Delhi High Court
The Federation Of Motorsports Clubs Of ... vs Motorsports Association Of India And ... on 25 August, 2005
Equivalent citations: AIR 2006 (NOC) 813 (DEL.)
Author: Swatanter Kumar
Bench: Swatanter Kumar
JUDGMENT Swatanter Kumar, J.
1. Plaintiff, Federation of Motorsports Clubs of India, filed the present suit for declaration of permanent injunction against the Motorsports Association of India and another, averring that the defendant No. 1 was incorporated as a company under Section 25 of the Companies Act, 1956 with its registered office at 41-42, Marine Lines, Liberty Building, Mumbai-400 020. Defendant No. 1 has purported to exercise authority and jurisdiction in respect of organising and conducting events pertaining to four wheelers in India based upon the purported sporting power conferred upon it by Federation Internationale De L Automobile, Paris, France, (FIA). The plaintiff further claims that it is recognised as a National Sports Federation from the Government of India. Defendant No. 1 on 14th August, 2001 submitted an application to the Government of India seeking recognition as a National Sports Federation. Certain discrepancies were pointed out in the application, and as such defendant No. 1 did not get recognition by the Government of India as representing Motorsports in India. After referring to some historical facts the plaintiff in paragraph 23 (b) has stated as under:-
Regarding the 'Sporting Power' in India, the General Assembly relied on good offices of the aforesaid two individuals to put things together. Dr. Mallya was to function as Chairman of both the plaintiff Federation as well as the Defendant No. 1. The implication of this decisions was that the 'Sporting Power' in India for four wheelers got transferred to the Defendant No. 1 while the plaintiff Federation continued to be a member of the FIA as well as its ASN having the 'Sporting Power' for touring. The intention of the General Assembly was to make the two competing groups to work together in the interest of motor sport in India. The General Assembly did not debate nor decide the merits of the controversy.
2. It is stated that despite efforts of various persons to make defendant No. 1 and the plaintiff federation to work together, the same could not succeed due to perverse attitude of defendants No. 1 and 2. Again vide letter dated 17th October, 2001 defendant No. 1 is stated to have been informed by the Government of India about various discrepancies in the application, to which clarification was sent by defendant No. 1 on 10th December, 2001, where after defendant No. 1 filed a writ petition in this court being Civil Writ No. 491/2002, on which a notice was issued on 28th January, 2002, and at the time of institution of the present suit, the said writ petition is stated to be pending before this court. The present plaintiff is respondent No. 2 in that writ petition. Finally the case of the plaintiff is that the defendant No. 1 has yet not been recognised by the Ministry of Youth Affairs and Sports for promoting of Motorsports in India, but they are still threatening various members of the plaintiff, for imposing sanctions, restraints, compliance of them from using the said illegal status. The plaintiff had written a letter to the defendant on 5th December, 2001 stating that they are the only approved National Sports Federation and the defendant should not involve in such activity. On this premise, the plaintiff has filed a suit for declaration that the plaintiff is the only authority duly recognised by Government of India to conduct Motorsports in India. Further, that defendant does not fulfilll any or all liability criterias as laid down by Government of India for recognition as a National Sports Federation in the field of motorsports in India and is not entitled to such recognition and further for a declaration that defendant No. 2 fraudulently obtained sporting power from the Federation Internationale De L Automobile by misusing and abusing his position as a titular delegate of the Plaintiff in favor of defendant No. 1 and further for injunction restraining the defendants from describing or claiming themselves to conduct National Rally Championships, take any action against members of the plaintiff or cause any impression in the minds of Government of India, Sporting Club of India, Competitors, any person related to the motorsports in any manner whatsoever that defendant No. 1 is empowered to conduct the sports. To this claim of the plaintiff, the defendants filed a written statement denying the averments made in the plaint. It is stated that similar prayers made by the plaintiff in a writ petition filed in Bombay High Court have already been rejected. It is stated that the defendants have not committed any breach of the guidelines issued or framed by the Government of India. The defendant is entitled to be a recognised federation under the guidelines and is entitled to hold national championships. Reliance has been placed upon paragraph '8' of the order passed by the Bombay High Court on 2nd August, 2000 which reads as under:-
8. We repeatedly asked the learned Counsel for the respondents as to under what provisions of law or authority of law, only FMSCI is authorised to conduct motor rallies in India, as contended by the Respondents. Unfortunately, the learned Additional Advocate General is unable to point out any provision of law or such authority in law. Ex-facie, we are fully satisfied that the action of the Respondents in refusing to grant such a permission to hold the motor car rally, by their letter dated 25th July, 2000, is totally arbitrary, irrational and capricious and without any authority of law and unsustainable in law".
3. While referring to various rules and regulations and guidelines, the defendants claim that the plaintiff is not the only empowered or authorised body. Reference has been made to the correspondence of FIAS. Defendant No. 1 has referred to various events that were conducted and/or held in paragraphs (i) and (xiii) and it is stated that suit of the plaintiff should be dismissed as a specific objection has been taken to the territorial jurisdiction of this court.
4. The defendants filed an application during the pendency of the suit and after filing the written statement, the defendant filed an application being IA No. 4212/2002 under Order 7 Rule 10 and 11 of the Code of Civil Procedure (for short 'CPC') praying that the plaint of the plaintiff is liable to be rejected and/or returned for presentation before the court of competent jurisdiction inter alia, but mainly on the grounds that:-
(a) No cause of action or part thereof has arisen within the territorial jurisdiction of this court.
(b) Plaint, on its bare reading, does not disclose any cause of action and in view of the order of the Bombay High Court dated 2nd August, 2000, the plaint is liable to be rejected.
5. To this application, detailed reply has been filed by the plaintiff stating that defendant No. 1 has committed serious acts of gross mis-representation in making the FIA believe that it had completed the pre-requisites envisaged in the dosier of the said application and the plaintiff has a right to relief arising out of the recognistion granted to it by the Government of India. The defendant is asserting its activities all over India and as such this Court had jurisdiction to entertain and decide the present suit and the plaint discloses the cause of action.
6. During the course of hearing of IA No. 4212/2002, counsel for the plaintiff had also made a reference to IA No. 5891/2002, an application filed under Order 1 Rule 3, 5, 8A and 10(2) read with Section 151 of the Code of Civil Procedure stating therein that Government of India and FIA be made defendants in the present suit. As already noticed this application is also without any merit as the question of recognition and the reliefs connected thereto are subject matter of a writ petition before this Court in Civil Writ No. 491/2002. Further, the plaintiff himself has not claimed any relief against Union of India and counsel for the applicant had stated that they do not wish to claim any relief against Government of India in the present suit. This application also hardly has any merit. Even in this application it is nowhere stated that how and on what facts the Government of India would be a necessary or a proper party and what relief the Court can grant to the plaintiff against the said Department particularly keeping in mind the fact that it claims to be the only association recognised by the Government of India. This alleged right of the plaintiff is not even an issue in the present suit. Whether the defendant should or should not be granted any recognition is again not a subject matter or a controversy in issue in the present suit. 'Cause of Action' has to be left to be determined in each individual's case as to where the cause of action arises. It will constitute of every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment before the court, but clearly distinct from every piece of evidence which may be necessary to prove each fact. Reference in this regard can be made to the judgments of the Supreme Court in the cases of Rajasthan High Court Advocates' Association v. Union of India and Ors., AIR 2001 Supreme Court 416 : (2001) 2 Supreme Court Cases 294.
7. Reference to basic facts of the case has already been made, but it is necessary to discuss in elaboration the pleadings of the parties for the purposes of disposal of this application.
8. It is a settled principle of law that for determination of an application under Order 7 Rule 10 and 11 of the CPC, the applicant has to take the facts as stated in the plaint, to be correct and then alone argue that the plaint is liable to be returned or rejected, keeping in mind the provisions of Order 7 Rule 10 and 11 of the CPC. The case as averred in the plaint, can be concisely stated that the plaintiff is the only recognised federation by the Government of India and is entitled to hold such sports and shows and for that reason, resultantly the suit of the defendant for injunction should be decreed. The only two defendants in the plaint are Motorsports Association of India, 41-42, Marine Lines, Liberty Building, Mumbai and Mr. Nazir Hoosein, who is stated to be the office bearer of that association, sued at the same address. The entire plaint does not state any facts as to how and what cause of action or part thereof has arisen and how, within the territorial jurisdiction of this court? In the lengthy plaint, running into 25 pages, there is no pleading much less proper pleadings which in law could be termed as a plaint disclosing a cause of action of the events which happened within the territorial jurisdiction of this Court. Obviously, cause of action has to be construed on the basis of the bundle of facts as averred in the plaint. The plaintiff is claiming a relief against the two defendants who as per the own showing of the plaintiff, are residents of Mumbai, and having their registered office at Mumbai and are carrying on their activities from that office. Union of India is not a party to the suit and in fact, no relief is claimed against Union of India . The learned counsel appearing for the plaintiff fairly stated that they have no claim against the Union of India and they do not intend to claim any relief as they are already a recognised body by the concerned Department of the Government of India.
9. In terms of the provisions of Section 16, 17 and 20 of the Code, a suit shall be instituted in the Court within the local limits of whose jurisdiction the property, subject matter of the suit, the defendant/defendants reside or where a cause of action wholly or in part arises within the jurisdiction of that court. The cause of action necessarily must constitute of certain facts which in law would give rise to an actionable wrong. No facts have been averred in the plaint as to what activities were being carried out in Delhi by defendant No. 1 which directly or indirectly infringed the rights of the plaintiff, so as to give rise to a 'cause of action as known in law'. The learned counsel appearing for the plaintiff made a reference to the averments made in paragraph 42 of the plaint to the effect that 'the suit raises inter alia issues relating to recognition by Government of India which are activities taking place in Delhi. Consequently, the cause of action arises entirely and/or at least a substantial part thereof, at New Delhi in as much as defendant No. 1 while exercising the authority as the purported ASN in India has in fact written letters pertaining to granting and cancellation of permits in respect of Motor Sports in Delhi and providing its expertise pertaining to Motor sports to persons situated in and operating from Delhi.
10. These averments are obviously incapable of conferring any territorial jurisdiction on this court, ex facie. If the statement of the plaintiff as argued, though not pleaded, that defendant No. 1 has its registered office at Mumbai and carrying on activities all over India, then the court has to see where the substantial cause of action has arisen, and not merely an incidental activity of the other party. It will be too far-fetched to argue that on such averments court all over India would get jurisdiction, particularly in absence of any specific averment relating to an act infringing the rights of the plaintiff. The plaint in this regard, is certainly vague, indefinite and on its cumulative reading, is incapable of giving any territorial jurisdiction to this court. Whether the plaintiff is the only association recognised by the Government of India, is a fact which can be proved or disproved by leading cogent evidence from the concerned Department of the Government of India. The Government of India, as already noticed, is not a party to the present suit and in any case would neither be a proper nor a necessary party, as no relief is being claimed against Government of India in the present suit, and rightly so, in view of the judgment of the Bombay High Court and pendency of the writ petition between the parties before this Court. Mere averments of certain facts in relation to exercise of power by another authority or a Department of the State by itself would not make that Department a necessary or a proper party to the suit.
11. The Supreme Court in the case of Union of India and Ors. v. Adani Exports Limited and Anr. even held that mere existence of an office of a company would not ipso facto give a cause of action to the Court within whose jurisdiction such an office is located (AIR 2002 Supreme Court 126). 'Cause of Action' must be relatable to the facts as they existed on the date of institution of the suit and it is for the plaintiff to plead and show before the court that such cause of action or any part thereof has arisen within the territorial jurisdiction of this court. In the present case, the plaint, as it stands, does not even refer to any activity of the defendant, much less an act giving right to the plaintiff to move the court. As far as the plea of plaint not disclosing the cause of action is concerned, it could be partly accepted in so far as it relates to the plaint not disclosing facts constituting territorial jurisdiction of this court, but in so far as the effect of the judgment of the Bombay High Court as afore-referred is concerned, it may not be barred by the principle of res judicata and the plaintiff being debarred from claiming such a relief, would have to be gone into by the court only during the trial.
12. In view of the above discussion, the application of the defendants is allowed, while holding that no 'Cause of Action' or part thereof has arisen within the territorial jurisdiction of this court. The plaint of the plaintiff is ordered to be returned for presentation before the court of competent jurisdiction.
13. Accordingly, IA No. 4212/2002 (U/O 7 Rules 10 &11); IA No. 9328/2002 (Under Section 151 CPC) and IA No. 5891/2002 (U/O 1 Rules 3,5,8A and 10(2)) stands disposed of.