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2005 DIGILAW 544 (MP)

Annapurna Malleables Pvt. Ltd. v. State Bank of India

2005-04-21

K.K.LAHOTI

body2005
ORDER 1. The petitioners have sought following reliefs in this petition : "(a) A writ of and/or in the nature of mandamus do issue restraining the DRT, Jabalpur (respondent No.5), from proceeding further with the trial of OA No. 130 of 2003 and/or to desist from taking any further steps in the said OA No. 130 of 2003. (b) A writ of and/or in the nature of certiorari do issue quashing the entire proceedings registered as OA No. 130 of 2003 before the DRT, Jabalpur, for the reasons (i) that it amounts to gross abuse both of the process of law as well as the process of Court and (ii) that the prior consent of the BIFR/ AAIFR as contemplated by S. 22(1) of the SICA had not been obtained by the respondent No.1. (c) To pass such further or necessary or to give such further or necessary direction as may appear to the Hon'ble Court just, fit and proper in the facts and circumstances of the present case. (d) To award full costs of the present proceedings against the respondent No. 1 including the exemplary cost for having commenced vexatious proceedings against the petitioners." A short question arises in this petition whether in the peculiar facts and circumstances, this petition may be entertained by this Court at Jabalpur ? 2. The short facts necessary for the decision of the question are as under : Petitioners have challenged the initiation of proceedings by respondent No. 1 under section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as 'Act of 1993' for short), before the Debts Recovery Tribunal, Jabalpur (hereinafter referred to as 'DRT, Jabalpur'). The challenge is on the grounds that : (a) Two writ petitions filed by the petitioners against respondent No. 1 Bank are pending in the High Court of Chhattisgarh at Bilaspur, bearing Case Nos. W.P. No. 1118/2001 and W.P. No. 1793/2002 and have not been decided so far. (b) That during the pendency of aforesaid petitions, if the respondent No. 1 is permitted to initiate proceedings before the DRT, Jabalpur, the aforesaid writ petitions involving the same subject-matter shall be rendered infructuous. W.P. No. 1118/2001 and W.P. No. 1793/2002 and have not been decided so far. (b) That during the pendency of aforesaid petitions, if the respondent No. 1 is permitted to initiate proceedings before the DRT, Jabalpur, the aforesaid writ petitions involving the same subject-matter shall be rendered infructuous. (c) The respondent No.1 has malafidely initiated proceedings before the DRT, Jabalpur, by concealing the fact that the said writ petitions are pending before the High Court of Chhattisgarh at Bilaspur, Chhattisgarh, and is guilty of suppressio vari and suggestio falsi. (d) That the respondent No.1 has not obtained any prior permission of BIFR/ AAIFR under section 22 of Sick Industrial Companies (Special Provisions) Act, 1985, and the proceedings before the DRT, Jabalpur, are liable to be quashed. 3. The respondent No.1 though caused appearance and filed reply, but has not filed any objection about the territorial jurisdiction of the Court. The respondent No.4 has also caused appearance, but has not filed any objection about the territorial jurisdiction of the Court. But looking to the peculiar facts and circumstances of the case, the aforesaid question is considered by this Court. 4. The petitioners in the petition has stated that: (i) Petitioner No.1 was incorporated as a private Limited Company under the Companies Act, 1956 on 8.2.1982. The petitioner No.1 set up a Steel Foundry at Urla Industrial Area, Raipur, Chhattisgarh. (ii) The petitioner No. 1 suffered heavy cash losses and filed a petition under the Sick Industrial Companies (Special Provisions) Act, 1985 before the Board for Industrial and Financial Reconstruction (hereinafter referred to as 'BIFR' for short) and on 9.10.1990 it was declared as sick. (iii) That the petitioners case is still pending before the 'BIFR' in which respondent-Bank is a party. (iv) That the Reserve Bank of India under section 35A of the Banking Regulation Act, 1949 issued guidelines for recovery of dues relating to Non Performing Assets (NP A) of Public Sector Banks. This guideline provides settlement formula applicable to different categories of NP As and a directions has been issued to all the Banks to settle all the NPAs covered under the scheme. (v) That the respondent-Bank failed to give any notice to the petitioners for One Time Settlement as per the guidelines issued by the Reserve Bank of India, though the petitioners were eligible to avail the benefits under the guidelines. (v) That the respondent-Bank failed to give any notice to the petitioners for One Time Settlement as per the guidelines issued by the Reserve Bank of India, though the petitioners were eligible to avail the benefits under the guidelines. (vi) The petitioner approached the respondent No. 1 by making offer of One Time Settlement of their dues as per the guidelines. As there was dispute in respect of cut-off date in respect of applicability of guidelines, the petitioners filed a writ petition before the High Court of Chhattisgarh, Judicature at Bilaspur, which is registered as W.P. No. 1118/2001 Annexure P-8. On 11.12.2001 the High Court of Chhattisgarh granted interim relief to the petitioner by order Annexure P-9. It is stated in para 5.10 of the petition that the said interim order is still in force. The petitioners on 23.7.2002 made a request to High Court of Chhattisgarh for hearing of the case, but it was rejected by the High Court on account of pendency of large numbers of cases. The order Annexure P-11 is on record. (vii) During the pendency of proceedings the President of India promalgated the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Ordinance, 2002, which came into force w.e.f. 21.7.2002. It is alleged that respondent No.1 issued a show cause notice to the petitioners on 6.8.2002 Annexure P-12 to repay a sum of Rs. 9,65,96,440.15 p. with future interest within 60 days from the date of receipt of show cause notice. The petitioner challenged this show cause notice by filing writ petition before the High Court of Chhattisgarh, at Bilaspur against respondent No.1 which was registered as W.P. No. 1793/2002. On 4.10.2002 the High Court of Chhattisgarh -issued ad-interim writ and stayed operation of show cause notice dated 6.8.2002. In para 5.14 of the writ petition it is pleaded that the aforesaid two petitions are complete, paper books for final hearing have been prepared and as such both the aforesaid writ petitions are ripe for hearing at the High Court of Judicature at Bilaspur. In para 5.14 of the writ petition it is pleaded that the aforesaid two petitions are complete, paper books for final hearing have been prepared and as such both the aforesaid writ petitions are ripe for hearing at the High Court of Judicature at Bilaspur. In para 5.15 it is pleaded that the respondent with a view to frustrate not only the two interim orders dated 11.12.2001 and 4.10.2002 passed by the High Court of Judicature at Bilaspur, but also to render both the petitions infructuous and otiose in the month of December 2004, filed a petition under section 19 of the 'Act of 1993'. This filing of writ petition is under challenge in this petition on the aforesaid grounds and also on various grounds. 5. From the perusal of aforesaid narrated facts it is not in dispute that the petitioners two writ petitions bearing Nos. W.P. No. 1118/2001 and W.P. No. 1793/2002 are pending for final adjudication before the High Court of Judicature at Bilaspur. The petitioner Company is having its registered office at Raipur in Chhattisgarh and petitioner No.2 being Managing Director is also residing at Raipur in Chhattisgarh State. The respondent No.1-Bank is having its branch at Raipur, Chhattisgarh, who has disbursed the loan to the petitioners. So far as respondent No. 4 is concerned in this petition no specific relief has been prayed against respondent No.4. The respondent No. 5 a Joint - Debt Recovery Tribunal for the State of Madhya. Pradesh and Chhattisgarh is situated at Jabalpur within the jurisdiction of this High Court. 6. Now the question arises whether in the peculiar facts and circumstances of the case this petition may be entertained at Jabalpur or should be relegated to the petitioners to file in the High Court of Chhattisgarh. 7. Shri R.S. Jha, learned senior Advocate submitted that filing of an application before the DRT Jabalpur in a separate cause of action and has no concern with the previous two writ petitions filed in the High Court of Judicature at Bilaspur. In the aforesaid two writ petitions, there are different cause of action namely implementation of guidelines issued by the RBI and notice issued by respondent No.1 Bank under the Securitisation Act, but the respondent No. 1 has filed an application under the provisions of 'Act of 1993' which is under challenge in this petition and the DRT is situated at Jabalpur. Hence this petition may be entertained at this stage. Shri Jha has placed reliance to the apex Court Judgment in Sri Nasiruddin v. State Transport Appellate Tribunal [ (1975) 2 SCC 671 ], and judgments of this Court in K.P. Govil v. Jawaharlal Nehru Krishi Vishwavidyalaya, Jabalpur and another ( 1987 JLJ 341 = 1987 MPLJ 396 ), Sudarshan Kumar Dhall v. Canara Bank [1992(2) Vidhi Bhasvar 107 = 1992 MPLJ 914 ], Mahadev Sailor v. Bharat Petroleum Corporation Limited [ 1996 MPLJ 386 ] and submitted that this petition may be entertained at Jabalpur. He has also referred to apex Court judgment in the case of Dhannalal v. Kalawatibai and others [ 2003(1) JLJ 85 = (2002) 6 SCC 16 ] and submitted that the plaintiff is dominus litis i.e. master of the suit, or having dominion over the case. He is the person who has control of an action and in case of conflict of jurisdiction the choice ought to lie with the plaintiff to choose the forum best suited to him unless there be a rule of law excluding access to a forum of the plaintiff's choice or permitting recourse to a forum will be opposed to public policy or will be an abuse of the process of law. He further submitted that even if it is assumed that the petition can also be filed at Bilaspur, even then the petitioner be permitted to file this petition at Jabalpur. 8. To appreciate the rival contention of the parties, the law relied on by the petitioner may be seen. In Sri Nasiruddin (supra) the apex Court held thus : "The conclusion as well as the reasoning of the High Court is incorrect. It is unsound because the expression "cause of action' in an application under Article 226 would be as the expression is understood and if the cause of action arose because of the appellate order or the revisional order which came to be passed at Lucknow then Lucknow would have jurisdiction though the original order was passed at a place outside the areas in Oudh. It may be that the original order was in favour of the person applying for a writ. In such case an adverse appellate order might be the "cause of action". The expression "cause of action" is well-known. It may be that the original order was in favour of the person applying for a writ. In such case an adverse appellate order might be the "cause of action". The expression "cause of action" is well-known. If the cause of action arises wholly or in part at a place within the specified Oudh areas, the Lucknow Bench will have jurisdiction. If the cause of action arises wholly within the specified Oudh areas, it is indisputable that the Lucknow Bench would have exclusive jurisdiction in such a matter. If the cause of action arises in part within the specified areas in Oudh it would be open to the litigant who is the dominus litis to have his forum conveniens. The litigant has the right to go to a Court where part of his cause of action arises. In such cases, it is incorrect to say that the litigant chooses any particular Court. The choise is by reason of the jurisdiction of the Court being attracted by part of cause of action arising within the jurisdiction of the Court. Similarly, if the cause of action can be said to have arisen part within specified areas in Oudh and part outside the specified Oudh areas, the litigant will have the choice to institute proceedings either at Allahabad or Lucknow. The Court will find out in each case whether the jurisdiction of the Court is rightly attracted by the alleged cause of action." In K.P. Cavil (supra) the Full Bench of this Court has held thus: "The decision was followed in Damomal (supra), though in a different context and under a different provision of law. The principle deducible is that in cases of orders impugned, the cause of action would arise at a place where the order is made and also at a place where its consequences fall on the person concerned. This principle appears to be sound, but the question remains, whether in the present case, the consequences of the impugned order (Annexure P-2) could be said to have fallen on the petitioner at Gwalior or at any other place within the specified revenue districts, because it was admittedly made at Jabalpur, which is a place beyond the jurisdiction of this Bench. We are of the view that it is possible to say that the consequences flowing from the impugned order fell on the petitioner• at Gwalior, where he is posted. We are of the view that it is possible to say that the consequences flowing from the impugned order fell on the petitioner• at Gwalior, where he is posted. The reason is that the impugned order was an order of fresh appointment served on the petitioner at Indore, where he was in service of Krishi Vigyan Kendra Trainers' Training Centre, run by the Kasturba Gandhi National Memorial Trust and not by the University. The order was to be effective from the date he took over charge of the post at Gwalior. In other words, in order to succeed in his petition. it would not only be necessary for the petitioner, to prove that an order of appointment in his favour was made by the University, but also that he made the order effective by joining the post at Gwalior. If he fails to prove that the appointment order has taken effect and that he has become an employee of the University, he would not be entitled to any relief against the University. That being the position, the fact that the order of appointment was made and the further fact that the appointment was accepted by joining the post would form part of a cause of action and it would arise at the place the order is made, as also at the place the order is implemented by joining the post. We accordingly hold that a part of cause of action having arisen at Gwalior, this Bench has jurisdiction to entertain the petition." In Sudarshan Kumar Dhall (supra) the Division Bench of this Court held that if a part of cause of action has arisen within the territorial jurisdiction of High Court, it has jurisdiction to entertain the petition. In Mahadev Sailor (supra) the single Bench of this Court considering the question of territorial jurisdiction in the matter of termination of service held that though the letter of appointment was issued from Bombay, order terminating services was served on petitioner at Guna within the jurisdiction of Gwalior Bench of M.P. High Court. The effect of termination order can be said to have fallen on petitioner within State of Madhya Pradesh, hence the Gwalior Bench of High Court will therefore have the jurisdiction. The effect of termination order can be said to have fallen on petitioner within State of Madhya Pradesh, hence the Gwalior Bench of High Court will therefore have the jurisdiction. The apex Court in Dhannalal (supra) also held that where there is conflict of jurisdiction the choice ought to lie with plaintiff to choose most suitable forum, unless a rule of law excludes access to a particular forum or permitting such choise would be opposed to public policy or would be an abuse of process of law. 9. In view of aforesaid legal position the fact of this case may be seen. It is not in dispute that the petitioners and respondent No. 1 both are having their office at Raipur within the territory of Chhattisgarh State. The transaction took place at Raipur and the cause of action for filing an application before the DRT also arose in the state of Chhattisgarh. There is one joint Tribunal for filing aforesaid application for the State of Madhya Pradesh and Chhattisgarh, which is situated at Jabalpur. 10. In Sri Nasiruddin (supra) the apex Court held that if the cause of action arises wholly or in part at a place within the jurisdiction of the Bench, the Bench will have the jurisdiction. The Full Bench of this Court in K.P. Cavil (supra) considering the question in respect of filing of writ petition within the jurisdiction of Court held that the order of appointment was accepted by joining the post at a place would form part of cause of action and it would arise at the place where the order is implemented by joining the post. On these grounds it is held that a part of cause of action arises within the jurisdiction of Bench and the Bench is having jurisdiction to entertain the writ petition. 11. In view of aforesaid settled position of law, it is not in dispute that by filing an application before the DRT, Jabalpur, a part of cause of action arises to the petitioner to invoke the writ jurisdiction of this Court. Now the question remains that even if a part of cause of action arises within the territorial jurisdiction of this Court, whether this Court can refuse to entertain the writ petition or can refuse to decide the matter on merits. Now the question remains that even if a part of cause of action arises within the territorial jurisdiction of this Court, whether this Court can refuse to entertain the writ petition or can refuse to decide the matter on merits. Recently, the apex Court, considering the question of territorial jurisdiction based on part of cause of action in M/s. Kusum Ingots and Alloys Ltd. v. Union of India and another [2004 AIR SCW 2766], held that when an order is passed by a Court or Tribunal or by an executive authority and a part of cause of action arises at that place, even in a given case, when the original authority is constituted at one place and the appellant authority is constituted at another, a writ petition would be maintainable at both the places. In other words as order of the appellate authority constitutes a part of cause of action, a writ petition would be maintainable in the High Court within whose jurisdiction it is situate having regard to the fact that the order of the appellate authority is also required to be set aside and as the order of the original authority merges with that of the appellate authority. The apex Court held thus : "In view of clause (2) of Art. 226 of the Constitution of India now if a part of cause of action arises outside the jurisdiction of the High Court, it would have jurisdiction to issue a writ. The decision in Khajoor Singh (supra) has, thus, no application. We must, however, remind ourselves that even if a small part of cause of action arises within the territorial jurisdiction of the High Court, the same by itself may not be considered to be a determinative factor compelling the High Court to decide the matter on merit. In appropriate cases, the Court may refuse to exercise its discretionary jurisdiction by invoking the doctrine of forum conveniens. (See Bhagar Singh Bagga v. Dewan Jagbir Sawhany AIR 1941 Cal. 670; Mandal Jalal v. Madanlal [(1945) 49 CWN 357; Bharat Coking Coal Limited v. M/s. Jharia Talkies and Cold Storage Pvt. Ltd. [(1997) CWN 122; S.S. Jain and Co. and another v. Union of India and others [(1994) CHN 445; M/s. New Horizon Ltd. v. Union of India AIR 1994 Delhi 126). 12. 670; Mandal Jalal v. Madanlal [(1945) 49 CWN 357; Bharat Coking Coal Limited v. M/s. Jharia Talkies and Cold Storage Pvt. Ltd. [(1997) CWN 122; S.S. Jain and Co. and another v. Union of India and others [(1994) CHN 445; M/s. New Horizon Ltd. v. Union of India AIR 1994 Delhi 126). 12. The apex Court in Kusum Ingots (supra) held that even if a small part of cause of action arises within the territorial jurisdiction of the High Court, the same by itself may not be considered to be a determinative factor compelling the High Court to decide the matter on merit. In appropriate cases, the High Court may refuse to exercise its discretionary jurisdiction by invoking the doctrine of forum conveniens. 13. In this case, two writ petitions between the parties are pending in the High Court of Judicature at Bilaspur, Chhattisgarh. Both the parties are residing at Raipur, within the jurisdiction of High Court of Chhattisgarh. The loan was advanced at Raipur. Major part of cause of action arose within the jurisdiction of High Court of Chhattisgarh. In these circumstances, though the petition is entertainable at Jabalpur, but looking to the fact that two matters are already pending in the High Court of Chhattisgarh, the present matter also relates to the same writ petitions, as in this petition the allegations are that, to deprive the petitioners' prayer/relief of the aforesaid petitions or to render them infructuous and otiose, the application before the DRT has been filed. In any case, the final order of the aforesaid both the writ petitions is having material effect on the application and when the matter is seized by the High Court of Chhattisgarh at Bilaspur in the aforesaid two writ petitions, the judicial proprietary demands that it will not be appropliate to entel1ain this petition at Jabalpur. In the present case the petitioners have made various allegations on the respondents which are also subject matter of aforesaid two writ petitions. While deciding this petition this Court has to go into the aforesaid questions which are subject matter before the High Court of Chhattisgarh at Bilaspur. The High Court of Chhattisgarh has already issued two interim orders in favour of the petitioners. If any decision is taken in this petition, the natural effect will be that the aforesaid two writ petitions shall be affected substantially. The High Court of Chhattisgarh has already issued two interim orders in favour of the petitioners. If any decision is taken in this petition, the natural effect will be that the aforesaid two writ petitions shall be affected substantially. In the aforesaid circumstances, it will not be appropriate for this Court to entertain this petition though part of cause of action arose within the jurisdiction of this Court. 14. In the peculiar facts and circumstances of the case, I do not find it proper to entertain this petition at Jabalpur and this petition is dismissed with liberty to the petitioners to file fresh petition before the High Court of Chhattisgarh. As the matter is not considered on merits and it is dismissed, merely on the aforesaid grounds, this order will not come in the way of petitioners to file a fresh petition before the High Court of Chhattisgarh at Bilaspur seeking relief as prayed in the petition. No order as to costs. .................