Calcutta High Court
Commercial and Corporate LawArbitration and Mediation

Section 430 of the Companies Act does not bar arbitration under a standalone arbitration agreement.

AMBICA BERI vs FORUM ATMOSPHERE FLAT OWNERS ASSOCIATION

Calcutta High CourtJUDGMENT: September 28, 20263 MIN READSOURCE JUDGMENT
Section 430 of the Companies Act does not bar arbitration under a standalone arbitration agreement.. AMBICA BERI vs FORUM ATMOSPHERE FLAT OWNERS ASSOCIATION. Calcutta High Court. LawLens
THE ORIGINAL LAWLENS SUMMARY
01

Facts

The appellant claimed ownership of Apartment E-101 in the Forum Atmosphere complex and membership in the respondent, a Section 8 company.

Source reference: para. 1–4

The respondent’s notice dated 3 August 2026 for its second AGM disputed her ownership and share certificate and stated that the notice did not recognize her membership or related rights.

Source reference: para. 1–4

The appellant invoked arbitration under Section 21 of the Arbitration and Conciliation Act, 1996, and applied under Section 9 for interim relief, including protection of her rights to attend and vote at the AGM scheduled for 26 August 2026.

Source reference: para. 1–4

The District Judge refused ad interim relief, prompting this appeal.

Source reference: para. 1–4

The appellant relied on KMC records regularising the construction and on her share certificate; the High Court also considered these materials and the terms of the company’s Articles.

Source reference: para. 5–11, 25–29
02

Issues

1. Whether the disputes concerning the appellant’s apartment ownership and shareholder rights fell within the arbitration clause in the respondent’s Articles, and whether Sections 6 and 430 of the Companies Act, 2013, barred recourse to arbitration and Section 9 relief.

Source reference: para. 20–24, 34–41

2. Whether the Section 21 notice and Section 9 application became infructuous once the AGM of 26 August 2026 had been held.

Source reference: para. 19, 30–33

3. Whether the appellant established a prima facie case, balance of convenience and urgency warranting interim protection of her membership, attendance and voting rights.

Source reference: para. 25–29, 42–44
03

Law Applied

Section 7(1)–(3) of the Arbitration and Conciliation Act, 1996 recognises a written arbitration agreement covering disputes arising from a defined legal relationship, whether contractual or not, and permits that agreement to take the form of an arbitration clause in a contract.

Source reference: para. 21–23

Section 21 concerns commencement of arbitral proceedings; a notice need only identify the rudiments of the dispute, with the full case to be developed in the statement of claim.

Source reference: para. 30

Section 9 permits interim measures in aid of arbitration.

Source reference: para. 11, 13–17, 24

Under Section 47 of the Companies Act, 2013, voting rights attach to a member’s shareholding; Sections 241, 242 and 244 provide a statutory remedy for oppression or prejudicial conduct subject to the eligibility requirements in Section 244, while Section 430 bars civil-court jurisdiction over matters the NCLT or NCLAT is empowered to determine.

Source reference: para. 11, 13–17, 24

Section 6 gives the Companies Act overriding effect over repugnant provisions in a company’s memorandum or articles.

Source reference: para. 12, 34–37

The Court relied on Life Insurance Corporation of India v. Escorts Ltd., (1986) 1 SCC 264, and Vodafone International Holding BV v. Union of India, (2012) 6 SCC 613, for the proposition that voting and participation in company management are incidents of shareholding.

Source reference: para. 9, 24, 27
04

Reasoning

The Court treated the arbitration clause as a written, standalone agreement under Section 7, notwithstanding its inclusion in the Articles.

Source reference: para. 20–24, 35–37

Because the clause covered disputes relating both to the Articles and to the premises, the appellant’s claims concerning her ownership and shareholder rights were within its scope.

Source reference: para. 20–24, 35–37

It held that Section 430’s bar concerns civil-court jurisdiction, not arbitration, and that the dispute was not confined to a statutory oppression claim; accordingly, the Companies Act provisions did not defeat the arbitration agreement or the Section 9 application.

Source reference: para. 34–41

The Section 21 notice identified the shareholder-rights dispute, and the underlying controversy extended beyond the particular AGM, so the application was not rendered infructuous by that meeting having taken place.

Source reference: para. 30–33

KMC records prima facie showed regularisation of the construction, while the share certificate supported the appellant’s membership.

Source reference: para. 25–29, 42–44

The respondent’s general denial did not identify a basis for disputing either, and the Court considered the AGM notice itself supportive of the appellant’s claimed membership.

Source reference: para. 25–29, 42–44

These materials established a prima facie case, with the balance of convenience and urgency favouring interim protection.

Source reference: para. 25–29, 42–44
05

Holding

The High Court allowed the appeal, set aside the District Judge’s order, and restrained the respondent from giving effect to the 3 August 2026 letter insofar as it prevented the appellant from exercising her rights of membership, attendance and voting at the respondent’s meetings, pending disposal of the Section 9 application.

CAN 1 of 2026 was disposed of, with no order as to costs.

Source reference: para. 46–48

The Court stated that its findings were tentative and would not unduly influence the further determination of the Section 9 application.

Source reference: para. 46–48
06

Acts & Sections Cited

10 provisions across 2 statutes referred to in this judgment. Each provision opens on LawLens.

Arbitration and Conciliation Act, 19963

Calcutta High Court

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AMBICA BERIvsFORUM ATMOSPHERE FLAT OWNERS ASSOCIATION

Calcutta High Court · September 28, 2026

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