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Bhagatram Goyal Vs. Gupta Cables Pvt. Ltd. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata High Court
Decided On
Case NumberSuit No. 45 of 1977
Judge
Reported inAIR1977Cal451
ActsCode of Civil Procedure (CPC) , 1908 - Sections 20 and 151
AppellantBhagatram Goyal
RespondentGupta Cables Pvt. Ltd.
Appellant AdvocateP.K. Das and ;P. Chatterjee, Advs.
Respondent AdvocateP.K. Sen and ;G.S. Gupta, Advs.
DispositionApplication dismissed
Cases ReferredShah Prabhudas Gulabchand v. Eurasion Equipments and Chemicals Ltd.
Excerpt:
- .....case, though i am inclined to think that it would be inconvenient for the defendant to defend the suit in calcutta, such inconvenience would not amount to such vexation as could be described as oppression on it. if that is not the position, then, in my opinion, by exercise of inherent power of section 151 of the code of civil procedure the suitshould not be stayed at this stage. i would, therefore, direct as follows : 9. the defendant will be at liberty to file the written statement within a fortnight from this date but whether the defendant has registered office at calcutta and whether the plaintiff is entitled to maintain this action being an unregistered firm or not. the defendant will be entitled to raise these issues along with other issues in the written statement and will be.....
Judgment:
ORDER

Sabyasachi Mukharji, J.

1. On the 27th of January, 1977 the plaintiff filed this suit in this Court against the defendant claiming a decree for Rs. 1,17,100/-. for interim and further interests and for other incidental and consequential reliefs.

2. The suit is by the plaintiff who alleges that he is the sole proprietor of a business and he states that he resides at Bhubaneswar in the State of Orissa and carries on business in the State of Rajasthan. The suit is against the defendant, which is a private limited company. It is alleged in the plaint that the company carries on business, inter alia, at Bhubaneswar in the State of Orissa but has its registered office at No. 3 Jadulal Mullick Road, Calcutta within the jurisdiction of this Court. The plaint is based on certain monetary transactions and accounts stated. The accounts were contained in two documents in which there were the following endorsements: 'Subject to Bhubaneswar Jurisdiction.' It is apparent from the plaint that the cause of action as pleaded in the plaint, arose at Bhubaneswar' and/or at places outside the jurisdiction of this Court. After the institution of this suit on the 27th January, 1977, writ of summons was served before the 13th May, 1977. On the 25th May, 1977, application was made under Chapter 13-A of the Original Side Rules of this Court for a summary judgment and thereafter on the 1st June, 1977 this application was made by the petitioner, the defendant herein. It is stated that after the institution of the suit another suit has been instituted on the basis of a counter claim by the defendant in the appropriate Bhubaneswar Court. In this application the defendant claims that the plaint be rejected or taken off the file and/or for stay of the suit. The prayers of the defendant are made on the following three reasons :

(a) It was stated that the registered office of the defendant was not within the jurisdiction of this Court, but at the material lime the same had been transferred to Howrah and as such this Court had jurisdiction to entertain the suit.

(b) It was urged that the plaintiff was not the sole proprietor of the business firm but was a partner thereof and the firm in question was an unregistered one, and as such incompetent to institute proceedings. Therefore, it was urged that the suit was liable to be dismissed.

(c) It was lastly but mainly contended that the entire cause of action had arisen outside the jurisdiction of this Court at Bhubaneswar and it would be vexatious to try the suit here and the suit should be stayed in exercise of the inherent power of the Court or under Section 151 of the Code of Civil Procedure.

3. So far as the question whether the registered office is within the jurisdiction of this Court or not, there is serious dispute as to facts. The defendant, denies that fact and states that the registered office had been duly transferred to Howrah. It refers to the appropriate resolutions and also to the copy of the letter which it wrote to the appropriate authorities for recording the transfer of the registered office. The entries in the Register of Companies however have not been produced. The plaintiff, who is still a share-holder and at one point of time was a Director of the defendant company, disputes this contention and this allegation. My attention was drawn to certain correspondence in which the plaintiff wanted to assert that the registered office had not been transferred from the place within the jurisdiction of this Court. In my opinion, a dispute of this nature should not be resolved in this application. If necessary such a dispute can be resolved as a preliminary issue at the trial of the suit. Therefore, I would not dismiss or stay the suit on this ground, but I would reserve the trial of this issue as a preliminary issue at the time of the hearing of the suit.

4. It was, then contended, as mentioned hereinbefore, that the suit was bad because the firm to which the plaintiff belongs, was an unregistered partnership firm and the plaintiff was merely a partner thereof. My attention was drawn to certain bills and vouchers and correspondence with Bank wherein the plaintiff and his son have signed describing themselves as partners of the firm. This again is disputed by the plaintiff. This is a question of fact. In my opinion, this question cannot also at this stage be summarily determined but should be tried as an issue at the time of hearing of the suit.

5. The main question in this case, however, is whether the suit should be stayed in the interest, of justice. The principles upon which this power of the Court to stay suits is exercised are well settled. The decision dealing with this point were aain referred to me. The Court will prevent vexatious proceedings which would have the effect of preventing the due administration of justice and the general principle is that the Court can and will interfere when there is vexation and oppression to prevent the administration of justice being perverted for an unjust end, it was so observed in the case of Logan v. Bank of Scotland, (1906) 1 KB 141 at pages 149-150. The Court will stay a suit where to continue a suit will cause such injustice to the defendant applicant as would amount to vexation and oppression to him. This was the view expressed bv P. B. Mukharji, J. as His Lordship then was, in the case of Hansraj Bajaj v. The Indian Overseas Bank Ltd., : AIR1956Cal33 . Some of these authorities were reviewed by me in the case of Jokai Assam Tea Co. Ltd. v. V. S. Barg, : AIR1976Cal18 , wherein it was stated that the Court had power under Section 151 of the Code to stay an otherwise competent suit. This power, however, had to be exercised sparingly and only for the ends of justiceor to prevent abuse of the process of the Court, and strictly within principles which the Courts have evolved. The first principle is mere balance of convenience is not sufficient ground for depriving the plaintiff of his choice of forum. The Second principle is the Court will have to be satisfied that by such stay the plaintiff will not suffer any injustice whereas the action if continued the defendant in defending the action will be the victim of such injustice as would amount to vexation and oppression which vexation and oppression will not arise if the suit is stayed. The facts of this case will have to be judged in the light of the aforesaid principles, referred to hereinbefore.

6. There is a further aspect of the matter, namely, that in this case the plaintiff has referred to though not relying thereon that there had been adjustment of account and in the document of such adjustment of account there is the expression 'subject to Bhubaneswar jurisdiction.' In the case of Libra Mining Works v. Baldota Brothers. AIR 1962 Andh Pra 452 the Division Bench of Andhra Pradesh High Court was considering the claim on a contract where a clause contained the expression 'this contract is subject to Bombay jurisdiction'. The Court held that the clause denoted that the parties had agreed to have the disputes arising out of the contract settled by the Courts in Bombay. The contract constituted contracting out of the right to bring actions in other competent courts. The aforesaid observations of the Andhra Pradesh High Court were relied on and approved of by the Division Bench of this High Court in an unreported decision in the case of Shah Prabhudas Gulabchand v. Eurasion Equipments and Chemicals Ltd. (Appeal from Suit, No. 189 of 1976: (reported in : AIR1977Cal449 . It is well settled that clause excluding the jurisdiction or vesting the jurisdiction ofj a particular forum does not oust the jurisdiction of the appropriate court. The jurisdiction of the Court to try a suit is vested in it by the Letters Patent or by the Constitution. The parties could not bv any private agreement confer or take away the jurisdiction but the Courts could compel the parties to abide by their contract if there is such a contract and if there is no circumstance indicating otherwise the Courts would compel the parties to abide by their contracts. In the instant case, however, this expression in the document is not, in my opinion,conclusive or decisive because this cause of action, as such, in its entirety is not based on the accounts stated or on any contract of this nature. But, this factor, in my opinion, may be taken into consideration along with other factors whether the suit should be stayed or not.

7. It has been alleged in the petition on behalf of the plaintiff that the suit should be stayed for the reasons which are enumerated in paragraph 10. It has been stated, that the plaintiff is a permanent resident of Bhubaneswar and this fact is not denied. It is further stated that he had never resided in Calcutta. This, however, has been controverted. It is further alleged that the defendant does the whole of its actual business of production and manufacturing of cables and all contracts at Bhubaneswar. It is also' alleged that the office of the defendant was in West Bengal. There is however some controversy whether it is at Watkins Lane, Howrah or at 3, Jad-ul-al Mullick Road, Calcutta. But, undoubtedly, it is in the State of West Bengal. According to the defendant, the said office was only for the purpose of making formal correspondence and licence. The cause of action wholly arose at Bhubaneswar and all the dealings and transactions referred to in the plaint took place at Bhubaneswar. The settlement of account was also alleged to have been at Bhubaneswar. Therefore, the entire facts leading to the present cause of action took place at Bhubaneswar. The defendant petitioner has also given a list of several witnesses who may be relevant and material for the purpose of proving the facts in dispute in the instant case. It has been alleged that these witnesses are residents of Bhubaneswar and would be available at Bhubaneswar. The books, papers and documents including the letters which are relevant are also stated to be in Bhubaneswar. It has therefore been submitted that it will be oppressive and vexatious for the defendant to defend the action at Calcutta. It is further alleged that this would be inconvenient to the plaintiff. On behalf of the plaintiff it has been submitted that the books of accounts, papers and documents should be available at the registered office and therefore it has been urged that those documents cannot be available at Bhubaneswar. On the other hand, on behalf of the defendant it was submitted that such papers, books of accounts and documents could be kept at the relevant Branch Office and in fact, were kept there.My attention was drawn to the relevant provisions of the Companies Act, 1956 which, according to the defendant, permitted such books of accounts, documents and papers being kept at places outside the registered office in the facts and circumstances of the case. My attention was also drawn to the Articles of the Association which permitted the Managing Director to keep such books of accounts, papers and documents at places outside and it was submitted that the Board of Directors had also decided to keep those documents and papers outside, The defendant also stated that the plaintiff had alleged in certain other proceedings beforehand that the books, papers and document were at the factory office at Bhubaneswar.

8. On these facts, the question, whether the suit should be stayed in this Court, will have to be determined. As mentioned hereinbefore, the true test is not the comparative convenience or inconvenience for the trial at a particular place. The balance of convenience is not sufficient ground for depriving the plaintiff of his choice of forum. Bearing that principle in mind it can safely be said from the facts as they appear, that the balance of convenience is in favour of trial of the suit at. Bhubaneswar. It can also fairly be said, on the averments made, that the plaintiff will not be inconvenienced or the plaintiff will not suffer any injustice if the suit is tried at Bhubaneswar. But the only question that has to be decided is whether the defendant in defending the action will be victim of such injustice as would amount to vexation and oppression. It is not merely a question whether it will be inconvenient for the defendant to defend but whether the prosecution of the suit will amount to vexation and oppression of the defendant. Admittedly, the defendant has some business connection with Calcutta or Howrah. Its registered office is at Calcutta or at Howrah. Some of the witnesses defendant has mentioned, were available at some point of time at Calcutta in connection with attending 1he Board Meeting. On the allegations made in this case, though I am inclined to think that it would be inconvenient for the defendant to defend the suit in Calcutta, such inconvenience would not amount to such vexation as could be described as oppression on it. If that is not the position, then, in my opinion, by exercise of inherent power of Section 151 of the Code of Civil Procedure the suitshould not be stayed at this stage. I would, therefore, direct as follows :

9. The defendant will be at liberty to file the written statement within a fortnight from this date but whether the defendant has registered office at Calcutta and whether the plaintiff is entitled to maintain this action being an unregistered firm or not. the defendant will be entitled to raise these issues along with other issues in the written statement and will be entitled to claim that these be trjerl as preliminary issues of the suit.

10. Costs of this application will be cost in the suit.


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