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Parasram Harnandrai Vs. Chitandas and ors. - Court Judgment

LegalCrystal Citation
CourtKolkata High Court
Decided On
Case NumberCivil Suit No. 232 of 1951
Reported inAIR1952Cal82,55CWN585
ActsPartnership Act - Sections 10, 24, 42 and 151
AppellantParasram Harnandrai
RespondentChitandas and ors.
Appellant AdvocateA.K. Sen and Gouri Mitter, Advs.
Respondent AdvocateH.C. Ghosh, Adv.
Cases ReferredBhuwalka Bros Ltd. v. Gobindram Bros Ltd
- .....under the name & style of parasram harnandrai at 129 cotton street, calcutta & also at delhi. the plff. firm claims the said business of 'peramal chetandas' to be a partnership of which the partnership firm is one of the partners. the deft. chetandas says that he is the sole owner of the business which bears his own name & that of his father peramal. the process by which the plff. firm claims to have become a partner is set out in the plaint & is as follows: (1) in or about 5-3-1945, one rajinder kumar, bhuramal & mangalchand, entered into a 'verbal agreement in calcutta, for the purpose of carrying on business in co-partnership under the name & style of 'gourishankar radheshyam.' (2) in such an agreement, rajinder kumar was really representing the plff. firm. (3) the plff. firm became.....

Sinha, J.

1. This is an application for revocation of leave which has been granted to the plff., under the provisions of Clause 12 of the Letters Patent. The facts are briefly as follows: There is a shop, situate at Katra Tobacco, Khari Baoli, in Delhi, under the name & style of 'Peramal Chetandas. The plff. is a registered partnership firm, carrying on business under the name & style of Parasram Harnandrai at 129 Cotton Street, Calcutta & also at Delhi. The plff. firm claims the said business of 'Peramal Chetandas' to be a partnership of which the partnership firm is one of the partners. The deft. Chetandas says that he is the sole owner of the business which bears his own name & that of his father Peramal. The process by which the plff. firm claims to have become a partner is set out in the plaint & is as follows: (1) In or about 5-3-1945, one Rajinder Kumar, Bhuramal & Mangalchand, entered into a 'verbal agreement in Calcutta, for the purpose of carrying on business in co-partnership under the name & style of 'Gourishankar Radheshyam.' (2) In such an agreement, Rajinder Kumar was really representing the plff. firm. (3) The plff. firm became agents of Gourishankar Radheshyam in Calcutta. (4) On 12-10-1946 Rajinder Kumar died. (5) On 17-4-1947 Bhuramull died. (6) The shares of the parties thereupon were altered, plff. firm getting 5/8 & Mangalchand 3/8. (7) On 28-6-1947, Chetandas was taken into the partnership under a 'verbal agreement' whereby the tenancy right of the shop-rooms & godowns was to belong absolutely to the plff. firm, name of partnership to be altered to 'Chetandas Gourishankar' & the shares were altered, Plff. having 2/8, Chetandas 5/8 & Mangalchand 1/8. (8) On or about 28-6-1949, the share of Mangalchand was taken over by plff. & name of the firm changed to 'Peramal Chetandas.' All this was 'verbal.' (95 It was stated that Chetandas committed various breaches of the partnership, agreement & it was no longer possible to carry on business in partnership.

2. It will thus be seen, that 'Peramal Chetandas' only comes into being in June 1949. Part of the cause of action is stated to have arisen in Calcutta, because the original agreement relating to Gourishankar Radheshyam is stated to have been in Calcutta. I do not see, how it is really possible to connect 'Peramal Chetandas' with the original firm of Gourishankar Radheshyam in the manner that it is sought to be done. When a partner dies, the firm is dissolved, in the absence of a contract to the contrary. (Section 42, Partnership Act.) No contract to the contrary is pleaded, & the facts pleaded show that the original partners have changed, the shares have changed, the name has changed, & in January 1947, the entire complexion of the business changed, inasmuch as the shop-rooms & godowns were to belong exclusively to one partner, whereas another partner was to be in exclusive charge of conducting the business. Mr. Basil, appearing for the plff. says that there is sufficient pleading to show that the present firm is the same as the Original firm of Gourishankar Radheshyam - I fail to see how that is so, at least on the pleading.

3. The next thing to be considered is the prayers. There is the usual prayer for dissolution of partnership & accounts. But there is also a prayer asking for 'Delivery of possession of the shops & godown herein mentioned.' Connecting this with the allegations in para. 6 (a), the question arises as to whether the suit is one for possession of an interest in land, & therefore, a suit for land.

4. The law relating to revocation of leave under Clause 12, Letters Patent, has been discussed 'with a thoroughness, which is characteristic of Das, J., in 'Madanlal Jalan v. Madanlal', 49 C W N 357. The learned Judge, after discussing all the case law, laid down the following principles for guidance, in matters of this description: (a) That an application lies for revoking leave granted under Clause 12, Letters Patent, (b) That such an application should be made at an early stage of the suit & delay & acquiescence may be a bar to such an application, (c) That if the application depends on difficult questions of law or fact the Court should not revoke leave on a summary application but should decide the question at the trial, (d) That if the deft, shows clearly that no part of the cause of action arose within jurisdiction, the leave should be revoked as a matter of course. (e) That if only a part of the cause of action arose within jurisdiction, then it is a question of discretion for the Court to give or refuse leave or where leave has already been granted to revoke or maintain the leave, (f) That assignment is a very important part of the cause of action in a suit by the assignee, (g) That in giving or refusing leave or maintaining or revoking leave the Court will ordinarily take into consideration the balance of convenience & may, if the balance is definitely in favour of the deft., apply the doctrine of 'Forum Conveniens.' (h) That the Court may refuse leave or revoke leave on the ground of balance of convenience although there be no evidence of bad faith or abuse of process on the part of the plff. (i) That if the cause of action is founded on an assignment within jurisdiction of a negotiable instrument, the Court will, in recognition of the principle of negotiability, insist on a far greater degree of balance of convenience in favour of the deft. & will more readily give or maintain leave, than in other case of assignment, (j) That if the Court is satisfied that the suit has been filed 'mala fide' for the purpose of harassing or oppressing the deft., or might result in injustice, the Court should in all cases readily refuse leave or if leave has already been granted revoke the leave as a matter of course.

5. I shall now notice the later decisions on the subject.

6. In 'Chetandas Matta v. Qutubuddin Khan', (unreported, dated 24-1-1947. Appeal No. 91 of 1945) the deft, executed a promissory note in favour of one Tilockchand. Both the drawer & drawee were residents of Dera Ismail Khan (situate in that part of British India, then known as the 'Frontier Province'). The promissory note was en' dorsed twice, & the last endorsement was made in Calcutta. Both the endorsements were made in quick succession, immediately prior to the institution of the suit in Calcutta. The plff. filed the suit in March 1943, after obtaining leave under Clause 12, Letters Patent. The writ of summons was served in February 1945 & in the March following, the deft, applied for revocation of the leave which had been granted to institute the suit in this Court. It was stated on behalf of the deft, that there was no consideration for the pronote, & that it was a colourable transaction. He further said that it would be absolutely inconvenient, very costly, embarrassing, & troublesome, for him to come to Calcutta to defend the suit. Ormond J., revoked the leave, & the appeal Court, consisting of R. C. Mitter, A.C.J., & Sharpe, J., upheld the order. Mitter A.C.J., pointed out that where there were more than one forum where a suit would be instituted, the general rule was that the plff. had the choice of forum. But there may be cases where this right requires to be restricted. The Civil Procedure Code accomplished this by giving the right to the deft, to have the suit transferred from one forum to another (Section 24). There is also the provision of stay under Section 10 & the inherent powers of the Courts, recognised by Section 151. Under the Letters Patent we have Clause 12. Such powers can be exercised to prevent an abuse of the processes of the Court or for the ends of justice. But those considerations are not the only consideration. The learned Judge says as follows:

'In such cases, the balance of convenience has never been ruled out. In most of them, where orders of transfer had been made, there were combinations with other elements. In some of the cases it was held that a 'mere balance of convenience' in favour of the proceedings in another Court is not a sufficient ground for transfer. Generally speaking, that is a sound rule. But we understand that phrase to mean that if on nice calculations the balance turns somewhat in favour of the party applying for transfer, that would not be sufficient. The balance of convenience must be strongly in his favour.........We therefore hold that in considering the question as to whether leave granted ought to be revoked or not, the question of convenience is a material factor. But this observation of ours must be taken not to mean that if on nice calculations the balance of convenience is on the side of the deft, asking for revocation, it would be sufficient. The convenience of the parties ought not to be, to use a figurative expression, weighed in the delicate scale of the chemist. The nature of the suit must also be taken into consideration, the question of comparative expenses to the parties would be a material factor.'

On the facts of the case, the learned Judges held that the deft's. witnesses were all in the Frontier Provinces & the expenses would be heavy to bring them to Calcutta. The plff. would have to call Calcutta witnesses to prove payment of consideration for the assignment, but the costs of doing so would not be comparable to the costs which the deft, would incur, to substantiate his defence. Revocation of leave was upheld.

7. The next case which is of importance is 'Barhoo Mahto v. Chittaranjan Mukherjee', (unreported, dated 7-4-1948. Suit No. 419 of 1947. Appeal No. 61 of 1947). This was a suit for dissolution of partnership, accounts etc. The partnership agreement was alleged to have been entered into in Calcutta, but the deft, resided in Bihar, where the plff. also resided until before suit, & the business was carried on outside Calcutta. Clough, j., refused to revoke leave. The Appeal Court, consisting of Harries C. J., & Mukherjee J., set aside the order & revoked the leave. Mukherjee, J., said as follows:

'It is not disputed that the deft, is an illiterate man, who resides & has his usual place of business in Muzaffarpur in the province of Bihar. The plff. also was a resident of that place. The registered office of the company is at Muzaffarpore & the business that was conducted by the partners were outside Calcutta. In these circumstances it may be said that 'prima facie' the balance of convenience is in favour of the deft.........on the question of accounting the convenience is undoubtedly in favour of a Court in the province of Bihar. The transactions as said above all took place outside Calcutta. The account books ought presumably to be at the registered office of the company, although they might have been brought down to Calcutta for the purposes of using them in connection with the assessment of income tax. The persons who are competent to speak to the entries in the account books are all people outside Calcutta & it would be a difficult & most expensive affair if all these witnesses have to be brought down from Bihar & other places & examined in the Original Side of this Court.'

This decision was reversed by the Supreme Court, Chittaranjan Mukherjee v. Barhoo Mahto', 5-5-1950, O. A. No. 64 of 1949, but on the point that there was an 'acquiescence' on the part of the deft. to the action being tried in this Court. The deft, appeared in several applications & took benefit of the. orders. After having done so, he could not ask for leave to be revoked. 'It is thus clear,' said the learned Judges,

'that the respondent has not only acquiesced in the steps taken by the appellant to carry forward the progress of the suit incurring considerable expenses, but, in the language of Clough J., 'made use of the existence of the suit', to obtain such interlocutory reliefs as he thought should be to his own advantage at the hands of the Court he now claims should not try the suit.' Ridhkaran Kabra v. A. Karamally & Sons & & anr.' (unreported, D/- 19-11-1948. Appeals Nos. 83 & 84 of 1948) was an appeal against an order of Clough J., revoking leave granted to the plff. under Clause 12. The suit was one for damages for breach of contract relating to sale of gunny bags. The plff's. case was that the terms of the contract were not only contained in correspondence but there were other terms agreed to, between the parties in Calcutta. Deft. 1 put forward the case that all the terms were contained in the correspondence. Clough, J., held that when asked to revoke leave already granted, the Court must proceed on the basis that all the allegations contained in the plaint were correct. But, according to the learned Judge, the evidence relating to the most important & the fundamental part of the plff's. case, which it was essential to give before the Court instead of on commission, could be given more conveniently only in Bombay, whereas the evidence which lay in Calcutta, related to a part of the case which was comparatively unimportant. The balance of convenience was therefore in favour of the suit being tried there. Chakravarty, J., delivering judgment on behalf of the Court of Appeal said:

'As regards balance of convenience, the principle I apprehend is that for making an order in favour of the deft., it is not enough that this balance tilt slightly in his favour. The Court has to take the field of enquiry to be that envisaged by the whole plaint & it has to take into account the whole mass of evidence which will have to be given by the plff. to prove his case & by the defts. to meet it. The Court may also take into consideration the inconvenience likely to be caused to the parties by having to attend personally throughout the trial, as also the expense, & any other local or special condition in the one forum or the other. If on taking into consideration all these facts, it appeared that that part of the evidence which could be more conveniently given in another Court was so much larger & the inconvenience of compelling the deft, in bringing that evidence to this Court was so much greater that it would be oppressive in the extreme to compel him to do so, then a balance of convenience would be established in favour of the deft.' On the facts, however, the learned Judge held that Clough J. had erroneously decided the question of the balance of convenience. 'What is to be considered,' said Chakravarti, J,

'it not the importance of the matter to be proved but the volume of the evidence, & convenience or inconvenience of producing it. The most vital & fundamental part of a case may well depend upon evidence of a limited volume & yet evidence bearing upon the remaining parts of the case which are only consequential or inconsequential, may be voluminous & troublesome to bring forward.'

8. The learned Judge was further of the opinion that in laying down proposition (j), in 'Madanlal v. Madanlal', 49 C W N 357 at p. 365, Das J., did not necessarily accept the proposition as good law under all circumstances.

9. According to Chakravarty J., in an application for revocation of leave, the Court must accept the facts pleaded in the plaint as true, & at that initial stage, the Court could not possibly decide the question of 'mala fides', although it might do so if the question came to be decided at the hearing stage. Although the learned Judges in appeal, disagreed with the view of Clough, J., on the question of balance of convenience, the appeal was dismissed because the plff. had impleaded another deft, as against whom, no part of the cause of action could be said to arise within the jurisdiction of this Court & it would not be possible to split the action into two.

10. In 'Bhuwalka Bros. Ltd. v. Govindram Bros. Ltd.' (dated 6-8-1948, Suit No. 510 of 1948) the deft, had brought a suit against the plff. in Bombay, upon an alleged loan of rupees five lakhs. The plff. brought a suit against the deft, in Calcutta upon an alleged statement of account, admitting that Rs. 200,883/11/- was due to the plff., presumably after giving credit for the said sum of rupees five lakhs. Sinha, J., held that for the purposes of the application, he must proceed upon the footing that the allegations in the plaint were correct. On the plaint, as it was pleaded, the transaction was 'essentially a Bombay transaction.' The account was stated in Bombay, the letter of 8-10-1947 (containing the acknowledgment) was written in Bombay & 'In the ordinary course of things,' witnesses in Bombay would have to be called to speak to the transaction. The learned Judge was of the opinion that:

'The Bombay High Court is the natural forum for the purpose of trying this suit, whether the suit has been filed 'mala fide' or not is another question.'

Another observation of the learned Judge is important for the purposes of the present case. 'Mr. Nagarmull Mhuwalka has filed an affidavit in opposition to the application' said the learned Judge,

'In para. 14 of that affidavit, he says that his books of account are in Calcutta, Ms witnesses are in Calcutta & the balance of convenience is in favour of the suit going on in the Calcutta High Court. No particulars are given in that para, as to the allegations & submissions made.'

11. This decision of Sinha, J., was upheld by the Court of Appeal On 22-3-1949 (Appeal No. 95 of 1948).

12. This decision of Sinha, J. was followed in 'B.S. Kothari v. The Muir Mills Co. Ltd.', decided by Das Gupta, J., on 5-1-1951, Suit No. 2648 of 1950, where on the facts, the learned Judge held that the balance of convenience was decidedly or overwhelmingly against the suit going on in this Court.

13. Analysing these latter decisions, I think that the following propositions may be usefully added to the list set out by Das, J., in 'Madanlal v. Madanlal', 49 C. W. N. 357 at p. 367. (a) Where an application for revocation of leave is made at the initial stages of a suit, the allegations in the plaint must be taken to be correct, & the Court will not enter into disputed questions of fact, (b) The Court cannot decide questions of 'mala fides' of he plff. in instituting the suit in a particular forum except at the trial of the action, (c) The 'balance of convenience' to be decided, in such an application, must be shown to be 'overwhelmingly' in favour of the deft, to such an extent, that to force the deft, to come to this Court would amount to a denial of justice. The Court will not enter into 'nice' calculations for ascertaining the respective convenience or inconvenience of the parties. This is what is meant by the phrase 'mere balance of convenience' is not enough.' (d) In considering the 'balance of convenience', what is to be considered is not the importance of the matter to be proved, but the volume of the evidence, & the convenience or inconvenience of producing it at a particular forum, (e) In deciding the question of 'balance of convenience', statements of a general nature contained in affidavits affirmed for that purpose, without particulars are useless. The Court must consider the facts & cannot proceed to act on vague allegations, devoid of particulars, (f) In deciding applications for revocation of leave, it is always useful to consider as to which Court was the 'Natural forum' for an action.

14. In this case before me, Mr. Sen appearing on behalf of the deft. 1, has taken the following points: (1) That this suit is 'mala fide' & instituted merely to harrass the deft. 1, & is an abuse of the processes of this Court. (2) That no part of the cause of action has arisen within the jurisdiction of this Court. (3) That the suit is a suit for land & the land is entirely situate outside the jurisdiction. (4) That the balance of convenience' is overwhelmingly in favour of the deft.

15. As regards the first point, I am unable to consider this point at this stage, because I have to go merely by the plaint & the plaint does not show on the face of it, any absence of 'bona fides.' As regards the second point, I think it to be extremely doubtful whether the plaint shows any part of the cause of action as arising within the jurisdiction of this Court. The only event that happened in Calcutta is the agreement pleaded in para. 1 of the plaint, whereby the firm of Gourishankar Radheshyam was constituted, I fail to appreciate how that agreement can form a part of the cause of action of the plff. in this suit. It might have a historical significance, showing the antecedent history of the present business, but we are not concerned with that. I cannot accept the argument that the plaint shows that the firm of 'Peramal Chetandas' is the same as the original firm of 'Gourishankar Radheshyam.' On the contrary, it shows that the firm of 'Gourishankar Radheshyam' had ceased to exist long ago, & the present business of 'Peramal Chetandas', is a different entity. Be that as it may, had I to consider only this particular point, I would have preferred to wait until the trial, when I would have known a little more about the constitution of 'Peramal Chetandas.' This application can however be disposed of, on other grounds.

16. As regards the third point, the suit must be considered to be a suit for land. In para. 6 of the plaint, it has been pleaded as follows:

'6. On or about Asar Sudi 1st Sambat Year 2004 corresponding to 28-6-1947, the deft. 1 was by mutual consent admitted as a partner of the said firm & it was agreed as follows:(a) That the stock-in-rade, book-debts & other assets including the tenancy rights of the said shop rooms & godowns existing, would belong absolutely to the plff. firm.'

It is then prayed as follows:

'The plff. firm prays: -

(d) delivery of possession of the shops & godowns hereinmentioned.'

Mr. Basu argued that it does not necessarily follow that possession of the tenancy rights was also asked for. I do not agree with him. I think that is precisely what he is asking for, & to 'my mind, what the suit is really about. At first, Mr. Basu agreed to delete the prayer, but later on, after taking instructions from his client, withdrew his prayer for deletion. Since the 'land' is wholly outside jurisdiction, I think that this point succeeds & leave should be revoked on this ground.

17. But the really substantial point is the penultimate point of 'balance of convenience. On the facts of this case, it is clear that the balance is overwhelmingly in favour of the deft. 1. The business is a running business & wholly situate at Delhi. The deft. 1 who is admittedly in charge of it, resides at Delhi & has never even come to Calcutta. On the contrary, the plff. firm has a place of business at Delhi. All the defts. reside at Delhi. All the books of account, & all persons capable of proving them are at Delhi. The only thing that happend at Calcutta is the remote agreement pleaded in para. 1 of the plaint. It is doubtful whether that is at all a relevant matter, but in any event, the cost of proving it cannot be comparable to the cost of proving the defence, (See 'Chetan Das v. Qutubuddin Khan' ibid.) The volume of evidence to be brought from Delhi will be considerable, if the action is tried here (See 'Ridhakara Kabra v. A. Karamally & Sons' ibid).

18. In his affidavit in opposition, Durga Prosad Goenka, a partner of the plff. firm says that evidence on behalf of the plff. firm is mostly in Calcutta, & the witnesses who will give evidence on its behalf are in Calcutta, but no particulars whatsoever are given. As held in 'Bhuwalka Bros Ltd. v. Gobindram Bros Ltd' (ibid), such statements, without particulars cannot be accepted.

19. I, therefore, think that 'Delhi' is the natural forum of this suit & it should not be allow-ed to be proceeded on with, in this Court.

20. I revoke the leave, granted to the plff. under Clause 12, Letters Patent.

21. The plff. must pay the costs of this application to the deft. 1, but I make no order as to cost of the suit itself or as to any costs reserved.

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