Civil courts cannot grant ex-parte injunctions in shareholder disputes — Calcutta High Court
A shareholder (plaintiff) filed a civil suit before the Civil Judge (Senior Division), Alipore, seeking relief regarding alleged wrongful appropriation/transfer/denial of rights in relation to his shares in a company (Power Tools and Appliances — as reported). The plaintiff sought an ex-parte ad-interim injunction from the civil court. The Calcutta High Court was moved (by the defendant/company or interested parties) to examine whether a civil court may grant such ex-parte relief where the subject-matter squarely falls within the jurisdiction of the NCLT/NCLAT under the Companies Act.
Section 430 of the Companies Act, 2013 provides (in effect) that no civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Tribunal (NCLT) or the Appellate Tribunal (NCLAT) is empowered to determine under the Act or other law; and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken pursuant to any power conferred under the Act. The consequence: where the Companies Act (or the NCLT) has the statutory machinery to decide an issue, civil courts are by statute ousted and injunctive relief is generally prohibited.
Issue: Can a civil court grant an ex-parte ad-interim injunction in a shareholder dispute that is otherwise within the jurisdictional ambit of the NCLT / which the Companies Act contemplates should be decided by the specialised company law forum?
Holding: No. The Calcutta High Court held that civil courts lack jurisdiction to grant ex-parte injunctions in such shareholder disputes in view of the express bar under Section 430 of the Companies Act. The Court affirmed that matters which can be adjudicated by the NCLT/NCLAT should normally be litigated before those fora; civil courts must not be used to obtain interim ex-parte restraints that effectively pre-empt or frustrate the statutory remedy.
The court’s analysis can be broken down in the following pillars:
Exclusive jurisdiction & statutory ouster — Section 430 is clear in its language: where the Tribunal or Appellate Tribunal is empowered to determine a matter, civil-court jurisdiction is ousted and injunctions are barred. A civil court should not supplant the specialised statutory forum.
Prevent forum-shopping and circumvention — Allowing ex-parte injunctions in civil courts would enable litigants to circumvent the NCLT/NCLAT’s exclusive domain and frustrate the legislative design of a single, specialised forum for company disputes (which includes quicker/technical remedies and statutory processes).
Nature of ex-parte relief — Ex-parte ad-interim injunctions have immediate and often disruptive effects on corporate governance, share transfers, meetings, and business operations. Given Section 430’s prohibition on injunctions concerning Company Act powers, civil courts must exercise extreme caution and generally refrain altogether.
Remedial parity — Reliefs sought in civil proceedings (declaratory, injunctive) are often also available before the NCLT (or via other provisions of the Act). Where parallel relief is available under the Act or before the NCLT, civil courts ought not to entertain suits that amount to alternative routes to the same relief. See the legislative design (Sections 408, 430).
(These points are drawn from the reported judgment and the court’s statutory interpretative approach as covered by press reports and commentary. The LiveLaw report summarises the bench’s reasoning.)
The Calcutta High Court has, in past decisions, shown some variance in approach to civil-court jurisdiction over company matters. For example, earlier judgments (and commentary) have sometimes allowed civil courts to entertain certain shareholder disputes depending on the precise relief and whether the matter was “otherwise triable” before civil courts (an approach that permitted narrow exceptions). There are also decisions which have emphasised that Section 430 does not completely bar civil-court jurisdiction in every conceivable factual matrix — the courts have sometimes parsed the scope of the ouster, examining whether the relief sought is purely within the NCLT’s purview or is a free-standing civil remedy.
This latest decision, however, stresses a stricter adherence to the statutory bar — especially against ex-parte injunctions which have immediate coercive effect. Practitioners must therefore take the latest holding into account and assess whether their cause of action truly lies within the NCLT’s exclusive domain.
Do not rush to civil courts for ex-parte injunctions in share disputes. If the dispute concerns corporate action, oppression/restriction of members’ rights, share-transfers, director appointments/removals, or matters expressly within the Companies Act, the proper (and safer) route is to approach the NCLT. The civil courts are likely to decline ex-parte relief and refer the matter to the statutory forum.
Urgency in company disputes must be handled before NCLT — where urgent interim relief is necessary, file appropriate interlocutory applications before NCLT (or seek ad-interim relief under the Act). The NCLT has power to grant interim relief tailored to corporate disputes and can do so without the jurisdictional complications of civil courts.
Increased importance of pre-litigation strategy — counsel must carefully map reliefs sought and craft pleadings to invoke NCLT jurisdiction if the statutory remedy exists; starting in a civil court may result in dismissal for lack of jurisdiction and possible delay.
Beware of tactical filings — plaintiffs should not use civil suits to obtain temporary injunctions that would harden positions (for example, freezing share transfers or excluding members from meetings) — such manoeuvres may be struck down. Defendants can promptly challenge the civil court’s jurisdiction and obtain a stay/dismissal.
Hybrid/ancillary relief caution — where a civil cause of action has ingredients separate and distinct from company law relief (for instance, purely contractual claims between parties not invoking company law remedies), civil courts may still have a role. Careful fact analysis is required — don’t assume blanket exclusion in every case. (But the present decision is a strong steer against ex-parte civil orders in shareholder disputes.)
Step 1 — Jurisdiction audit: Map each relief sought against the provisions of the Companies Act and the NCLT’s jurisdiction (e.g., oppression/remedies under Sections 241–242, restoration of membership, rectification of register, etc.).
Step 2 — Primary forum: If equivalent relief exists under the Act, prepare NCLT pleadings and interim applications; prefer NCLT for injunctive/rectificatory relief.
Step 3 — Emergency relief: For immediate urgency, apply for interim relief before the NCLT (ensuring full and fair disclosure and strong prima facie case; NCLT will weigh competing commercial impacts).
Step 4 — Avoid ex-parte civil routes: Do not take a chance on obtaining an ex-parte injunction from a civil court for a subject-matter that Section 430 covers; an adverse jurisdictional challenge is likely.
Step 5 — If in doubt, seek protective orders in NCLT and preserve evidence: Use discovery/inspection mechanisms, urgent applications, or contempt mechanisms in the NCLT where necessary.
(These steps follow the logic of the recent decision and best practice in corporate litigation.)
The Calcutta High Court’s holding is a strong reaffirmation of the statutory design that reserves company-law disputes — and the power to grant injunctions relating to company action — to the specialised tribunals created by the Companies Act. For litigants and counsel, the decision is a clear caution: do not attempt to short-circuit the NCLT by seeking ex-parte civil injunctions in shareholder disputes. The route to relief is the specialised statutory machinery; remedies under the Act are the primary — and often exclusive — means of adjudication.
LiveLaw report: Civil courts cannot grant ex-parte injunction in shareholder disputes due to bar u/s 430 Companies Act: Calcutta High Court (Oct 18, 2025).
Companies Act, 2013 — Section 430 (text and commentary).
Analysis and past commentary on Calcutta High Court jurisdictional approaches (EIMPA case commentary and related pieces).
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