Icici Bank Limited vs Limtex (India) Limited on 23 March, 2011

[Cites 15, Cited by 1]

Calcutta High Court (Appellete Side)

Icici Bank Limited vs Limtex (India) Limited on 23 March, 2011

Bench: Prasenjit Mandal

Form No.J(2) IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
APPELLATE SIDE

C.O. No. 2803 of 2010
with
C.O. No. 2804 of 2010

Present :

The Hon'ble Mr. Justice Prasenjit Mandal

ICICI Bank Limited.

Versus

Limtex (India) Limited.

For the petitioner: Mr. Ashoke Baenrejee,
Mr. Joydeep Kar,
Mr. S. Ganguly.

For the opposite party: Mr. Mainak Bose,
Mr. S. Basu,
Mr. S. Das,
Mr. Ankur Jain.

Heard On:09.03.2011.

Judgement On: March 23, 2011.

Prasenjit Mandal, J.: These two applications are at the instance

of the defendant and are directed against the order nos.26 and 28

both dated July 19, 2010 passed by the learned Judge, Sixth Bench,

City Civil Court, Calcutta in Title Suit No.2569 of 2008 and in

Title Suit No.1887 of 2008 respectively thereby rejecting

applications under Order 7 Rule 10 of the C.P.C.
2

Since identical questions of law are involved in the two

matters, these two applications are disposed of by this common

judgment. For convenience, I am discussing the case under C.O.

No.2804 of 2010 first.

The plaintiff/opposite party herein instituted a suit for a

decree of declaration that the transaction dated November 7, 2006

and the credit arrangement letter dated October 31, 2006 and its

extension dated October 30, 2007 between the parties hereto are

illegal, null and void and not enforceable by either party,

perpetual injunction, mandatory injunction directing the defendant

to credit in the plaintiff's current account with ICICI Bank,

Kolkata Branch with a sum of Rs.18,00,000/- for fixed deposit

adjusted by the bank on April 15, 2008 and other reliefs.

The petitioner entered appearance and it is contesting the

said suit. The petitioner filed an application under Order 7 Rule

10 of the C.P.C. contending, inter alia, that according to the

agreement between the parties, the Mumbai High Court has the

exclusive jurisdiction with regard to the dispute between the

parties in respect of the agreement, credit arrangement, etc. Most

of the transactions between the parties took place within the

jurisdiction of the Mumbai High Court and so, the suit should have

been filed with the Mumbai High Court or the Debts Recovery

Tribunal having jurisdiction over the matter at Mumbai. Anyway,

the City Civil Court, Calcutta has no jurisdiction at all and no
3

cause of action has arisen within the jurisdiction of the City

Civil Court at Calcutta. For this reason, the said suit before the

City Civil Court at Calcutta is not maintainable.

It is also contended by the petitioner that as per claim of

the petitioner, the total dues have become to the extent of

1,04,95,914/- due and payable by the plaintiff to the defendant

under the claim. In order to avoid such payment, the plaintiff

has filed the suit stating baseless allegations against the

defendant. The valuation of the suit has not been properly given.

The suit valuation could well be assessed in terms of the monetary

reliefs as claimed. So, proper court fees have not been paid. So,

the application should be allowed.

The plaintiff has filed a written objection against the

application and the petitioner has filed counter-affidavit.

Upon consideration of the materials on record, the learned

Trial Judge has rejected the said application under Order 7 Rule

10 of the C.P.C. Being aggrieved, this application has been

preferred.

Mr. Ashoke Banerjee, learned senior Advocate appearing on

behalf of the petitioner, has submitted that all the transactions

between the parties originated from the ISDA Master Agreement

dated October 31, 2006, the agreement dated November 7, 2006 and

October 30, 2007 between the parties. The agreement between the

parties took place at Mumbai and though both the parties have
4

offices in Calcutta. It was agreed by the parties that the

adjudication to solve the dispute, if any, with regard to the

agreement and transaction shall be settled by the Mumbai High

Court and for that reason, the suit by the plaintiff should have

been filed before the Mumbai High Court. The City Civil Court,

Calcutta has a limited jurisdiction and the claim of the plaintiff

is more than Rs.10 lac, that is, the pecuniary jurisdiction of the

City Civil Court and for that reason, the City Civil Court had no

jurisdiction at all. Moreover, the Debts Recovery Tribunal,

Mumbai has the jurisdiction to settle any dispute relating to the

transactions under the agreement as per provisions of Section 18

of the Recovery of Debts due to Banks and Financial Institutions

Act, 1993. Section 18 of the said Act clearly bars the

jurisdiction of the City Civil Court, Calcutta. So, the suit, if

any, should have been filed either in the High Court at Bombay or

in the Debts Recovery Tribunal in Mumbai. But the suit has been

filed in City Civil Court, Calcutta. But, no cause of action has

arisen at all in Calcutta. The valuation of the suit could be

assessed in terms of the monetary reliefs as prayed for. But

proper valuation has not been given. The learned Trial Judge is

not justified in rejecting the said application under Order 7 Rule

10 of the C.P.C.

On the other hand, Mr. Mainak Bose, learned Advocate

appearing on behalf of the opposite party, has vehemently opposed
5

the said submission and he has submitted that the plaintiff has

its registered office at 25 A, Shakespeare Sarani, Second Floor,

Kolkata - 700 017 which is within the jurisdiction of Calcutta and

all the transactions between the parties arose in Calcutta, the

cause of action arose also in Calcutta. The defendant bank has

also its office at 20B, Gorky Terrace under P.S. Shakespeare

Sarani, Kolkata - 700 017. The reliefs sought for shall be

adjudicated by the civil Court having jurisdiction. Since

valuation of the suit is as per Section 7(iv)(b) of the Court Fees

Act, the City Civil Court, Calcutta has the jurisdiction to try

the suit. So, the City Civil Court has the jurisdiction to

adjudicate the dispute between the parties. The plaintiff has

filed the suit for declaration and injunction and the City Civil

Court is competent to entertain such kind of reliefs. It is not

at all a suit for recovery of money. No claim amount has been

made. In the circumstances, mandatory injunction has been sought

for directing the defendant to credit in the plaintiff's account a

sum of Rs.18 lac. This is a purely mandatory injunction and not

the claim amount. So, the contention that the claim is more than

Rs.18 lac as mentioned by Mr. Banerjee is not tenable at all. It

was a simple prayer for mandatory injunction. The plaintiff has

clearly stated the valuation of the suit at Rs.100/- for

declaration and Rs.100/- for injunction, total Rs.200/- only and

so the reliefs sought for are within the jurisdiction of the City
6

Civil Court, Calcutta. The question of filing the suit before the

High Court at Mumbai or before the Debts Recovery Tribunal, Mumbai

did not arise at all on the question of claim of valuation for

more than Rs.10 lac. Therefore, the learned Judge, City Civil

Court, Calcutta is quite justified in rejecting the application

under Order 7 Rule 10 of the C.P.C. Thus, he supports the impugned

order.

Upon hearing both the sides, I am of the view that the

following question shall be decided in this application:

Whether the learned Trial Judge is justified in rejecting the

application under Order 7 Rule 10 of the C.P.C.

Upon hearing the learned counsel for the parties and on

perusing the materials on record, I find that admittedly, there

was an ISDA Master Agreement dated October 31, 2006 between the

parties. Other transactions being FC 39793, OP 39795, 39797 dated

November 7, 2006 and its extension dated October 30, 2007 were

also held between the parties. Admittedly, the agreement between

the parties lays down a clause relating to the jurisdiction with

respect to any suit, action or proceeding relating to the

agreement. For convenience, the said clause is reproduced below:

"2. Section 13(b) of this Agreement is deleted and
replaced by the following :
With respect to any suit, action or proceeding
relating to this Agreement ("Proceedings") each party
irrevocably:
7

(i) submits to the jurisdiction of the High Court
of Mumbai in India; and
(ii) waives any objection which it may have at any
time to the laying of the venue of any
Proceedings brought in any such court and
waives the right to object, with respect to
such Proceedings, that such court does not
have jurisdiction over such party.
Nothing in this Agreement precludes Party B from
bringing Proceedings in any other court, tribunal or
appropriate forum in India nor will bringing of
Proceedings in any one or more jurisdictions preclude
the bringing of Proceedings in any other
jurisdiction."
Thus, from the above clause of the agreement, it appears that

the parties have submitted to the jurisdiction of the High Court

of Mumbai in India with respect to any suit, action or proceeding

relating to the agreement between the parties irrevocably. There

is a dispute as to where the cause of action arose. While the

plaintiff has asserted that all the transactions between the

parties arose in Kolkata, the defendant bank has clearly stated

that all the transactions between the parties took place in

Mumbai. In order to determine the jurisdiction of the Court over

the suit, the plaint and the agreement between the parties shall

be considered. It has been clearly admitted by the plaintiff that

the transactions between the parties took place in regard to ISDA

Master Agreement between the parties and the relevant clause
8

relating to filing of suit, action or proceeding has been clearly

indicated in Clause No.13 B of the said agreement as referred to

above. Further, the provisions of the C.P.C. clearly lay down the

jurisdiction of the different courts where a suit is to be filed

in consideration of the cause of action or residence or place of

carrying business by the defendant. In the instant case, the

provisions of Section 20 of the C.P.C. shall govern the situation

to determine the jurisdiction. For convenience, I am quoting the

Section 20 of the C.P.C. below:

"20. Other suits to be instituted where defendants
reside or cause of action arises.- Subject to the
limitations aforesaid, every suit shall be instituted
in a Court within the local limits of whose
jurisdiction-
a. the defendant, or each of the defendants where
there are more than one, at the time of the
commencement of the suit, actually and
voluntarily resides, or carries on business, or
personally works for gain; or
b. any of the defendants, where there are more than
one, at the time of the commencement of the suit,
actually and voluntarily resides, or carries on
business, or personally works for gain, provided
that in such case either the leave of the Court
is given, or the defendants who do not reside, or
carry on business, or personally work for gain,
as aforesaid, acquiesce in such institution; or
c. the cause of action, wholly or in part, arises."
9

In spite of such jurisdiction as provided in Section 20 in

either place, parties may prefer a particular place having

jurisdiction to entertain the suit according to the agreement. In

the instant case, an agreement has been arrived at in between the

parties to adjudicate their suit, action or dispute in the High

Court of Mumbai in India. It may be noted herein that after

availing the facilities by the plaintiff from the defendant bank

pursuant to the agreement between the parties, the plaintiff failed

to comply with the terms of agreement and for that reason, the

defendant adjusted an amount of Rs.18 lac being the fixed deposit

of the plaintiff with the bank. Against the claim amount and for

that reason, the plaintiff has sought for the relief of mandatory

injunction in prayer (f) which is quoted below:

"f. Mandatory Injunction directing the Defendant to
credit in the Plaintiff's Current Account
No.000605012059 with ICICI Bank, Kolkata Branch,
with a sum of Respondent, 18 lacs being Fixed

Deposit adjusted by the Bank on 15.04.2008."

Thus, I find that the plaintiff has prayed for mandatory injunction directing the defendant to credit in the plaintiff's current account, Kolkata Branch with a sum of Respondent amounting to 18 lac. This, I hold, is nothing but a claim of Rs.18 lac arising out of the agreement and transactions arising between the parties.

The City Civil Court, Calcutta has a limited jurisdiction to entertain a suit valued Rs.10 lac only. Virtually, by the said prayer (f), the plaintiff has claimed Rs.18 lac in the form of mandatory injunction. It is nothing but a relief to the extent of Rs.18 lac. If the decree for mandatory injunction as prayed for is granted and if it is not complied with, certainly an execution case will be filed for adjustment of such amount against the defendant bank. So, virtually, it is nothing but a claim of Rs.18 lac against the bank. Since the City Civil Court, Calcutta has limited jurisdiction, I am of the view that the City Civil Court, Calcutta has no jurisdiction to entertain the claim as made in prayer (f) of the plaint. For this reason, I am of the view that the City Civil Court, Calcutta has no jurisdiction, at all, to entertain the suit as framed.

Mr. Bose has submitted that there is no court at all in the name of High Court of Mumbai in India. So, the question of filing of the suit at the High Court at Mumbai does not arise at all. The proper description of the High Court of Mumbai is the High Court at Bombay and so the question of filing the suit before the High Court of Mumbai as per agreement does not arise at all. There is no indication that the suit is to be filed before the Debts Recovery Tribunal, Mumbai as per agreement and so, the question of filing the claim at Mumbai does not arise at all.

Mr. Banerjee has referred to the decision of New Moga Transport Company Vs. United India Insurance Company Limited and others reported in AIR 2004 SC 2154 and Hanil Era Textiles Ltd. Vs. Puromatic Filters Pvt. Ltd. reported in AIR 2004 SC 2432 in support of his contention that the parties may have choice of forum, by the agreement, as the High Court of Mumbai in India. But in fact, they meant as High Court of Bombay. There is no High Court by the name of High Court at Mumbai. So, what was the intention of the parties, has to be gathered from the terms of agreement. It was the intention that the parties should settle their dispute by the High Court of Bombay or any Court or Tribunal at Mumbai. The decision of New Moga Transport Co. (supra) clearly lays down when the choice of forum is available to the plaintiff under Section 20(a) to (c) in terms of the restriction by agreement. It is held permissible where two or more Courts have jurisdiction under the C.P.C. and the agreement restricts place of suing to any one of them. It has been observed that such an agreement is not contrary to public policy and in no way contravenes Section 28 of the Contract Act, 1872. This decision of New Moga Transport Company (supra) is quite applicable in the instant situation. So, by the agreement between the parties, parties could settle their dispute by suit, action or proceeding at the High Court at Bombay or any Court having the jurisdiction to settle the dispute at Mumbai.

The decision of Hanil Era Textiles Ltd. (supra) lays down that when the ouster clause so clear and unambiguous, in appropriate cases the maxim of 'expressio Unius est exclusio alterius' may be applied. What is an appropriate case, shall depend on the facts of the case. When certain jurisdiction is specified in a contract and intention is to exclude all others from its operation, in such a case mention of one thing may imply exclusion of another, when certain jurisdiction is specified in a contract, an intention to exclude all other from its operation may in such cases be inferred. Such a view has been adopted on the basis of AIR 1989 SC 1239 and 1995(4) SCC 153. The contract has, therefore, to be properly construed. Therefore, I am of the view that the present case is in consonance with the case of Hanil Era Textiles Ltd. (supra) also. Similarly, the decisions of Shriram City Union Finance Corporation Ltd. Vs. Rama Mishra reproted in (2002) 9 SCC 613 and of Harshad Chiman Lal Modi Vs. DLF Universal Ltd. and anr. reported in (2005) 7 SCC 791 lay down that where two or more courts have jurisdiction to try a suit, parties can, by an agreement, choose one of such courts for adjudication of their dispute. If there is such an express agreement, suit filed in a different court would be invalid. Such an agreement is not opposed to public policy and legal, valid and enforceable.

Mr. Bose, learned Advocate appearing for the opposite party, has referred to the decision of 2001 CWN 924 and thus, he has 13 submitted that where the cause of action arose within the jurisdiction of Kolkata and not at Bombay, exclusive jurisdiction of Bombay is not acceptable. This decision is quite distinguishable from the present one. In the instant case, the petitioner also claims that the cause of action arose in Bombay. So, with due respect to Mr. Bose, I hold that this decision is not applicable in the instant case and consequently his submission cannot be accepted.

As regards suit valuation, in the instant case, as per clause

(f), the plaintiff has virtually claimed adjustment of Rs.18 lac against the petitioner which amount has been appropriated in respected of the dues of the bank from the fixed deposit account of the plaintiff/ opposite party herein. So, virtually the plaintiff has prayed for an adjustment of such an amount of Rs.18 lac by way of mandatory injunction. This is nothing but a claim over the said amount.

From the plaint case, the suit valuation could well be decided in terms of monetary value. According to the decision of (2002) 1 SCC 304 and 1977 CHN 829, it is the substance of relief sought that is important, not the form for assessing the valuation of the suit.

The monetary value claimed for adjustment should be the value of the suit for relief (f) of the prayer and in the instant case the plaintiff has wrongly valued the suit Rs.100/- for declaration 14 and Rs.100/- for injunction though the actual claim is over Rs.18 lac in the suit. So the valuation of the suit shall be taken as Rs.18,00,200.00. The plaintiff is, therefore, required to pay the deficit court fees over the suit valuation.

Now, Section 18 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 clearly bars the jurisdiction of the Court to entertain such claim. Only the competent Debts Recovery Tribunal has the jurisdiction to entertain such a claim between the parties. For convenience, Section 18 of the said Act is quoted below:-

"18. Bar of Jurisdiction.- On and from the appointed day, no court or other authority shall have, or be entitled to exercise, any jurisdiction, powers or authority (except the Supreme Court, and a High Court exercising jurisdiction under articles 226 and 227 of the Constitution) in relating to the matters specified in section 17."

Therefore, I am of the view that the submission made by Mr. Bose that there is no High Court named by the High Court of Mumbai, cannot be accepted. The parties have actually meant the High Court of Bombay in the State of Maharastha. Since that High Court also have no jurisdiction to entertain the said action as claimed in the plaint according to the provisions of the said 1993 Act, the suit should have been filed before the concerned Debts Recovery Tribunal of Mumbai. It may be mentioned herein that after filing of the suit by the plaintiff, the defendant bank instituted 15 a claim before the Debts Recovery Tribunal - III, Mumbai claiming a sum of Rs.1,04,95,914/- against the plaintiff/opposite party herein. Therefore, the Detbs Recovery Tribunal, Mumbai alone, I hold, has the jurisdiction to try the suit filed by the plaintiff/opposite party herein. In coming to this conclusion, I have also considered the decision of the Mc. Nally Bharat Engineering Co. Ltd. Vs. Benoy Krishna Bose reported in 2002 (3) CHN 138 which lays down the ratio that before coming to a conclusion on the question of jurisdiction, the ouster clause should be interpreted carefully and properly. So, the submission of Mr. Bose that the City Civil Court at Calcutta has the jurisdiction to entertain the suit, cannot be accepted. The learned Trial Judge has committed errors of law in rejecting the application under Order 7 Rule 10 of the C.P.C. The observations of the learned Trial Judge that the agreement relating to the selection of forum is vague and ambiguous, that there is no scope to come to conclusion that this Court (City Civil Court) has no jurisdiction to entertain the suit and that Mumbai High Court alone has jurisdiction to try this case, cannot be supported at all. The impugned order, therefore, cannot be supported at all. The learned Trial Judge should have allowed the application under Order 7 Rule 10 of the Code of Civil Procedure.

The application succeeds. It is, therefore, allowed. The impugned order is hereby set aside. The application under Order 7 Rule 10 of the C.P.C. stands allowed.

The plaint shall be returned to the plaintiff for filing the same to the proper Debts Recovery Tribunal at Mumbai having jurisdiction to adjudicate the matter in dispute. The learned Trial Judge is directed to take necessary steps accordingly, under Order 7 Rule 10 A of the C.P.C. within four weeks from the date of communication of the order to him.

Considering the circumstances, there will be no order as to costs.

C.O. No. 2803 of 2010

In view of the above decision in C.O. No.2804 of 2010, the impugned order cannot be sustained. The application is, therefore, allowed. The impugned order is hereby set aside. The application under Order 7 Rule 10 of the C.P.C. stands allowed. The learned Trial Judge is directed to take steps under Order 7 Rule 10A of the C.P.C. within four weeks from the date of communication of the order to him.

Considering the circumstances, there will be no order as to costs.

Urgent xerox certified copy of this order, if applied for, be supplied to the learned Advocates for the parties on their usual undertaking.

(Prasenjit Mandal, J.) Later:

Heard the learned Advocates for both the sides.

Mr. Bose, learned Advocate for the opposite party, prays for stay of operation of the above order for four weeks.

Upon due consideration of the matter, prayer is allowed.

Accordingly, the operation of the judgment be stayed for a period of four weeks from date.

(Prasenjit Mandal, J.)

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