AIR 2010 (NOC) 37 (BOM.)(NAGPUR BENCH) ::2009 (5) AIR Bom R 819 ::2010 A I H C 471

Bombay High Court ( Nagpur Bench )

Hon'ble Judge(s): C. L. Pangarkar , J

(A) Civil Procedure Code (5 of 1908) O. 7, R. 11— Rejection of plaint — Suit for specific performance of contract — Case of defendants that Memorandum of Understanding entered into between parties is void and illegal — Civil court is entitled to take cognizance of every dispute of civil nature unless law prohibits it either expressly or impliedly from entertaining the dispute — Party seeking rejection of plaint under O 7, R 11 must show provision of law prohibiting civil court from entertaining the dispute or that an alternate forum or remedy is provided — Failure to show any such provision of law — Rejection of plaint not proper (Para 9)

(B) Civil Procedure Code (5 of 1908) O. 7, R. 11— Rejection of plaint — Suit for specific performance of contract — Case of defendant that Memorandum of Understanding entered into between parties is void and illegal — No law which prohibits institution of suits and taking of its cognizance on said ground — Court will always have to consider facts, evidence and law to find out if contract between parties is enforceable or not — Court may ultimately refuse its specific performance and may also hold the contract to be void but there is nothing which prohibits civil Court from entertaining such a suit — Rejection of plaint on that ground not proper (Para 10)

(C) Civil Procedure Code (5 of 1908) O. 7, R. 11— Contract Act (9 of 1872), S 65 — Rejection of plaint — Suit for specific performance of contract — Case of defendant that Memorandum of understanding entered into between parties is void and illegal — Even if a suit is instituted on a void contract or a contract discovered to be void the party receiving advantage will have to restore it — In the circumstances the party to void contract is still entitled to institute suit for enforcement of contract and in alternative to pray for refund of the money — It could not be said that plaint does not disclose cause of action or that a suit could not be entertained — Rejection of plaint not proper (Para 11)

(D) Civil Procedure Code (5 of 1908) O. 7, R. 11—Specific Relief Act (47 of 1963), Ss 10, 20 — Specific performance of contract — Suit for — Case of defendant that Memorandum of Understanding entered into between parties is void and illegal — No ground to reject plaint — Court will have to consider facts and evidence in each case and then decide about decreeing specific performance — Provisions of Ss 10, 20 do not in any way prohibit taking cognizance of suit by civil Court (Para 12)

(E) Civil Procedure Code (5 of 1908) O. 7, R. 11— Companies Act ( 1 of 1956), Ss 81, 108, 291, 292 — Rejection of plaint — Suit for specific performance of contract — Case of defendant that due to Ss 81, 108, 291 and 292 of Companies Act contract for transfer of shares cannot be enforced hence such suit should not be entertained — Not acceptable — None of those sections prohibits a party from entering into a contract of transfer of shares — Even otherwise it does not take away jurisdiction of Civil Court to entertain suit for specific performance — Such transfer may depend upon approval by the Board of Directors or the authority of competent under the Companies Act — However, it is different question whether Board of Directors may or may not approve such transfer (Para 14)