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CASE NO.: Appeal (civil)  4774-76 of 1996

PETITIONER: Dwarka Prasad Agarwal (D) by Lrs. And Another                                            

RESPONDENT: Vs. Ramesh Chandra Agarwala and Others       

DATE OF JUDGMENT: 07/07/2003

BENCH: CJI., S.B. Sinha & [AR Lakshmanan.

JUDGMENT:                              

J U D G M E N T

W I T H

CIVIL APPEAL NOS.4777-78 OF 1996

SINHA, S.B. :

These appeals involving identical questions of law and facts were  taken up for hearing together and are being disposed of by this common  judgment.  

Civil 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.

 Civil 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.  

       Factual matrix of the matter, shortly stated is as under:

Ramesh 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 settlement.  

Ms. Hemlata 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

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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.

 Thereafter, 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.   

By an 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 withdrawn.   

He in 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.  

The said appeals filed by Ramesh Chandra Agarwal were dismissed  by the Appellate Board on 29.5.1991 holding as under :

"(a)    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;

(b)     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;  

(c)     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.

Annexure 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 assessed.   However, the appellant admits that the  photocopy of the declaration A-1 was

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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     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.

For 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 thereagainst.   Similar writ petitions came to be filed in relation to the orders passed in  respect of other declarations.  

By 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.    Strangely 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.   

Late Dwarka 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.  

The 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

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in the printing and publishing of the newspaper Dainik Bhaskar from  Gwalior.    Both 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.

These appeals were filed by Dwarka Prasad Agarwal (since deceased),  questioning the legality/correctness of the said orders.

The   questions, in the aforementioned factual backdrop, which  arise  for consideration in these appeals are :

1)      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?

2)      Whether the civil  court had  any jurisdiction to entertain the  suit ?

Re: Question No.1 :

At the 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.   In any 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.   We 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.  

Re: Question No.2 :

Sections 9 and 10 of the Companies Act are as under :

       "Act to override memorandum, articles etc.          9.      Save as otherwise expressly provided in the Act â\200\223         

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(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.     10.     (1)     The High Court having jurisdiction  under this Act shall be â\200\223

(a)     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

(b)     where 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.

(2)     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 â\200\223

(a)     in respect of companies generally, by  sections 237, 391, 394, 395 and 397 to 407,  both inclusive;

(b)     in 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.

(3)     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."    

A bare perusal of the aforementioned provisions leaves no manner of  doubt that thereby the jurisdiction of the civil court has not been ousted.  The

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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].

In Suvvari 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.

The 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 Act, 1956.

 In R. Prakasam vs. Sree Narayana Dharma Paripalana Yogam [1980  (50) CC 611], it has been held that :

"â\200¦The 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 10â\200¦"   

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Yet again in Maharaja Exports and Another vs. Apparels Exports  Promotional Council  [1986 (60) CC  353], the Delhi High Court held :          "Under 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.

Where 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.   The 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.  

The 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.   Counsel’s fee assessed at Rs.25,000/- (Rupees twenty five thousand only).