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CS Professional · Corporate Restructuring, Valuation and Insolvency · Winding-up by Tribunal under the Companies Act, 2013

Sunrise Textiles Ltd, a company in Surat, is being wound up by the Tribunal. Its supplier, Mehta Yarns, files a civil suit in a civil court for recovery of dues and seeks an injunction against the Tribunal's winding-up proceedings. Under the Companies Act, 2013, what is the correct position?

The civil court has no jurisdiction. Section 430 bars civil courts from entertaining suits on matters the Tribunal can decide, and from granting injunctions against the Tribunal's actions. Since section 280 gives the Tribunal jurisdiction over claims against the company, Mehta Yarns must pursue its claim before the Tribunal.

  1. AThe civil court may entertain the suit but cannot grant any injunction
  2. BThe civil court has jurisdiction because the claim is a commercial debt
  3. CThe civil court may hear the suit with the Tribunal's permission, as the matter is concurrent
  4. DThe civil court has no jurisdiction over matters the Tribunal is empowered to determine, and no injunction can be granted against Tribunal actionCorrect

Explanation

Section 430 bars civil courts from entertaining any suit or proceeding on a matter the Tribunal is empowered to determine under the Act. It also bars injunctions against actions taken by the Tribunal. Section 280 gives the Tribunal jurisdiction over suits and claims by or against the company. The option allowing the suit with Tribunal permission has no basis in these provisions.

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