Ravindranath GE Medical Associates Pvt. Ltd. v. P. Raja Rao
2021-01-29
C.V.KARTHIKEYAN
body2021
DigiLaw.ai
JUDGMENT : C.V. Karthikeyan, J. 1. Application No. 5144 of 2019 has been filed by the First Defendant under Order 14, Rule 1 of O.S. Rules read with Clause 12 of the Letters Patent seeking to revoke the Order, dated 13.12.2018 in A. No. 9787 of 2018 granting Leave to institute the Suit as against the Applicant/First Defendant. 2. A. No. 5145 of 2019 had been filed by the Eighth Defendant under Order 14, Rule 1 of O.S. Rules read with Clause 12 of the Letters Patent seeking to revoke the Order, dated 13.12.2018 in A. No. 9787 of 2018 granting Leave to institute the Suit against the Applicant/Eighth Defendant. 3. For the sake of convenience the Applicants would be referred as First & Eighth Defendants. The Respondents are the Plaintiffs and they would be referred as Plaintiffs. 4. In the Affidavit filed in support of A. No. 5144 of 2019, it is the contention of K. Arun Kumar, the Authorised Representative of the First Defendant, Ravindranath GE Medical Associates Private Limited had stated that the First Defendant is a Company having Registered Office in Perumbakkam, and therefore, is outside Chennai, the territorial limits of this Court. It had been stated that the Suit is not one in which this Court has been inherently conferred with the jurisdiction and it had been stated that this Court does not have the discretion to entertain the issues raised in the Suit. It had also been stated that neither the Plaintiffs nor any of the Defendants reside or carry on business in Chennai within the jurisdiction of this Court and no cause of action had arisen as on the date of filing the Suit, within the jurisdiction of this Court. It had been stated that the Plaintiffs had filed the Suit and seeking reliefs on the sole basis that certain Cheques that formed part of the consideration of the transaction in dispute were deposited within a Bank that fell within the jurisdiction of this Court. It was stated that this would not satisfy the requirements as enumerated under Class 12 of the Letters Patent.
It was stated that this would not satisfy the requirements as enumerated under Class 12 of the Letters Patent. It was stated that even if it is to be assumed that the pleadings in the Plaint can be construed as giving rise to part of cause of action within Chennai, no specific, or material cause of action had arisen within the jurisdiction of this Court to entertain the Suit against any of the Defendants since they are all situated beyond the Territorial jurisdiction of this Court. It had also been stated that miniscule or irrelevant parts of a. cause of action arising within the jurisdiction of this Court cannot be the basis for granting Leave to institute the Suit. It had been further stated that the Plaintiffs, with wrongful purpose to coerce the First. Defendant to meet their unlawful demands had filed the Application seeking Leave to institute before this Court, with knowledge that this Court does not have, jurisdiction over the subject matter of the Suit or over the issues involved. It had been stated that similar proceedings have already been filed before the NCLT, Hyderabad and similar issues have been raised by the Plaintiffs in the aforesaid proceedings. It had been stated that there exists a more appropriate Court of competent jurisdiction to decide the lis between the parties. It had been also stated that the object of the Plaintiffs in instituting the Suit was to harass the First Defendant rather than protecting their rights. It had also been stated that the Plaintiffs have already filed ah impleading A. No. 385 of 2018, dated 11.9.2018 in a Company Petition filed under Sections 241 to 243 of the Companies Act, 2013 and pending before NCLT, Hyderabad Bench, wherein it had been alleged that the amounts invested by the Plaintiffs in the Second Defendant had been diverted to the First Defendant and that the Third Defendant had fraudulently utilised the same to represent his ownership in the First & Eighth Defendants to enter into an Investment Agreement, dated 28.8.2015. It had been stated that the Impleading Application is pending. It had been stated that on the Doctrine of Forum non conveniens the present proceedings should not be entertained by this Court as there exists a more appropriate forum of competent jurisdiction.
It had been stated that the Impleading Application is pending. It had been stated that on the Doctrine of Forum non conveniens the present proceedings should not be entertained by this Court as there exists a more appropriate forum of competent jurisdiction. It was obligatory on part of this Court to examine the convenience of all the parties and to further examine the existence of a more appropriate forum convenient to the parties, for verification of the facts, which are necessary for adjudication of the disputes. It had been stated that the Courts in Hyderabad would be the appropriate forum to seek the reliefs. It had been, therefore, stated that the Leave granted to institute the Suit in A. No. 9787 of 2018 on 13.12.2018 should be revoked in so far as the First Defendant is concerned. 5. In the Affidavit filed in support of A. No. 5145 of 019, Low Soon Teck, the Authorised Representative of the Eighth Defendant had stated that the Eighth Defendant is a Company registered under the Laws of Singapore and having its Registered Office at Singapore outside the territorial limits of this. Court. It was stated that this Court has not been conferred with jurisdiction to examine the issues raised in the Suit. It had been stated that this Court does not also have the discretion to entertain this issues raised in the Suit. It had been stated that no cause of action had arisen within the jurisdiction of this Court against the Eighth Defendant on the date of filing the Suit. 6. It had been stated that the Leave had been obtained on the basis that cheques that form part of consideration of the transaction were deposited within a Bank, which fell within the jurisdiction of this Court. It had been stated that this fact does not satisfy the requirements enumerated under Clause 12 of the Letters Patent. It had been further stated that the Plaintiffs have wrongfully, with purpose of coercive this Defendant to meet their unlawful demands, had filed the Application seeking Leave to institute the Suit knowing fully well that this Court does not have jurisdiction over the subject matter or over the issues involved. It had been stated that similar proceedings have been filed and are pending NCLT, Hyderabad.
It had been stated that similar proceedings have been filed and are pending NCLT, Hyderabad. It had been stated that the Suit had been instituted to harass this Defendant rather than to protect the rights of the Plaintiffs. It had also been stated that the Plaintiffs had filed A. No. 385 of 2018, dated 11.9.2018 before NCLT, Hyderabad, wherein it had been alleged that the amounts invested by the Plaintiffs in the Second Defendant had been diverted to the First Defendant and that the Third Defendant had fraudulently utilised the same to represent the ownership in the First & Eighth Defendants to enter into an Investment Agreement, dated 28.8.2015. It had been stated that the said Application is pending before the NCLT, Hyderabad. It had been stated that on the basis of the Doctrine of Forum non conveniens, the present proceedings should not be entertained by this Court as there exists an appropriate forum of competent jurisdiction which would be in a better position to decide the lis between the parties. It had been stated that the Courts in Hyderabad would be the proper forum to adjudicate the issues raised. It had been, therefore stated that this Court should revoke the Order, dated 13.12.2018 in A. No. 9787 of 2018 granting Leave to institute the Suit against the Eighth Defendant herein. 7. The Plaintiffs filed their Counter Affidavit in A. No. 5144 of 2018 wherein they have stated that the cause of action arose within the jurisdiction of this Court since the Third & Sixth Defendants requested the First Plaintiff at the residence of the Plaintiff at Chennai to provide monies to the Second Defendant and misrepresented to the First Plaintiff that the Seventh Defendant would be allotted shares in the Second Defendant in lieu of the amounts provided by the First Plaintiff and the Second & Third Plaintiffs. It had also been stated that the cause of action arose within the jurisdiction of this Court when a sum of ` 42 crores was paid from the Plaintiffs Bank Accounts situated in Chennai to the First and the Second Defendants' Bank Accounts, some of which were also located in Chennai. It had been further stated that this Court by Order, dated 13.12.2018 had granted Leave to institute the Suit after considering the specific averments in the Plaint.
It had been further stated that this Court by Order, dated 13.12.2018 had granted Leave to institute the Suit after considering the specific averments in the Plaint. It had been stated that the entire cause of action had arisen within the jurisdiction of this Court. It had been stated that since the First Defendant was being registered outside the Territorial jurisdiction of this Court. Leave to sue was sought and obtained. It had been stated that a perusal of Paragraph Nos. 63 to 71 of the Plaint would indicate that the cause of action fell within the jurisdiction of this Court with specific reference to the First; Defendant. It had been stated that the Application was an abuse of Judicial process. It had been stated that this Court is competent to examine the issues raised in the Plaint. It had been stated that it is a fact that the Plaintiffs had filed A. No. 385 of 2018, dated 11.9.1999 in C.P. No. 471/241/HDB of 2018 before the NCLT at Hyderabad. However, the Application had been dismissed by Order, dated 17.7.2019 on the ground that the remedy of the Plaintiffs was to file a Suit, which they have now instituted. It had been also stated that the NCLT did not have wide powers as this Court to grant the reliefs sought. It had been therefore stated that the Application should be dismissed. 8. The Plaintiff also filed a Counter Affidavit to A. No. 5145 of 2019. They denied the averments made in the Affidavit filed in the Application. It had been stated in the Counter Affidavit that the cause of action arose within the jurisdiction of this Court. It had been stated that the Second & Third Defendants had unjustly, enriched themselves at the expense of the Plaintiffs and such enrichment took place pursuant to Bank transfers of amounts from the Bank Accounts of the Plaintiffs in Chennai within the jurisdiction of this Court to the Bank Accounts of the First and Second Defendants, some of which were located in Chennai. It had been stated that this transfer was done due to the misrepresentations of the Third & Sixth Defendants and the investment in the First & Second Defendants by the Plaintiffs took place in Chennai within the jurisdiction of this Court.
It had been stated that this transfer was done due to the misrepresentations of the Third & Sixth Defendants and the investment in the First & Second Defendants by the Plaintiffs took place in Chennai within the jurisdiction of this Court. It had also been stated that the third and Sixth Defendants requested at the residence of the First Plaintiff at Koturpuram in Chennai the First Plaintiff to provide financial existence to the Second Defendant and had misrepresented to the First Plaintiff that the Seventh Defendant would be allotted shares in the Second Defendant in lieu of the amounts provided by the First Plaintiff and the Second & Third Plaintiffs. It had been stated that the cause of action had arisen within the jurisdiction of this Court when ` 42 crores was paid from the Bank Account of the Plaintiffs in Chennai to the Bank Accounts of the First & Second Defendants, some of which were located in Chennai. It had been stated that the Plaintiffs had filed A. No. 385 of 2018 before NCLT, Hyderabad, to implead themselves in C.P. No. 479/241/HDB/2018 filed by the Sixth Defendant against the First & Fifth Defendants but the said Application had been dismissed and hence, this present Suit had been instituted. It had been stated that this Court had granted Leave to institute the Suit by Order, dated 13.12.2018 after being satisfied with the averments made in the Plaint that the cause of action had arisen within the jurisdiction of this Court. It had been stated that though the Eighth Defendant is a Company registered outside the Territorial jurisdiction of this Court, the averment that this Court does not have jurisdiction is not correct and has to be rejected. It had been stated that a perusal of Paragraph Nos. 63 to 71 of the Plaint would show that the entire cause of action fell within the jurisdiction of this Court. It had been further stated that in Paragraph Nos. 67 to 69, the involvement of the Eighth Defendant had been pointed out. It had been stated that the Application is an abuse of judicial process. It had been stated that this Court is competent to decide the issues in this Suit. It had been stated that this Court is the forum most convenient to decide the issues. It was stated that therefore, the Application should be dismissed. 9.
It had been stated that the Application is an abuse of judicial process. It had been stated that this Court is competent to decide the issues in this Suit. It had been stated that this Court is the forum most convenient to decide the issues. It was stated that therefore, the Application should be dismissed. 9. Heard arguments advanced by Mr. R. Sankaranarayanan, learned Senior Counsel on behalf of the First Defendant/Applicant in A. No. 5144 of 2019 and Mr. Vijayendra Pratap Singh, learned Counsel for the Eighth Defendant/Applicant in A. No. 5145 of 2019 and Mr. R. Rajesh, learned Counsel for the Plaintiffs/Respondents in the Applications. 10. It is the contention of Mr. R. Sankaranarayanan, learned Senior Counsel that both the First and Eighth Defendants are Companies, which had been registered outside the jurisdiction of this Court. Learned Senior Counsel stated that the citus for any lis with respect to any. Company normally is only where the Registered Office is situated. Learned Senior Counsel stated that the only cause of action which is claimed by the Plaintiff to have arisen within the jurisdiction of this Court is the meeting at the residence of the First Plaintiff at Koturpuram in Chennai. The learned Senior Counsel referred to the reliefs sought in the Plaint and stated that the only relief sought as against the First Defendant was an alternate relief seeking a direction against the First & Second Defendants to pay to the Third Plaintiff a principle sum of ` 5 crores together Interest at 15% p.a. The learned Senior Counsel stated that in accordance with the directions in the order in A. Nos. 1283 to 1288 of 2020 in O.A. Nos. 1178 to 1180 of 2018, dated 1.7.2020, the First Defendant had deposited a sum of ` 5 crores by way of Demand Drafts on 31.7.2020 and had ensured compliance of the Order. Learned Senior Counsel stated that therefore, the course of action does not any longer survive as against the First Defendant. The learned Senior Counsel further stated that the further causes of action referred by the Plaintiff were with respect to the Bank Account of the Plaintiff and stated that fact cannot be considered as a substantive cause of action.
Learned Senior Counsel stated that therefore, the course of action does not any longer survive as against the First Defendant. The learned Senior Counsel further stated that the further causes of action referred by the Plaintiff were with respect to the Bank Account of the Plaintiff and stated that fact cannot be considered as a substantive cause of action. The learned Senior Counsel stated that no relief has been directly sought as against the First Defendant and that the Suit is primarily a Family dispute between the First Plaintiff on the one hand and the Third Defendant on the other hand. Learned Senior Counsel finally stated that since substantial part of cause of action had not arisen within the jurisdiction of this Court, the Leave granted on 13.12.2018 in A. No. 9787 of 2018 will have to be necessarily revoked in so far as the First Defendant is concerned. 11. Mr. Vijayendra Pratap Singh, learned Counsel on behalf of the Eighth Defendant/Applicant in A. No. 5145 of 2019 adopted the arguments of Mr. R. Sankaranarayanan and additionally stated that the Eighth Defendant is a Company registered in Singapore and that no amounts had been transferred to the account of the Eighth Defendant. Learned Counsel also stated that the transactions had taken place between the years 2011 & 2013 and the Eighth Defendant had entered into the picture only on 25.8.2015. The learned Counsel stated that the Eighth Defendant is not party/nor privity to the discussions at the residence of the First Plaintiff. He stated that the Eighth Defendant is held at ransom as a major shareholder. He further stated that the Suit was not a bona fide litigation and therefore, stated that the Application should be allowed and the Leave granted should be revoked in so far as the Eighth Defendant is concerned. 12. Mr. R. Rajesh, learned Counsel on behalf of the Respondents/Plaintiffs disputed the contentions raised. The learned Counsel took the Court through the various documents filed along with the Plaint to emphasise that substantial part of cause of action had arisen within the jurisdiction of this Court. The learned Counsel also drew the attention of this Court to the Written Statement filed by the First Defendant. He also pointed out the fact that the Plaintiffs had invested money in the First Defendant.
The learned Counsel also drew the attention of this Court to the Written Statement filed by the First Defendant. He also pointed out the fact that the Plaintiffs had invested money in the First Defendant. He also stated that in the Counter Affidavit to the Injunction Applications, the First & Eighth Defendants had subjected themselves to the jurisdiction of this Court. He also stated that except these two Defendants, the other Defendants have not raised the issue of Forum non-conveniens. The learned Counsel very specifically stated that there has been substantiate delay in filing these Applications and in seeking revocation of Leave, which had been granted in the year 2018. The learned Counsel therefore stated that the Applications should be dismissed. 13. Even though elaborate and vehement arguments have been advanced on either side, taking the Court through the averments in the Plaint and also the documents filed along with the Plaint, I hold that it would be highly inappropriate for this Court to examine the issues in minute detail. The limited scope of these Applications lie with determining whether the Leave granted to institute the Suit on 13.12.2018 in A. No. 9787 of 2018 should be interfered with in so far as the First & Eighth Defendants are concerned. 14. The learned Counsel for the Plaintiff placed specific reliance on the averments made in Paragraph Nos. 63 to 71 of the Plaint. It had been stated that the cause of action had arisen pursuant to Bank transfers from the Bank Accounts of the Plaintiffs in Chennai to the Bank Accounts of the First & Second Defendants in Hyderabad. It had been stated that the misrepresentation by the Third & Sixth Defendants took place in Chennai. It had also, been stated that the Third & Sixth Defendants requested the First Plaintiff to provide monies to the Second Defendant in the First Plaintiff and this request was made at the residence of the First Plaintiff at Koturpuram in Chennai. 15. It had been stated that an amount of Rs. 42 crores had been transferred to the First & Second Defendants from the Bank Accounts of the Plaintiffs at Chennai to the Bank Accounts of the First & Second Defendants, some of which were in Chennai. These submissions had been taken note by the learned Single Judge while examining A. No. 9787 of 2018 and granting Leave to institute the Suit.
These submissions had been taken note by the learned Single Judge while examining A. No. 9787 of 2018 and granting Leave to institute the Suit. By the present Application, the First & Eighth Defendants seek to revoke the Leave granted. 16. I hold that the transfer of money and alleged failure to satisfy the purposes of such transfer is a cause of action for institution of the Suit. The alleged representation of the Third & Sixth Defendants believing which the First Plaintiff transferred the monies took place at Chennai. 17. As a matter of fact, the thrust of the arguments on behalf of the First & Eighth Defendants was that there was no cause of action at all to institute the Suit as against the said Defendants. If that be the case, Applications seeking to revoke the Leave is not the answer. When an Application is filed seeking to revoke the Leave, there is an implicit admission by the said Defendants that causes of action to institute the Suit exist but that the said causes of action either entirely or partially had arisen outside the jurisdiction of this Court. If it is the case of the Defendants that there are no causes of action at all to institute the Suit as against them, then they should have taken advantage of specific provisions in the Code of Civil Procedure and sought appropriate reliefs to that effect. When there is a specific provision addressing issues of the nature, when Defendants Complains that there is no cause of action at all to institute the Suit then the Defendants cannot also seek the Court to consider a Petition filed seeking to revoke the Leave as one to reject the Plaint as there being no cause of action at all. That is not possible. 18. Order 1, Rule 3-A is as follows: "3-A. Any right to relief in respect of or arising out of, the same act or transaction or series of acts or transactions is alleged to exist against such persons, whether jointly, severally or in the alternative." [Emphasis supplied] 19. The Plaintiffs must only allege that by a series of transactions, a right to relief exists against the Defendants either jointly or severally. It is for the Plaintiffs to only allege a series of transactions.
The Plaintiffs must only allege that by a series of transactions, a right to relief exists against the Defendants either jointly or severally. It is for the Plaintiffs to only allege a series of transactions. Till the issue in the Suit are determined, after evidence is recorded, it is to be presumed that the statements made in the Plaint are true and correct. This is the ratio laid down by the Hon'ble Supreme Court and this is the law of the land as on date. 20. A similar issue came up for consideration, in Secretary of State for India in Council v. Golabrai Paliram, AIR 1932 Cal 146, wherein a Division Bench had occasion to consider an Application for revocation of Leave under Clause 12 of Letters Patent. The Hon'ble Chief Justice, Rankin observed as follows: "I do really protest against questions of difficulty and importance being) dealt with by an Application to revoke the Leave under Clause 12, Letters Patent and to take the Plaint off the file. Normally it is well settled that the proper way to plead to the jurisdiction of the Court is to take the plea in the Written Statement and as a substantive part of the Defence. Except in the clearest cases that should be the course." 21. In the instant case, the First Defendant had filed his Written Statement. The Plaintiff had come to Court stating that a part of cause of action had arisen within the jurisdiction of this Court and has based such statement by stating a series of transactions whereby cause to institute the Suit is alleged to exist and for relief to be granted. If that be so, Plaintiff must be granted an opportunity to adduce evidence to substantiate such statements or transactions. Then the issues should go to trial. 22. The above observations of the Calcutta High Court had been considered with advantage in Indian Mineral & Chemicals Co. and others v. Deutsche Bank, 2004 (12) SCC 376 , wherein also, the Hon'ble Supreme Court was concerned with an Application for revocation of Leave. In the said Judgment, the Hon'ble Supreme Court held as follows: "10.
22. The above observations of the Calcutta High Court had been considered with advantage in Indian Mineral & Chemicals Co. and others v. Deutsche Bank, 2004 (12) SCC 376 , wherein also, the Hon'ble Supreme Court was concerned with an Application for revocation of Leave. In the said Judgment, the Hon'ble Supreme Court held as follows: "10. We are of the opinion that the learned Judges erred in revoking Leave under Clause 12 of the Letters Patent in view of the clear assertions made in the Plaint and the assertions in a Plaint must be assumed to be true for the purpose of determining whether Leave is liable to be revoked on a point of demurrer Abdulla Bin Ali v. Galappa, 1985 (2) SCC 54 ." 23. Later, they extracted the observations of the Hon'ble Chief Justice Rankin in Secretary of State (supra) and also stated that the said observations correctly represents the law as to how the Court should approach an Application for revocation of Leave. 24. A similar issue again cam up for consideration before the Hon'ble Supreme Court in Isha Distribution House Pvt. Ltd. v. Aditya Birla Nuvo Ltd. and another, 2019 (12) SCC 205 , In that case, the Respondents/Defendants have filed an Application for revocation of Leave granted to the Appellant/Plaintiff for filing a Civil Suit. In that case, the Respondents/Defendants sought revocation of Leave on the ground that no part of cause of action arose within the Territorial jurisdiction of the Calcutta High Court, but arose at Bangalore. The Hon'ble Supreme Court observed and held as follows: "13. The question arose as far back as in the year 1932 before the Calcutta High Court in the case of Secretary of State v. Golabrai Paliram, AIR 1932 Cal. 146 as to how the Court should approach the Application for revocation of Leave, when it filed in a Civil Suit. 14. Justice Rankin, learned the then Chief Justice, laid down the following principle of law in the case while answering this question in the following words at Page 147: Secretary of State for India in Council v. Golabrai Paliram: "I do really protest against questions of difficulty and importance being dealt with by an Application to revoke the Leave, under Clause 12 of the Letters Patent and to take the Plaint off the file.
Normally it is well settled that the proper way to plead to the jurisdiction of the Court is to take the plea in the Written Statement and as a substantive part of the Defence. Except in the clearest cases that should be the course." 15. This question came up for consideration before this Court in Indian Mineral & Chemicals Co. and others v. Deutsche Bank, 2004 (12) SCC 376 . The learned Judge Ruma Paul, J. speaking for the Bench in Para 15 approved the law laid down in Secretary of State (supra) as laying down the correct principle of law and observed as under: "15. The observations of Rankin, C.J. in Secy. of State v. Golabrai Paliram correctly represents the law as to how the Court should approach an Application for revocation of Leave: (AIR p. 147) "I do really protest against questions of difficulty and importance being dealt with by an Application to revoke the Leave under Clause 12 of the Letters Patent and to take the Plaint off the file. Normally it is well settled that the proper way to plead to the jurisdiction of the Court is to take the plea in the Written Statement and as a substantive part of the Defence. Except in the clearest cases that should be the course." 16. In other words, the law laid down in Secretary of State (supra) by the Calcutta High Court is now the law laid down by this Court in view of its affirmation by this Court in Indian Mineral & Chemicals Co., 2004 (12) SCC 376 ." 25. The Hon'ble Supreme Court had very categorically stated that the law laid down is now the law to be followed by the Courts. The law laid down is the settled principle that the proper way to plead to the jurisdiction of the Court is to take that plea in the Written Statement as a substantive part of the Defence. 26. Precedents were also cited on behalf of the First & Eighth Defendants. But, the Judgments cited above; answers the issues raised directly. 27. In view of the above settled principle of law, I am not inclined to grant the reliefs sought in the Applications. Accordingly, these Applications are dismissed. No Costs.