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1946 DIGILAW 124 (CAL)

Himatsinghka Timber Ltd. v. Narendranath Banerji

1946-05-08

body1946
JUDGMENT Clough, J. - The Defendant is a timber merchant who resides at Sapatgram in the District of Goalpara, Assam, and carries on business as a timber merchant in Assam. In 1943 the Defendant who had secured the right to extract and sell dead and wind fallen trees in two forests in the Kuchgaon Division, Assam required finance to enable him to carry out this project. He arranged with the Plaintiff company which has its registered office at No. 6, Old Post Office Street, Calcutta, for finance. The Plaintiff company carries on business as a timber merchant as well as the business of financiers: from and after January 1943 considerable sums were advanced to the Defendant by the Plaintiff company. From June 1943 in accordance with arrangements then made the Defendant delivered extracted limber to the Plaintiff who sold it applying the sale proceeds to the liquidation of the sums which had become due to it on account of advances and commission which had been earned. In January 1944 a new finance agreement was made which provided for:-- (a) finance (b) control by the Plaintiff over the Defendant's timber and appropriation of sale proceeds towards the Plaintiff's dues. 2. In June 1944 a Power of Attorney was executed by the Defendant in favour of two nominees of the Plaintiff implementing the measures of control which the Defendant had agreed to give to the Plaintiff. 3. In December, 1945, the Defendant purported to cancel the agreement with the Plaintiff and the Power of Attorney in favour of the Plaintiff's nominees. This suit was filed in February, 1946. 4. It is alleged in the plaint that a sum of Rs. 57,735-15-9 is due to the Plaintiff, this being made up of the sums due to the Plaintiff in respect of the timber business that I have mentioned and also a further sum of Rs. 13,256-11-6 which is due on another account but which the Plaintiff contends, it was agreed, was to be debited to the Defendant and adjusted in his account under the timber extracting agreement. 5. In paragraph 8 of the plaint the statement is made that the sum which the Plaintiff claims is payable at the Plaintiff's office in Calcutta which is within the ordinary original civil jurisdiction of this Court. 6. 5. In paragraph 8 of the plaint the statement is made that the sum which the Plaintiff claims is payable at the Plaintiff's office in Calcutta which is within the ordinary original civil jurisdiction of this Court. 6. The plaint was admitted on February 19th 1946, and leave under clause 12 of the Letters Patent having been applied for and first obtained or the same day the Plaintiff took out a notice of motion for the appointment of a receiver of certain stocks of timber and for an injunction as mentioned in the notice of motion. 7. On March 25th, 1946 the notice of motion which is now before me was taken out by the Defendant. The relief claimed is revocation of the leave granted under Clause 12 of the Letters Patent. 8. On April 16th, 1946, the written statement in this suit was filed. 9. The grounds upon which the application before me is made are two:-- (i) that no part of the cause of action arose within the local limits of the ordinary on civil jurisdiction of this Court and that therefore leave under Clause 12 ought not to have been given and ought now to be revoked. (ii) that if part of the cause of action did arise within the local limits considerations of convenience require that this suit should be tried not in this Court but in Assam and that in the circumstances the leave granted ought to be revoked. 10. In Madanlal Jalan v. Madanlal 49 C. W. N. 357 (1945) Das, J., dealt with the considerations which arise in an application for revocation of leave under clause 12 more directly and more comprehensively than, I think, has ever been done before. He laid it down at page 365 as two of several propositions that an application for revocation of leave should be made at an early stage of the suit, and delay and acquiescence may be a bar to such an application and that if the Defendant shows clearly that no part of the cause of action arose within the jurisdiction the leave should be revoked as a matter course. 11. 11. Having regard to the provisions of Clause 12 of the Letters Patent, it is only where part of the cause of action arose within the jurisdiction that this court has in a suit of this nature jurisdiction to receive, try and determine the suit after leave has been first obtained. If no part of the cause of action arose within the jurisdiction and no other circumstance exists which gives this Court jurisdiction, then the Court is without jurisdiction in any event and the giving of leave is ineffective. It is wrong to ask for it and if it is asked for, it ought not to be given, and if given it affects nothing; the Court is still without jurisdiction. 12. With great respect to the views expressed by Das J., it seems to me questionable whether in such a case an application for revocation of the leave granted is really the proper course. Leave indeed should not have been given, but the question which really arises having regard to the contention put forward in such a case is an issue in the suit, namely, whether the Court has jurisdiction at all and it seems to me that the proper procedure in such circumstances is to settle and try an issue of law if possible; does the plaint disclose a cause of action which the Court has jurisdiction to try: if questions of fact are involved, then the issue will be a mixed issue of fact and law ; namely, has the court jurisdiction to try the suit? 13. An issue of the first kind, if it can be framed on the pleadings, could be tried as a preliminary issue, and perhaps in some circumstances an issue in the wider form could also be tried as a preliminary issue though the circumstances in which that should be done, I think, are rare. 14. Assuming however that in such a case an application for revocation of leave is a proper procedure to adopt it seems to me that no order should be made in the circumstances of this case. 15. In paragraph 8 of the plaint it is stated, as I have already mentioned, that the sum claimed is payable at the Plaintiff's office in Calcutta. That allegation is not supported by reasons. 15. In paragraph 8 of the plaint it is stated, as I have already mentioned, that the sum claimed is payable at the Plaintiff's office in Calcutta. That allegation is not supported by reasons. But in paragraph 21 of the affidavit used in opposition to this application the case is expressly made that the moneys were agreed to be paid to the Plaintiff at their office in Calcutta, that the Defendant had been taking advances from the Plaintiff from prior to 1936 and the agreement between the parties has always been that the moneys will be payable in Calcutta. 16. In view of the decision of Stanley, J., in W. R. Fink v. Buldev Dass I. L. R. 26 Cal. 715 (1899) and in view of the observations of Sir George Rankin, C. J., in Engineering Supplies Ltd. x. Dhandhania & Co., I. L. R. 58 Cal. 539, at p. 542 (1930) it seems to me that in any event it would not be right to revoke the leave which has been granted. The proper course would be to order particulars to be given or to order an amendment of the plaint. What has been stated by Sir George Rankin, C. J., at page 542 of the report in Engineering Supplies Ltd. v. Dhandhania & Co. I. L. R. 58 Cal. 539, at p. 542 (1930). I must point out that an application in such a case as the present to revoke leave, once it has been given, ought to be based upon something better than a mere criticism of the clarity of the pleadings. If a pleading is not quite in order, the reasonable thing for the learned Judge to do would be to order particulars to be given or to order an amendment of the plaint and it would be unreasonable for him to with draw the leave and to order the plaint to be taken off the file until he has satisfied himself what the real case of the Plaintiff is in respect of the matter which is alleged to give jurisdiction to the Court. 17. Having regard to the case made in the affidavit the decision of the question of jurisdiction involves, it seems to me, decision on questions of fact which it is quite impossible to make in an application of this kind on affidavits. 17. Having regard to the case made in the affidavit the decision of the question of jurisdiction involves, it seems to me, decision on questions of fact which it is quite impossible to make in an application of this kind on affidavits. It has been laid down by Sir George Rankin, Chief Justice, in Secretary of State for India in Council v. Golabrai Paliram I. L. R. 59 Cal. 150 at p. 153 (1931) that questions of difficulty and importance should not be dealt with on an application to revoke leave under clause 12, and the same view has been expressed by Das. J., in the case of Madanlal Jalan v. Madanlal 49 C. W. N. 357 at p. 365 (1945) which I have mentioned. Questions which involve consideration of facts of the kind that arise in this case are, I think, certainly questions of difficulty with the meaning of the phrase used in these two judgments. They are far too difficult to determine upon affidavit evidence. 18. The second branch of the applicant's argument is that if part of the cause, of action arose within the jurisdiction, the balance of convenience requires that the suit should not be tried in Calcutta but should be tried in Assam. In support of the contention that this consideration entitles him to ask for revocation of leave, the applicant relies on the conclusions expressed by Das, J., in the case of Madanlal Jalan v. Madanlal 49 C. W. N. 357 at p. 365 (1945). In giving or refusing leave or maintaining or revoking leave, the Court will ordinarily take into consideration the balance of convenience, and may, if the balance is definitely in favour of the Defendant, apply the doctrine of forum convenience. 19. As has been pointed out by Das, J., leave is in the first instance granted by the Judge ex parte, and at that stage the only material placed before the Court is the plaint, and the Court has to exercise discretion whether to grant or refuse leave upon materials contained in the plaint. At page 360 Das. J., observes as follows:-- At that stage the only material placed before the court is the plaint. From the cause title the court comes to know of the respective occupations, and places of residence of the parties. At page 360 Das. J., observes as follows:-- At that stage the only material placed before the court is the plaint. From the cause title the court comes to know of the respective occupations, and places of residence of the parties. From the body of the plaint the court gathers the cause of action on which the suit is founded. The court has to exercise its discretion in the matter of giving or refusing leave only on these materials. The question of bona fides or bona fides of the Plaintiff in seeking to file the suit in this Court will not usually be apparent from the plaint. Therefore the discretion of the court at this stage cannot, of necessity, the based on a consideration of the motives of the Plaintiff. It must, at this initial stage at any rate, be exercised on a consideration of convenience having regard to the respective occupations and places of residence of the parties and the facts constituting the cause of action and the extent of the part of the cause of action which is alleged to have arisen within jurisdiction. If it finds that the Defendant resides at a distance and the material facts mainly took place outside so that the bulk of the witnesses of the Defendant will be resident outside the jurisdiction and only an insignificant part of the cause of action arose within jurisdiction, the court may in its discretion refuse the leave. This refusal must mainly, if not solely, be based on a consideration of convenience, for as I have said, at this stage at any rate the court will not usually have any material bearing on the motives of the Plaintiff unless of course the degree of inconvenience itself or the insignificance of the part of the cause of action shown to have arisen within jurisdiction by itself suggests bad motive. 20. It appears to me that the discretion of the Court is indeed quite unrestricted, but I hesitate to agree with the conclusion that at the first stage its exercise can really be based principally upon the consideration of convenience; except inasmuch as the Plaintiff having filed his suit in this Court, it can plainly be inferred that it is convenient for the Plaintiff that the suit should be tried in this Court. 21. 21. From a reading of the plaint, it would, I think, seldom be possible to do more than make a guess on the subject of where it would be more convenient to try a suit. The circumstance that an incident occurred in a particular place, does not by any means indicate that the evidence which would prove the facts necessary to be proved is to be obtained at that place. It is, I think, not often that the consideration of convenience can really weigh very greatly at the time when leave is first granted. 22. Assuming, however, that on an application revocation, the question of the balance of convenience is a matter which should be given the full weight that Das, J., suggests should be given to it, there remains the question, on what materials such a consideration should be decided Is the application to be treated upon principles applicable to review, and is the Court entitled to take into consideration matters of fact which do not appear in the plaint at all but are alleged by the Defendant for the first time on the application for revocation and which therefore were not and could not have been before the Court at the time when leave was first granted? To permit considerations of that kind means that the Court would have to take into consideration allegations made by the Defendant which may be quite untrue and which may have only been raised for (sic) of making it appear that convenience required that the suit should be tried somewhere other than in Calcutta ; questions which, if the application succeeds, may never be tried at all in a suit which is subsequently filed. For myself, it seems to me very doubtful whether considerations of convenience based upon contentions of fact raised by the Defendant, having regard to which he alleges that convenience requires that the suit should be tried elsewhere than in Calcutta, are considerations which it is proper to give weight to on an application for revocation of leave, particularly when the facts contended for by the Defendant are disputed by the Plaintiff. 23. In this case, it has been suggested by the Defendant that a great, deal of evidence, and in particular the evidence which he requires to call, is to be had from Assam. 23. In this case, it has been suggested by the Defendant that a great, deal of evidence, and in particular the evidence which he requires to call, is to be had from Assam. But, even assuming that I am entitled to give these considerations the weight which the Defendant asks me to give them, I do not think that in this case they would weigh in his favour so as to induce me to revoke the leave given. The Defendant has chosen to borrow money from a company which has its registered office in Calcutta. If it was indeed agreed that the payment shall be made in Calcutta--and the determination of that question must await the calling of evidence,--it seems to me plain that that agreement was made so that the Plaintiff company could institute its suit in Calcutta, if a suit eventually became necessary; and a Defendant who agrees to such a term must be taken to have borrowed the money, understanding full well that if a suit is eventually filed, the Plaintiff may choose to file it in Calcutta, and, subject to obtaining leave, will very probably do so. Impliedly, the Defendant in such circumstances agrees to the Plaintiff exercising a choice of forum, and if that choice is exercised and leave is granted, I do not think that considerations of convenience would entitle the Court to deprive the Plaintiff of the advantage which he has given himself by his contract and which the Defendant has agreed to. 24. In this particular case, as (sic) everything in favour of the Defendant, although a considerable volume of evidence may have to be obtained from Assam, it seems to me that the Plaintiff company is right when it contends that in order to meet the charges made against it, it will have to call evidence which can only be conveniently obtained in Calcutta or its neighbourhood ; and that from the Plaintiff company's point of view, the convenient forum is the Calcutta High Court and not the appropriate Court in Assam. 25. In my judgment, no proper case has been made for revocation of the leave which has been granted. I do however consider that this is a case where the Court ought to order an amendment of the plaint. 25. In my judgment, no proper case has been made for revocation of the leave which has been granted. I do however consider that this is a case where the Court ought to order an amendment of the plaint. I direct, therefore, that paragraph 8 of the plaint be amended by the Plaintiff company alleging an agreement as stated in the affidavit used in opposition that the money was payable in Calcutta; and proper particulars of the agreement must be given in the amended paragraph. 26. In view of the order that I have made with regard to the amendment of the plaint, the costs of this application will be costs in the cause. 27. The amendment of the plaint is to be effected within 2 weeks. The Defendant will have liberty to file an additional written statement within 10 days thereafter. The Plaintiff company will pay the costs of the additional written statement, if any. The application for revocation is dismissed.