LAHORE: The Lahore High Court has ruled that civil courts have no jurisdiction to hear cases against entities incorporated under the companies law as such cases strictly fall within the ambit of company judge of the high court.

“It is settled principle now that the courts generally refuse to interfere in the decision of a club on disciplinary matters if given without any irregularity in procedure unless it is proved either that the rules were opposed to natural justice or that they were not properly followed or that there was malice or mala fide in arriving the decision,” rules Justice Shahid Bilal Hassan in a verdict released on a petition moved by the Lahore Polo Club.

The club had challenged the proceedings before a civil court initiated on a suit filed by its terminated member. The judge allowed the petition of the club and set aside the impugned proceedings laying down some guidelines for the civil courts.

Justice Hassan further rules that the jurisdiction of the court in such cases is limited within a very narrow compass and if managing committee of a club or an association has acted bona fide and honestly, followed the principles of natural justice, the civil courts have no jurisdiction to interfere in a matter where disciplinary action is taken against its members.

In the present case, the judge observes that when there appears no mala fide and malice on the part of the polo club’s executive committee in cancelling the membership of the respondent (member), the civil court has no jurisdiction to entertain the suit filed by the respondent as the high court being court of first instance has the jurisdiction to deal with such matters as has been provided under section 5 of the Companies Act, 2017.

“The learned courts below have misconstrued law on the subject and have wrongly exercised jurisdiction vested in them,” Justice Hassan rules.

The club’s counsel, Taffazul Haider Rizvi, had argued that the Lahore Polo Club was a registered company and the respondent namely Naveed Sheikh was one of its members. He said an extraordinary general meeting of the club first suspended membership of Mr Sheikh and then terminated him for his constant misconduct.

The counsel stated that as the club was a company registered in 1934, therefore, under the Companies Act, 2017 all disputes between member and the company fell under the exclusive jurisdiction of company judge of the Lahore High Court and the civil court had no jurisdiction in this regard.

Published in Dawn, April 4th, 2018