Calcutta High Court
Shakambhari Ispat And Power Pvt. Ltd vs Birat Chandra Dagara on 6 January, 2025
Author: Soumen Sen
Bench: Soumen Sen
OC-5
ORDER SHEET
AO-COM/2/2025
WITH
CS-COM/565/2024
IA NO: GA-COM/1/2024
IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
ORIGINAL SIDE
(Commercial Division)
SHAKAMBHARI ISPAT AND POWER PVT. LTD.
VERSUS
BIRAT CHANDRA DAGARA
BEFORE:
The Hon'ble JUSTICE SOUMEN SEN
AND
The Hon'ble JUSTICE BISWAROOP CHOWDHURY
Date : 6th January, 2025.
Appearance:
Mr. Surajit Nath Mitra, Sr. Adv.
Mr. Kumarjit Banerjee, Adv.
Mr. Sourojit Dasgupta, Adv.
Ms. Sanchari Chakraborty, Adv.
Ms. Tanishka Khandelwal, Adv.
...for the petitioner
Mr. Ratnanko Banerji, Sr. Adv.
Mr. Jayanta Sengupta, Adv.
Mr. Rahul Auddy, Adv.
Mr. Saurodip Banerjee, Adv.
Mr. Aditya Gooptu, Adv.
..for the respondent
1. The appellant is the plaintiff.
2. In a suit for recovery of money, the plaintiff filed an application being
GA-COM/1/2024 praying, inter alia, for judgment upon admission for
a sum of Rs.3,37,15,075/- along with interest at the rate of 24% per
annum and also an order of injunction restraining the defendants,
their men, agents, servants and/or assigns from dealing with and/or
disposing of and/or alienating and/or transferring and/or
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encumbering their assets and properties. After the said application
was heard out and made C.A.V. on 16th July, 2024, the defendant
filed an application being GA-COM/2/2024 on 18 th July, 2024
praying, inter alia, for revocation of leave granted under Clause 12 of
the Letters Patent or in the alternative, to return the plaint or
rejection of the plaint.
3. The plaintiff filed the suit for recovery of the aforesaid sums due and
owing by reason of failure on the part of the respondent to supply,
agreed quantities and qualities of iron ore pursuant to several
purchase orders issued in this regard by the plaintiff.
4. As stated earlier after the hearing of the application for judgment of
admission was concluded an application for revocation under leave
under Clause 12 of the Letters Patent was filed. It is further argued
that point of jurisdiction was also urged in the affidavit-in-opposition
filed in connection with the application for the judgment of an
admission. The basis of the application for revocation of the leave
under Clause 12 that no part of the cause of action has no
jurisdiction of this court. The defendant alleges that the defendant
carries on business at Orissa outside the jurisdiction and the factory
of the plaintiff is located at Purulia where the iron ore were required to
be supplied. It is further submitted that the purchase order would
show that they were issued from the factory site of the plaintiff and
accordingly the registered office of the plaintiff has no role to play.
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5. We have carefully read the plaint. For the purpose of the limited
inquiry for leave under Clause 12 of the Letters Patent the following
paragraphs are required to be looked into.
4. Pursuant thereto, the parties entered into various
discussions and negotiations, during which it was mutually
agreed that the Defendant would supply the required iron ore
mineral of specified description on the basis of purchase orders
issued by the Plaintiff in such regard (hereinafter referred to as
the “said materials”). It was agreed by and between the parties
that the Plaintiff would make advance payments in respect of the
orders, and the Defendant would forthwith deliver and/or supply
the materials as per terms and conditions stipulated therein. It
was further agreed that in default of supply of the materials by
the Defendant, the Defendant would be liable to refund the entire
advance amount paid by the Plaintiff in that regard to the Plaintiff
with interest at the rate of 24% per annum, at the Plaintiff’s
registered office situated within the jurisdiction aforesaid. The
aforesaid discussion, negotiation and agreement took place
and/or were concluded at the office of the Plaintiff situated within
the jurisdiction aforesaid.
5. Apropos the various discussions and deliberations by
and between the parties the Defendant herein proceeded to issue
an offer for supply of iron ore dated, 7th February, 2018
comprising of his offer together with the various terms and
conditions upon which such offer was being made. Upon receipt of
the aforementioned supply offer, the Plaintiff proceeded to issue a
Purchase Order cum Tax Invoice dated 7th February, 2018 setting
out the terms and conditions upon which such supply was to be
made by the Defendant together with the agreed consideration
payable in respect thereof, from its office situated within the
jurisdiction aforesaid, for supply of specified quantities of the
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contracted material to the Plaintiff at its factory situated at Village
Mohuda, P.O. Rukni, P.S. Para, District – Purulia, West Bengal –
712145.
A copy of the said Purchase Order Cum Tax Invoice dated
7th February, 2018 is annexed herewith and marked with the
letter “A”.
The said Purchase Order Cum Tax Invoice was issued by
the Plaintiff from his office within the jurisdiction aforesaid and
received by the Defendant outside the jurisdiction aforesaid.
27. Inasmuch as the. Defendant is liable to make payment
of the admitted sum to the Plaintiff’s office situated within the
jurisdiction aforesaid, and inasmuch as the Plaintiff is entitled to
receive the aforesaid sum at its office situated within the
jurisdiction aforesaid, and since the agreement as pleaded in
paragraph no. 5 and 7 hereof was entered into and/or concluded
at the office of the Plaintiff situated within the jurisdiction
aforesaid, a part of cause of action have arose within the
Jurisdiction of this Hon’ble Court and inasmuch as the Defendant
is situated outside the jurisdiction aforesaid, a part of cause of
action of arose outside the jurisdiction aforesaid. The Plaintiff,
accordingly seeks leave under Clause 12 of the Letters Patent,
1865 to institute the instant suit before this Hon’ble Court.”
6. The bare reading of the aforesaid paragraphs would show that there is
a clear averment that the discussion, negotiation and agreement took
place and/or were concluded at the registered office of the plaintiff
within the jurisdiction of this court. It is not in dispute that the
address of the plaintiff mentioned in the cause title is the place where
from the plaintiff carries on business. It is the registered office of the
plaintiff. Although, it is attempted to be argued that purchase orders
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cum tax invoices setting out the terms and conditions and its
acceptance by the defendant would decide the jurisdiction and in view
of the fact that the purchase orders cum tax invoices raised on the
plaintiff were accepted at the registered office of the defendant at
Odisha and the contract was performed at Purulia where the factory
of the plaintiff is situated, this court has no jurisdiction to try, receive
and decide the suit.
7. We are not inclined to accept the said submission having regard to
the fact that the purchase order was issued consequent upon a
contract concluded at the office of the plaintiff and it is not an
independent document for the purpose of deciding the jurisdiction.
One of the classes of jurisdiction which the High Court can avail
under Clause 12 of the Letters Patent is where the reality or the cause
of action is not wholly but only partly occurred within its jurisdiction.
It is an inchoate jurisdiction which comes into action upon the court
granting the leave to institute the suit. It is the nascent jurisdiction
which lies dormant in this court and can only be put into life and
operation by an act of the court in granting leave to institute the suit.
Here the court has to acquire it. Here the jurisdiction does not depend
only on the fact of the court but also on the act of the court. The
jurisdiction of a court also does not depend upon the defence taken by
the defendant and it is the allegations/averments made in the plaint
which decided the forum. The court while considering the application
for grant of temporary injunction can however, go into the question
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whether prima facie it has jurisdiction or not and for the said purpose
not only in the pleadings but the affidavits, documents and other
materials on record can be examined. Therefore, for the purpose of
forming prima facie opinion, the court can travel beyond what is
averred in the plaint.
8. It is elementary that making of contract is a part of cause of action
and the suit on contract therefore should be filed at the place where it
was made. In this case, it is a clear averment of the plaintiff that the
contract was concluded at the registered office of the plaintiff within
the jurisdiction of this court. The circumstances under which a suit
under Clause 12 of the letters patent would lie has been elaborately
discussed in Chainrup Sampatram v. Punjab & Sind Bank
reported at 2009 (1) CHN 346 at paragraph 24 which reads:-
“24. There are three limbs to Clause 12 of the Letters Patent: the
first limb covers suits for land or other immovable property, which
is not germane for the present purpose; the second limb speaks of
the place of accrual of the cause of action in the suit, requiring no
previous leave if the cause of action arises wholly within
jurisdiction but requiring previous leave if only a part – however
infinitesimal or significant – of the cause of action arises within
jurisdiction; and, the third is the situs of the defendant at the time
of commencement of the suit. A suit for land (or other immovable
property) stands on a different pedestal and it is unnecessary to
go into that aspect of Clause 12 here. But in a suit which is not a
suit for land (or other immovable property) the plaintiff has a
choice of invoking the jurisdiction of this Court on either of the two
remaining limbs of Clause 12. If there is a solitary defendant in a
suit which is not a suit for land (or other immovable property), the
7plaintiff may unquestionably institute it on the Original Side of
this Court if the entirety of the cause of action arises within the
original jurisdiction of the Court and irrespective of where the
defendant may dwell or carry on business or personally work for
gain. If there is a solitary defendant in a suit which is not a suit
for land (or other immovable property), the plaintiff may institute it
on the original side of this Court if a part of the cause of action
arises within the original jurisdiction of this Court irrespective of
where the defendant may dwell or carry on business or
personally work for gain, subject, however, to obtaining prior
leave under Clause 12 to institute the suit. If there is a solitary
defendant in a suit which is not a suit for land (or other
immovable property), the plaintiff may institute it on the original
side of this Court if the defendant, at the time of the
commencement of the suit, dwells or carries on business or
personally works for gain within the original jurisdiction of this
Court, irrespective of where the cause of action may be arisen.
The second and third limbs of Clause 12 that cover suits other
than suits for land (or other immovable property) are, in a sense,
mutually exclusive; in that the plaintiff has the choice of either
founding territorial jurisdiction on situs of cause of action or on
location of the defendant at the time of commencement of the suit.
In a suit other than a suit for land (or other immovable property)
where the plaintiff sues more than one defendant, either of the
last two limbs of Clause 12 of the Letters Patent has to be
satisfied in respect of each defendant in the suit for the action to
be launched on the Original Side of this Court.”
9. The said judgment has reiterated the principles of leave under Clause
12 as lucidly and authoritatively stated in Muttra Electric Supply v.
Gopal Saran reported at 59 CWN 419.
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10. It is trite law that for the purpose of deciding an application for
revocation, the allegations and/or averments in the plaint must be
taken to be correct and the Court shall not enter into disputed
questions of facts.
11. We have carefully read the plaint. The application for judgment
upon admission is based on the communication dated 28 th October,
2021 addressed to the registered office of the plaintiff in which the
defendant has clearly acknowledged that a sum of Rs.3,37,15,075/- is
lying on account of the plaintiff with accrued interest. However, the
defendant expressed its inability to supply the said iron ore of the
specifications agreed upon. The defendant prayed for some fund to
start the mining operation and despatches. By the said
communication, the defendant made a request to arrange to transfer
Rs.60 lakhs as advance in addition to the advances which are already
lying with the defendant. Since no material was despatched
subsequent thereto, the plaintiff filed the suit for recovery of money
on the ground of failure of consideration of the quantities covered by
the said advance. The principal defence to the said claim appears to
be that no part of the cause of action has arisen within the
jurisdiction of this Court and in the affidavit-in-opposition to the
judgment upon admission, it has been stated that due to government
sanctions, the iron ore could not be delivered.
12. Mr. Ratnanko Banerji, learned senior counsel appearing on behalf
of the respondent, has submitted that an approval was received on 6 th
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May, 2024 and the respondent has clearly stated in its affidavit that it
expects that the approval which was pending would be granted within
a short span of time. The fact however remains that till date no part of
the iron ore which the defendant was required to supply under several
purchase orders has been delivered. The plaintiff apprehends that in
view of the impecunious situation of the defendant and having regard
to the fact that the iron ore of huge quantity was not supplied in the
meantime, until some protective order is passed in favour of the
plaintiff, the decree that is likely to be passed in favour of the plaintiff
may be rendered nugatory.
13. Mr. S.N. Mitra, learned senior counsel appearing on behalf of the
plaintiff, has referred to the decision in Harleen Jairath v. Prabha
Surana and Ors., reported in (2019)4 CHN (Cal) 412 and submits
that the Court in appropriate cases in exercise of its power under
Order 39 Rule 1(b) can even pass orders of injunction. It is submitted
that in view of a clear case of admission and the fact that the iron ore
has not been supplied till date, there is a clear apprehension that
unless there is some protective orders passed at this stage, the
plaintiff would suffer irreparable loss and prejudice. Mr. Mitra
submits that while the learned Single Judge has dismissed the
application for revocation of leave under Clause 12 of the Letters
Patent, the learned Single Judge did not decide the issue of judgment
upon admission on the ground that unless territorial jurisdiction of
the Court is decided, no order could be passed.
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14. Mr. Ratnanko Banerji, learned senior counsel, in reply, submitted
that unless the Court finally decides on the question of jurisdiction,
no interim order could have been passed and the learned Single
Judge being in doubt with regard to the territorial jurisdiction has
postponed the prayer for judgment upon admission and injunction till
the decision is taken in the suit.
15. In the impugned order, the learned Single Judge has mainly
focussed on the territorial jurisdiction of the Court although there are
some discussions with regard to the claim of the plaintiff. The learned
Single Judge did not take any prima facie view with regard to the
prayer for judgment upon admission or injunction and declined to
grant any relief on the ground that having regard to the averments in
the plaint and the nature of dispute raised by the defendant, the
question of jurisdiction is required to be decided. The learned Single
judge although has referred to a Co-ordinate Bench decision in
Parasram Harnandrai v. Chetandas & Ors., reported in AIR 1952
Cal 82 but while deciding the said issue seems to have overlooked the
ratio of the said decision which clearly says that in an application for
revocation of leave, the allegations in the plaint must be taken to be
correct and the Court will not enter into disputed questions of fact.
Unless the application for revocation of leave under Clause 12 of
Letters Patent is allowed, the Court retains the jurisdiction to pass all
interlocutory orders that may be necessary in the suit so that the
plaintiff is not ultimately prejudiced. The defendant has failed in its
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application for revocation of Clause 12 of the Letters patent. There is
no cross appeal.
16. Prima facie, there is failure of consideration. There has been no
supply since 2021. The letter of the defendant acknowledges that
substantial amount is lying with the defendant for supply of iron ore
of the quantities and specifications mentioned in the various
purchase orders. Although an averment is made that the defendant is
in a position to despatch the iron ores, till date no such despatch was
made with regard to any quantity of the balance iron ore.
17. On such consideration, we direct the defendant to file an affidavit
of assets in the interlocutory proceeding disclosing all its properties
having regard to the unimpeachable claim for money as it appears
from the communication dated 28 th October, 2021.
18. Since the application for judgment upon admission and injunction
was heard and the said matter was made C.A.V., we request the
learned Single Judge to decide the said application on merits and till
such time, the respondent no.1 shall not deal with its assets and
properties without the leave of the learned Single Judge. In the event
security is furnished for an amount of Rs.3,37,15,075/- the embargo
shall stand automatically vacated.
19. We make it clear that the learned Single Judge shall decide the
said application on merits without being influenced by any
observation made in this order.
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20. The appeal and the application accordingly stand disposed of.
However, there shall be no order as to costs.
21. GA-COM/1/2024 i.e., the application for judgment upon
admission shall be heard on the basis of the pleadings which are
already on record and is to be decided in view of the order passed
above.
(SOUMEN SEN, J.)
(BISWAROOP CHOWDHURY, J.)
bp/R.Bhar
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