Calcutta High Court
Vhyom Mines And Minerals Private ... vs Jharkhand Ispat Private Limited on 21 May, 2025
Author: Arindam Mukherjee
Bench: Arindam Mukherjee
IN THE HIGH COURT AT CALCUTTA
ORdINARy ORIGINAL CIvIL JURISdICTION
[COMMERCIAL dIvISION]
ORIGINAL SIdE
Present :
THE HON'BLE JUSTICE ARINDAM MUKHERJEE
IA GA NO.5 of 2022
In
CS-COM 301 OF 2024
(Old no. CS 172 of 2021)
VHYOM MINES AND MINERALS PRIVATE LIMITED
Vs.
JHARKHAND ISPAT PRIVATE LIMITED
For Plaintiff/Petitioner : Mr. Jishnu Chowdhury,
Mr. Aditya Garodia,
Mr. Ratul Das,
Mr. Pintu Ghosh,
Mr. U. Garodia
.........Advocates
For the Defendant/Respondent : Mr. Shaunak Mitra,
Mr. Dripto Mazumdar, Mr. Pallav Samajdar, Mr. Saunak Sengupta ......... Advocates Last Heard on : 20.05.2025.
Judgment on : 21st May, 2025.
Arindam Mukherjee, J:
GA NO.5 of 2022
In CS COM 301 of 2024
1. This is an application by the defendant for revocation of leave under Clause 12 of Letters Patent, 1865 granted in favour of the plaintiff to institute the suit in this Court and rejection of the plaint.
2. The defendant says that the plaintiff has sought for recovery of the balance consideration money paid to the defendant for supply of iron ore of diverse grade (hereinafter referred to as the "said goods") on the defendant's failure to supply the entire quantity said to have been agreed upon by alleging that there has been total failure of consideration in respect of a portion of the money paid in advance against which goods have not been supplied. The defendant also says that the registered office of the plaintiff is situated admittedly outside the Ordinary Original Civil Jurisdiction of this Court. The registered of the defendant is also situated at Jharkhand outside the Ordinary Original Civil Jurisdiction of this Court. The defendant further says that the tax invoices raised by the defendant against the goods supplied by the defendant which are annexed with the plaint clearly shows that the same contains a forum selection process. In majority of the tax invoices, it is clearly mentioned that the same are subject to "Ranchi" jurisdiction. The plaintiff on receiving the said tax invoices has reaccepted such tax invoices and has acted upon the same by adjusting the price of such supplies with the money paid by it. By virtue of such acceptance of tax invoices, the parties had agreed to a particular jurisdiction by excluding the jurisdiction of all other Courts. Moreover, the goods were supplied from Jharkhand, outside the jurisdiction of Page 2 of 12 GA NO.5 of 2022 In CS COM 301 of 2024 this Court to the plaintiff also outside the jurisdiction of this Court. No part of the contract for sale of goods was therefor, performed within the jurisdiction of this Court to confer territorial jurisdiction of this Court for which the suit could have been filed by obtaining leave under clause 12 of the Letters Patent, 1865. The payment which forms integral part of the transaction and plaintiff's cause of action, if any, has also been admittedly made by the plaintiff through its banker from outside the jurisdiction of this Court to the defendant and/or its banker also outside the jurisdiction of this Court. The defendant relied upon the payment schedule and the invoices annexed to the plaint to demonstrate that no part of the alleged cause of action of the plaintiff has taken place within the jurisdiction of this Court. Moreover, the dispute relates to sale of goods for which the same comes within the fold of commercial dispute in view of the provisions of 2(1) (c) (18) of the Commercial Courts Act, 2015. No part of the alleged commercial dispute has also taken place within the jurisdiction of this Court to confer territorial jurisdiction to this court. The plaint therefore should be rejected by revoking leave under clause 12 of Letters Patent, 1865.
3. The defendant has cited judgments of the Coordinate Benches of this Court reported in AIR 2019 Cal 178 [Shridhar Vyapaar Private Limited vs. Gammon India Limited] and AIR 2022 Cal 143 [Techma Engineering Enterprise Private Limited Vs.Union of India].
4. The defendant says that by accepting the tax invoices containing a jurisdiction clause and having acted upon it by adjusting the value of Page 3 of 12 GA NO.5 of 2022 In CS COM 301 of 2024 the goods covered under such tax invoices, there has been a meeting of mind between the parties selecting a particular jurisdiction and ousting the others. By relying upon the aforesaid two judgments, the defendant submits that the case in hand is squarely covered by the ratio laid down in the said two judgments as a consequence whereof the leave should be revoked and the plaint should be rejected. The defendant had also relied upon a judgment of the Hon'ble supreme Court reported in 2013 (9) SCC 32 [Swastik Gases Private Limited vs. Indian Oil Corporation Limited] submit that even the absence of the words "alone" "exclusive" or "only" in the forum selection clause, does not negate the binding nature thereof to allow the plaintiff to file a suit in a Court, the jurisdiction whereof stands excluded due to such forum selection clause.
5. The defendant has also relied upon judgments reported in (2009) EWCA Civ 585 (UBS AG and Anr. Vs. HSH Nordbank AG) and (2010) EWCA Civ 998 (Sebastian Holdings Inc. vs. Deutsche Bank AG) to demonstrate as to how in a commercial contract and a dispute arising out therefrom has been dealt by Courts in United Kingdom. It is the case of the defendant that the forum selection clause contained in the Tax Invoices on the acceptance thereof forms a binding forum selection clause which should be honoured.
6. The defendant, therefor, submit that the leave under clause 12 of Letters Patent 1865, are rejected and the plaint CS 172 of 2021 be rejected.
Page 4 of 12 GA NO.5 of 2022 In CS COM 301 of 2024
7. The plaintiff on the other hand submits that their case is not based on the tax invoices but for recovery of the excess consideration money lying with the defendant which was paid towards consideration for the sale and supply of the goods the full quantity whereof which the defendant has failed to do which has resulted in failure of total consideration. So far as the tax invoices are concerned, the goods covered thereunder have been delivered to the plaintiff against and the price thereof paid in advance the value of which has been set off and/or adjusted against the total money paid to the defendant for supply of the entire quantity. Assuming without admitting, the plaintiff has accepted the tax invoices containing the forum selection clause then also the plaintiff's cause of action is not based on the same which would fix an embargo on the plaintiff in instituting the suit before this Court. Moreover, plaintiff has clearly stated in the plaint about an agreement with the defendant containing specific terms which was entered at the office of the defendant within the jurisdiction of this Court. That apart and in any event, at the relevant time, the plaintiff had its corporate office within the jurisdiction of this court and at least, one invoices was raised at the said address.
8. The plaintiff also states that the principles followed in a case for revocation of leave and rejection of plaint is same as that under Order VII Rule 11 of the Code of Civil Procedure, 1908 (in short CPC). The Court in such a case is to look into the plaint only along with documents annexed thereto considering the statements made in the Page 5 of 12 GA NO.5 of 2022 In CS COM 301 of 2024 plaint to be true and correct. Any defence put forth by the defendant, therefore, should not be looked into at this stage. Even if a miniscule part of the cause of action has arisen within the jurisdiction of this Court, then the plaintiff is entitled to maintain a suit in this Court. By referring to an agreement pleaded in paragraph 4 of the plaint, it is submitted by the plaintiff that the agreement was as pleaded in the plaint was entered within the jurisdiction of this Court. Coupled with the same at least one invoices was raised at the plaintiff's corporate office at Rabindra Sarani within the jurisdiction of this Court as a consequence whereof at least a part of the cause of action as pleaded by the plaintiff as arisen within the jurisdiction of this Court.
9. The plaintiff also says that if the submissions of the defendant is to be taken at its face value then also a limited evidence is necessary for which the jurisdiction issue can be at the highest set down as a preliminary issue.
10. On the issue of setting down the jurisdiction issue as a preliminary issue, the plaintiff has cited the following judgments.
(i) 2002 (10) SCC 101 [Arjun Agarwal Vs.Nagreeka Exports (P Ltd. & Anr.]
(ii) 2004 -I-L-W 695 (Madras) (S.G. Badrinath Vs. V. Jagannathan & Anr.)
(iii) Judgment of a Division Bench of this Court in APO 121 of 2017 dated 30th July, 2021.
Page 6 of 12
GA NO.5 of 2022 In CS COM 301 of 2024 The plaintiff says that in view of the ratio laid down in these judgments, the issue of jurisdiction raised by the defendant should be at the highest decided as a preliminary issue.
11. The plaint, therefor, cannot be rejected on the defendant allegation that no part of the cause of act has arisen within the jurisdiction as aforesaid.
12. After hearing the parties and considering the materials on record as also the judgments cited, I find that admittedly the registered office of the plaintiff is situated outside the jurisdiction of this Court. The plaintiff has not pleaded in the plaint that at the relevant point of time, the plaintiff had its corporate office at Rabindra Sarani within the jurisdiction of this Court. On the contrary the plaintiff has pleaded that the defendant had an office at Taltala within the jurisdiction of this Court wherein the agreement was interim. There is no written agreement but the terms of the oral agreement has been pleaded in the plaint. Although the said agreement pleaded by the plaintiff does not speak of a forum selection process but the admitted position is that the tax invoices say so. The plaintiff ha also admittedly accepted the tax invoices and has acted on the basis thereof. In that view of the matter, the ratio laid down in Sridhar Vyapaar (supra) and Techman Engineering (supra) gets attracted. The plaintiff cannot deny the forum selection process contained in the tax invoices.
13. Assuming without admitting that the plaintiff's suit is based on recovery of the excess amount paid to the defendant against which no Page 7 of 12 GA NO.5 of 2022 In CS COM 301 of 2024 supplies were made thereby amounting to total failure of consideration then also the jurisdictional issue stares at the plaintiff.
14. On a scrutiny of the invoices, as also the tax invoices, it is clear that each of the invoices and the tax invoices were addressed to the plaintiff at its registered office situate outside the jurisdiction of this Court. The delivery of the goods has admittedly taken place from Jharkhand outside the jurisdiction to the plaintiff at its registered office situated outside the jurisdiction of this Court. The documents annexed with the plaint do not reveal that any portion of the supplies were made from the defendant's office at Taltala. The registered office of the defendant, the works of the defendant all at Jharkhand. The invoices referred to by the plaintiff which contains the address of the corporate office of the plaintiff at Rabindra Sarani within the jurisdiction of this Court is also raised at the registered office of the plaintiff outside the jurisdiction below. The corporate office address of the plaintiff has been printed below its registered office. Therefor, it cannot be said that the said invoice was raised at the corporate office of the plaintiff within the jurisdiction of this Court as contended by the plaintiff to give territorial jurisdiction of this Court. The tax invoices containing the jurisdiction clause has not been included by the transporter. It is defendant's document duly accepted by the plaintiff thereby signifying meeting of mind leading to a banking contract with the forum slection clause. That apart and in any event the plaintiff has not made out a case in the plaint based on its corporate office at Rabindra Sarani. Page 8 of 12 GA NO.5 of 2022 In CS COM 301 of 2024
15. It is also an admitted position as will appear from the plaint, that the payments were made through electronic mode by the plaintiff from its bank admittedly outside the jurisdiction of this Court. The plaintiff has also not indicated in the plaint that the payments were made to the defendant or to its banker situated within the jurisdiction of this Court. In absence of such pleadings, it is to be held that the payment was made to the defendant at a place outside the jurisdiction of this Court. It is well-settled provisions of law that without pleading, no amount of evidence led by a party will be admitted by the Court or looked into. The plaintiff, therefor, cannot lay any evidence to demonstrate that payments were made to the defendant within the jurisdiction of this Court.
16. The suit is a commercial suit. The statutory mandate command the plaintiff to disclose all documents in its possession and custody concerning the commercial dispute or in support of the plaintiff's case of action along with the plaint. Even if the plaintiff's case is that the agreement had taken place at the defendant's office at Taltala within the jurisdiction of this Court then also the plaintiff was required to annex some documents to corroborate that defendant's office allegedly situated at Taltala had a nexus with the cause of action of the plaintiff as alleged in the plaint. No such document is available. The only letter annexed to the plaint and addressed at the Rabindra Srarani office of the defendant is plainifff's letter dated 25th February, 2021. On a bare perusal of the same shows that the said letter is not addressed to the Page 9 of 12 GA NO.5 of 2022 In CS COM 301 of 2024 defendant but to an individual. The letter also does not mention anything about the defendant but refers to other entities which are neither impleaded in the plaint nor there is any averment to that effect that their presence is necessary for adjudication of the disputes being the subject matter of the suit.
17. On an overall consideration of averments in the plaint along with the documents annexed there, I do not find that any part cause of action as alleged by the plaintiff in paragraph 4, 6, 11, 12, 18, 19, 20 and 21 as summarized in paragraph 25 thereof had arisen within the jurisdiction of this Court. Even if the plaintiff's contention that its suit is based on failure of total consideration, then also no part of the plaintiff's cause of action appears to have arisen within the jurisdiction of this Court and admittedly the plaintiff and the defendant have their respective registered office outside the jurisdiction of this Court.
18. So far as the contention of the plaintiff as to set down the issue as to the jurisdiction as a preliminary issue is concerned, I have considered the following judgments:-
i) (2020) 6 SCC 557 (Nusli Neville Wadia Vs. Ivory Properties & Ors.)
ii) (2022) 7 SCC 644 (Sathyanath & Ors. Vs. Sarojamani) The paragraph 52 of Ivory Properties (supra) of the Hon'ble Supreme Court has held the jurisdiction issue can be a preliminary issue. In Sathyanath (supra) the Hon'ble Supreme Court while elaborately dealing as to what is a preliminary issue has held that preliminary Page 10 of 12 GA NO.5 of 2022 In CS COM 301 of 2024 issue is only on the part of law where no evidence is required. The ratio laid down in the two judgments aforesaid on being considered in the facts of the instant case I do not find any reason to set down the jurisdiction issue as a preliminary issue. As described hereinabove the suit being a commercial suit, the Court has the advantage of looking into all the documents which are annexed to the plaint as all necessary documents are required to be disclosed with the plaint as mandated under the Commercial Courts Act, 2015 read with the amended provisions of CPC made applicable to commercial suits. There is no supporting document to show that anything has taken place at the Taltala Office of the defendant. In absence of any supporting document the bare pleading in the plaint cannot persuade the Court to set down the jurisdiction issue as a preliminary in the particular when not part of the transaction has taken place with the jurisdiction of this Court.
19. In the aforesaid facts and circumstances, the leave under Letters Patent granted to the plaintiff for instituting the plaint is revoked. At this stage, on the basis of averments as it stand, it cannot be said that the plaintiff does not have an cause of action or that the plaint does not disclose any cause of action when there is a clear allegation that the defendant did not supply the total quantity against the advances made as consideration money. Although, under the provisions of Order 49 Rule 3 the application of Order 7 Rule 10 and clauses (b) and (c) of order 7 rule 11 are excluded from being applicable to a Chartered High Court like this High Court but there is an amendment on 14 th May, Page 11 of 12 GA NO.5 of 2022 In CS COM 301 of 2024 1974 which has been published in the Calcutta Gazette (Part-I) on 1 st August, 1974 by which Provisions Order 7 Rule 10 has made applicable to this Court. The plaint is, therefore, directed to be returned to the plaintiff for being presented before the appropriate Court. The registry is directed to delete the records of this suit from its database on the plaint being returned after completion of all necessary formalities. GA 5 of 2022 is accordingly disposed of.
Urgent photostat certified copy of this judgment and order, if applied for, be supplied to the parties on priority basis after compliance with all necessary formalities.
(ARINDAM MUKHERJEE, J.) Page 12 of 12