Chamber Summons No.2 of 2002,IN Suit No.2631 of 2001

24th June, 2002

Petitioner Counsel: Mr. N. M. SHAH, Mr. A. B. KERKAR
Respondent Counsel: MR. M. M. BAGADIA

JUDGMENT

JUDGMENT :- The respondent filed a suit no.2631 of 2001 against the applicants in this Court after obtaining an ex-pare leave under Clause XII of the Letters Patent on 22-6-2001. The petition for leave under Clause XII of the Letters Patent was not numbered by the office. I am informed that in July 2001, when the leave was granted the prevalent practice in this Court was to present the petition (under clause XII of the Letters Patent) directly to the Chamber Judge, who after hearing the plaintiff's counsel ex-parte either granted or refused the leave. It was only from 27-2-2002, when the directions were issued by Hon'ble Mr. Justice J.A. Patil that the practice of presenting the leave petition to the Chamber Judge directly was discontinued and the petitioner is now required to present the petition in the office which after numbering is placed before the Court. However, practice of granting leave ex-parte and without notice to the defendants is still continued.

2. The applicants (who are the defendants in the suit no.2631 of 2001 have therefore, moved this Court by this Chamber Summons for revocation of the leave granted ex-parte to the respondent. The applicants have filed an affidavit in support of the Chamber Summons duly sworn in by Aslam Haji Sattar, the applicant no.2 and the proprietor of applicant no.1. Shri. Amit Kumar Khan, Constituted Attorney of the respondent has filed the affidavit-in-reply sworn in on 18-2-2002.

3. In the suit, the plaintiff (respondent) alleged that it advanced to the defendants certain sums at Mumbai; the defendants (applicants) were to supply goods (fish) against the value of which the advance was to be adjusted; accounts were maintained at Mumbai; part of cause of action arose at Mumbai; under the agreement dated 15-6-1998 (Exhibit-A to the plaint) the courts at Mumbai alone had the jurisdiction to try the suit and hence leave under clause XII of the Letters Patent be granted. Separate application for such leave was also made which was granted ex-parte, by this Court (Coram : Nishita Mhatre, J) on 16th July 2001.

4. Clause XII of the Letters Patent reads as under :

Original jurisdiction as to suits:

"Clause XII: And whether it further ordain that the said High Court of Judicature at Bombay in exercise of its ordinary original civil jurisdiction shall be empowered to receive, try and determine suits of every description if, in the case of suits for land or other immovable property, such land or property shall be situated or in all other cases, if cause of action shall have arisen either wholly or in case leave of the court shall have been first obtained in part, within the local limits of ordinary original civil jurisdiction of the High Court or if the defendants at the time of commencement of the suit shall dwell or carry on business or personally work for gain within such limits except that the said High Court shall not have such original jurisdiction in cases falling within the jurisdiction of the Small Causes Court at Bombay or Bombay City Civil Court."

5. The High Court of Judicature at Bombay, in exercise of it's Ordinary Original Jurisdiction is empowered to receive, try and determine the following suits:

i) In case of a suit for land or other immovable property, if such land or property is situated within the limits of its original jurisdiction;

ii) If the cause of action for the suit has arisen wholly within the local limits of its original jurisdiction;

iii) If a part of cause of action has arisen within the limits of its original jurisdiction of this Court, prior leave of this Court is obtained;

iv) If the defendant or all the defendants if there are more than one, at the time of commencement of the suit reside or carry on business or personally work for gain within the local limits of it's original jurisdiction.

6. Clause XII of the Letter Patent contemplates four contingencies mentioned above, when the suit can be entertained and tried in the High Court of Judicature at Bombay. In respect of the categories mentioned at Serial No.(i), (ii) and (iv) above, the suit can be filed as of a right and would be received and entertained by this Court. In respect of category no.(iii), the suit cannot be filed in this Court as of a right but the plaintiff would first have to obtain leave under Clause XII.

7. I would now consider whether any part of cause of action in the present case has arisen within the jurisdiction of this Court. If no part of cause of action has arisen within the jurisdiction of this Court, the respondent could not have applied for leave and the leave obtained ex-parte would have to be revoked.

8. The learned counsel for the plaintiff (respondent) stated that part of the cause of action has arisen within limits of Ordinary Original Jurisdiction of this Court because:

a) the amount of advance was paid/sanctioned by the respondent at Mumbai.

b) the respondent has an office at Mumbai; the amount of advance sanctioned by the plaintiff was entered into books of accounts of the respondents maintained at Mumbai; the adjustments for the price of the goods (fish) received by the respondent was to be made in its books maintained at Mumbai.

c) Part of the goods (fish) were to be delivered at Mumbai.

d) Clause no.9 of the agreement which though executed at Verawal specifically provides that only court at Mumbai has the jurisdiction.

9. The learned counsel for the applicants submitted that incorrect and false representations were made by the respondent ex-parte in their absence and thereby the Court was induced to grant the leave under clause XII of the Letters Patent. Since the leave was granted ex-parte without hearing the applicants, they are, contends learned counsel, entitled to place before the Court relevant materials and to satisfy the Court that relevant material was suppressed and that no part of cause of action had arisen within the limits of Ordinary Original Jurisdiction of this Court.

10. The agreement dated 15-6-1998 was admittedly executed at Verawal i.e. outside the limits of Ordinary Original Jurisdiction of this Court. Under the said agreement, the respondent was to make certain advances to the applicant. The previous advance of Rs.14,17,749.61 paid in earlier years by the respondent to the applicants was to be treated as advance under that agreement. The applicants were to catch fish viz. Shrimps, Lobsters, Sand Lobsters, Squid, Cuttle fish, Pomfret, Ghol fish or any other exportable variety of fish by using 12 trawlers, small trawlers and pillanis and other boats from 15-8-1998 to 15-5-1999 at any port in Gujarat (clause no.1) The supplies were to be made at the branch office at respective centres or at Verawal (clause no.2). Contracted boats were to operate at Dwarka, Jakhau, Vanakbara, Porbandar or Okha Port (clause no.6). The applicant had agreed to procure material from their contracted boats operating at any centre in Gujarat State (clause no.9). Normally, the contracted boats were to fish in Gujarat State. In case the boats went to any other centre for fishing, the applicants were to inform the purchaser atleast two days in advance to enable the respondent to keep their men and material ready for receiving the catch at respective centre/port in Gujarat. (clause no.9(e) of the agreement). All these clauses show that the applicants had agreed to operate 12 boats within the Gujarat state and supplies were to be made in Gujarat State i.e. outside the limits of ordinary original civil jurisdiction of this Court.

11. In para no.4 of the affidavit dated 1-1-2002, the applicant no.2 has affirmed that the Respondent has a full fledged office and factory and operate all their business dealings from GIDC Estate, Somnath Road, Verawal; the respondent has a bank account with Bank of India and Vijaya Bank at Verawal; the respondent did not pay any advance or any money to the applicants; the money was paid to the late father of the applicant no.2 at Verawal by cheques drawn on the plaintiff's Bank account at Verawal; the contract was executed at Verawal; no payment as an advance for supplies was made to the applicants at Mumbai. In para-6 of the Affidavit, the applicant no.2 also stated that Mr. Amit Kumar Khan who has signed and verified/declared the plaint as a Constituted Attorney of the plaintiff has no personal knowledge; he was not involved in the transactions with the applicants; that when Shri. D.S. Deshpande who was working with the respondent alone was acting for the plaintiff and Mr. Amit Kumar Khan had no personal knowledge of the facts. In Affidavit in reply dated 18-2-2002 sworn in by Mr. Khan has not denied the averments made in para-9 of the affidavit that he did not have any personal knowledge in the matter. Mr. Amit Kumar Khan has also not specifically denied the averments made in para no.4 of the Affidavit of Aslam Haji Sattar mentioned above. He has not denied that respondent has bank accounts only in Bank of India and Vijaya Bank at Verawal and that all advances (which were not even made to the applicant no.2 but were made to his father) were made from those bank accounts at Verwal. He has not denied that respondent has a factory and office at GIDC Estate, Somnath Road, Verawal and that all dealings were done from that factory and office. He has not stated that any supplies were made outside State of Gujarat or at Mumbai or any place within the Ordinary Original Jurisdiction of this Court. In the circumstances, no part of cause of action has arisen at Mumbai.

12. The Learned Advocate for the respondent however submitted that though it is not denied that loans were paid from the bank accounts at Verawal, the respondent has categorically stated that advances were sanctioned from Mumbai. According to him, since the loans were sanctioned from Mumbai, part of cause of action has arisen at Mumbai. I am unable to agree. Sanctioning of an advance is a unilateral act of the respondent with which applicants are not concerned. This unilateral act of internal sanctions cannot be a part of the cause of action. Normally, the place where the loan/advance is disbursed would be a place where the cause of action would arise. It is not necessary to consider in this case as to whether the place where the loan/advance was applied and/or the place where the sanction of advance/loan was communicated would also be a place where part of cause of action arises because it is nobody's case that application/request for advance or the communication of sanction/advance was made at Mumbai. Let us take an example of a foreign bank which has a head office outside India and the Branch office at Mumbai. A customer applies for a loan at Mumbai Branch for a sum which is beyond an ordinary sanctioning powers of the branch office at Mumbai as per the internal regulations of the bank. The bank therefore, sends the papers to it's Head Office say at London where they are processed and ultimately internal sanctions are accorded at London. Can by any stretch of imagination, it be said that the suit can be instituted at London because part of cause of action arose in London where the papers were internally processed and decision for sanction was taken ? In my firm opinion, the answer has to be in the negative.

13. Same is the case with respect to the maintenance of the accounts. Merely because the plaintiff maintains accounts at Mumbai would not mean that part of cause of action arose at Mumbai. Let us take illustration of a Company having branches all over India and head office at Mumbai. The Company may maintain accounts only at the Head Office and entries of all transactions all over India may be made in its books maintained at Mumbai. That would not mean that part of cause of action on a contract or a transaction which is made outside Mumbai arises at Mumbai merely because books of accounts are maintained by the company at Mumbai.

14. It was lastly contended by the respondent that clause no.9 of the agreement specifically provides that only Courts at Mumbai shall have the jurisdiction. Relying on this clause, the respondent contends that the suit could be instituted at Mumbai. It is well settled law that it is not competent to the parties by agreement to invest a Court with a jurisdiction which it does not otherwise possess. If there are more than one forums(places) where a suit can be filed, it is open to the parties to select a particular forum and exclude all other forums where the suit can be filed. What is however, necessary is that there must be more than one forums where the suit can be filed and then parties can choose one of such forums. The parties cannot choose a forum which lacks jurisdiction altogether. Suppose a contract is made at Mumbai and the goods are delivered at Satara but are alleged to be defective, then in such cases, normally, Courts at Mumbai and Satara would have a jurisdiction to try such suit. It is open to the parties in such a case to agree that out of the two, only Courts at either Mumbai or Satara would have a jurisdiction to exclusion of other. It is however, not open to the parties to agree that Nagpur, where no part of cause of action has arisen would alone have jurisdiction to entertain and try the suit.

15. In the present case, advance was made at Verawal. The goods (fish) were to be delivered at Verawal or at Ports in Gujarat. No part of cause of action had arisen at Mumbai and therefore, courts at Mumbai had no jurisdiction and clause no.9 of the agreement therefore, does not and cannot confer any jurisdiction on this Court. In this view of the matter, leave granted by the Court under Clause XII of the Letters Patent has to be revoked. Accordingly, Chamber Summons is made absolute in terms of prayer clause (a).

16. After this order was dictated, the learned counsel for the respondent states that since the leave is revoked, the plaint may be returned to the plaintiff for presentation to proper Court. Accordingly, plaint be returned to the respondent with liberty to file the same plaint in an appropriate Court within a period of six weeks.

Chamber Registrar to give an authenticated copy of this order to the parties on payment of usual copying charges. All concerned to act on such authenticated copy.

Order accordingly.