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Srei Equipment Finance Limited Vs. M/S. Essar Project (India) Limited - Court Judgment

LegalCrystal Citation
CourtKolkata High Court
Decided On
Judge
AppellantSrei Equipment Finance Limited
RespondentM/S. Essar Project (India) Limited
Excerpt:
.....company runs into crores. the finance company in order to preserve the assets financed under master facility agreement dated 22nd september, 2015 has filed an application under section 9 of the arbitration and conciliation act, 1996 for appointment ancillary and incidental reliefs. of receiver and other the principal objection to passing of any order in this petition is that this court lacks inherent jurisdiction to try and entertain this petition. mr.pratap chatterjee, learned senior counsel appearing on behalf of the respondent has referred to paragraphs 3, 4, 10 and 31 of the petition on which reliance has been placed by the petitioner for invoking the jurisdiction of this court and submits that none of this paragraphs could confer any jurisdiction in this court. paragraph mr.4.....
Judgment:

AP No.387 of 2016 IN THE HIGH COURT AT CALCUTTA Ordinary Original Civil Jurisdiction ORIGINAL SIDE SREI EQUIPMENT FINANCE LIMITED -VersusM/S.ESSAR PROJECT (INDIA) LIMITED Appearance: Mr.Ratnanko Banerjee, Sr.Adv.Mr.Satarup Banerjee, Adv...for the petitioner.

Mr.Pratap Chatterjee, Sr.Adv.Mr.Shaunak Mitra, Adv.Mr.Vivek Jhunjhunwala, Adv...for the respondent.

BEFORE: The Hon'ble JUSTICE SOUMEN SEN Date : 20th July, 2016.

The Court Letters Patent.

: Leave granted under Clause 12 of the Leave is also given to correct the petition upon payment of costs assessed at 200 GMs.to the West Bengal State Legal Services Authority, who shall keep the account earmarked for juvenile.

The claim of the finance company runs into crores.

The finance company in order to preserve the assets financed under Master Facility Agreement dated 22nd September, 2015 has filed an application under Section 9 of the Arbitration and Conciliation Act, 1996 for appointment ancillary and incidental reliefs.

of receiver and other The principal objection to passing of any order in this petition is that this Court lacks inherent jurisdiction to try and entertain this petition.

Mr.Pratap Chatterjee, learned Senior Counsel appearing on behalf of the respondent has referred to paragraphs 3, 4, 10 and 31 of the petition on which reliance has been placed by the petitioner for invoking the jurisdiction of this Court and submits that none of this paragraphs could confer any jurisdiction in this Court.

paragraph Mr.4 Chatterjee of the submits petition that that it the would be respondents clear signed from the agreement at its branch and/or regional office of the petitioner and in the instant case it is the communication of the acceptance which is decisive and determining factor to ascertain if the Court has jurisdiction to receive the petition.

It is submitted that the legal notice issued by an Advocate from the Old Post Office Street, cannot confer any jurisdiction on this Court.

Per contra Mr.Ratnanko Banerjee, learned Senior Counsel appearing on behalf of the petitioner submits that the agreement itself would show that the agreement was “made on 3rd July, 2014 at Olisha House, 4, Government Place (North).7th Floor, Kolkata- 700 001” and the said agreement bears the signature of the parties.

The learned Senior Counsel has also referred to paragraph 31 of the petition which says that the agreement was concluded at the corporate office of the petitioner at Olisha House, 7th Floor, 4, Government Place (North).which is admittedly within the jurisdiction of this Court.

Mr.Banerjee has also referred to the jurisdiction clause being Clause 8.10 which gives exclusive jurisdiction to the judicial forum at Calcutta.

There cannot be any dispute that by an agreement, a party cannot confer jurisdiction in a Court which otherwise does not have the jurisdiction either territorial or over the subjectmatter of the dispute.

At this stage, while deciding the point of demurer as to the jurisdiction of this court, the Court is required to look into the averments made in the petition.

The Court may also look into the pleadings agreement forming part of the disclosed in the proceedings in order to ascertain the jurisdiction of this Court.

There is no dispute that the agreement records that the Master Facility Agreement was made on 3rd July, 2014 at 4, Government Place (North).7th Floor, Kolkata.

also contains a jurisdiction clause.

Moreover, the said agreement The parties have intended to have the agreement executed in Kolkata as would be evident from the prefatory words of the agreement as also the clause relating to service of notice upon the petitioner and the jurisdictional clause.

The present proceeding is an interlocutory application in contemplation of a proceeding to be initiated before the arbitrator under the agreement.

The principal grievance of the petitioner appears to be that there is a breach of contract.

case of a breach of contract, three places would have In the jurisdiction namely, where the contract is entered into, performed or where the breach has taken place.

In view of the fact that the Master Facility Agreement was made at 4, Government Place (North).7th Floor, Kolkata, it appears that this Court has jurisdiction to entertain the present petition.

Now, considering the prayer for injunction or receiver it has to be seen that if any interim measure or protection is required till the matter is finally decided and adjudicated upon by the arbitrator.

Prima facie, it appears that there has been default which runs into crores and the respondent is in possession of about 393 discharging equipments their covered obligation under and the liability.

agreement The without petitioner alleged that the cheques issued towards the payment of instalment under the agreement were dishonoured on presentation.

Under such circumstances, the Court is required to find out as to whether any interim protection is required to be passed till the arbitration proceeding commenced.

Mr.Pratap Chatterjee, learned Senior Counsel appearing on behalf of the respondent submits that any order of injunction would operate as an order of attachment and the pleadings made are insufficient and vague which disentitled the petitioner to have any order in this proceeding.

Unlike an unsecured creditor, the petitioner is having a security interest in respect of the equipments financed under the Master Facility Agreement.

Clause 7.2 and the subsequent clauses of the Master Facility Agreement deals with the consequence of a default.

The agreement interest created in clearly terms of provides the that agreement the security shall enforceable in the event there is a breach of agreement.

become The notice of demand dated 15th March, 2016 has not been replied to.

There is no explanation offered for not being able to pay a large sum which runs into crores.

Under such circumstances, in my view, some protective order is required to be passed.

Under such circumstances, there shall be an order in terms of prayer (b) of the notice of motion.

Affidavit-in-opposition shall be filed within two weeks from date; reply thereto, if any, may be filed within two weeks thereafter.

In the affidavit, the respondent shall disclose the whereabouts of the assets in question.

The matter shall appear under the heading ‘arbitration motion (adjourned)(Section

9) six weeks hence.

(SOUMEN SEN, J.) A/s.


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