Prasad Agarwal & Anr Vs. Ramesh Chandra Agarwala & Ors  Insc 289
(7 July 2003)
S.B. Sinha & Ar Lakshmanan.
CIVIL APPEAL NOS.4777-78 OF 1996 SINHA, S.B. :
appeals involving identical questions of law and facts were taken up for
hearing together and are being disposed of by this common judgment.
Appeal Nos. 4774-76 of 1996 arise out of the judgments and orders dated
12.3.1993 and 18.3.1993 passed by the Gwalior Bench of the Madhya Pradesh High
Court in Miscellaneous Petition Nos.1654, 1727 and 1728 of 1991; wherein the
legality/validity of three orders passed on 29.5.1991 by the Press and
Registration Board purported to be in exercise of its jurisdiction under
Section 8-C of the Press and Registration of Books Act, 1867 (for short 'the
Act) were questioned by the Respondent No.1 herein.
Appeal Nos. 4777-78 of 1996 arise out of the judgment and order dated 29.6.1991
passed by the Gwalior Bench of the Madhya Pradesh High Court arising out of
Misc. Appeal Nos. 60-61 of 1988.
matrix of the matter, shortly stated is as under:
Chander Agarwal s/o late Dwarka Prasad Agarwal, a partner of M/s Dwarka Prasad Agarwal
and Brothers allegedly upon taking advantage of his father's ill-health made an
attempt to create a lease in relation to the right to publish Dainik Bhaskar
from Bhopal. According to late Dwarka Prasad Agarwal,
to the best of his knowledge, he did not sign the said document dated 13.4.1984
and in any event the same was meant to be applicable only for Bhopal and not for any other place. On
13.4.1985, a partition/family settlement deed was prepared wherein late Dwarka
Prasad Agarwal was not a signatory. Allegedly, Bishambhar Dayal also did not
agree to the said settlement and did not sign the said purported deed of family
Agarwal, eldest daughter of late Dwarka Prasad Agarwal through his second wife,
was made a Joint Managing Director of Bhaskar Publications and Allied
Industries. Ramesh Chander Agarwal being intrigued thereby tried to increase
the equity shares of the company to such an extent that he gets majority in the
equity shares purported to be in total disregard and violation of the
provisions of the Companies Act, 1956. The said respondent also took alleged
forcible possession of the Printing Press on 3.7.1987 which had been leased out
by M/s Dwarka Prasad Agarwal and Brothers (the Firm) to M/s Bhaskar
Publications and Allied Industries Private Limited. Allegedly, late Dwarka
Prasad Agarwal and his two daughters were also physically assaulted by the
first respondent leading to initiation of a proceeding under Section 145 of the
Code of Criminal Procedure. In the said proceedings, the Executive Magistrate
directed the police to open the locks put in the premises of the printing press
in presence of both the parties. However, late Dwarka Prasad Agarwal was not
permitted to run the said printing press.
Ramesh Chander Agarwal filed a declaration before the District Magistrate, Jabalpur, wherein he allegedly accepted the
partnership of M/s Dwarka Prasad Agarwal and others as owners of the newspaper Dainik
Bhaskar. In terms of the provisions of Section 5 of the Press and Registration
of Books Act read with the rules framed thereunder, declarations are required
to be filed by the owner as also the printer(s) and publisher(s) thereof. Six
declarations were filed; three each by Respondent No.2 on the purported
authority of late Dwarka Prasad Agarwal and three by the Respondent No.1.
Objections to the said declarations were filed by late Dwarka Prasad Agarwal
before the appropriate authority.
order dated 6.6.1988, the District Magistrate, Gwalior, in exercise of his
power under Section 8-B of the Act cancelled the said declarations dated
11.3.1985 filed by Respondent No.1. He preferred an appeal thereagainst before
the Press and Registration Appellate Board, but the same was ultimately
the meanwhile filed a writ petition before the High Court for stay of the
proceedings before the District Magistrate. Although an order of stay was
passed therein but before the same could be communicated the aforementioned
order dated 6.6.1988 was passed. Ramesh Chander Agarwal, Respondent No.1, then
filed another writ petition against the said order dated 6.6.1988 before the
High Court but the same was withdrawn on the ground that he had in the
meanwhile availed alternative remedy of filing an appeal against the same
order. During the pendency of the said appeal before the Board, yet another
writ petition was filed by the first respondent marked as Writ Petition No.798
of 1988 praying therein for quashing of the order dated 6.6.1988 whereby the
declarations were directed to be filed.
said appeals filed by Ramesh Chandra Agarwal were dismissed by the Appellate
Board on 29.5.1991 holding as under :
The document at the top portion is pasted with thick opaque white paper slips
from both sides, perhaps to cover up and make unreasonable something which was
written or printed under these slips;
Below the seal of the Deputy Collector and Executive Magistrate, Bhopal (party
super- imposed) appears a somewhat blurred impressed of the seal of the
Executive Magistrate, Gwalior;
The printed proforma of A1 is patently of Bhopal. That proforma does not tally
with the printed form produced by the Appellant with his application.
A-1, is only a photocopy of the original, in the absence of which, the true
effect of these suspicious circumstances (a) to (c) cannot be correctly
the appellant admits that the photocopy of the declaration A-1 was presented by
Devinder Tiwari not personally by him (appellant). This Devinder Tiwari who,
according to the appellant, as a Director of the Company did not file any
letter of authority on behalf of the Company, or even from the appellant, to
explain why the declaration was not presented in person by the appellant".
xxx xxx xxx "Nevertheless, there is no reason to differ from the finding
of the District Magistrate, that Shri S.C. Shukla (Deputy Collector) Executive
Magistrate, not being a District, Presidency or Sub-Divisional Magistrate was
not competent, in view of Section 5(2) of the Act, to entertain and
authenticate the declaration dated 11.3.1985, filed by the appellant.
all the reasons aforesaid, we would uphold the order dated 6.6.88 of the
District Magistrate, Gwalior and dismiss the Appeal No.III filed
by Ramesh Chander Agarwal." A writ petition was filed by Ramesh Chander Agarwal
writ petitions came to be filed in relation to the orders passed in respect of
reason of the impugned order dated 12.3.1993, the order of the Appellate Board
dated 29.5.1991 as also that of the District Magistrate, Gwalior, dated
6.6.1988 were quashed and the Appellate Board was directed to consider the
matter afresh within a period of three months.
enough, however, the same learned Judge on a review application filed by the
first respondent herein by an order dated 18.3.1993 directed that the inquiry by
the District Magistrate should be deferred if an application is filed before
him till the final outcome of the civil litigations by the parties.
Prasad Agarwal, alleging his alleged illegal dispossession from the printing
press, filed a suit for eviction and permanent injunction in the court of
A.D.J., Gwalior, which was registered as Suit No.1-A of 1988. An application
for grant of injunction in terms of Order 39, Rules 1 and 2 of the Code of
Civil Procedure was filed wherein a prayer was made for grant of temporary
injunction against Respondent No.1 restraining him from publishing the
newspaper illegally and furthermore not to indulge in false propaganda and/or
to take forcible possession of the printing press. Respondent No.1, Ramesh Chander
Agarwala also filed a suit against late Dwarka Prasad Agarwal praying therein
for a permanent injunction restraining him from interfering with the working of
the press at Gwalior and not to take possession thereof. He also filed an
application for grant of interim injunction in terms of Order 39, Rules 1 and 2
of the Code of Civil Procedure.
First Additional District and Sessions Judge before whom the matters were
pending, disposed of both the applications by a common order dated 28.5.1988.
The court directed maintenance of status quo by the parties and further
directed that Ramesh Chander Agarwal would not interfere with the working of
late Dwarka Prasad Agarwal in the matter of managing the affairs of the
company. However, in his order relating to the application filed for injunction
in Suit No.2-A of 1988 of Respondent No.1, the court directed the original
appellant, late Dwarka Prasad Agarwal not to interfere in the printing and
publishing of the newspaper Dainik Bhaskar from Gwalior.
the parties preferred appeals before the High Court against the said orders
which were marked as M.A. No.60 of 1988 and M.A. No.61 of 1988. The High Court
allowed the appeal preferred by Ramesh Chander Agarwal and dismissed Appeal
No.61 of 1988 filed by late Dwarka Prasad Agarwal holding that the suit for
temporary injunction was barred under Section 10 of the Companies Act.
appeals were filed by Dwarka Prasad Agarwal (since deceased), questioning the
legality/correctness of the said orders.
questions, in the aforementioned factual backdrop, which arise for
consideration in these appeals are :
Whether the High Court was justified in issuing a direction that its earlier
direction contained in order dated 12.3.1993 directing the Appellate Board to
dispose of the appeal within three months need not be adhered to, if Ramesh Chander
Agarwal files an application for stay of the inquiry by the District Magistrate
during the pendency of the civil suit?
Whether the civil court had any jurisdiction to entertain the suit ? Re:
Question No.1 :
outset, we may observe that when a disputed question as regard the right of one
partner against the other to file a declaration in terms of the provisions of
the Act had arisen for consideration, the High Court was not correct in issuing
a subsequent direction in the review petition. Such a jurisdiction the High
Court did not have. The conflicting rights of the parties were required to be
determined in accordance with law by the statutory authority. Such a dispute,
it goes without saying, should be determined as expeditiously as possible
inasmuch as the dispute involved rival claims of the parties to the lis to run
and manage newspaper business.
event, while directing the statutory authority to dispose of the matter in
accordance with law; it does not stand to any reason as to why a party to the lis
was given such liberty so as to file an application for stay of inquiry by the
District Magistrate till the disposal of the civil suit particularly when the
High Court itself was of the opinion that the suit was not maintainable.
fail to see any reason as to why one party to the lis should be given unfair
advantage over another in the matter of enforcement of statutory rights under
the said Act. The orders of the High Court are, thus, absolutely contradictory
to and inconsistent with each other, and do not stand a moment's scrutiny. The
impugned orders are, therefore, set aside with a direction to the Appellate
Board to hear out and dispose of the appeal as expeditiously as possible but
not later than three months from the date of communication of this order. It
would be open to the Appellate Board to consider the question of adequately
compensating the appellants herein on monetary terms in the event it comes to
the conclusion that the appeal was liable to be dismissed.
Question No.2 :
9 and 10 of the Companies Act are as under :
to override memorandum, articles etc.
Save as otherwise expressly provided in the Act (a) the provisions of this
Act shall have effect notwithstanding anything to the contrary contained in the
memorandum or articles of a company, or in any agreement executed by it, or in
any resolution passed by the company in general meeting or by its Board of
directors, whether the same be registered, executed or passed, as the case may
be, before or after the commencement of this Act; and (b) any provision
contained in the memorandum, articles, agreement or resolution aforesaid shall,
to the extent to which it is repugnant to the provisions of this Act, become or
be void, as the case may be." "Jurisdiction of Courts.
(1) The High Court having jurisdiction under this Act shall be
the High Court having jurisdiction in relation to the place at which the
registered office of the company concerned is situate, except to the extent to
which jurisdiction has been conferred on any District Court or District Courts
subordinate to that High Court in pursuance of sub-section (2); and
jurisdiction has been so conferred, the District Court in regard to matters
falling within the scope of the jurisdiction conferred, in respect of companies
having their registered offices in the district.
The Central Government may, by notification in the Official Gazette and subject
to such restrictions, limitations and conditions as it thinks fit, empower and
District Court to exercise all or any of the jurisdiction conferred by this Act
upon the Court, not being the jurisdiction conferred (a) in respect of
companies generally, by sections 237, 391, 394, 395 and 397 to 407, both
respect of companies with a paid-up share capital of not less than one lakh of
rupees, by Part VII (sections 425 to 560) and the other provisions of this Act
relating to the winding up of companies.
For the purposes of jurisdiction to wind up companies, the expression
"registered office" means the place which has longest been the
registered office of the company during the six months immediately preceding
the presentation of the petition for winding up."
perusal of the aforementioned provisions leaves no manner of doubt that thereby
the jurisdiction of the civil court has not been ousted. The civil court, in
the instant case, was concerned with the rival claims of the parties as to
whether one party has illegally been dispossessed by the other or not. Such a
suit, apart from the general law, would also be maintainable in terms of
Section 6 of the Specific Relief Act, 1963. In such matters the court would not
be concerned even with the question as to title/ownership of the property.
In India, it is trite, that a person cannot
be forcibly dispossessed except in accordance with law. [See Lallu Yeshwant
Singh (dead) by legal representatives vs. Rao Jagdish Singh and Others AIR 1968
SC 620 at Page 622].
Sanyasi Apparao and Another vs. Bodderpalli Lakshminarayana and Another (1962)
Supp. 1 SCR 8], this Court upon considering the Press and Registration of Books
Act, 1867 observed that the matter relating to ownership of the press is a
matter of general law and the Court, thus, must follow that law. It was
observed that a declared keeper of the press is not necessarily the owner
thereof so as to be able to confer title to the press upon another.
dispute between the parties was eminently a civil dispute and not a dispute
under the provisions of the Companies Act. Section 9 of the Code of Civil
Procedure confers jurisdiction upon the civil courts to determine all dispute
of civil nature unless the same is barred under a statute either expressly or
by necessary implication. Bar of jurisdiction of a civil court is not to be
readily inferred. A provision seeking to bar jurisdiction of civil court
requires strict interpretation. The court, it is well-settled, would normally
lean in favour of construction, which would uphold retention of jurisdiction of
the civil court. The burden of proof in this behalf shall be on the party who
asserts that the civil court's jurisdiction is ousted. [See Sahebgouda (dead)
by Lrs. and Others vs. Ogeppa and Others [2003 (3) Supreme 13]. Even otherwise,
the civil court's jurisdiction is not completely ousted under the Companies
In R. Prakasam
vs. Sree Narayana Dharma Paripalana Yogam [1980 (50) CC 611], it has been held that
purpose of s.2(11) read with s.10 is only to enable the shareholders to decide
as to which court they should approach for remedy, in respect of that
particular matter. It is difficult to construe the definition clause as one
conferring jurisdiction, exclusive or otherwise; and even s.10 refers only to
"the court having jurisdiction under this Act", i.e., where such
jurisdiction is conferred by the Act, as under Sections 107, 155, 163(2), 237,
397, 425, etc. In other words, the conferment of jurisdiction on "the court"
is not under s. 10, but by other provisions of the Act like those enumerated
above. If, on the other hand, Sections 2(11) and 10 are construed as not only
nominating the courts, but also conferring exclusive jurisdiction on them, the
specific provisions in the other sections conferring jurisdiction on the court
to deal with the matters covered by them will become redundant. It may be that
where the Act specifies the company court as the forum for complaint in respect
of a particular matter, the jurisdiction of the civil court would stand ousted
to that extent. This depends, as already noticed, on the language of the
particular provisions (like Sections 107, 155, 397 and others) and not on
Sections 2(11) and 10
" Yet again in Maharaja Exports and Another vs.
Apparels Exports Promotional Council [1986 (60) CC 353], the Delhi High Court held
section 9 of the Code of Civil Procedure, 1908, civil courts have jurisdiction
to try all suits of a civil nature excepting suits of which their cognizance is
expressly or impliedly barred. Unlike some statutes, the Companies Act does not
contain any express provision barring the jurisdiction of the ordinary civil
courts in matters covered by the provisions of the Act. In certain cases like
winding-up of companies, the jurisdiction of civil courts is impliedly barred.
a person objects to the election of directors and claims a decree for a
declaration that he was one of the directors, there is no provision which bars
the civil court either expressly or by implication from trying such a
suit" In the present suit also, besides other reliefs, the plaintiff has
sought a declaration that all the 27 members of the existing executive
committee are not entitled to hold the respective offices in view of the judgment
of this court and further that the 18 members of the executive committee who
have retired by rotation are not entitled to continue in office as members of
the executive committee.
judgment, referred to above, fairly and squarely applies to the facts of the
present case and there is no reason to oust the jurisdiction of this court to
entertain the present suit. Under these circumstances, this issue is decided in
favour of the plaintiff and against the defendants." In that view of the
matter, we are of the opinion that the civil suit was maintainable. In any
event, we fail to understand and rather it is strange as to how the High Court
while rejecting relief to the original plaintiff, (late Dwarka Prasad Agarwal),
granted a similar relief in favour of the first respondent herein.
impugned orders are, therefore, set aside. The matters are remitted to the Collector/High Court for a fresh decision on merits as
expeditiously as possible within a period of three months, keeping in view the
observations made hereinabove. These appeals are allowed with costs.
fee assessed at Rs.25,000/- (Rupees twenty five thousand only).