JURISDICTION OF COMPANY LAW BOARD
Companies Act, 2013 introduced the National Company Law Tribunal (NCLT) to replace the existing Company Law Board. The intention behind establishing a new tribunal is to relieve the courts of the unnecessary burden and all the matters pending before the Company Law Board are to be transferred to the NCLT as per the Company Act, 2013. But the tribunal is yet not established and the Company Law Board is presiding over all the pending and fresh matters in relation to the company law.
Company law Board was established vide Notification No. 364 dated 31st May, 1991. The procedures for filling the applications/petitions before the Company Law Board have been laid down under the “Company Law Board Regulations, 1991”. The powers and functions of Company Law Board are enumerated under Section 10E of the Company Act, 1956, wherein sub-section (4C) and (4D) lays down several matters upon which it enjoys the powers vested in a Court under the Code of Civil Procedure, 1908 and sub-section (5) states that powers and functions shall be guided by the principles of natural justice and on the board’s discretion.
CIVIL COURT’S JURISDICTION IN RELATION TO COMPANY LAW MATTERS
The jurisdiction of civil court over the company law matters has always been a debatable issue. The main contention put forth against the civil court’s jurisdiction is that the position of Company Law Board has been kept at par with that of Civil Court because of which the appeal against any decision or order of company law board is to be filed before High Court. It is always debated that, since a special body has been established to adjudicate over the matters related to company law it automatically ousts the jurisdiction of civil court.
The issue at hand can be best understood with the help of the decided cases wherein the courts have minutely analyzed and read Section 9 of CPC, 1908, in relation to the intention and powers conferred to company law board under the Companies Act, 1956. Some of the important decisions are as under:
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