ISHA DISTRIBUTION HOUSE PVT. LTD. versus ADITYA BIRLA NUVO LTD. & ANR. on 7 March 2019

ISHA DISTRIBUTION HOUSE PVT. LTD.

v.

ADITYA BIRLA NUVO LTD. & ANR.

(Civil Appeal Nos. 2554-2555 of 2019)

MARCH 07, 2019[ABHAY MANOHAR SAPRE ANDDINESH MAHEHSWARI, JJ.]

Letters Patent Act, 1865:

Clause 12 – Suit for declaration, damages and grant ofinjunction filed by appellant in the Calcutta High Court on itsoriginal side along with an application seeking leave to file thecivil suit as required under Clause 12 of the Letters Patent Act,1865 – Single Judge of the High Court granted leave to appellantas prayed for – Respondent, on entering appearance, filed anapplication praying for revocation of leave granted to the appellanton the ground that no part of cause of action arose within theterritorial jurisdiction of Calcutta High Court – Single Judgerevoked the leave – Division Bench affirmed the order of SingleJudge – On appeal, held: Since in the instant case, the respondentsdid not file any written statement and instead raised the plea ofterritorial jurisdiction by filing application for revocation of leave,High Court should have granted liberty to the respondents(defendants) to file the written statement in the suit and to raisetherein a plea of territorial jurisdiction of the Court, instead ofentertaining the said application – An issue of such nature, cannotbe tried by filing an application for revocation of leave – Applicationfiled by the respondents for revocation of grant of leave is dismissedand the respondent is granted liberty to file their written statementin answer to the plaint and raise therein the plea in question alongwith all other pleas relating to the facts and law as the case may be– Impugned order is set aside and matter remanded to Single Judgeof High Court to decide the issue afresh – Code of Civil Procedure,1908 – Or.XIV.

Allowing the appeal and remitting the matter to SingleJudge of the High Court, the Court

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AHELD: 1. A plea of territorial jurisdiction is essentially amixed question of law and fact. It is for this reason, therespondents(defendants) should be allowed to raise such plea inthe written statement to enable the Court to try it on its merits inaccordance with law in the light of the requirements ofOrder 14 of the Code of Civil Procedure, 1908 and otherBrelevant provisions governing the issue on merits. [Para 20][961-H; 962-A]

2. The application filed by the respondents (defendants)for revocation of grant of leave is dismissed and the respondentis granted liberty to file their written statement in answer to theCplaint and raise therein the plea in question along with all otherpleas relating to the facts and law as the case may be. On suchwritten statement being filed, the Single Judge will frameappropriate issues arising in the suit and proceed to answer themin accordance with law keeping in view the procedure laid downDin Order 14 of the Code of Civil Procedure. [Paras 22, 23][962-C, D]

Indian Mineral & Chemicals Co. & Ors. v. DeutscheBank (2004) 12 SCC 376 - relied on Secretary of State v. Golabrai Paliram AIR 1932ECalcutta 146 – approved Case Law Reference From the Judgment and Order dated 13.02.2017 and 02.05.2017of the High Court at Calcutta in APOT No. 274 of 2016 and RVWONo. 16 of 2017 in APOT No. 274 of 2016 respectively.

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K. V. Vishwanathan, Sr. Adv., Mainak Bose, Amitabh Ray,S. Sukumaran, Bhupesh Kumar, Ms. Meera Mathur, Advs. for theAppellant.

Dhruv Mehta, Sr. Adv., Sanjeev Kumar, Varun Sharma, AbhishekE. Kisku, Abhishek Goyal, Anshul Sehgal, Gaurav, Faisal Sherwani,HRajesh Singh Chauhan, Sanjeev Singh, Ms. Anandita, Advs. for theRespondent.

The Judgment of the Court was delivered by ABHAY MANOHAR SAPRE, J. 1. Leave granted.

2. These appeals are filed against the final judgment and orderdated 13.02.2017 in APOT No.274 of 2016 and dated 02.05.2017 inRVWO No.16 of 2017 passed by the High Court at Calcutta wherebythe High Court dismissed the appeal and review petition filed by theappellant herein.

3. These appeals involve a short point as would be clear from thefacts stated infra.

4. The appellant is the plaintiff whereas the respondents are thedefendants in a civil suit out of which these appeals arise.

5. The appellant filed a civil suit (Civil Suit No.88/2016) againstthe respondents for a declaration, damages and for grant of injunctionetc. in the High Court at Calcutta on its original side.

6. The suit was filed inter alia for a declaration that the terminationof two agreements dated 11.07.2007 and 21.05.2008 made by respondentNo.1 was wrongful and, therefore, both the agreements be declared asbeing bad in law. The other reliefs claimed in the suit were consequentialin nature to the main relief.

7. The appellant (plaintiff) also filed an application and soughtleave to file the civil suit as required under Clause 12 of the LettersPatent Act, 1865. The Single Judge by order dated 18.03.2016 grantedleave to the appellant as prayed for.

8. The respondents, on entering their appearance in the suit, filedan application and prayed therein for revocation of the leave granted tothe appellant (plaintiff) for filing a civil suit by order dated 18.03.2016.

9. The respondents-defendants, in substance, sought revocationof leave on the ground that since no part of cause of action arose withinthe territorial jurisdiction of the Calcutta High Court but it arose atBangalore and hence the civil suit could not have been filed in CalcuttaHigh Court for want of territorial jurisdiction. It was, therefore, prayedthat the leave granted to the appellant to file and prosecute the civil suitin the Calcutta High Court(original side) is liable to be revoked.

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A10. The appellant (plaintiff) also filed their reply and contestedthe said application. By order dated 28.07.2016, the Single Judge allowedthe application of the respondents(defendants) and revoked the leave.The appellant felt aggrieved and filed an appeal before the Division Benchof the High Court. By impugned order, the Division Bench dismissed theappeal and affirmed the order of the Single Judge, which has given riseBto filing of this appeal by way of special leave by the appellant(plaintiff)in this Court.

11. So, the short question, which arises for consideration in thisappeal, is whether the High Court (Single Judge and Division Bench)was justified in allowing the respondents’ (defendants’) application andCthereby was justified in revoking the leave granted to the appellant(plaintiff) by order dated 18.03.2016.

12. Heard Mr. K.V. Vishwanathan, learned senior counsel for theappellant and Mr. Dhruv Mehta, learned senior counsel and Mr. RajeshSingh Chauhan, learned counsel for the respondents.D

13. Having heard the learned counsel for the parties and on perusalof the record of the case including the written submissions filed by theparties, we are inclined to allow these appeals and while setting asidethe impugned order and the order of the Single Judge dated 28.07.2016,remand the case to the Single Judge for deciding the issue in questionEafresh in accordance with law as directed hereinbelow.

14. The question arose as far back as in the year 1932 before theCalcutta High Court in the case of Secretary of Statevs. GolabraiPaliram(AIR 1932 Calcutta 146) as to how the Court should approachthe application for revocation of leave when it filed in a civil suit.F

15. Justice Rankin, learned the then Chief Justice, laid down thefollowing principle of law in the case while answering this question inthe following words at page 147:

“I do really protest against questions of difficulty andimportance being dealt with by an application to revokeGthe leave under clause 12 of the Letters Patent and to takethe plaint off the file. Normally it is well settled that theproper way to plead to the jurisdiction of the court is totake the plea in the written statement and as a substantivepart of the defence. Except in the clearest cases that shouldHbe the course.”

ISHA DISTRIBUTION HOUSE PVT. LTD. v. ADITYA BIRLANUVO LTD. & ANR. [ABHAY MANOHAR SAPRE, J.]

16. This question came up for consideration before this Court inIndian Mineral & Chemicals Co. & Ors.vs.Deutsche Bank[(2004)12 SCC 376]. The learned Judge Ruma Paul J. speaking for the Benchin Para 15 approved the law laid down in Secretary of State (supra) aslaying down the correct principle of law and observed as under:

“15. The observations of Rankin, C.J. in Secy. of State v.Golabrai Paliram correctly represents the law as to howthe Court should approach an application for revocation ofleave: (AIR p. 147)

“I do really protest against questions of difficulty andimportance being dealt with by an application to revokethe leave under clause 12 of the Letters Patent and to takethe plaint off the file. Normally it is well settled that theproper way to plead to the jurisdiction of the court is totake the plea in the written statement and as a substantivepart of the defence. Except in the clearest cases that shouldbe the course.”

17. In other words, the law laid down in Secretary of State (supra)by the Calcutta High Court is now the law laid down by this Court inview of its affirmation by this Court in Indian Mineral & ChemicalsCo. (supra).

18. Coming now to the facts of this case, since in this case therespondents did not file any written statement and instead raised theplea of territorial jurisdiction by filing the application for revocation ofleave, in our view, the High Court should not have entertained the saidapplication and instead should have granted liberty to therespondents(defendants) to file the written statement in the suit and toraise therein a plea of territorial jurisdiction of the Court.

19. An issue of such nature, in our view, cannot be tried by filingan application for revocation of leave. Indeed, this is what Rankin, thethen CJ., held for the Bench in Secretary of State (supra) and whichreceived approval of this Court in Indian Mineral & ChemicalsCo.(supra).

20. In our opinion, a plea of territorial jurisdiction is essentially amixed question of law and fact. It is for this reason, therespondents(defendants) should be allowed to raise such plea in the A

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Awritten statement to enable the Court to try it on its merits in accordancewith law in the light of the requirements of Order 14 of the Code of CivilProcedure, 1908 and other relevant provisions governing the issue onmerits.

21. Learned counsel for the respondents cited several decisionsBin support of his submissions. Having gone through them, we are of theopinion that these decisions are distinguishable in the light of the law laiddown by this Court in Indian Mineral & Chemicals Co. (supra).

22. In the light of the foregoing discussion, we allow the appeals,set aside the impugned orders as also the order of the Single JudgeCdated 28.07.2016 and while dismissing the application filed by therespondents (defendants) for revocation of grant of leave, grant libertyto them to file their written statement in answer to the plaint and raisetherein the plea in question along with all other pleas relating to the factsand law as the case may be.

D23. On such written statement being filed, the Single Judge willframe appropriate issues arising in the suit and proceed to answer themin accordance with law keeping in view the procedure laid down in Order14 of the Code of Civil Procedure.

24. We, however, make it clear that we have not expressed anyEopinion on the merits of the controversy having formed an opinion toremand the case to the Single Judge for deciding the issue afresh asdirected above.

25. The Single Judge of the High Court will accordingly decidethe issue strictly in accordance with law on its merits without beinginfluenced by any observations made by him, the Division Bench in theFimpugned order and this Court.

Devika Gujral

Appeal allowed and matter remitted to High Court.

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