></p><p>',
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	(int) 1 => '<p>1. This petition seeks a declaration that the forfeiture of the shares held by the petitioners in the first respondent company by a notice published in the Deccan Chronicle, dated January 11, 1996, is void and that the petitioners continued to be the holders of the shares. ',
	(int) 2 => '<p>2. It is stated in the affidavit filed in support of the petition that the company floated a public issue of 33 lakhs equity shares of Rs. 10 each and since the company was sick at that time the petitioners applied for the allotment of those shares and also paid the initial application money upon which 21,15,400 shares were allotted to the petitioners. It is stated that the share certificates were issued endorsed as fully paid-up and some of them were also transferred by the petitioners. In the meanwhile, cheques issued by the first and ninth petitioners bounced. Thereafter, notices of forfeiture of the shares were sent by the company on December 2, 1995, which were not received by petitioners Nos. 5 to 9 but the others received and replied to the same. Yet on January 11, 1996, a public notice was advertised in the issue of the Deccan Chronicle that the shares mentioned in the notice have been forfeited and the public were cautioned not to deal with the share certificates. It is stated that the said notice is invalid and should be cancelled. In the counter-affidavit filed by the company it is claimed that the petitioners subscribed to the shares as part of a programme for financing the sick company but failed to give the amounts in time as the cheques were dishonoured and also dealt with the shares disregarding the conditions of the agreement, and, therefore, those shares were forfeited after due notice. ',
	(int) 3 => '<p>3. Learned counsel for the petitioners submitted that there were factual discrepancies in the notice of forfeiture, no doubt the first petitioner had to pay a sum of Rs. 7 lakhs and the other petitioners called upon to pay only the interest for the delay, that no call was made, that the notice was invalid because there was no specific demand and it was also not properly served, that the shares already transferred and registered in the names of the purchasers cannot be forfeited and the interest claimed is also at a higher rate of 24 per cent. as against 9 per cent. It was submitted that in these circumstances the notice of forfeiture published in the paper being prima facie bad it should be set aside. On the other hand, the respondents took the preliminary objection that this petition itself was not maintainable. Accordingly, I decided to try the preliminary issue whether the petition is maintainable. ',
	(int) 4 => '<p>4. On this issue, learned counsel for the petitioners, submitted that any matter relating to a company can be heard only by the company court or by the District Court notified under section 10 of the Act. He also submitted that under rule 9 of the Companies (Court) Rules, 1959, the company court has inherent powers to give directions to meet the ends of justice which can be invoked even if there are no other proceedings as is being done under the analogous provisions of section 482 of the Criminal Procedure Code, 1973. It was, therefore, submitted that even if there is no specific section under which this petition was to be filed, it could always be entertained under rule 9 of the Companies (Court) Rules. On the other hand, learned counsel for the respondents submitted that only in respect of those matters which were specified under the Companies Act could a petition be filed in the company court and the ordinary remedies would still be available in respect of other matters even though a company may be a party to that litigation. It was pointed out that it is not as if in all matters relating to a company or in all matters in which the company is a respondent or the petitioner that a petition has to be filed in the company court. ',
	(int) 5 => '<p>5. I have carefully considered the arguments of both the sides and I find that there is no specific provision in the Companies Act to entertain a petition of this kind. The power to forfeit the shares has been given in the articles of association. The relevant article in Table 'A' is article 29 which provides that if a member fails to pay any call on the appointed day, the board may serve a notice requiring payment and if the requirements of such notice are not complied with, the relevant share may be forfeited by a resolution of the board. The board has also a power to cancel the forfeiture on such terms as it thinks fit. It is seen that these articles do not provide any other remedy except approaching the board for cancellation of the forfeiture. If the forfeiture is claimed to be invalid due to any other legal infirmity, no specific power is provided therefor in the articles. The only section which may perhaps be referred to is section 155 of the Companies Act which empowers the court to rectify the register of members if the name of any person is, without sufficient cause, omitted from the register of the members of the company. This section, however, was omitted by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, because this power was assigned to the Company Law Board under section 111(4). Again, by a recent amendment brought about by the Depositories Ordinance, 1996 [See [1996] 85 Comp Cas (St.) 66.], section 111 has been confined to a private company and a new section 111A has been incorporated which empowers the Company Law Board to direct any company to rectify the register or the records if the transfer of shares is in contravention of the provisions of the Securities and Exchange Board of India Act or regulations made thereunder or in the Sick Industrial Companies (Special Provisions) Act, 1985. The situation now arising for consideration is, therefore, not amenable to the jurisdiction of either the court or the Company Law Board under section 111 or section 111A of the Companies Act. ',
	(int) 6 => '<p>6. Learned counsel for the petitioners referred to the decision in Maharaj Kumar Mahendra Singh v. Lake Palace Hotels and Motels Pvt. Ltd. [1985] 58 Comp Cas 805 (Raj), where it was held that where section 209(4) of the Companies Act envisages the right of inspection of the records of a company by a director he could seek a remedy by moving a petition before the company court on the ground 'where there is a right there should be a remedy'. I have at once pointed out that the question whether the jurisdiction of the ordinary court was thereby ousted was not considered in that case. The next case relied on by the petitioners was in Vitthalrao Narayanrao Patil v. Maharashtra State Seeds Corpn. Ltd. [1990] 68 Comp Cas 608 (Bom), where it was observed that from the very language of section 10 of the Companies Act, it would appear that essentially it is the jurisdiction of the High Court to entertain any dispute in respect of affairs of the company except such disputes in respect of which powers have explicitly been conferred on the District Court by the Central Government. That was a case where the suit was filed challenging the removal of a director and the court held that since the district court was not notified under section 10, the petition had to be filed in the High Court. It appears that this case was followed by a single judge of this court in Nizamabad Corn Products Pvt. Ltd. v. Vasudev Dalia : 1992(3)ALT303 . Here again, there was a suit against a resolution removing the director. The single judge held that because section 283 was not one of the sections in respect of which a District Court was notified, the company court has jurisdiction. It was mentioned there that this particular aspect was not taken into consideration in an earlier decision of this court in Avanthi Explosives P. Ltd. v. Principal Subordinate Judge [1987] 62 Comp Cas 301, where it was held that such a suit was not maintainable unless the jurisdiction of the civil court was excluded specifically or by necessary implication. I am of the opinion that this statement of law is a well settled view and the two cases relied on by learned counsel for the petitioners overlooked the fact that section 10(2) refers only to assignment of a case specifically required to be dealt with by the court acting under the Companies Act, between the High Court and the District Court by a notification and has nothing to do with cases which are required to be filed before the ordinary civil court. This is because section 2(11) defines a court to mean the court having jurisdiction under the Act with respect to that matter relating to that company as provided in section 10, meaning thereby the appropriate court as between the High Court and the District Court when notified with reference to that matter. Those matters which are required to be dealt with under the Companies Act are specifically mentioned in certain sections such as, sections 17, 79, 101, 391(2), 398, etc., some of which have now been assigned to the Company Law Board. If the case does not fall under any of those sections listed in rule 11 of the Companies (Court) Rules, 1959, then they are not cases which are specifically excluded from the civil court. ',
	(int) 7 => '<p>7. This view is supported by our High Court in the case referred to above Avanthi Explosives P Ltd. [1987] 62 Comp Cas 301 as well as the Kerala High Court in R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd. [1990] 69 Comp Cas 256 (Ker), Marikar (Motors) v. Ravikumar (M.I.) [1982] 52 Comp Cas 362 (Ker) and Mylavarapu Ramakrishna Rao v. Mothey Krishna Rao [1947] 17 Comp Cas 63 (Mad). The leading case on this point is Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336; 7 WR 464. The general rule, when relating to the trial of new offences created by statute, was explained by Willies J. in that case as follows : ',
	(int) 8 => '<p>'There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'. The case before the learned judge was whether the defendant was a shareholder in the plaintiff company which sued for calls on shares. He said : 'Reading the 21st section (of the Companies Consolidation Act, 1845), by the aid of the light thrown upon it by the subsequent sections, it appears to me that the remedy was intended to be enforced only in the particular mode prescribed against persons who are shareholders.' ',
	(int) 9 => '<p>8. The present case falls in the second class since the statute gives a right to sue without any particular form of remedy, and, therefore, the petitioners have to approach only the civil court. Such a case has normally has been taken to the civil court as could be seen by the report of a similar case in Jones v. Pacaya Rubber and Produce Co. Ltd. [1911] 1 KB 455 (CA). ',
	(int) 10 => '<p>9. Learned counsel for the petitioners referred to the decision in Public Passenger Service Ltd. v. M.A. Khadar, : AIR1962Mad276 , which was confirmed by the Supreme Court in [1966] 36 Comp Cas 1 (SC). Though this case is related to forfeiture of shares, it will be seen that the petition was only for rectification. While such rectifications were admissible by reason of section 155 which was then extant, such a petition is no longer maintainable since section 155 has been omitted from the Act. ',
	(int) 11 => '<p>10. In my considered opinion, therefore, this company petition is not maintainable as the petitioners are unable to indicate the section under which the petition was required to be filed before the company court. Only when there is such a special mode prescribed under the Companies Act could the ordinary jurisdiction of the civil court be ousted. As long as the jurisdiction of the civil court is preserved, the question of bypassing the general remedy by entertaining the petition under rule 9 of the Companies (Court) Rules, 1959, cannot arise. It is true that petitions are entertained under analogous provisions of section 482 of the Criminal Procedure Code, 1973, but they are cases where no other remedy is provided and, moreover, the jurisdiction is exercised by the High Court in its ordinary criminal jurisdiction unlike the company court which functions only under the statutory conferred jurisdiction. I am, therefore, convinced that this company petition is not maintainable. It is, therefore, dismissed. ',
	(int) 12 => '<p>11. No costs.<p>',
	(int) 13 => '<p>'
)
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Subject	Company
Court	Andhra Pradesh High Court
Decided On	Aug-20-1996
Case Number	Company Petition No. 5 of 1996
Judge	T.N.C. Rangarajan, J.
Reported in	[1997]89CompCas270(AP)
Acts	Companies Act, 1956 - Sections 2(11), 10, 10(2), 17, 79, 101, 111, 111(4), 111A, 155, 209(4), 283, 391(2) and 398; Companies (Amendment) Act, 1988; Sick Industrial Companies (Special Provisions) Act, 1985; Companies (Court) Rules, 1959 - Rules 9 and 11; Code of Criminal Procedure (CrPC) , 1973 - Sections 482
Appellant	Tej Prakash S. Dangi and ors.
Respondent	Coromandal Pharmaceuticals Ltd. and anr.
Appellant Advocate	M.V. Suresh, Adv.
Respondent Advocate	Rajendar Desh Mukh, Adv.

Tej Prakash S. Dangi and ors. Vs. Coromandal Pharmaceuticals Ltd. and anr. - Court Judgment