Civil court does not have power to entertain cases related to issue and transfer of shares

Last updated: 03 December 2022

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Quick Summary

The National Company Law Appellate Tribunal (NCLAT) has ruled that civil courts cannot hear cases concerning the issue and transfer of shares. This is because Chapter IV of the Companies Act, 2013, specifically empowers the National Company Law Tribunal (NCLT) to handle such matters. Section 430 of the Act explicitly bars civil courts from entertaining any suit or proceeding related to issues that the NCLT or Appellate Tribunal is authorised to decide. Consequently, the NCLAT upheld the NCLT's order in this case, dismissing the appeal.

Court :
NCLAT

Brief :
SECTION 430 of the Companies Act, 2013- 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 for the time being in force, by the Tribunal or the Appellate Tribunal.

Citation :
Positive edge Technology Pvt. Ltd. &Ors. (Appellants) vs. Asmita Katdare & Ors. (Respondents)- NCLAT Dated: 18/11/2020

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