Exclusive Jurisdiction and Transfers

In one line

No civil court may entertain a suit or proceeding on a matter the Tribunal or the Appellate Tribunal is empowered to determine, and no court or authority may injunct action taken under the Act by either of them; and everything that was pending before the Company Law Board, and much of what was pending before the High Courts, stood transferred to the Tribunal on notified dates.

In exam wording: under section 430 no civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Tribunal or the Appellate Tribunal is empowered to determine by or under this Act or any other law for the time being in force, and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or any other law by the Tribunal or the Appellate Tribunal.

Why the law has this at all

A specialist tribunal is worth having only if its jurisdiction is exclusive. If the same dispute could be taken to a civil court as a suit, three things would follow at once: parallel proceedings on the same facts, inconsistent decisions, and the delay the tribunal was created to avoid. Worse, a litigant unhappy with the Tribunal could obtain an injunction from another forum and stop it working.

Section 430 closes both routes, and it does so in two limbs that should be stated separately.

The jurisdiction limb. No civil court may entertain a suit or proceeding in respect of any matter which the Tribunal or the Appellate Tribunal is empowered to determine. The test is not what the plaintiff calls his claim but whether the Tribunal is empowered to determine the matter.

The injunction limb. No court or other authority may grant an injunction in respect of any action taken or to be taken in pursuance of a power conferred on the Tribunal or the Appellate Tribunal.

Section 434 does the transitional work that any change of forum requires: it moves the pending cases, and it decides which of them go and which stay.

But an exclusive jurisdiction raises its own problem, and it is the problem the case worked below answers. Company disputes are not sealed off from the general law. An oppression petition may turn on whether a gift deed was forged, whether a signature is genuine, whether a contract was procured by coercion. If the Tribunal cannot decide such a question, the petitioner is sent to a civil court and the exclusivity is worthless; if it can, a summary forum is deciding questions ordinarily tried on oral evidence. Shailja Krishna is the Supreme Court's answer.