Legal provisions involved: Section 430 of the Companies Act, 2013
Judgement by: Delhi High Court
Judge/Bench: Justice Amit Mahajan
Facts
The plaintiffs filed a case saying that some company documents were forged and asked the court to declare them invalid and stop the defendants from using them. The defendants argued that the Civil Court could not hear the case because the same issues were already being dealt with by the National Company Law Tribunal (NCLT) under Section 430 of the Companies Act. The District Court, however, rejected the defendants’ request to dismiss the case.
Key legal provisions
Section 430 of the Companies Act, 2013
Issues raised
- Whether the Civil Court could hear the suit despite pending proceedings before NCLT?
- Whether allegations of fraud or forgery can bypass the statutory bar under Section 430?
Arguments of the case
Plaintiffs argued forgery claims required Civil Court intervention. Defendants contended the NCLT was the appropriate forum and Civil Court jurisdiction was barred.
Judgement
The Delhi High Court said that just claiming fraud or forgery does not override Section 430. The NCLT can look into such claims if they are part of a company dispute. If the Civil Court allowed the case to proceed at the same time, it could lead to multiple cases and conflicting decisions. The court cancelled the District Court’s order and ruled that the Civil Court cannot hear the case while the NCLT is already handling it.
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