Doctrine of Judicial Comity Bars Civil Court from Entertaining Forgery Case Pending Before NCLT: Delhi HC [Read Order]

In a recent case, the Delhi High Court has held that the doctrine of judicial comity bars a civil court from entertaining a forgery suit already pending before the National Company Law Tribunal (NCLT).

The dispute arose from allegations of forgery in corporate documents relating to a research-led, high-tech startup focused on designing, developing and manufacturing world-class Unmanned Aerial Vehicle (UAV) for the defence forces of India, founded by the plaintiffs Vivek Kumar Mishra and Others (respondents)

They claimed that a Shareholders Agreement dated 30 July 2020, multiple SH‑1 and SH‑4 share transfer forms, board resolutions, and receipts bore forged signatures. Karyan Global LLP (Defendant-Petitioner) and its partners allegedly fabricated these documents to create third‑party rights and undermine the plaintiffs’ control over the company.

The plaintiffs filed a civil suit before the District Judge, South East District, Saket Court, seeking declarations that the documents were null and void, along with injunctions restraining reliance on them. Karyan Global LLP, arrayed as defendant, moved an application under Order VII Rule 11 CPC for rejection of the plaint, arguing that the suit was barred by law, lacked cause of action, was undervalued, and amounted to forum shopping.

On 24 December 2024, the Saket Court dismissed the application. It held that since the plaintiffs’ claim was primarily about forgery, only a civil court could adjudicate fraud. The court rejected the plea that Section 430 of the Companies Act, 2013 barred jurisdiction, reasoning that the NCLT lacked authority to declare documents forged. It also found objections on valuation, suppression of facts, and forum shopping unmerited at the threshold stage.

Aggrieved, Karyan Global LLP filed a revision petition before the Delhi High Court. The petitioner argued that Section 430 Companies Act, 2013 bars civil jurisdiction when NCLT is seized of company law matters. Also, NCLT has wide powers under its Rules to examine forgery and fabrication.

It was further argued that the plaintiffs were guilty of forum shopping, having pursued remedies before the NCLT, the civil court, and a criminal complaint simultaneously. Also, the suit was undervalued (₹13.26 lakh vs. the alleged ₹20 crore transaction). The dispute was commercial in nature, hence within the purview of the Commercial Courts Act.

The plaintiffs countered that only civil courts can adjudicate fraud and forgery, that valuation was proper since the relief sought was a declaration of invalidity, and that multiple remedies were lawful.

On the jurisdictional bar, the bench of Justice Amit Mahajan invoked the doctrine of judicial comity, stressing that courts must respect the authority of other forums to avoid conflicting decisions. It observed:

“Courts ought to apply the said doctrine to restrain proceedings where another forum’s authority is established… In challenges under Order VII Rule 11(d) CPC, comity may be used to interpret ‘barred by law’ broadly, including deference to foreign/prior forums.”

The Court noted that the issues raised in the plaint were already agitated in the company petition before the NCLT. Therefore, the civil court could not assume jurisdiction unless it was later found that the matter required a detailed trial into allegations beyond NCLT’s scope.

In its final analysis, the Delhi High Court held that the Saket Court erred in refusing to reject the plaint. It ruled:

“In view of the aforesaid discussion, the impugned order is set aside. Consequently, the plaint of the respondent plaintiffs is rejected under Order VII Rule 11 of the CPC on account of the same being barred under Section 430 of the Companies Act, 2013.”

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