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Jokai (Assam) Tea Co. Ltd. and anr. Vs. Bhawani Shankar Bagaria - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata High Court
Decided On
Case NumberSuit No. 20 of 1975
Judge
Reported inAIR1976Cal18
ActsCode of Civil Procedure (CPC) , 1908 - Section 151
AppellantJokai (Assam) Tea Co. Ltd. and anr.
RespondentBhawani Shankar Bagaria
Cases ReferredHansraj Bajaj v. The Indian Overseas Bank Ltd.
Excerpt:
- .....1972, which contained, inter alia, as follows:'clause 12. the agreement shall be subject to dibrugarh jurisdiction.' this was the first agreement for supply of the foodgrains. the entire cause of action of course was in respect of three contracts and the other two contracts do not contain the similar clause. it must be noted that this was the main contract and it is a factor, which though not decisive in this case is a factor which, in my opinion should be taken into consideration by the court in staying a suit.8. in the premises aforesaid and having regard to the facts and circumstances of this case, in my opinion this suit ought to be stayed. but this will not prejudice the plaintiffs' right to institute proceedings for establishing their claims in proper forum, if otherwise.....
Judgment:
ORDER

Sabyasachi Mukharji, J.

1. This is a suit by two plaintiffs Jokai (Assam) Tea Company Limited end the British India Tea Company Limited both of whom are English Companies having their registered offices in London and also carrying on business by branch office at 21, Netaji Subhash Road, Calcutta, within the jurisdiction of this Court. The defendant is Bhawani Sankar Bagaria who for self and Karta representing a Hindu undivided family carries on business under the name and style of Girdharilal Sardarmall at Dibrugarh outside the jurisdiction of this Court, and also has a place of business at Commerce House, 3rd floor, Room No. 4-A of No. 2, Ganesh Chandra Avenue in the town of Calcutta. It is alleged that the plaintiffs were each owners of tea gardens. It is further alleged that by an agreement contained in or evidenced by a writing the defendant was appointed the agent of the plaintiffs to supply foodgrains allotted from the Government sources for consumption by the workers of the plaintiffs' tea estates. The agreement is dated 1st August, 1972. The terms and conditions of the agreement have been set out in the petition. It is stated that thereafter pursuant to the said agreement the plaintiffs from time to time advanced sums of money to the defendant for procuring foodgrains in the manner agreed. It is alleged that by two letters both dated 15th July, 1974 written at and sent from 21, Netaji Subhas Road the plaintiffs terminated the aforesaid agreement on the ground that the supply of foodgrains had become irregular from May, 1974. It is stated that at that time the defendant was in possession of Rs. 7,80,802 advanced by the first plaintiff to the defendant and Rs. 1,35,261 advanced to the defendant by the second plaintiff for procurement of foodgrains which the defendant did not procure and did not supply. There was another agreement evidenced by writing dated 20th July, 1970 between the first plaintiff and the defendant whereby the defendant had agreed to make available on account of the first plaintiff cash, coins and notes of denominations required by the Manager of the said tea estate in exchange of cheques given in advance by the first plaintiff for an all inclusive charge of 44 paise per Rs. 100. It is alleged that by a further agreement contained in or evidenced in writing dated 1st April, 1974 the first plaintiff had agreed to maintain and did subsequently maintain a cash reserve of Rs. 2,00,000 with the defendant in connection with the aforesaid agreement. Interest at the rate of 11 per cent. per annum was payable on the said Rs. 2,00,000. It is then alleged that by a writing dated 24th June, 1974 written at and sent from 21, Netaji Subhas Road the first plaintiff terminated the aforesaid agreement. At that time it is claimed that a sum of Rs. 3,79,464 belonging to the first plaintiff was in possession of the defendant pursuant to the aforesaid agreement dated 20th July, 1970 and 1st April, 1974. It is stated that the defendant has refused to pay the sum of Rs. 11,60,267 to the first plaintiff and Rs. 1,35,261 to the second plaintiff. The first plaintiff claims the sum of Rs. 11,60,267/20 and the second plaintiff claims Rs. 1,35,261/20 as money had and received by the defendant. There is also an alternative claim. There are some further additional claims. The suit was filed at Calcutta after having obtained leave under Clause 12 of the Letters Patent.

2. Leave under Clause 12 of the Letters Patent was obtained by averments made in paragraphs 5, 7 and 10 of the plaint. In paragraph 5 it is alleged that that the letter dated 15th July. 1974 was written and sent from Calcutta. In paragraph 7 it is similarly stated that the letter dated 24th June, 1974 was written and sent from Calcutta within jurisdiction of this Court but none of these letters was received at Calcutta, or the communication did not become effective until the recepient received the letters in question In paragraph 10 it is alleged that payments were made from Netaji Subhas Road in the town of Calcutta within the jurisdiction of this court. The defendant asks for a stay of the suit on various grounds but mainly on the ground of balance of convenience. The averments upon which the stay is asked for have been set out in paragraph 12 of the petition and it would be material to set out the said paragraph in extenso:

'On the other hand your petitioner states that the alleged cause of action of the plaintiffs arose entirely in Dibrugarh in the State of Assam and each and every fact or circumstance relating to the disputes and differences between the parties took place in Assam as will appear, inter alia, from the following facts:--

(a) All the agreements referred to in the plaint were signed and/or executed at Dibrugarh in Assam.

(b) All the agreements were wholly and entirely performed and/or given effect to at Dibrugarh in Assam.

(c) All supplies of foodgrains, sales or delivery of coins etc., were made at and from Dibrugarh in Assam.

(d) AH moneys were paid and/or received at Dibrugarh in Assam.

(e) The Tea Estates to which the food grains were supplied as also the coins are situate in the district of Dibrugarh in Assam.

(f) Your petitioner and/or his predecessors-in-interest have been carrying on business at Dibrugarh for over one hundred years and 99.5 per cent. of your petitioner's business is in Assam. The said Calcutta office of your petitioner merely looks after tea sales from your petitioner's tea gardens in Assam and does nothing else, and such tea sales have nothing whatever to do with the present suit.

(g) All books, papers, documents, letters etc., which are in any way relevant to the disputes and differences between the parties hereto are located in Dibrugarh in Assam. The whole of the correspondences between the parties took place and/or passed in Assam.

(h) The witnesses that will be necessary to substantiate your petitioner's defence and/or prove your petitioner's counter-claim are all in Assam. It is impossible to secure the attendance of such witnesses in this Hon'ble Court. In order to substantiate your petitioner's defence as also to establish your petitioner's counter-claim against the plaintiffs the following persons at least would be required to give evidence and all of them are in Assam and they cannot be brought down to Calcutta without incurring expenditure of such a large amount that it would be wholly disproportionate to the relief that your petitioner might obtain:--

(i) Sri S.L. Saraogi of Dibrugarh being the Accountant of your petitioner's Assam business which handled the food-drains and coins supply under the contracts in suit.

(ii) Sri R.K. Varma of Dibrugarh being the departmental in-charge of your petitioner's said Assam business referred to in Clause (i) hereof.

(iii) Several Transport Contractors and/or lorry owners and/or lorry drivers who delivered the foodgrains to the tea estate belonging to the plaintiffs in Assam. In addition there are the stores and godown keepers relating to the food-grains supply who are all in Assam.

(iv) The Grain Distributing Officer, Assam Branch. Indian Tea Association (A.B.I.T.A.) Dibrugarh Circle in the district of Dibrugarh in Assam is a very vital witness because all the dealings and transactions took place through him as will appear from the said agreement dated 1st August, 1972. The records of the said Grain Distributing Officer, his books, papers and documents are absolutely essential to establish your petitioner's defence and/or counter-claim against the plaintiffs and all such books, papers and documents are in Assam and cannot be brought down to Calcutta. The procedure was that the said Grain Distributing Officer gave instructions with regard to the supply of foodgrains to the particular tea gardens to your petitioner, and after such supplies were effected by your petitioner statements with regard thereto were submitted by your petitioner to the Grain Distributing Officer who in his turn prepared the bills and submitted the same to the plaintiffs. Payments were thereupon made by the plaintiffs to the Grain Distributing Officer who forwarded the same to your petitioner. In the circumstances, the Grain Distributing Officer and his records are absolutely essential to establish your petitioner's defence in the above suit. It is impossible to get G.D.O. in Calcutta.

(i) Your petitioner is a permanent resident of Dibrugarh in Assam and he does not or the members of the joint family do not reside in Calcutta. Your petitioner's entire business is in Assam and it will be extremely costly and wasteful if your petitioner has to come down to Calcutta and contest the suit from day to day. The disputes between the parties in this suit are entirely Assam based and in fact the plaintiffs themselves do the whole of their business in Assam so far as is relevant or material for the purpose of this suit. Nothing at all took place in Calcutta and even the plaintiffs' letter of termination was sent to your petitioner at Assam. A true copy of the said letter is annexed hereto and marked with the letter 'B'.

(j) Every other material fact which is in any way connected with the disputes and differences between the parties hereto arose and/or took place in Assam. Your petitioner has nothing to do with the Calcutta offices of the plaintiffs.'

3. In the affidavit-in-opposition the said averments are denied vaguely but it is not stated in what way it would be inconvenient for the plaintiff to have the suit tried at Dibrugarh. The plaintiffs have their offices at Dibrugarh, the transactions took place in Dibrugarh in Assam. It is nobody's case that any material evidence or document is in Calcutta within the jurisdiction of this Court.

4. The principles upon which courts should exercise the power of staying a suit are well settled. In this connection, reliance may be placed on the decision in the case of Logan v. Bank of Scotland, (1906) 1 KB 141 at p. 145 where it was observed that the court would stay an action brought within the jurisdiction in respect of a cause of action arising out of the jurisdiction if satisfied that no injustice would be done thereby to the plaintiff and that the defendant would be subjected to such injustice in defending the action as would amount to vexation and oppression to which he would not be subject to if an action had been brought in another accessible court, where cause of action arose.

5. The same principle was reiterated in the decision in re : Norton's Settlement, Norton v. Norton, reported in (1908) 1 Ch D 471. This court also in the case of Hansraj Bajaj v. The Indian Overseas Bank Ltd., : AIR1956Cal33 had the occasion to consider this question. The court observed that under Section 151 of the Code of Civil Procedure jurisdiction to stay an otherwise competent suit was to be sparingly exercised and only for the ends of justice or to prevent abuse of the process of the court and within the strict limit of rigorous conditions. The court had evolved certain principles in this regard. The first principle was that a mere balance of convenience was not a sufficient ground for depriving a plaintiff of his right of prosecuting his action in or his right of access to the competent courts of law. The second principle was that the court stayed an action brought within the jurisdiction in respect of a cause of action arising entirely out of the jurisdiction when it was satisfied that the plaintiff would thereby suffer no injustice whereas if the action was continued the defendant would, in defending the action, be the victim of such injustice as to amount to vexation and oppression would not be caused to the plaintiff if the action was brought in another accessible court where the cause of action arose. In that case, the court had also indicated that the onus was upon the defendant to satisfy the court, first that the continuance of the action would work an injustice because it would be oppressive or vexatious for him or would be an abuse of the process of the court and, secondly also that the stay would not cause any injustice to the plaintiff. In that case it was held that the defendant had discharged his onus.

6. Counsel for the plaintiffs contended before me that those were cases where question of convenience arose between different countries. In the first case, it was between Scotland and England; in the second case, it was between India and England and in the third case, it was between Malaysia and India. He further submitted that with the rapid growth of transport facilities, distance was no longer a problem and distance was no longer of such importance as to deprive the plaintiff's right to chose the forum. It is true that the plaintiff has right to chose its forum and such choice of forum would not normally be interfered with unless it is clearly established that by exercise of the choice of forum grave injustice would be caused to the defendant and the suit would not cause any injustice to the plaintiff. Within this limited principle in my opinion, the courts still retain its inherent jurisdiction for staying the suit, even with the rapid expansion of transport facilities and even if the action is brought in a competent court having jurisdiction to try the case. Furthermore no inconvenience to the plaintiff will be caused by staying the suit. It has not been clearly stated that any of the witnesses or documents are in Calcutta, so that the stay of the suit in this court will cause any injustice to the plaintiff. Counsel for the plaintiffs further contended that the plaintiffs had to pay a heavy court-fees and in the event they have to file a fresh suit after the present suit is stayed the plaintiffs would lose that amount of money and would suffer financial consequences. On behalf of the defendant it was stated that if as a result of this stay the plaintiffs have to institute proceedings in other forum or in other court or in arbitration proceedings, then the defendant is willing to give the plaintiff credit for Rs. 10,000 which is the total amount of court-fees paid in respect of filing of this suit.

7. The other aspect of the matter upon which reliance was placed was based on the contract dated 1st August, 1972, which contained, inter alia, as follows:

'Clause 12. The agreement shall be subject to Dibrugarh Jurisdiction.' This was the first agreement for supply of the foodgrains. The entire cause of action of course was in respect of three contracts and the other two contracts do not contain the similar clause. It must be noted that this was the main contract and it is a factor, which though not decisive in this case is a factor which, in my opinion should be taken into consideration by the court in staying a suit.

8. In the premises aforesaid and having regard to the facts and circumstances of this case, in my opinion this suit ought to be stayed. But this will not prejudice the plaintiffs' right to institute proceedings for establishing their claims in proper forum, if otherwise they are entitled to. It is made clear that if as a result of the stay the plaintiffs institute proceedings in other forum or in other courts of arbitration, the defendant will give the plaintiffs credit for the sum of Rs. 10,000 as conceded by the counsel for the defendant. In the facts and circumstances of this case each party to pay and bear their own costs. There will be orders in terms of prayers (a), (b) and (c), subject to aforesaid direction.


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