Kolkata: The Calcutta High Court has held that companies and other juristic entities can be proceeded against for violating court injunctions, rejecting the view that such action is limited only to natural persons.
A division bench of Justices Sabyasachi Bhattacharyya and Supratim Bhattacharyya set aside an order of the Judge, Fifth Bench, City Civil Court at Calcutta, which had dismissed an application as not maintainable against a corporate entity.
The case arose from allegations that a finance company had breached an interim injunction. The trial court had rejected the application, holding that such an action could not lie against a juristic person.
Setting aside this view, the High Court said there is no legal bar on initiating such proceedings against a
company. It clarified that while a juristic entity cannot be sent to civil prison, its property can be attached for disobedience of an injunction.
The bench observed that the law provides for two consequences—attachment of property and civil imprisonment—but these need not always go together. Since attachment can be enforced against a company, such proceedings are maintainable, though relief in such cases may be limited to attachment of property.
The court also noted that if action is sought against individuals responsible for the company’s conduct, such as directors or principal officers, they must be made parties to the proceedings, and the court’s leave would be required.
Holding that the trial court had erred in treating the law as imposing a complete bar, the High Court directed the lower court to rehear the application on the merits after allowing both sides to be heard.
The High Court clarified that it had not gone into the merits of the alleged breach and left all issues open for the trial court to decide independently. The court also left it open for the complainant to implead the company’s directors or officers, if deemed necessary.