JUDGMENT : (Prayer: Civil Suit is filed under Order IV Rule 1 of Original Side Rules read with Order VII Rule 1 of C.P.C. (a). Directing the defendant to pay a sum of Rs.28,46,18,581/- (Rupees Twenty Eight Crores Forty Six Lakhs Eighteen Thousand Five Hundred and Eighty One only) as on 18.04.2017 with interest at the rate of 18% per annum on the Principal sum of Rs.22,17,05,264/- from the date of Plaint till the day of payment in full to the plaintiff. (b). The costs;) 1. The suit is for recovery of Rs.28,46,18,581/- as on 18.04.2017 with interest at the rate of 18% from the date of plaint till the date of payment for the principal sum of Rs.22,17,05,264/- and costs. 2. The subject suit relates to non payment of consideration for the coal imported from UAE and delivered to the defendant hence determined as Commercial Dispute. 3. The case of the plaintiff:- (i). The plaintiff Company, is carrying on the business of trading in iron ore, coal, barite, bentonite and other minerals. The defendant envincing interest in buying Non Coking Steam Coal of Indonesian Origin, (herein after referred as ‘goods’) approached the plaintiff and placed purchase order dated 25.02.2015 for 51000 MTs of coal and 03.07.2015 for 25000 MTs of coal. The plaintiff and defendant entered into an High Seas Sale (HSS) Agreement on 20.03.2015 and 04.08.2015, for selling 55687 MT & 23932 MT of goods respectively at the price of Rs.2,908.58 per MT and Rs.2,725/- MT respectively on terms and conditions contained therein. The plaintiff raised invoice on 20.03.2015 & 04.08.2015 for 55687 MTS & 23932 MT of coal respectively for a total price of Rs.15,57,48,672/- & Rs.6,59,56,592/- respectively. As per the terms of the HSS agreement and purchase order, the payment for the ‘goods’ sold is to be made by RTGS or LC on 90 days usance basis on the 60th day from the date of completion of the vessel discharge at the Tuticorin port and interest shall be levied for the delay beyond 60 days. (ii). The vessels i.e., “MV Fanoula and MV Marianna” completely discharged the ‘goods’ on 30.03.2015 and 17.08.2015. The payment for the ‘goods’ supplied by the plaintiff fell due on 30.05.2015 & 17.10.2015 within the said period, the defendant failed to pay the dues in full. (ii). The vessels i.e., “MV Fanoula and MV Marianna” completely discharged the ‘goods’ on 30.03.2015 and 17.08.2015. The payment for the ‘goods’ supplied by the plaintiff fell due on 30.05.2015 & 17.10.2015 within the said period, the defendant failed to pay the dues in full. After giving credit to various payments made by the defendant, a sum of Rs.22,17,05,264/- was due and payable to the plaintiff by the defendant. To the legal notice dated 03.09.2016 issued by the plaintiff, the defendant confirmed their liability of Rs.22,17,05,264/- towards the principle as on 15.09.2016. Thereafter, the defendant again issued a letter dated 21.09.2016 and promised to pay the due once it realises the huge arrears from TANGEDCO through “TNERC”. 4. In the meeting held at the Office of the Defendant in Chennai, the defendant undertook to settle the dues before January-2017. However, the defendant failed to keep up their promise. “TANGEDCO” owes more than Rs.60 crores to the defendant. As on 18.04.2017, the balance outstanding due payable by the defendant to the plaintiff is Rs.22,17,05,264/- towards principal and Rs.6,29,13,317/- towards interest. The cause of action for the suit arose within the jurisdiction of this Court, when the defendant placed the purchase order at the plaintiff’s Office at Chennai. When HSS agreement entered at Chennai and the correspondence between the parties emanated within Chennai. 5. The case of the defendant:- The defendant is a Special Purpose Vehicle, which owns a power generation station at Swaminatham Village, Tuticorin primarily for the purpose of generating electricity for the use of its shareholders. The suit suffers from lack of cause of action within the jurisdiction of this Court. This suit is not maintainable without leave to sue. The defendant under clause 12 of the Letter Patent Act, only the Court at Tuticorin where the defendant carrying on business and the goods delivered will have jurisdiction. The plaintiff purchased coal as per the purchase order to produce electricity for the sale to its shareholders and TANGEDCO. 6. In the light of the purchase order, the parties had entered into High Seas Sale Agreements dated 20.03.2015 and 04.08.2015 for the supply of coal and certain invoices raised by the plaintiff to the defendant. As per the purchase order, the GCV (ARB) KCAL/KG for supply of coal shall be 4200 typically and if the quality is to be less than 4000 and same shall be rejected. 7. As per the purchase order, the GCV (ARB) KCAL/KG for supply of coal shall be 4200 typically and if the quality is to be less than 4000 and same shall be rejected. 7. The defendant, after due diligence, came to know that the coal supplied by the plaintiff is inferior in quality. The plaintiff has fudged the report and therefore, the reports are required to be audited for ascertaining the loss caused. In the notice dated 04.10.2017, the defendant has pointed out the above malpractices of the plaintiff. In spite of that, the plaintiff has failed to fulfil its part of the contractual obligations. The plaintiff has not taken into consideration the penalty to be charged for the quality deficiency in the supply of coal by the plaintiff. In the light of the same, the alleged acknowledgement of debt is not valid. The amount payable as computed by the plaintiff is not in accordance with contractual provisions of the purchase order. The rate of interest calculated by the defendant is more and above the agreed rate. The plaintiff has already initiated proceedings before the NCLT, Hyderabad. Hence, the present suit is abuse of process of law and also amount to frivolous claim. The High Sea Sale Agreement and the invoices are based on incorrect computations and forged documents, hence suit has to be dismissed. 8. After receipt of the affidavit of admission and denial from the parties, this Court based on the pleadings framed the following issues:- (i) Whether the Hon’ble High Court, Madras has got territorial jurisdiction to entertain and decide the suit filed by the plaintiff against the defendant? (ii) Whether the plaintiff is entitled to file and maintain the present suit on account of having initiating Corporate Insolvency Proceedings before National Company Law Tribunal, Hyderabad under the Insolvency Bankruptcy Code Rules, 2016? (iii) Whether the Goods(Coal) supplied by the plaintiff to the defendant under the Purchase Order dated 25.02.2015 and 03.07.2015 is in terms of specifications contained therein? (iv) Whether the plaintiff is entitled to a sum of Rs.28,46,18,581/- as on 18.04.2017 with interest at the rate of 18% on the principal sum of Rs.22,17,05,264? (v) To what other reliefs, the plaintiff is entitled to? 9. For the plaintiff, its authorised signatory Mr.Vishwanath had deposed as PW-1. (iv) Whether the plaintiff is entitled to a sum of Rs.28,46,18,581/- as on 18.04.2017 with interest at the rate of 18% on the principal sum of Rs.22,17,05,264? (v) To what other reliefs, the plaintiff is entitled to? 9. For the plaintiff, its authorised signatory Mr.Vishwanath had deposed as PW-1. For the defendant, its former employee Mr.M.N.V.Sudhakar and the authorised representative of the defendant Mr.T.S.Das had deposed as DW-1 and DW-2 respectively. On behalf of the plaintiff Ex.P-1 to Ex.P-12 through P.W.1 and Ex.P.13 to Ex.P.16 during the cross of D.W.1. No documents marked on the side of the defendant. Issue No.1:- (i). According to the Learned Counsel appearing for the plaintiff, based on the Purchase Order (Ex.P.13) dated 25.02.2015, the High Seas Sale agreement was entered between the parties at Chennai. On 20.03.2015, the High Seas Sale agreement (Ex.P.2) for supply of 55,687 coal under Non-Coking Steam Coal of Indonesian Origin through vessel MV FANOULA. On the same day, the invoice (Ex.P.3) was raised for a sum of Rs.1,55,78,672/-. Similarly, based on the Purchase Order (Ex.P.4) dated 03.07.2015, the High Seas Sale agreement (Ex.P.4) dated 04.08.2015, for 23,932 MTS of Non-Coking Coal of Indonesia Origin through vessel MV Marianna was entered between the parties and on the same day, the High Seas Sale Agreement was raised by the plaintiff for a sum of Rs.6,59,56,592/-. All these documents were entered at Chennai where the plaintiff and the defendants have their Office. The supply of Coal to the defendant is accepted and also proved through Bill of Entry (Ex.P.14) and Ex.P.7. The defendant having his Office at Chennai and have entered into the agreement in Chennai cannot plead that no cause of action had arisen within the jurisdiction of this Court. Even according to the defendant, they are carrying on business at New No.20, (Old No.129), Chamiers Road, Nandanam, Chennai. This fact would be easily seen from the purchase order placed by the defendant. While so, there is no necessity to obtain leave of this Court under Clause 12 of Letter Patent Act, since the defendant carrying on business within the jurisdiction of this Court. (ii). Per contra, the Learned Counsel for the defendant would submit that registered Office of the defendant is at Hyderabad. The plant of the defendant is at Tuticorin and in Chennai Office no business is carried. (ii). Per contra, the Learned Counsel for the defendant would submit that registered Office of the defendant is at Hyderabad. The plant of the defendant is at Tuticorin and in Chennai Office no business is carried. No cause of action arisen within the local limits of the ordinary original jurisdiction of this Court. Therefore, this suit at Chennai Court is not maintainable. More so, without leave to sue when the suit against the defendant carrying on business outside the local limit of this Court. (iii). Clause 12 of Letter’s Patent 1865., deals about leave to sue. This clause reads as below:- Clause 12. Original jurisdiction as to suits:- “And We do further ordain that the said High Court of Judicature at Madras, in the 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 the cause of action shall have arisen, either wholly, or in case the leave of the Court shall have been first obtained, in part, within the local limits of the ordinary original jurisdiction of the said High Court or if the defendant at the time of the 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 Cause Court at Madras, in which the debt or damage, or value of property the sued for does not excited hundred rupees. (iv). Place where cause of action arose (situs) and the place where the defendant(s) reside or carry on business (domicile) are the two fundamental ingredients to determine the jurisdiction of the Court. The Clause 12 of Letters Patent, while conferring ordinary original civil jurisdiction with High Court Madras, in case of immovable property, if the property situated within its local limit and has contemplated the following eventualities. In all other cases:- a). Whole cause of action within the local limits of this Court. b). The defendant(s) dwell or carrying on business or personally work for gain within the local limits of this Court. c). Part cause of action within the local limits of this Court. d). In all other cases:- a). Whole cause of action within the local limits of this Court. b). The defendant(s) dwell or carrying on business or personally work for gain within the local limits of this Court. c). Part cause of action within the local limits of this Court. d). Defendant(s) dwell or carrying on business outside the local limits of this Court. (v). Under Clause 12 of Letters Patent, in case of suits other than in respect of land or immovable property, if whole cause of action arisen within the territorial jurisdiction of this Court, or the defendant dwells or carry on business or personally work for gain in Chennai, no leave under Clause 12 of Letter’s Patent, is required. In case, if only part cause of action arisen in Chennai and the defendant carry on business outside Chennai, leave under Clause 12 of Letter’s Patent is mandatory. 10. In support of his submission, the Learned Counsels relied upon the following judgments. (i). C.Govindarajulu Naidu -vs- The Secretary of State for India in Council reported in (1927) 26 LW 558 , in this Court has held as below:- “The next contention is that even so he can sue by reason of the latter part of Cl. 12 of the Letters Patent which is: “or if the defendant shall dwell or carry on business or personally work for gain within those limits.” It is contended that the defendant both dwelt and carried on business here at the commencement of the suit and in support of this contention the plaintiff has cited the decision of a Bench of this Court in Subbaraya Mudali and others v. The Government and Cunliffe. In that case it was held that under Clause 12 of the Letters Patent the Government must be considered as carrying on business at the place where its members exercise all the functions of Government, that is, in Madras. But even in that case the word “dwell” was considered inapplicable to the Government. On the other hand in Doya Narain Tewary v. The Secretary of State for India in Council, it was held by a Bench that the words “carrying on business or personally work for gain” are inapplicable to the Secretary of State for India in Council. But even in that case the word “dwell” was considered inapplicable to the Government. On the other hand in Doya Narain Tewary v. The Secretary of State for India in Council, it was held by a Bench that the words “carrying on business or personally work for gain” are inapplicable to the Secretary of State for India in Council. At page 273, in the course of this judgment Mitter, J., says: (emphasis added) “that the word ‘business’ in Clause 12 of the Letters Patent was used in a restricted sense is also indicated by the words ‘personally work for gain’ to be found in the same section. The latter words would be unnecessary if the word ‘business’ had been intended to be used in an unrestricted sense.” (ii). J.D.John and others -vs- Oriental Government Security Life Assurance Company Limited reported in 1928 SCC Online Mad 347, this Court has held as below:- “7. The other objection depends upon the question whether the Oriental Government Security Life Assurance Co. Ltd., carries on business in Madras. It is no doubt true that the company has got an agency in Madras, but it is not stated that this agency has any directors here or any persons who form a kind of controlling Board in Madras or at least have some direction as regards the policies. The affidavit filed on behalf of the company is to the effect that so far as the Madras office is concerned, it has no independent discretion in the matter, but simply acts as a post office which receives applications or moneys and passes them to the Head office in Bombay, and that is the Head Office that issues all orders there being no vestige of discretion in the local office here to do anything. These facts are not contradicted and the question is whether it can be said that the Oriental Government Security Life Assurance Co. Ltd., carries on business in Madras. I think this question is really concluded by the judgment of Beasley, J., in Bombay Co. Ltd. v. Municipal Council Dindigul [A.I.R. 1929 Mad. 146.] which was a suit filed by the Bombay Co. Ltd., Madras, against the Municipal Council of Dindigul. It was there shown that the representatives of the Bombay Company in Dindigul had no discretion except receiving orders and sending them on. Ltd. v. Municipal Council Dindigul [A.I.R. 1929 Mad. 146.] which was a suit filed by the Bombay Co. Ltd., Madras, against the Municipal Council of Dindigul. It was there shown that the representatives of the Bombay Company in Dindigul had no discretion except receiving orders and sending them on. The question was whether they carried on business in Dindigul to be taxed. It was held that they were not, and Beasley, J., in an elaborate review of the authorities states that there is no difference in principle between residence for purposes of either the Income-tax Act, or the Municipal Act, or for purposes of jurisdiction. This judgment was affirmed by the Chief Justice and Madhavan Nair, J., in O.S. Appeal No. 6 of 1928 where all the authorities have been discussed by the learned Judges. I think that the facts disclosed in the present case in the affidavit, namely, that the agency in Madras does nothing, but acts as a post office forwarding proposal and sending moneys and not having any discretion in the matter either to conclude contracts or to vary them or to enter into them, the Oriental Government Security Life Assurance Company does not carry on business in Madras. It was stated that a suit may lie under S. 12 of the Letters Patent if the money is not paid. That may be so not on the ground that there is business carried on in Madras, but because the proposal was made in Madras and forwarded and part of the cause of action arose in Madras and on that ground leave may be given. I do not think we can confuse the fact of jurisdiction arising out of a part of the cause of action with jurisdiction arising out of the carrying on of business. Unfortunately, our rules do not provide for garnishee proceedings in cases where a part of the cause of the action arises in respect of a debt sought to be enforced by garnishee proceedings.” (iii). The Clan Line Streamers Ltd -vs- Gordown Woodroffe and Company (Madras) (Pte.) Ltd., reported in 92 LW 541, this Court has held as below:- “9. Unfortunately, our rules do not provide for garnishee proceedings in cases where a part of the cause of the action arises in respect of a debt sought to be enforced by garnishee proceedings.” (iii). The Clan Line Streamers Ltd -vs- Gordown Woodroffe and Company (Madras) (Pte.) Ltd., reported in 92 LW 541, this Court has held as below:- “9. Where leave under Clause 12 is necessary, the granting of such leave is a condition precedent to the court having jurisdiction to entertain the suit; and therefore, such leave has to be obtained at the time of the institution of the suit (Vide:- Shamchandra Rampratab v. Bhikamchand Ganeshlal reported in A.I.R. 1929 Bom.468, Motilal Trithovandas Chokesey v. Shankarlal Chaganlal reported in A.I.R.1939 Bom.345, Bimal Singh Kothari v. Muir Mills Ltd. reported in A.I.R.1952 Cal.645, Khitish Kumar Som v. State of Bihar reported in A.I.R.1953 Cal.639 and Laliteswar Singh v. Rameshwar Singh reported in 34 Cal 619.)” (iv). Urooj Ahmed, Lords Enterprises (India) -vs- Preethi Kitchen Appliances Pvt Ltd reported in (2013) 6 CTC 247 . 5(b).Clause 12 of the Letters Patent Act, 1970: “There is no difficulty in appreciating the submissions of the learned Counsel appearing for the Appellant that when there is a part of cause of action having arisen outside the jurisdiction of the Court, a leave under Clause 12 of the Letters Patent is required mandatorily. Consequently, when such a leave has not been obtained already, the same cannot be cured subsequently, as held by this Court in The Clan Line Steamers Ltd. v. Gordon Woodroffe & Co., AIR 1980 Mad. 73 .” 11. The proposition of law on the interpretation of Clause 12 of the Letters Patent cited by the Plaintiff’s Counsel, does not have any application to the present case. There are specific averments in the plaint that the defendant placed the purchase order at the plaintiff Office at Chennai. The High Seas Sale Agreement was entered at Chennai and negotiation happened in Chennai. The representative of the defendants at Chennai Office were carrying on their administrative work and taking decision on behalf of the defendant Company. They were not just acting as Post Office. The witnesses examined on behalf of the defendant were not able to disprove the above assertion either orally or through documents. The representative of the defendants at Chennai Office were carrying on their administrative work and taking decision on behalf of the defendant Company. They were not just acting as Post Office. The witnesses examined on behalf of the defendant were not able to disprove the above assertion either orally or through documents. Both the witnesses examined on behalf of the defendant are not parties to the agreement nor present when these agreements were executed therefore, they are not competent witness to speak about the place of execution of this documents. These two witnesses not even able to tell the name of the person who represented the defendant and signed the High Seas Sale Agreement and the purchase order. Contrarily, the plaintiff is able to establish that the defendant having its Office at Chennai and his representatives came to the plaintiff’s Office for negotiation and settlement of the terms of agreement. Therefore, this Court holds that when the evidence clearly shows that the defendant having their Office at Chennai and carrying on business within the Territorial of this Court, leave to sue under Clause 12 of Letters Patent does not arise. Hence, issue No.1 is held in affirmative. Issue No.2:- Across the bar, it has been represented by the Learned Counsels that the proceedings initiated before the NCLT, Hyderabad, has been disposed of as withdrawn vide order dated 29.05.2018 and there is no proceedings pending before the NCLT, Hyderabad, in respect of this claim and therefore, the parties are not pressing this issue. Issue No.3:- (i). In the written statement, the defendant has vaguely stated the coal supplied by the plaintiff were of inferior quality. As far as this contention is concern, it is an admitted fact by the defendant that coal was delivered to them and in Memorandum of Understanding (Ex.P.15) dated 08.11.2018, the defendant agreed that the due payable is Rs.22,17,05,264/-. In this memorandum of understanding parties agreed to settle for a sum of Rs.12,19,38,000/- towards the full satisfaction, but this compromise had failed. Though, in the written statement, it has been contended that the coal supplied by the plaintiff is of inferior quality, there is no material placed before this Court to show that as soon as the delivery of the coal or sometime immediately thereafter, the defendant raised objection regarding the quality of the coal. (ii). Though, in the written statement, it has been contended that the coal supplied by the plaintiff is of inferior quality, there is no material placed before this Court to show that as soon as the delivery of the coal or sometime immediately thereafter, the defendant raised objection regarding the quality of the coal. (ii). In the written statement, the defendant has specifically stated that in the notice dated 04.10.2017, they have informed the plaintiff about the inferior quality of the coal supplied. This reply notice dated 04.10.2017 not produced before the Court for appreciation. There is no other documentary proof to show that the defendant refused to pay the price of the goods due to non compliance of specification contained in the purchase order. Further, in none of the subsequent correspondence between the parties, there is whisper about the poor quality of the coal supplied. From the invoice and the Bill of Entry, there is a clear evidence to show that two consignments worth Rs.15,57,48,672.00 & Rs.6,59,56,592/- has been delivered to the defendant at tuticorin in Port in two different vessels. (iii). To the legal notice (Ex.P.10) dated 03.09.2016, calling upon the defendant to pay a sum of Rs.24,83,23,136/- with interest on the principal at the rate of 10.50% p.a., thus from the legal notice of the plaintiff, the rate of interest claimed for the due is restricted to 10.50% p.a. The defendant has admitted the liability in the reply notice dated 21.09.2016 and only sought time to settle the dues, on realising the arrears pending with TANGEDCO. While so, the allegation regarding quality of the coal which is raised for the first time in the written statement and without any proof has to be rejected. There is no evidence before this Court to accept the allegation of the defendant about the quality of the Coal supplied by the plaintiff. Hence, issue No.3 is held against the defendant. Issue No.4:- According to the plaintiff, the defendant is liable to pay a sum of Rs.28,46,18,581/- towards principal. The plaintiff demands 18% interest for the money dues. However, according to the legal notice (Ex.P.10), they have demanded only 10.50% interest. Hence, issue No.3 is held against the defendant. Issue No.4:- According to the plaintiff, the defendant is liable to pay a sum of Rs.28,46,18,581/- towards principal. The plaintiff demands 18% interest for the money dues. However, according to the legal notice (Ex.P.10), they have demanded only 10.50% interest. Therefore, if the Memorandum of Understanding (Ex.P.15) dated 08.11.2018 is to be relied, where both the parties have signed and accepted the dues, as on that date was only Rs.22,17,05,264/-, for this amount, the plaintiff is entitled only for 10.50% interest as claimed under this legal notice (Ex.P.10). Therefore, this Court holds that the plaintiff is entitled for a money decree for a sum of Rs.22,17,05,264/- with interest at the rate of 10.50% p.a., from 08.11.2018, till the date of realisation. Accordingly, the Suit is Allowed with costs. Consequently, connected Applications are closed.