Final Order 1

Order Details: Notice of Motion
Pdf Text: NM 3484 of 2019 in S.C.Suit No. 2234 of 2019
1 Date : 02.03.2020
MHCC010095092019
IN THE BOMBAY CITY CIVIL COURT FOR GREATER MUMBAI
NOTICE OF MOTION NO. 3484 OF 2019
IN
S.C. SUIT NO. 2234 OF 2019
(CNR NO.MHCC01-009509-2019)
Surendra Bhagwandas Jhunjhunwala, .. Applicant
In the matter between
Manmohan Balkrishna Jhunjhunwala & Anr. .. Plaintiffs
Versus
Surendra Bhagwandas Jhunjhunwala & Ors. .. Defendants
Appearances :-
Ld. Adv. K. M. Bhatia i/b. Rajaballi for plaintiff.
Ld. Adv. Somnath Sahu for defendant No. 1.
Ld. Adv. Gaurav Sharma for defendant No. 2.
Coram : His Honour Judge
Shri. A.H.Laddhad
Additional Judge
CR No. : 7
Date : 02.03.2020
-- 1 of 26 --
NM 3484 of 2019 in S.C.Suit No. 2234 of 2019
2 Date : 02.03.2020
ORDER
1. The defendant no. 1 has filed instant Notice of Motion for
dismissal of the suit on the ground that this Court have no
jurisdiction to try and entertain the present suit.
2. It is contended by the defendant no. 1 that the plaintiff filed
suit pertaining to “Narandas Pokermal and Meghraj Pokarmal
Trust” which is private trust and relief claimed with respect to the
Trust Property which is not maintainable in law, as there is a legal
bar of the jurisdiction of this Court. Therefore, this court have no
jurisdiction to try and entertain the present suit and same is liable
to be dismissed. The Relief claimed by the plaintiff fall under
provisions of Indian Trust Act, 1982. In view of the settled the
position of law as laid down by the Hon’ble Bombay High Court
and Hon’ble Apex Court, the suit claiming relief in respect of Trust
Property liable to be filed before “Principal Civil Court of Original
Jurisdiction” of a District and such a Court, for the City of Mumbai,
is the Hon’ble Bombay High Court and not this Court.
3. It is contended by the defendant no. 1 that City Civil Court is
an additional Civil Court constituted under the Bombay City Civil
Court Act, 1948 for the purpose of entertaining specified
categories of Civil Suits, the subject matter or the property
involved in which does not exceed the pecuniary limits of Rs. One
Crore. Therefore, the present suit is barred by provisions of
-- 2 of 26 --
NM 3484 of 2019 in S.C.Suit No. 2234 of 2019
3 Date : 02.03.2020
Indian Trust Act, 1882 and this Court does not have the
jurisdiction to entertain the present suit.
4. The defendant no. 1 further contended that the plaintiff filed
suit seeking relief for management rights, rents, outgoings, taxes,
liabilities, declaration of rights, title and interest, injunction,
appointment of Court Receiver in respect to the Trust Property,
which is situated at Dadar and more particularly described in the
plaint. The plaintiffs have maliciously concealed the fact that the
current market value of the trust is around 12,50,00,000/-, thus,
the suit is beyond the pecuniary jurisdiction of this Court.
Therefore, the suit liable to be dismissed.
5. The Notice of Motion is opposed by the plaintiff by filing say.
It is contended by the plaintiff that the defendant no. 1 filed
present Notice of Motion with ulterior motive to mislead the Court
and thereby to take advantage of his own wrongs. In view of the
provision, Section 9 of the Code of Civil Procedure
(hereinafter
shall be referred to as CPC), the suit is well within jurisdiction of
this Court and hence, there is no substance in the Notice of Motion
and same deserves to be dismissed with cost.
6. The defendant no. 2 also filed reply to the Notice of Motion
raising the same contention as raised by the defendant no. 1. The
defendant no. 4 also filed reply in support of the plaintiff’s
contentions and contended that the suit is maintainable.
-- 3 of 26 --
NM 3484 of 2019 in S.C.Suit No. 2234 of 2019
4 Date : 02.03.2020
7. Heard both the sides. Perused Notice of Motion and reply.
The defendant no. 1 and 2 filed Written Submissions and also
advanced their oral arguments. It is argued that the subject matter
of the suit property is related to Private Trust under Act and thus,
the provision of the said act would governed. As per Section 9 of
CPC, the Court to try all Civil Suits unless barred except the suits
of which their cognizance is either expressly or impliedly barred.
8. It is argued that the present suit is filed before City Civil
Court which was established under Section 3 of Bombay City Civil
Court Act, 1948. The Section 3(c) of Bombay City Civil Court Act,
1948 provides that, in the event, any suit or proceeding under
special law cognizance of such suit or proceeding shall be taken
only by Hon’ble High Court. The Indian Trust Act, 1982 inter-alia
provides for entertaining, dealing and trying various subject
matters under Act by “Principal Civil Court of Original
jurisdiction”, which in the present case is only Hon’ble Bombay
High Court though City Civil Court is a aditional Civil Court of Gr.
Bombay under Bombay City Civil Court Act, 1948. The defendant
no. 1 in support of his submissions relied on the following
judgments.
a) Chatrabhuj Mavji Merchant V/s. Sumati Morarjee & ors.
1992 Mh.L.J. 1075.
-- 4 of 26 --
NM 3484 of 2019 in S.C.Suit No. 2234 of 2019
5 Date : 02.03.2020
b) Khetan Industries Pvt. Ltd. & Ors. V/s. Manju
Ravindraprasad Khetan, 1995(1) Mh.L.J. 645.
c) Vidya Drolia & Ors. V/s. Durga Trading Corporation, AIR
2019 SC 3498.
9. Per contra Ld. Advocate for plaintiff vehemently contended
that they are not seeking removal of Trustees of the Trust, rather
they are seeking declaration that the defendant no. 1 to 3 are not
interested in managing Trust Property. Therefore, defendant no. 4
through plaintiffs be permitted to manage the Trust. In
alternative, they are seeking to declare that the plaintiffs are
permitted to collect outgoings, pay taxes and clear their liabilities
pending or that may occurred during pendency of the suit. It is
further contended that the present Trustees are bound to pay the
taxes and other outgoings. However, they failed to perform their
obligations. Hence, the plaintiff also prayed for appointment of
the Court Receiver for temporary management of the Trust
Property. Hence, it would argued that the jurisdiction of this Court
is not oust under the provision of Trust Act.
10. The Ld. Advocate for the plaintiff in support of his
submission relied on the judgment of
Hon’ble Bombay High Court
in case of Santosh Poddar & Ors. V/s. Kamalkumar Poddar & Ors.
Reported in 1992(3) BOM.C.R. 310.
-- 5 of 26 --
NM 3484 of 2019 in S.C.Suit No. 2234 of 2019
6 Date : 02.03.2020
11. It is further contended by the plaintiff that the judgment
relied by the defendant
in case of Khetan Industries Pvt. Ltd. &
ors. V/s. Manju Ravindraprasad Khetan reported in AIR 1995 Bom
43 has been overruled by Hon’ble Division Bench of Bombay High
Court
in case of Yes Bank Limited V/s. Madhu Ashk Kapur & Ors.
Reported in 2014(4) Bom. C.R. 476.
12. It is further argued that the provision of law has to be
construed liberally, so as to do substantial justice to the parties.
The technicalities should not came into ways of plaintiff when they
are prima-facie entitled for relief prayed for. In support of his
submission, he has relied on the judgment of
Hon’ble Apex Court
in case of State of nagaland V/s. Lipok AO & Ors. Reported in
2005(3) SC 752. Thus, Ld. Advocate for the plaintiff prayed for
dismissal of the Notice of Motion.
13. The defendant no. 1 has filed instant Notice of Motion on the
ground that this Court have no jurisdiction and thus, prayed for
the dismissal of the suit. Although the defendant no. 1 did not file
Notice of Motion for rejection of the plaint under Order 7 Rule 11
(d) of C.P.C. but the contention of the defendant appears to be that
in view of the provision of Indian Trust Act which is applicable
only with respect to the private trust, any grievances of the parties
such as removal or appointment of trustees and management of
the Trust Property is to be filed before “Principal Civil Court of
Original Jurisdiction” and in the present case Civil Court is not the
-- 6 of 26 --
NM 3484 of 2019 in S.C.Suit No. 2234 of 2019
7 Date : 02.03.2020
Principal Civil Court of original Jurisdiction, rather it is the
Additional Civil Court. Thus, the sum and substance of the Notice
of Motion of defendant no. 1 is that he is seeking rejection of the
plaint under Order 7 Rule 11(d) of the C.P.C.
14. It is well settled law that the plaint can be rejected under
Order 7 Rule 11 of CPC, if the condition enumerated in the
provisions are fulfilled. The relevant facts which needs to be
looked into for deciding the application are the averments of the
plaint only and not the pleadings in the Written Statement. If on
an entire and meaningful reading of the plaint, it is found that the
suit is manifestly vexatious and merit less in the sense of not
disclosing the right to sue, the court should exercise power under
Order 7 Rule 11 of CPC. The averment made in the Written
statement as well the contentions of the defendant are wholly
immaterial while considering the prayer of the defendant for
rejection of the plaint. Even when the allegation made to the
plaint are taken to be correct as a whole on their face value, if they
show that the suit is barred by any law and do not disclose the
cause of action, the application for rejection of plaint can be
entertained and the power under order 7 Rule 11 of CPC can be
exercised. If the clever drafting of the plaint has created illusion
of the cause of action, the court will nip it with the bud at the
earliest so that bogus litigation will end at the earlier stage.
(a. T Arivandanam V/s. T.V Satyapal reported in (1977) 4
SCC 467.
-- 7 of 26 --
NM 3484 of 2019 in S.C.Suit No. 2234 of 2019
8 Date : 02.03.2020
b. Madanuri Sri Rama Chandra Murthy V/s. Sayed Jalal
reported in (2017) 13 SCC 174.)
15. It is the specific pleadings of the plaintiffs that they are the
beneficiaries of trust namely “Narandas Pokermal and Meghraj
Pokarmal Trust” which was formed under Deed of Settlement
dated 15.11.1938 and the defendants are the trustees who are in
possession, power and control of the trust. It is submitted by the
plaintiff that Trust owns property situated Plot No. 170, Cadestral
Survey No. 137/10 of the Dadar, Matunga Estate of Municipal of
Corporation, building known as “Impress Mahal” bearing New
Survey No. 1239(Part).
(hereinafter shall be referred to as Trust
Property). It is alleged by the plaintiff that although the
management of the Trust Property is being in the hands of
defendants, however, none of the defendants are taking care of
managing and looking after the Trust Property and thus,
neglecting the same. The defendants managed the Trust Property
up to year 2008 and thereafter, they are in gross negligence in the
management of the trust so much as that there is no income of the
Trust at all, as none of the trustees collecting the rents from the
tenants since years and no outgoings, Municipal Taxes are paid to
the local authorities. The Amount of Rs. 48,95,007/- are pending
towards property taxes upto 26.12.2018. The trustees failed to
pay the aforesaid taxes and therefore, the attachment warrant has
been issued. The plaintiff although brought to the notice of
defendant no. 1 to 3 about the pendency of the tax but the
-- 8 of 26 --
NM 3484 of 2019 in S.C.Suit No. 2234 of 2019
9 Date : 02.03.2020
defendants shows no interest in saving the trust properties. The
plaintiffs being the beneficiaries under the Deed of Settlement
would be vitally affected due to carelessness and negligence with
ulterior motives on the part of the defendant no. 1 to 3.
16. Thus, in addition to the above, the plaintiff also pointed out
other irregularities which are prejudicial to the interest of the Trust
that :
1. The Trustees have failed and neglected to set apart 10%
of the gross rents and profits for a reserve fund for
carrying out heavy repairs to the Trust Property and
failed to keep the same invested in any of the investment
as contemplated of the Clause No. 3 of the Trust Deed.
2. The trustees failed to get Trust Property insured againt
loss or damage as per clause 15 of the Trust Deed.
17. Thus, plaintiff prayed for declaration that the defendant no.
1 to 3, trustees of the trust are not interested in managing the
entire Trust. The defendant no. 4 through plaintiff be permitted to
manage the Trust. In alternative, the plaintiff prayed for granting
permission to collect the rent and to meet out outgoings of the
Trust Property. The plaintiffs further prayed for injunction against
defendant no. 1 to 3 restraining them from damaging or
destroying the suit property. The plaintiff by way of ad-interim
relief prayed for appointment of Court Receiver under Order XL
Rule 1 of C.P.C. and that power to create fresh tenancy in the event
-- 9 of 26 --
NM 3484 of 2019 in S.C.Suit No. 2234 of 2019
10 Date : 02.03.2020
any tenant vacates the premises in his possession in accordance
with the law.
18. Preamble of Bombay City Civil Court Act 1948 speaks that
“The Act to established Additional Civil Court for Greater Bombay,
whereas it is expedient to established an additional Civil Court for
Greater Bombay”. Section 3 prescribed the constitution of City
Court which thus read as under :
“The State Government may, by notification in the
Official Gazette, establish for the Greater Bombay, a
Court, to be called the Bombay City Civil Court.
Notwithstanding anything contained in any law, such
court shall have jurisdiction to receive, try and dispose
of all suits and other proceedings of civil nature arising
within the Greater Bombay, except suits or proceedings
which are cognizable.
(a) by the High Court, as a Court of admiralty or vice-
Admiralty or as a Colonial Court Admiralty, or as a
Court having testamentary, intestate or matrimonial
jurisdiction, or
(b) by the High Court for the relief of insolvent debtors, or
(c) by the High Court under any special law other than the
Letters Patent, or
(d) by the small Cause Court.
-- 10 of 26 --
NM 3484 of 2019 in S.C.Suit No. 2234 of 2019
11 Date : 02.03.2020
Provided that the Government may, from time to time,
after consultation with the High Court, by a like
notification extend the jurisdiction of the City Court to
any suits or proceedings (which are cognizable by the
High Court as a Court having testamentary or intestate
jurisdiction or for the relief of insolvent debtors.)”
19. Thus in view of Section 3(c), the suits or proceedings which
are cognizable by Hon’ble High Court under special law other than
Letters Patent are not triable by the City Civil Court.
20. As per the contention of the defendant no. 1, the word
“Special Law” appearing in Section 3(c) means Indian Trust Act,
1982. The Indian Trust Act, 1982, no where defines the meaning
of Court rather in various sections, it has specifically mentioned
“Principal Civil Court of original jurisdiction” such as Section 11 of
Act contemplated that the duty of Trustees to execute the trust,
where the beneficiary is incompetent to contract, consent be given
by principal Civil Court of original jurisdiction. Section 22
contemplates that the extension of time of sell by Trustees can be
granted upon authorisation by Principal Civil Court of original
jurisdiction. Section 34 gives right to the trustees for Trustees to
apply by way of petition to a Principal Civil Court of original
jurisdiction without filing suit for its opinion, advice or direction
on any questions respecting the management or administration of
the Trust Property. Section 36 contemplates that except with the
-- 11 of 26 --
NM 3484 of 2019 in S.C.Suit No. 2234 of 2019
12 Date : 02.03.2020
permission of a Principal Civil Court of original jurisdiction, no
Trustees shall lease Trust Property for a term exceeding twenty one
years from the date of executing of lease. Section 41 deals with
the power to apply property of minors, etc., for their maintenance,
etc. Where any of the Trust Property is insufficient, the Trustees
may, with the permission of a Principal Civil Court of original
jurisdiction, but not otherwise, apply the whole or any part of such
property for or towards such maintenance, education,
advancement or expenses. Section 46 prescribed that the Trustees
cannot renounce after acceptance, except with the permission of a
Principal Civil Court of Original Jurisdiction. Section 49 deals with
the control of discretionary power conferred on a trustees. Such
power may be controlled by a Principal Civil Court of Original
jurisdiction. Section 53 prescribed that no Trustees may, without
the permission of a Principal Civil Court of Original jurisdiction,
buy or become mortgagee or lessee of the “Trust Property”. As per
Section 72, every Trustees may apply by petition to a Principal
Civil Court of Original jurisdiction to be discharged form his office.
Section 73 prescribed that appointment of new Trustees on death
etc., if, in the opinion of a Principal Civil Court of Original
jurisdiction, the Trustee is unfit or incapable to act in the trust, etc.
Section 74 prescribed that for appointment of the Trustees or new
Trustees on the application made by the beneficiary, without
instituting a suit to a Principal Civil Court of Original jurisdiction.
Thus, on perusal of the aforesaid provisions, it appears that the
statute have specifically used the meaning of Court as “Principal
-- 12 of 26 --
NM 3484 of 2019 in S.C.Suit No. 2234 of 2019
13 Date : 02.03.2020
Civil Court of Original jurisdiction”.
21. The defendant relied on the judgment of
Chatrabhuj Mavji
Merchant (Supra) in which the similar contingency had arose.
The Hon’ble High Court formulated the question that
“Is the suit
seeking redress for alleged breach of trust and such trust being
private trust triable only by a principal Civil Court of original
jurisdiction? If so, is City Civil Court within limits of prescribed
pecuniary valuation such a Court have territory of Greater
Bombay?
22. In the aforesaid case the appellant / plaintiff had filed suit in
the City Civil Court, Greater Bombay for declaration and injunction
leading breach of trust by the respondents therein. The interim
reliefs were claimed by way of appointment of Court Receiver to
take over the Trust Property and injunction to restrain the
defendants from using or dealing with the suit property. The Trial
Court dismissed the Notice of Motion against which the plaintiff
had filed an Appeal. The Hon’ble High Court in its judgment at
para no. 4 considered various sections appearing in the Indian
Trust Act wherein the jurisdiction is conferred upon Principal Civil
Court of Original jurisdiction and have also considered the Section
2(4) of CPC and Section 15 of the CPC requiring institution of suit
in the Court of Lowest Grade Competent to try and various clauses
such as clause 11, 12 and 13 of the letters patent as well as rules
relating to the jurisdiction of the High Court on its original side
-- 13 of 26 --
NM 3484 of 2019 in S.C.Suit No. 2234 of 2019
14 Date : 02.03.2020
and thus, observed that
“
the Bombay City Civil Court Act, 1869 is an enactment to
consolidate and amend the law relating to the district and
subordinate Civil Courts in the State. Section 5 of the Act
mandates the existence of a district of a District Court presided
over by a District judge in each district of the State. This District
Court is defined by Section 7 to be the Principal Court of original
Civil jurisdiction in the district within the meaning of CPC. The
last of these enactment is the Bombay City Civil Court Act, 1948.
The very preamble of the Act shows it be an act to establish “an
additional Civil Court for greater Bombay”. Section 3 of the act
has empowered the Court established “an additional Civil Court
for Greater Bombay.” Section 3 of the Act has empowered the
Court established (City Court) to “receive, try and dispose of all
suits and other proceedings of a civil nature not exceeding a
certain value within Greater Bombay, except certain suits or
procedings.” This jurisdiction is to prevail notwithstanding
anything contaied in any law. Section 12 makes it clear that the
High Court, unless it exercises the power of withdrawal contained
in the proviso, shall not have jurisdiction to try suits and
proceedings cognizable by the City Court. One of the categories of
suit or proceedings excepted by Section 3 (c) are those which are
cognizable by the Hon’ble High Court under any special law other
than the letters patent.
-- 14 of 26 --
NM 3484 of 2019 in S.C.Suit No. 2234 of 2019
15 Date : 02.03.2020
23. The Hon’ble High Court further accepted the argument of the
defendant that “
the City Court is within the pecuniary limits
presecibed for it one of the two principal Civil Courts of original
jurisdiction for Bomaby, the other being this Hon’ble High Court.
Section 15 of CPC is attracted and therefore, the suiter must go to
the Court of the lowest grade which is competent to try his cause.
Implied in this submission is the acceptance of the position that a
suit seeking redressed for breach of trust has only one forum, and
that the principal Civil Court of original jurisdiction.”
24. The Hon’ble High Court further observed that
“no provision
of the trust Act in specific terms vests such jurisdiction in the
Principal Court. Even Section 34 does not lay down where a
Trustees seeking an answer to questions, has to file a suit,
assuming that he does not want to move a petition for summoary
disposal. Beatify advisory jurisdiction is vested in a principal
Court it should be presumed that the adjudicatory function is also
its preserve. An inferior Court cannot have the superior
adjudicatory jurisdictionwhen the inferior power to advice, opine
and direct is left to the superior forum, and thus, Hon’ble High
Court concluded that City Court did not have the jurisdiction to try
the suit.”
25. In case of
Khetan Industries Pvt. Ltd. (Supra) the Hon’ble
Bombay High Court was dealing with two questions of law. Firstly,
which is the Principal Civil Court for Bombay for the purpose of
-- 15 of 26 --
NM 3484 of 2019 in S.C.Suit No. 2234 of 2019
16 Date : 02.03.2020
proceedings for the removal of the trustees under Chapter 7 of the
indian Trusts Act, 1882 and whether a Civil Suit lies for removal of
directors of a private limited company incorporated under the
Company Act, 1956.
26. In the present case, second issue is not relevent. In the
aforesaid case, original plaintiff filed suit, claiming various reliefs.
The relief relevant for the present case are as under :
(a) This Court will be pleased to remove the defendant no. 3
to 5 from the trusteeship of the defendant no. 2 and be
pleased to appoint some other fit and proper person as
Trustees of the 2nd defendant-trust.
(b) The defendant no. 3 to 5 be restrained by a permanent as
also interim and ad-interim order and injunction of this
Hon’ble Court from acting as trustees of defendant no. 2.
Trust as also from dealing with or disposing of the assets
of the defendant no. 2 save and except with permission of
the Hon’ble Court.
27. The Hon’ble High Court in its para no. 6, thus, observed as
under :
“
The controversy stands concluded by the decision of this
Court in Chatrabhuj Mavji Merchant V. Sumati Morarjee
1992 Mah LJ 1075 and the decision of the Supreme Court
in Dhulabhai V/s. State of M.P., MANU/SC/0157/1968 :
-- 16 of 26 --
NM 3484 of 2019 in S.C.Suit No. 2234 of 2019
17 Date : 02.03.2020
(1968)3SCR662. In Chatrabhuj Mavji Merchant’s case
(supra), a suit was filed in the City Civil Court, Bombay, for
a declaration and injuction alleging breach of trust by
trustees of a trust vis-a-vis the Trust Property. Interim
reliefs were claimed by way of the appointment of a
receiver to take over the trust propety and an injunction to
restrain defendants therein from using or dealing with the
property through a notice of motion. The same having
been dismisssed, and appeal was filed in the High Court.
The issue for consideration before the High Court was
whether the City Civil Court had jurisdiction to try the suit.
This Court held that breach of trust suits under the Induan
Trusts Act have to be instituted in the Principal Court
irrespective of whether it be or not the District Court. So
far as Bombay is concerned, the ordinary civil jurisdiction is
vested in the High Court. The territory covered by the High
Court’s ordinary original Civil jurisdiction includes villages
of the Bombay Suburban District and Thane District. The
Bombay City Civil Court Act, 1948, in terms, speaks of the
City Court being “an additional Civil Court for Greater
Bombay”. It is not the principal Court as referred to in the
indian Trusts Act. Reference to the principal court in the
Trust Act clearly imply that breach of trust suits have to be
instituted in and tried by the principal Court. Suits of the
nature of breach of private trusts for declaration and
injunction are not maintainable in the City Court under the
-- 17 of 26 --
NM 3484 of 2019 in S.C.Suit No. 2234 of 2019
18 Date : 02.03.2020
Bombay City Civil Court Act. The decision of this Court in
P.R. Geglani V/s. M/s. Beharilal Beniprasad,
MANU/MH/0036/1978 : AIR 1978 Bom 255 was also
referred to in the above decision and explained. I have
carefully perused the above decision. In my opinon, the
above controversy is no more res inegra in view of the
above decision. Following the same, I hold that the
principal Civil Court of original jurisdiction for Greater
Bombay is the High Court of Judicature at Bombay and not
the City Civil Court. The Civil Court of limited pecuniary
jurisdiction cannot be held to be principal civil court. This
position is not affected by the enactment of Bombay City
Civil Court Act, 1948 and creatiion of the Bombay City Civil
Court.
28. In case of
Vidya Darolia & Ors. V/s. Durga Trading
Corporation, MANU/SC/0363/2019, the Hon’ble High Court while
dealing with the dispute of Private Trust, referred to the arbitration
in its para no. 27 concluded that “
it is not any civil court that has
jurisdiction, but only one designated court, namely, a principal
Civil Court of original jurisdiction, who can decide the dispute. By
necessary implication, disputes arising under the Indian Trusts Act
cannot possibly be referred to arbitration.
-- 18 of 26 --
NM 3484 of 2019 in S.C.Suit No. 2234 of 2019
19 Date : 02.03.2020
29. The plaintiffs relied on the judgment of
Santosh Poddar
(Supra). In the aforesaid judgment the Hon’ble Division Bench of
Hon’ble Bombay High Court held that “
there is no ouster of
jurisdiction of a Civil Court in all cases where the provisions of the
Companies Act may be attracted. It is only in respect of those
proceedings which are expressly contemplated under the
Companies Act under any specific provision that the Court which
is referred to in that section would be the special court, namely
the High Court or the notified District court. In all other cases
ordinarily Civil Courts would continue to have jurisdiction.
30. In the aforesaid case, the suit filed for declaration that the
some of the parties have ceased to be Director of the Company and
some of the parties have not ceased to hold office of the Director of
the Company. The other reliefs relate to a declaration that the
meetings of the Board of Directors held on certain dates is not
valid. The Hon’ble High Court after considering the meaning of
Court define under Section 2(11) of the Companies Act and
Section 10 of the said Act held that the term Court whenever is
used in Companies Act, the Court which is referred is the Court as
set out under Section 10. Therefore, as per Section 10, whenever
the application to a Court referred shall be the High Court. In all
other cases, accordingly, Civil Court would continue to have
jurisdiction. The Division Bench while rejecting the contention of
the defendant that said suit be filed under special law, would fall
under definition of 3(c) of Bombay City Civil Court Act,
-- 19 of 26 --
NM 3484 of 2019 in S.C.Suit No. 2234 of 2019
20 Date : 02.03.2020
coginzance of which should be taken by the Hon’ble High Court,
held that the said suit is not required to be filed in the High Court
under Section 10 of Comapanies Act and thus, Section 10 of
Companies Act is for application to a suits which were subject
matter before the Hon’ble High Court. Thus, I am of the view that
the aforesaid judgment is not helpful to the plaintiff as in the
present case under most of the sections the word “Principal Court
of original jurisdiction” is used and not any other Court.
31. The advocate for the plaintiff vehemently argued that the
judgment of Hon’ble Bombay High Court in case of
Yes Bank
Limited (supra) is overuled, the judgment of
Khetan Industries
Pvt. Ltd. (supra). I have perused the aforesaid judgment. In the
aforesaid matter the challenged was with respect to appointment
of directors made other tan pursuant to or under sub-sections (3),
(4) or (5) of Section 10-A of Banking Regulation Act. It was held
that Section 10-A of Banking Regulation Act, curtailed jurisdiction
of Civil Courts, but only to a limited extent. In the aforesaid
judgment, the judgment of
Khetan Industries Pvt. Ltd. (Supra) was
referred and in their Lordship thus, observed as under :
“
The Ld. Judge was incidentally also a party to the judment
of the Division Bench in Santosh Poddar’s case. One of the
questions which arose before the Ld. Judge, was whether a
civil suit lies for removal of directors of a private limited
company incorporated under the Companies Act, 1956.
-- 20 of 26 --
NM 3484 of 2019 in S.C.Suit No. 2234 of 2019
21 Date : 02.03.2020
The respondent had filed a suit seeking the removal of
some of the defendants from the post of directors and for a
permanent injunction restraining them from acting as
directors of the company. The Ld. Judge held that Civil
Courts cannot interfere with matters relating to the
appointment of directors. He held that the right to appoint
and /or remove directors of a company being a creature of
the companies Act which provides a machinery for the
enforcement of the said right, the Civil Court’s jurisdiction
is impliedly barred and that disputes relating to the
appointment and / or removal of directors are outside the
jurisdiction of the Civil Courts. The Ld. Judge, accordingly,
answered the preliminary issue in the negative holding that
the company Court had no jurisdiction to entertain and try
the suit. The judgment is clearly contrary to the judgment
of the Division Bench. It was rendered per incuriam. The
judgment in Khetan’s case is, therefore, over-ruled.
32. I have perused the judgment of
Khetan Industries Pvt. Ltd.
(supra) as well as
Judgment of Yes Bank Limited (Supra), the
Hon’ble High Court concern with the two issues. Firstly which is
the Principal Civil Court for Bombay for the parties of proceedings
for removal of the trustees under Chapter 7 of Indian Trust Act,
1882 and secondly whether the Civil Suit would lies for removal of
directors of Private limited company incorporated under
Companies Act, 1956.
-- 21 of 26 --
NM 3484 of 2019 in S.C.Suit No. 2234 of 2019
22 Date : 02.03.2020
33. It appears that in the judgment of
Yes Bank Ltd. (Supra), the
Hon’ble High Court overruled the Second issue which has been
held in Khetan Industries Pvt. Ltd. as Civil Court has no
jurisdiction to entertain the suit for removal of directors of Limited
Company, as it relates to the internal management of the Company
which has governed by the provisions of the Companies Act, 1956.
In Khetan Industries Pvt. Ltd. (Supra) the defendant no. 2 was the
private trust and plaintiff claimed relief against the same. In the
judgment of “Yes Bank Ltd.” there was no issue in respect of the
Indian Trust Act. Therefore, I am unable to accept the contention
of the Ld. Advocate for the plaintiff that the Judgment of Khetan
Industries Pvt. Ltd. is overruled by the subsequent decision of
Hon’ble Bombay High Court in case of Yes Bank Ltd. (Supra). It is
only with respect to second issue, the Judgment of Khetan
Industries Pvt. Ltd. (Supra) is over ruled by Judgment of Yes Bank
Ltd. (Supra)
34. I lay my hands on 17th Commission Report in respect of
Private Trust. The reasons for exclusion of City Civil Court, is
stated in Para No.9, it is as under :
Para No. 9 : “
The act uses the expression “Principal Civil
Court of original jurisdiction” to denote the district court
(outside presidency-towns). In the report of judicial
Administration the law commision opined that there should
be devolution of some of the functions of the district court on
subordinate Courts to relieve the congestion of the work in
-- 22 of 26 --
NM 3484 of 2019 in S.C.Suit No. 2234 of 2019
23 Date : 02.03.2020
the district courts. We think that the State Government should
be empowered to authorised subordinate courts to excercise
the powers under the Act. A definition, therefore, of district
Court to bring out these ideas may be included. Consequential
changes in the provisions of the Act may be made. So far as
presidency towns are concerned, we were, at one stage, of the
view that the City Civil Court should be treated as the district
court for the purposes of the Act. From the comment received
from the High Court of Calcutta, however, it appears that in
Calcutta, the City Civil Court Act, 1953, (West Bengal Act, 21
of 1953), Section 5(4), read with the schedule, expressly
excludes the jurisdiction of the City Civil Court in suits and
proceedings relating to or arising out of the trusts or
endowments. In view of this, we have not mentioned the City
Civil Court in the proposed definition. It will be for the State
Governments to deal with the matters by notification, if they
want to transfer the jurisdiction to the City Civil Court.”
35. In view of the law laid down by the Hon’ble Bombay High
Court in case of Chatrabhuj Merchant Khetan Industries (Supra), I
am of the view that the principal Courtof original jurisdiction
means the Hon’ble High Court and this Court have no jurisdiction
to try and entertain the present suit.
36. On reading of the entire plaint in a meaningful manner, it
appears to me tht the contention of the plaintiff is that the
-- 23 of 26 --
NM 3484 of 2019 in S.C.Suit No. 2234 of 2019
24 Date : 02.03.2020
defendants although were duty bound to manage the Trust
Property by virtue of Trust Deed, but they are failed to manage the
same and thus, the Trust Property and their interest as beneficiary
is at stake. Therefore, the plaintiffs are seeking to declare the
trustees has no interest in the Trust and seeking permission to
manage the trust. Section 15 of Indian Trust Act contemplates that
the Trustees is bound to deal with the property as carefully as man
of ordinary prudence would deal with such property if it were his
own. As per Section 18 of the Act, trustees are bound to take
measures to prevent the waste of the Trust Property. Section 23
contemplates liability on the trustees for breach of the trust.
Further Section 34 prescribed trustees right to apply to Court for
opinion in management of Trust Property to principal Civil Court
of original jurisdiction. Thus, after considering the pleadings of the
plaint and relief claimed and the above judgments of Hon’ble High
Court, I am of the view that this Court have no jurisdiction and
thus, the plaint deserves to be rejected. Thus, I proceed to pass
the following order :
ORDER
1. The prayer of defendant in respect of dismissal of the suit is
rejected.
2. The plaint is rejected in view of Order 7 Rule 10 (d) of Code
of Civil Procedure.
-- 24 of 26 --
NM 3484 of 2019 in S.C.Suit No. 2234 of 2019
25 Date : 02.03.2020
3. No order as to the cost.
(A.H.Laddhad)
Judge,
City Civil and Sessions Court,
Dated : 02.03.2020 Greater Bombay.
Dictated on : 02.03.2020
Typed on : 02.03.2020
Draft Submitted on : 02.03.2020
Checked on : 11.03.2020
Signed on : 11.03.2020
-- 25 of 26 --
NM 3484 of 2019 in S.C.Suit No. 2234 of 2019
26 Date : 02.03.2020
“CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL SIGNED
JUDGMENT/ORDER.”
13/03/2020 at 11.35 a.m. (Ms. V. V. Sawant)
UPLOAD DATE AND TIME NAME OF STENOGRAPHER
Name of the Judge (With Court room
no.)
Shri A.H.LADDHAD
(C.R. No.7)
Date of Pronouncement of
JUDGMENT/ ORDER
02/03/2020
JUDGMENT/ORDER signed by P.O.
on
11/03/2020
JUDGMENT/ORDER uploaded on 13/03/2020
-- 26 of 26 --