Civil Courts Cannot Grant Ex-Parte Injunction In Shareholder Disputes Due To Bar U/S 430 Companies Act: Calcutta High Court

The Calcutta High Court bench presided over by Justice Aniruddha Roy, has observed that a civil court cannot grant an ex parte ad interim injunction in a shareholder dispute, in light of the bar under section 430 of the Companies Act, 2013. The plaintiff filed a civil suit before the Civil Judge, Senior Division, Alipore, alleging that his shares in the Power Tools and Appliances Co. Pvt. Ltd. had been illegally reduced, usurping his control over the company. The court passed an ex-parte ad interim injunction restraining with regard to the company's asset. Aggrieved by the impugned ex parte order of the civil court, the defendants filed a revisional application under Article 227 of the Constitution challenging the impugned order. Submission of the Parties The petitioners contended that since the impugned order was passed ex parte, they could not get the opportunity to oppose the jurisdictional issue with regard to maintainability. The petitioner also submitted that there was gross jurisdictional error by the civil court, and the appellate forum was not available during vacation; therefore, it invoked the jurisdiction under Article 227. Relying on the ruling of Shailja Kirshna vs. Satori Global Limited and others, 2025 SCC Online SC 1889, the petitioner submitted that the NCLT has ample authority to adjudicate upon the fraud while adjudicating a shareholder action. The other counsel for petitioners submitted that section 430 of the Companies Act bars the order of injunction by a civil court. It also highlighted that there was no reason specified in the impugned order and that it was merely a verbatim reproduction of the prayers. Per contra, the respondent argued that the impugned order is appealable but not revisable under Article 227 of the Constitution. It is a settled law that an application under Article 227 is not maintainable without invoking the jurisdiction of the appellate forum. It also submitted that the allegation of fraud cannot be adjudicated by the NCLT, and the civil court is the right forum to adjudicate that. Furthermore, the respondent relied on the ruling of Arpee Properties Pvt. Ltd. vs. United Bank of India and others, AIR 1987 Cal 60, to submit that even if no reason has been mentioned in the impugned order, that doesn't make an order revisable if an appeal was available under law. Judgment of the Hon'ble High Court The bench observed that the power conferred under Article 227 is the power of superintendence over all the courts in its territory, and the alternative remedy is not an absolute bar but merely a self-imposed restriction. Further, the bench observed that the impugned order suffers from the ex-facie jurisdictional error, which affects the rights of the parties, and the High Court has ample jurisdiction to intervene in such a scenario despite the availability of the alternative remedy. The bench also observed that the order doesn't record the reason that prompted the civil court to pass it. Also, no justification was there to support the prima facie case. “The law is well settled that reason is the very life of law; when the reason of a law once ceases, the law itself generally ceases. Such is the significance of reasoning in any rule of law.” - the Hon'ble court observed. With the above observations, the bench found that the impugned ex parte order is devoid of reason and not sustainable in the eyes of the law. Therefore, that needs to be set aside and quashed. Case Name: Power Tools and Appliances Co Pvt. Ltd. Vs. Pinaki Roychowdhury & Ors. Case No.: C.O. 3756 & 3767 of 2025 Coram: Aniruddha Roy, J. Judgment Date: 16.10.2025Click Here To Read/Download The Order

Civil Courts Cannot Grant Ex-Parte Injunction In Shareholder Disputes Due To Bar U/S 430 Companies Act: Calcutta High Court

Mohd.Rehan Ali

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Civil Courts Cannot Grant Ex-Parte Injunction In Shareholder Disputes Due To Bar U/S 430 Companies Act: Calcutta High Court

Mohd.Rehan Ali

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