Madras High Court
T. Vetriselvan vs Tamil Nadu Merchantile Bank Ltd. And 3 ... on 10 January, 2001
JUDGMENT
1. O.A. Nos. 855 and 856 of 2000 have been filed by plaintiff to pass an order of temporary injunction, restraining the first defendant from in any way interfering with his functioning and also to pass a temporary injunction restraining D1 from in any way filing up the post of director in D1 Bank.
2. A. Nos. 4371 to 4373 of 2000 have been filed by D2 to strike off his name from the plaint, to reject the plaint as there is no cause of action arising at Madras and also to strike out the pleadings, which are unnecessary, scandalous, frivolous and vexatious, which may tend to prejudice the image and reputation as contained in paras 72, 77, 78, 88, 89, 90, 93, 94, 100 and 191 and A. No. 4631 of 2000 has been filed by D1 to revoke the leave granted in A. No.3558 of 2000 dated 7.9.2000.
3. The case in brief for disposal of all the applications is as follows:-
The plaintiff filed the suit to declare the resolution dated 27.6.2000 passed at the Board Meeting of D1 Bank as null and void and plaintiff claimed damages of Rs. 10 lakhs. The suit is hot maintainable before this court as D1 and other defendants except D2 are not residents within the jurisdiction of this Court. The plaintiff already filed OS. No.224/2000 on the file of the DMC Tuticorin involving the same issues and D1 withdrew the suit with a liberty to file a fresh suit for impleading the Company Secretary of the D1-Bank on the same cause of action. However, contrary to the conditional liberty granted by the Court, the plaintiff has filed the present suit by making M/s. King & Partridge, Advocates, Chennai as a party to the proceedings allegedly on the ground that D1 acted on their opinion. The entire cause of action alleged in the plaint is against the Bank. Only with a view to bring the suit within the jurisdiction of this Court, M/s. King & Partridge has been impleaded as D2 alleging that the opinion rendered by them would constitute 'cause of action'. An opinion held either by the counsel or by a party could in no event constitute a cause of action for maintaining the suit. On the cause of action alleged in seeking leave, no leave could be granted in law for maintaining the suit within the jurisdiction of this Court. The leave granted by this Court vide order dated 7.9.2000 is liable to be revoked. The suit is an abuse of process of Court. The plaintiff is also well aware that this Court in CRP. No.30/98 has given directions to various Subordinate Courts to the effect that the institution of suit against the Bank pertaining to AGM/Board/Committee meetings of the Bank could be only before the court in whose jurisdiction the Office of the Bank is situated. The plaintiff in order to circumvent the said order has come out with a strange plea that an opinion rendered by the counsel could constitute 'cause of action' and as such the leave has to be revoked.
4. D2 contended that the allegations made in the suit filed by the plaintiff are frivolous, vexatious and tend to prejudice their reputation. D1-Bank sought their opinion in their letter dated 7.6.2000 on issue whether the plaintiff participation in the Board Meetings and the decision taken therein while considering the agenda item with regard to the transaction of D3 and D4 will attract the provisions of Section 297 and Section 299 of the Companies Act. The Bank also furnished the report of the Committee of Executives constituted with top Executives of the Bank to investigate on the issue. After perusing the papers, the opinion was tendered by D2. The plaintiff has filed the suit solely on the alleged cause of action based on the opinion given by the law Firm. There is no privity of contract between the plaintiff and D2. It is for D1 to take note of the opinion and decide whether to take any decision regarding the issues. The plaintiff has averred unnecessary scandalous remarks in various paragraph of the plaint. D2 reserves their rights to file a suit for damages for defamation against the plaintiff.
Moreover the plaintiff has no right to sit in judgment on the opinion given by them. The opinion rendered cannot be challenged in the court of law by any 3rd party. Moreover, the opinion forms part of a privileged communication between a client and their counsel. There is no cause of action against D2 and as such the plaint is liable to be rejected and the various paragraphs mentioned in the affidavit have to be expunged and the name of D2 should be struck out from the plaint. Hence, these petitions.
5. The plaintiff filed separate counter contending that though the defendants 1, 3 and 4 are not the residents of Madras, still the 2nd defendant is having their office at Madras, and they are practising only at Madras, as Solicitors and Attorneys. The impugned legal opinion was given at Madras, and as such the plaintiff is entitled to file the suit also at Madras. No specific reason given by the learned Dt. Munsif in OS.224/2000 by the order dated 11.8.2000. The law is very much settled for the purpose of jurisdiction, the allegations in the plaint atone have to be looked into. The question of hardship is a relevant factor while deciding such kind of allegations. The D1-Bank is one of the leading Banks in India, and the Chairman often himself coming over to Madras. They can effectively defend the case. If the leave is revoked, the plaintiff will be greatly prejudiced. D2 has to establish that the allegations made by the plaintiff are unnecessary and scandalous. It is always open to them to challenge and they cannot be expunged. The question whether D2 is a necessary party can be decided only at the time of final disposal of the suit. When the Bank acts on the instructions given by the Board of Directors and in which the plaintiff was also one of the member at the time when the cause of action for the suit arose, the suit is maintainable. The points raised by D1 and D2 could be decided only at the final stage and as such these applications are liable to be dismissed.
6. Heard the learned counsel for the parties.
7. The points that arise for consideration are:-
i. Whether the leave already granted by the order dated 7.9.2000 is liable to be revoked?
ii. Whether the pleadings in the plaint against D2, are scandalous and frivolous and liable to be expunged?
iii. Whether the plaint has to be rejected against D2 as there is no cause of action?
iv. Whether the name of D2 has to be struck out from the plaint?
v. Whether the plaintiff has got a prima fade case and the balance of convenience is in their favour?
8. Points:- The plaintiff was one of the Directors in the D1-Bank, and based upon the opinion given by D2-Firm and other matters, the D1-Bank passed a resolution depriving the right of the plaintiff to hold the office of the Director of the Bank and aggrieved against this, the plaintiff filed the present suit for declaration that the resolution dated 7.6.2000 passed by the Bank is illegal and arbitrary and for mandatory injunction directing the D1-Bank to restore the office of the Director of the D1-Bank to the plaintiff and for declaration that the opinion dated 24.6.2000 and 27.6.2000 given by D2-Firm is malicious and without any basis and also for permanent injunction restraining D1-Bank from interfering with his functioning as a Board of Director in the Bank till the completion of his full term and also for direction that D1 and D2 jointly and severally to pay a sum of Rs. 10 lakhs as damages and compensation.
9. The second defendant is a registered firm Solicitors having office at Armenian Street, Chennai-1. The first defendant is a Bank having its registered office at Tuticorin. Defendants 3 and 4 are also admittedly residing outside the jurisdiction of this Court. The plaintiff filed the suit before this Court based on the cause of action that the legal opinion was given by the second defendant at Madras and based on the opinion only, the Bank took a decision of removing the plaintiff from the post of Director and, as such, the plaintiff has filed the present suit and other applications. Now, the first defendant filed Application No. 4631 of 2000 to revoke the leave granted by an order dated 7.9.2000 on the ground that already the plaintiff filed a suit in O.S. No.224 of 2000 before the District Munsif Court, Tuticorin for a similar relief, wherein the present second defendant was not a party. The plaintiff, thereafter, filed an application to withdraw the plaint on the ground that the Company Secretary has to be made a party and for which the plaintiff was given liberty to withdraw that suit to file a fresh suit on the same cause of action. However, the plaintiff without filing any subsequent suit before Tuticorin Courts has filed the present suit before this Court alleging that the Firm of Solicitors namely, the second defendant gave the opinion at Madras and their Office is also at Madras and, as such, part of the cause of action had arisen within the jurisdiction of this Court. Similarly, the second defendant also filed Application Nos. 4371 to 4373 of 2000 to strike out the name of the second defendant from the plaint, to reject the plaint as there is no cause of action at Madras and also to strike out the pleadings which are unnecessary, scandalous, frivolous and vexatious against the second defendant as contended in paras 72, 77, 78, 88, to 90, 93, 94, 100 and 101.
10. Per contra, learned counsel for the plaintiff contended that the opinion given by the second defendant is a malicious one and, as such, the plaintiff has got cause of action to file a suit before this court. He further stated that the Chairman of the Bank used to come to Madras Office and as such it is convenient for him to defend the case at Madras. Learned counsel for the plaintiff further stated that necessary remarks alone had been against the second defendant and the question whether they are scandalous and frivolous can be considered only in the course of trial. Further more, only if the remarks are considered to be irrelevant, then alone they can be struck of as otherwise it is not necessary.
11. Learned Senior Counsel for the first defendant contended that the leave already granted by this Court in Application No. 3558 of 2000 is liable to be revoked. There is no dispute that the plaintiff already filed a suit in O.S. No. 224 of 2000 in District Munsif Court, Tuticorin relating to the same issue and ultimately withdrew the suit with liberty to file a fresh suit for impleading the Company Secretary of the Bank on the same cause of action. The typed set of documents filed by the parties clearly indicate that leave was granted to the plaintiff only for a limited purpose and on the same cause of action, he should file a fresh suit. This being the state of affairs, now by impleading the second defendant alleging that the opinion was given by the Solicitors Firm, the plaintiff has come forward with the suit before this court. The entire cause of action alleged in the plaint is only against the Bank, but only to bring the suit within the jurisdiction of this court, it is evidently clear that the second defendant has been made a party. If really the plaintiff was aggrieved against the opinion given by the second defendant, he would have normally impleaded the second defendant in O.S. No. 224 of 2000 itself. The plaintiff has also not stated in the affidavit filed by him seeking permission to withdraw the suit that the impleading of the second defendant was absolutely necessary. In the absence of any such material, it will lead to the irresistible conclusion that the second defendant has been deliberately added only to give a cause of action to file a suit before this Court and to harass.
12. It is also clear from the records that in respect of the disputes, several cases have been filed before the different courts and in C.R.P. No. 30 of 1998, this Court gave a clear direction that institution of the suit against the Bank pertaining to the AGM / Board/ Committee Meeting of the Bank could be only before the Court in whose jurisdiction, the registered office of the Bank is situated. In spite of this, the plaintiff has come forward with a suit before this Court alleging as if the opinion of the Second defendant is responsible for removing him from the Directorship. The opinion given by the Solicitors Firm cannot constitute a cause of action to enable a third party to proceed against the said firm. Admittedly, the opinion given by the second defendant firm was only to the bank and not the plaintiff. There is no privity of contract between the plaintiff and the Solicitors Firm and this being the position, there is absolutely no cause of action for the plaintiff to proceed against the second defendant. Further more, Section 126 of the Evidence Act also gives protection in respect of professional communications. The opinion was given by the second defendant only to the Bank and it is quite possible that the opinion also might have been considered in the Board Meeting and they might have taken decision of removing the plaintiff from the post of Director. This does not mean that the Opinion given by the second defendant has to be agitated in a Court of Law. No Court of Law can give any opinion or finding in respect of the opinion given by the Solicitors Firm. As adverted to, the opinion given by a firm to a client is a matter between the parties and the Court cannot take cognizance of the same. Now, the plaintiff has claimed the relief of declaration that the opinion given by the second defendant is mala fide and such a relief cannot be granted by a Court of Law.
13. Learned counsel for the plaintiff relied on the Bench decision of this Court reported in Bank Of Madurai Ltd., v. Balaramadass and brothers, under Clause 12 of the Letters Patent, wherein the suit based on equitable mortgage by deposit of title deeds. Although the property was situated in Ooty and mortgage by deposit of title deeds was created at Madras and all the defendants were residing at Madras, it was held that this Court has got jurisdiction to hear the suit. It is necessary to state that based upon the deposit of title deeds at Madras coupled with the fact that all the defendants were residing at Madras, such a view was taken; but so far as this case is concerned, except the second defendant, all the other parties are residing outside Madras and if the Court comes to the conclusion that the opinion given by the Solicitors Firm will never be a cause of action, I am of the view that this Court has no jurisdiction to entertain the suit and leave already granted is liable to be vacated.
14. Reliance is also placed upon the decision in K. Murugesan v. Seethalakshmi, 1992 (1) L.W. 277, wherein the averments linked to an earlier agreement executed at Madras between plaintiffs husband and 1st defendant granting rights over a cinema picture produced by him and about issue of a cheque by him at Madras and its being returned unpaid and only under such circumstances, the leave to sue granted was held to be proper and correct, This decision is not applicable to the case on hand.
15. It has also been held in Tuticorin Alkali Chemicals and Fertilizers Ltd., v. Cochin Silicate & Glass Industries, 1992 (2) MLJ 376 : 1992 (1) LW. 308 that in considering the balance of convenience, the court is required to see the plaint and the facts stated therein. There is no dispute about the principles.
16. Reliance is also placed upon the decision in N. Dhanalakshmi and Ors. v. S. Ekanathan, that the Court has to look into averments of plaint for determining jurisdiction. Possibility of plaintiff claiming further reliefs on future date is irrelevant for determining jurisdiction of Court for entertaining suit. There is also no dispute about this principle.
17. Learned Counsel for the plaintiff also relied on State of Orissa v. Klockner & Co. , wherein the applicant specifically not pleading that plaint does not disclose any cause of action, Court not maintaining distinction between plea that there was no cause of action for suit and plea that plaint does not disclose cause of action and rejecting plaint and it was held that the rejection is not proper. There is no dispute about this proposition and the application of the same depends upon the facts and circumstances in each case. Viewed in any way, it is manifestly clear that the opinion given by the second defendant cannot be a cause of action for the suit and on this ground alone, the plaint is liable to be rejected so far as the second defendant is concerned and similarly based upon the opinion as well as the place of the second defendant, the leave was granted, consequently the same also has to be revoked.
18. Learned Senior Counsel for the second defendant relied on T. Arivanandam v. T.V. Satyapal, AIR 1977 SC 2421 : 1978 (91) L.W. 21 S.N. that the trial courts should insist imperatively on examining the party at the first hearing so that bogus litigation can be shot down at the earliest stage. The Penal Code, is also resourceful enough to meet such men and must be triggered against them. If the trial Court is satisfied that the litigation was inspired by vexatious motives and altogether groundless it should take deterrent action under Section 35A. This decision is applicable to the case on hand in all fours.
19. It is, therefore, evidently clear from the aforesaid discussion and also the position of law that there is absolutely no cause of action for the plaintiff to proceed against the second defendant and the cause of action has been deliberately introduced so as to give jurisdiction for the plaintiff to file the suit before this Court. When once the Court comes to the conclusion that there is no cause of action for the plaintiff to proceed against the second defendant, the leave already granted is liable to be revoked and the name of the second defendant from the plaint also has to be struck off. Further more, the plaint has to be rejected in so far as the second defendant is concerned for want of cause of action. It is necessary to state that the plaintiff had unnecessarily filed the suit before this Court only to harass the parties. When the decision was taken in the Board Meeting at Tuticorin and the Registered Office of the Bank is also at Tuticorin and the plaintiff is also a resident outside the city of Madras, the plaintiff ought to have filed a suit where the registered office of the bank is situated. Rightly the plaintiff filed O.S. No. 224 of 2000 before the proper court and it is quite probable that as no interim order was granted, he had thought it fit to withdraw the suit with liberty to file a fresh suit on the same cause of action; but at a later point of time, on some advice he had filed the suit before this court on a different cause of action and on these grounds, I am of the view that the act of the plaintiff is highly condemnable and, as such, he should be dealt with severely for his conduct.
20. The second defendant also filed separate applications to strike out the pleadings, which are unnecessary scandalous, frivolous and vexatious and pointed out the averments in paras 72, 77, 78, 88 to 90, 93, 94, 100 and 101. The plaintiff is not the client of the Solicitors Firm. The opinion given by the second defendant firm was only to the first defendant bank and no doubt, the opinion was also considered in the Board Meeting to take a decision. It cannot be stated that because of the opinion only, the plaintiff was removed from the post of Director. There is an accusation against the plaintiff relating to his association with defendant's firms 3 and 4 as they have taken loan from the first defendant bank and in view of these transactions only, the plaintiff was removed from the post of Director. The question whether the removal is proper or not can be considered only in a suit properly constituted in an appropriate forum. As such, it is not necessary that this Court has to go into the question whether his removal is justified or not. The opinion given by a counsel is mainly based upon the records produced by his client and the plaintiff has no right whatsoever to question the same or find fault with the opinion.
21. It is seen from Order 6, Rule 16 of Civil Procedure Code that it relates to striking out pleadings and for appreciating the various contentions, the Rule is extracted as follows:
"The Court may at any stage of the proceedings order to be struck out or amended any matter in any pleading:-
(a) which may be unnecessary, scandalous, frivolous or vexatious, or
(b) which may tend to prejudice, embarrass or delay the fair trial of the suit, or
(c) which is otherwise an abuse of process of the Court".
22. Learned Senior Counsel for the second defendant contended that the aforesaid averments in various paragraphs have to be struck out because it is an abuse of the process of court. These remarks are unnecessary, scandalous, frivolous and vexatious. A bare reading of the paragraphs mentioned supra clearly indicates that the plaintiff is expecting the second defendant to explain to him under what circumstances the opinion was given. Learned counsel for the plaintiff further stated that before giving opinion, the Solicitors Firm ought to have called upon the plaintiff to produce records and after proper hearing only, the opinion ought to have been given. In short, it is stated that the principle of natural justice has not been adhered to. I am unable to agree with the contention of the learned counsel for the plaintiff. When a party engages a counsel, he is expected to give opinion only to his party and nowhere it is stated that the counsel should keep in touch with the opposite party and call upon him to produce records for giving opinion. The view expressed by the learned counsel for the plaintiff is a novel one and however, such a stand is adopted and if the counsel gets in touch with the opposite party, he is running the risk of facing enquiry before the Bar Council. Under the circumstance, I am of the view that the entire approach by the plaintiff and the various averments in the pleadings are vexatious and deliberately introduced only to malign the Solicitors Firm because he had been removed in view of the opinion given by the Firm.
23. In para 93, it is stated that the defendants 1 and 2 are acting together hand in glove to cause loss to the plaintiff. In para 94, it is stated that "the foremost duty obligated upon the second defendant is to forward the reports and his provision conclusions to the plaintiff and offer him an opportunity to explain his stand, so that, the plaintiff would have gladly furnished all the informations." This is absolutely unnecessary. In para 100, it is stated that "the alleged opinion dated 24.6.2000 and 27.6.2000 are all perverse, arbitrary, mala fide, beyond the scope of this function as Legal Advisor, the said opinion are also bad in law". The aforesaid averments would clearly indicate the mind of the plaintiff and to what extent he had been affected by the removal. The plaintiff has no business whatsoever to use such words against the Solicitors Firm and the plaintiff is not the pay master to the Solicitors Firm. These remarks are absolutely unwarranted and made with a view to spoil the reputation of the second defendant firm. Under the circumstances, the averments mentioned in the aforesaid paras are likely to be struck out from the pleadings and if it is to remain, it would amount to an abuse of process and the plaintiff cannot be given such an opportunity to exceed his limits.
24. Learned counsel for the plaintiff relied on the decision reported in Saraswathi v. Somasundaram Chettiar, 1970 (2) MLJ 119 : 1970 (83) L.W 42, wherein it was observed as follows:
"It would be seen from the language employed in Order 6, Rule 16 that the power to strike out any matter in any pleading is discretionary and the power could be exercised at any stage of the proceedings. The Court could exercise this power even suo motu, but if an application is made by a party after an inordinate delay, as in the instant case, the Court would be justified in refusing to exercise the discretionary power.
If a scandalous allegation, which is not relevant to any of the issues arising for decision is made, it is the duty of the Court to delete it in the interest of public morals. But it is not every scandalous allegation that is liable to be struck out. Nothing can be scandalous if it is relevant."
25. Learned Senior Counsel for the second defendant relied on the decision reported in Dhartipakar v. Rajivgandhi, that in a Election Petition, paras of petition not disclosing any cause of action, they can be struck off under Order 6, Rule 16 of C.P.C. No triable issues remaining to be considered after striking out pleadings and the Court has power to reject petition also. Reliance is also placed upon Amalgamated Commercial Traders Private Ltd. v. C. Hariprasad, that every Court has an inherent power, quite independently of Order 6, Rule 16, C.P.C., to strike out scandalous matter in any record or proceeding. Unless Section 151, the court has power to expunge scandalous allegations which are irrelevant to the proceedings, even though they are contained in an affidavit.
26. It has also been in N.S. Varadhachari v. State rep by Inspector of Police, District Crime Branch, 1992 (2) MWN (Cr.) 225, wherein it was held as follows:
"The savings of the High Court's inherent powers, both in civil and criminal matters is designed to achieve a salutary public purpose which is that a court proceeding ought not to be permitted to degenerate into a weapon of harassment of persecution. In a criminal case, the veiled object behind a lame prosecution, the very nature of the material on which the structure of the prosecution rests and the like would justify the High Court in quashing the proceeding in the interest of justice. The ends of justice are higher than the ends of mere law, though justice has got to be administered according to laws made by the legislature. The compelling necessity for making these observations is that without a proper realisation of the object and purpose of the provision which seeks to save the inherent powers of the High Court to do justice between the State and its subjects ii would be impossible to appreciate the width and contours of that salient jurisdiction."
The analogy in this decision also can be made applicable to the case on hand.
27. It is, therefore, evidently clear that the various averments made in the paras referred to above are unnecessary, scandalous frivolous and vexatious and, as such, they are liable to be deleted from the pleadings. There is no cause of action against the second defendant and, as such, the plaint has to be rejected in respect of the second defendant and under the circumstance, the name of the second defendant also has to be struck out from the plaint. The leave granted to the plaintiff also is liable to be revoked. Hence, these points are answered accordingly.
28. For the foregoing reasons, Application Nos. 4371 and 4373 and 4631 of 2000 are allowed. So far as Application No. 4372 of 2000 is concerned, the plaint is rejected so far as the second defendant is concerned and the plaint is returned to the plaintiff for presentation to the proper court in a period of six weeks. Consequently, Original Application Nos. 855 and 856 of 2000 are dismissed as unnecessary .