RANJIT SINGH Vs. SYLVANIA AND LAXMAN LIMITED

JUDGEMENT

(1.) Appellants Nos. 1 and 2 in this appeal had instituted a suit for a permanent injunction to restrain M/s. Sylvania & Laxman Limited, a public limited company and its Board of Directors from holding a meeting for the purpose of removing defendant No. 14, Mr. L, S. Aggarwal and plaintiff No. 2, Mrs. Shyama Kumari Aggarwal from the offices of Managing Director/President and Joint Managing Directors/Executive Vice President respectively. During the trial of this suit it appears that Mr. L. S. Aggarwal was transposed and became plaintiff No. 3. At the same time, an application under Order 39, Rules 1 and 2, Civil Procedure Code . was moved for the purpose of obtaining an interim injunction to restrain the holding of the said meeting. Some of the defendants opposed it. The opposing defendants' opposition was based on the fact that the suit was barred by Section 41 (1) (b) and Section 41 (e) of the Specific Relief Act. The judgment on this application was delivered by Mr. M. S. Rohilla, Sub Judge 1st Glass, Delhi, on 15th March, 1978, who held that the contract of service of Managing Director or Joint Managing Director being a contract of personal service could not be the subject-matter of an injunction which would have the effect of specifically performing that contract. It was observed that the only remedy available in such a case was to get compensation for damages. Another point which weighed with the learned Subordinate Judge was that the Managing Director had in any case to relinquish the office on 30th September, 1979, as per terms of the agreement and the grant of the injunction would virtually amount to decreeing the suit. It was also held that the terms of office of the second plaintiff had to expire on 28th February, 1978, and hence, no relief could be granted in her case.

(2.) An appeal was taken by the plaintiffs to the Senior Subordinate Judge who admitted the appeal and granted an interim injunction restraining the holding of a meeting by the Board of Directors of M/s. Sylvania & Laxman Limited for the purpose of removing Mr. L. S. Aggarwal from the office of Managing Director. This ex-parte interim injunction was granted on 16th March, 1973,

(3.) In the meantime, a petition was moved by Mr. L. S. Agarwal and Mrs. S. K. Agarwal u/s 397 and 398 of the Companies Act, 1956, complaining of oppression and claiming that the effort to remove them from the office of Managing Director and Joint Managing Director, respectively was prejudicial to the interest of the company, and so on. This petition came before me as Company Judge and at that time it was brought to my notice that there was another proceeding pending in a Civil Court in which an injunction had been granted. An application was moved u/s 24 Civil Procedure Code . praying for the transfer of the appeal before me on the ground that there were two separate legal proceedings covering more or less the same grounds in which interim orders had been passed by two separate Courts. All the parties agreed that the appeal should be transferred and accordingly, I have transferred the appeal concerning the grant of an interim injunction to myself and I have heard this appeal along with the connected petition u/s 397 and 398 of the Companies Act, 1956, wherein, at present, the contention before the Court is regarding the interim order that should be passed pending the disposal of the petition As, the ground covered by the two proceedings overlaps, arguments in both the matters have been heard by me together. Needless to say, although the two separate legal proceedings seems to overlap, the jurisdiction exercised by a Civil Court under Order 39, Rules 1 and 2 of Civil Procedure Code . pending the disposal of a suit claiming a perpetual injunction is quite different from the jurisdiction of a Court hearing a proceeding u/s 397 and 398 of the Companies Act, 1956, wherein the power of the Court is some what different.