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2007 DIGILAW 901 (DEL)

AJAY VERMA v. EAST INDIA COMPANY

2007-05-01

VIPIN SANGHI

body2007
VIPIN SANGHI, J. ( 1 ) THIS application has been filed by the defendant under Order 7 Rule 11 CPC praying for rejection of the plaint on the ground that the suit filed by the plaintiff is not maintainable under the provisions of Section 41 (a) and (d) of the Specific Relief Act, 1963. The applicant has also contended that this Court has no territorial jurisdiction. However, this argument is not raised by the defendant/applicant in the course of his arguments. ( 2 ) THE plaintiff has filed the present suit seeking the following reliefs:- " (a) Pass a decree of declaration thereby declaring that cheque No. 482423 dated 15. 03. 06 drawn on Punjab National Bank, Tolstoy house, Tolstoy Marg, New Delhi for a sum of Rs. 62,60,000 is null and void and un-enforceable against the issuing bank or against the plaintiff. (b) Pass a decree thereby adjudging the cheque No. 482423 dated 15. 03. 06 drawn on Punjab National Bank, Tolstoy House, tolstoy Marg, New Delhi for a sum of Rs. 62,60,000/- is null and void and unenforceable, and directing that the same be delivered up and cancelled. (c) Pass a decree of permanent injunction restraining the defendants from making any claim against the Plaintiff, of whatsoever nature on the basis of cheque No. 482423 dated 15. 03. 06 drawn on Punjab National Bank. Tolstoy House, tolstoy Marg, New Delhi for a sum of Rs. 62,60,000/ -. " ( 3 ) THE case of the plaintiff is that the plaintiff is the proprietor of M/s. Sirdanwal Overseas which is engaged in the business of manufacture and export of garments and other allied products and services. The plaintiff acts as the Indian representative of various foreign buyers sourcing garments and apparels from India. One of the foreign buyers intended to source cushion covers from India and the plaintiff was authorised by the foreign buyer to negotiate and finalize the conditions of purchase, and to supervise and certify the quality control requirements in respect of the products to be sourced from India. The plaintiff has expertise and experience in the relevant field. Consequentially, the plaintiff was so authorised by the foreign buyer. The defendant is a manufacturer of garments. To meet the requirement of the said foreign buyer, the parties herein entered a memorandum of understanding on 24th February, 2006. The plaintiff has expertise and experience in the relevant field. Consequentially, the plaintiff was so authorised by the foreign buyer. The defendant is a manufacturer of garments. To meet the requirement of the said foreign buyer, the parties herein entered a memorandum of understanding on 24th February, 2006. Under the terms of the MOU, the defendant was obliged to get the initial fabric of 9,200 meters worth Rs. 21,41,576/- for base fabric of cushion covers and 6,600/- meters worth Rs. 19,71,420/- for border fabric of cushion covers and accessories "in-house at its factory as a guarantee for the Letter of Credit". The Letter of Credit was to be issued by the foreign buyer in favour of the defendant. As a counter guarantee, the plaintiff issued its own cheque for rs. 62,60,000/-, in the event of the LC not being furnished by the foreign buyer. The said cheque was to be encashed only upon failure of the foreign buyer to furnish the LC provided the defendant had procured base fabric and the border fabric as aforesaid. ( 4 ) THE case of the plaintiff is that the LC as opened by the foreign buyer was not acceptable to the defendant. Even though the defendant itself failed to procure the fabric as aforesaid, it sought to encash the cheque of Rs. 62,60,000/- issued by the plaintiff. It is the case of the plaintiff that the defendants had no lawful right to present the cheque for clearance and the cheque had already become null and void in terms of the Clause 3 of MOU. In para 13 of the plaint, it is disclosed that the defendant have initiated proceedings under Section 138 of the Negotiable Instruments Act against the plaintiff in respect of the dishonour of the said cheque. The aforesaid reliefs have been prayed for in these circumstances. ( 5 ) THE objections raised by the defendant in his aforesaid application are that the plaintiff is essentially seeking to scuttle the proceedings under section 138 of the Negotiable Instruments Act and an injunction cannot be granted to restrain any person from prosecuting a judicial proceeding pending at the institution of the suit, unless such restraint is necessary to prevent multiplicity of proceedings. Similarly, no injunction can be granted to restrain any person from instituting or prosecuting any proceedings in a criminal matter. Similarly, no injunction can be granted to restrain any person from instituting or prosecuting any proceedings in a criminal matter. It is also argued that the first two reliefs prayed for are essentially the same and are a surplussage and the real effective relief sought in the suit is the third relief of a permanent injunction to restrain the defendant to make any claim against the plaintiff "of whatsoever nature" on the basis of the said cheque. It is argued that the third relief, as aforesaid, is barred by Section 41 (d) and could not be sought by the plaintiff. If the. said relief is excluded, the first two reliefs being the reliefs of declaration, without any consequential relief, would be barred by Section 34 of the specific Relief Act. The plaintiff was entitled to seek further consequential relief such as damages, which the plaintiff has failed to claim. ( 6 ) ON the other hand, counsel for the plaintiff submits that the suit as filed does not fall with the ambit of Section 34 of the Specific Relief Act, inasmuch as, the plaintiff is not claiming declaration in respect of a legal character or as to any right to any property. In fact, the plaintiff is seeking cancellation of a written instrument, that is the cheque, under Section 31 of the Specific Relief Act which reads as follows:- "31. When cancellation may be ordered.- (1) Any person against whom a written instrument is void or voidable, and who has reasonable apprehension that such instrument, if left outstanding may cause him serious injury, may sue to have it adjudged void or voidable; and the court may, in its descretion, so adjudge it and order it to be delivered up and cancelled. " ( 7 ) HE submits that the necessary corollarv, of a declaration that may ultimately be granted by this Court in terms of the prayers 'a' and 'b' made in the suit would be that the defendant would be dis-entitled from relying upon the said cheque to maintain any legal proceedings against the plaintiff. It is also argued that the injunction as sought in the suit is a final relief and not by way of an interim relief to restrain the proceedings under Section 138 of the Negotiable Instruments Act. ( 8 ) IN his rejoinder, counsel for the applicant/defendant has pointed out that in the interim application,. It is also argued that the injunction as sought in the suit is a final relief and not by way of an interim relief to restrain the proceedings under Section 138 of the Negotiable Instruments Act. ( 8 ) IN his rejoinder, counsel for the applicant/defendant has pointed out that in the interim application,. e. , IA Nos. 7485/06, the plaintiff had squarely sought restrain against the defendant in respect of the proceedings under Section 138 of the Negotiable Instruments Act in complaint No. 213/06 pending in the Court of the Metropolitan Magistrate, Mazgaon, Mumba. ( 9 ) AT this stage, counsel for the plaintiff states that he is not pressing for grant of the said interim relief. ( 10 ) HAVING considered the rival submissions of the parties, I am of the view that the present application filed by the defendants deserves to be dismissed. ( 11 ) I find force in the submission of the plaintiff that the first two reliefs in Clauses (a) and (b) of the plaint squarely fall within the scope of Section 31 of the Specific Relief Act. The plaintiff is, in fact, seeking to have the cheque adjudged void or avoidable, and is further seeking the relief of its being delivered up and cancelled. The plaintiff is not seeking the declaration of his legal character qua the defendant nor is the plaintiff seeking a declaration of a right as to any property. It cannot, therefore, be said that reliefs (a) and (b) fall within the scope of Section 34 of the Specific Relief Act. It is not even the defendant's case that the plaint does not disclose a cause of action in relation to reliefs (a) and (b) as aforesaid. ( 12 ) NOW Order 7 Rule 11 CPC enables the Court to reject a plaint in certain cases. What is contemplated by this provision is that the plaint as a whole is open to rejection. ( 12 ) NOW Order 7 Rule 11 CPC enables the Court to reject a plaint in certain cases. What is contemplated by this provision is that the plaint as a whole is open to rejection. If, even one of the reliefs sought by the plaintiff cannot be rejected under this provision, the plaint as such cannot be rejected (see AIR 1999 SC 1128 and AIR 2000 Punjab and Haryana 44) ( 13 ) SO far as relief (c) is concerned, there may be some substance in the argument of the defendant that an injunction cannot be granted to restrain any person from instituting or prosecuting any proceedings in a criminal matter and prayer (c) as made by the plaintiff may, therefore, be in the teeth of Section 41 (d) of the specific Relief Act since a restrain is being sought by the plaintiff against the defendants for making any claim against the plaintiff "of whatsoever nature" on the basis of the cheque in question. However, as noticed by me, the plaint itself is not open to rejection in this case since prayers (a) and (b), in any case, survive for determination in the suit. ( 14 ) IN my view, whether or not the plaintiff is entitled to relief (c), is a question that the Court would consider when the suit is finally heard. The plaint, in any event, cannot be rejected even if it were to be accepted that relief (c) is not maintainable in law. ( 15 ) CONSEQUENTLY, the IA is dismissed. IA No. 7485/06 ( 16 ) COUNSEL for the defendant does not press the present application. Application stands dismissed as not pressed. CS (OS) No. 1382/2006 ( 17 ) THE plaintiff may file its replication within 8 weeks. Parties should also file their respective original documents within same time. ( 18 ) LIST the matter before the Joint Registrar for admission/denial of documents on 2nd August, 2007 and before the Court for framing of issues on 14th September, 2007.