COMPANIES ACT, 2013

Sections 430, 241

Civil Court not to have jurisdiction - Plaintiff failed to disclose any cause of action or any foundational basis for claiming right in property - Availability of appropriate remedy under section 241 - Allowability of appeal against rejection of suit for restraining company to transfer any tenancy right in favour of any new tenant

Appellant filed a suit against company and its agents and sought for a decree of permanent injunction against company and its agents from transferring any tenancy right in favour of any new tenant in respect of the property described in plaint. The plaint was rejected by Trial Court on the ground that the suit was not maintainable in view of section 430 read in conjunction with section 241, since the reliefs sought primarily pertain to alleged mismanagement of the company. Therefore, the appellant filed an appeal against the order that he sought the declaration as to the plaintiff's rights as a shareholder of the company by virtue of demise of his mother, which relief was not covered under section 241. Further, unless and until the share of the plaintiff in the company was declared, the plaintiff did not come within the purview of section 241.Held: As per admission in the plaint itself, the plaintiff is yet to be declared as a shareholder of the company and/or recorded as such. Even if the plaintiff were to be declared as a shareholder in the company, the position of law is well-settled that a shareholder of a company cannot claim any right, title or interest in the assets of the company. The plaintiff did not disclose clearly in the plaint as to how he became such partial owner of the property. The plaintiff had failed to essentially disclose a legal right to the subject property as well as an infringement of such right, both of which ingredients are absent from the plaint, inasmuch as the immovable property is concerned, which is the only subject-matter of the suit as mentioned in the plaint schedule. If the plaintiff has an axe to grind regarding the alleged mismanagement of the affairs of the Company by inducting third party-tenants, the appropriate remedy would be under section 241. The plaint did not disclose any cause of action for the reliefs sought in respect of the immovable property or any foundational basis for claiming right in the said property. Thus, the suit was rightly rejected by the trial court.

REFERRED : Eastern Indian Motion Picture Association & Ors. v. Milan Bhowmik & Ors. AIR 2024 Cal 108I (Cal-HC) : 2024 TaxPub(CL) 187 (Cal-HC).

FAVOUR : Against the appellant.

A.Y. :

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