Gujarat High Court
Sunrise Industries India Limited vs Pt Oki Pulp And Paper Mills & on 12 January, 2017
Equivalent citations: AIR 2017 (NOC) 1114 (GUJ.)
Bench: M.R. Shah, B.N. Karia
C/AO/471/2016 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
APPEAL FROM ORDER NO. 471 of 2016
With
CIVIL APPLICATION NO. 12991 of 2016
In
APPEAL FROM ORDER NO. 471 of 2016
With
FIRST APPEAL NO. 2897 of 2016
With
CIVIL APPLICATION NO. 12999 of 2016
In
FIRST APPEAL NO. 2897 of 2016
For Approval and Signature:
HONOURABLE MR.JUSTICE M.R. SHAH Sd/
and
HONOURABLE MR.JUSTICE B.N. KARIA Sd/
=============================================
1 Whether Reporters of Local Papers may be allowed to see Yes the judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of law as No
to the interpretation of the Constitution of India or any order made thereunder ?
============================================= SUNRISE INDUSTRIES INDIA LIMITED....Appellant(s) Versus PT OKI PULP AND PAPER MILLS & 1....Respondent(s) ============================================= Appearance:
MR RS SANJANWALA, SR. ADVOCATE with MR SANDEEP SINGHI with MR SIDDHARTH JOSHI for SINGHI & CO, ADVOCATE for the Appellant MR MIHIR JOSHI, SR. ADVOCATE with MS NISHA OJHA for M/S WADIAGHANDY & CO, ADVOCATE for the Respondent(s) No. 1 ============================================= CORAM: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE B.N. KARIA Date : 12/01/2017 Page 1 of 30 HC-NIC Page 1 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT COMMON CAV JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) [1.0] As common question of law and facts arise in the present First Appeal and the Appeal From Order and as such are interconnected, both these First Appeal and Appeal From Order are decided and disposed of by this common judgment and order.
[2.0] Feeling aggrieved and dissatisfied with the impugned order dated 05.12.2016 passed by the learned Judge, Commercial Court, Vadodara (hereinafter referred to as "Commercial Court, Vadodara") below Exh.1 in Commercial Civil Suit No.288/2016, by which the Commercial Court, Vadodara has dismissed the said suit on the finding recorded by the Commercial Court, Vadodara while disposing of the application Exh.5 that the Commercial Court, Vadodara has no territorial jurisdiction, the original plaintiff has preferred the present First Appeal No.2897/2016.
[2.1] Feeling aggrieved and dissatisfied with the impugned order dated 05.12.2016 passed below Exh.5 in Commercial Civil Suit No.288/2016, by which the Commercial Court, Vadodara has dismissed the said application Exh.5 solely and mainly on the ground that the Commercial Court, Vadodara has no territorial jurisdiction, the original plaintiff has preferred the present Appeal From Order.
[3.0] For the sake of convenience, facts in Appeal From Order arising out of the order passed below Exh.5 are narrated and considered, which in nutshell are as under:
[3.1] That the original plaintiff is a company registered under the Companies Act, 1956 and is engaged in the business of manufacturing of Page 2 of 30 HC-NIC Page 2 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT Thermostats and Thermoplastic Lined equipment and pipe and fittings. That the original defendant No.1 is a company incorporated under the Laws of Republic of Indonesia and is engaged in the manufacturing of Pulp Paper and Tissue Paper. The original defendant No.2 is a public sector Bank.
[3.2] It appears that original defendant No.1 was desirous of building a pulp mill in Ogan Komering Llir, South Sumatra, Republic of Indonesia. That for the said the original defendant No.1 decided to secure services of the plaintiff and awarded a contract for the supervision and installation of the said material to the original plaintiff. That two contracts were executed between original plaintiff and the original defendant No.1 on 10.07.2015, viz. the supply contract and the installation contract. Both the contracts were amended vide Amendment Agreement No.1 dated 14.09.2016 respectively. It appears that as per clause 4.2 of the Supply Contract Amendment Agreement No.1, the original plaintiff was supposed to issue a Bank Guarantee upon the original defendant No.1 for a sum of 10% of the due price of the balance equal to USD 6,92,58,390. That in an irrevocable and unconditional bank guarantee bearing No.074915 FGPER0002 was issued by the original defendant No.2 Bank to the original defendant No.1 for sum of USD 6,92,58,390 towards the performance of the supply contract and the supply contract Amendment Agreement No.1. It appears that the supply contract was further amended vide Amendment Agreement No.2 dated 10.11.2015. The scope of the supply was increased and the aggregate value of the supply contract subsequently amounted to USD 83,24,132. That the installation contract was further amended vide Amendment Agreement No.2 dated 10.11.2015. Pursuant to clause 4.1 of the supply contract of Amendment Agreement No.2, the Bank Guarantee was to be increased by 10% of the additional goods Page 3 of 30 HC-NIC Page 3 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT amounting to USD 1,39,82,930. That Bank Guarantee was amended and the value of the original Bank Guarantee was increased from USD 6,92,58,390 for 10% of the total value of the supply contract including the Amendment Agreements. Dispute arose between the parties. That thereafter the original defendant No.1 issued letter to the original defendant No.2 Bank invoking Bank Guarantee and directing the original defendant No.2 to pay the same USD 8,32,41,320. That thereafter the plaintiff instituted the Commercial Civil Suit No.288/2016 in the Commercial Court, Vadodara seeking the following reliefs.
"(A) This Hon'ble Court may be pleased to declare that the Defendant No.2 has no right whatsoever to invoke the Bank Guarantee bearing No.074915FGPER0002 in favour of the Defendant No.1 or acting upon the letter of the Defendant No.1 dated 10.10.2016;
(B) It may be further declared that the Defendant No.2 is under no obligation to honour the Bank Guarantee bearing No.074915FGPER0002 since the plaintiff has completed all its obligations under the supply contract and hence, the Bank is discharged of its obligations to honour the Bank Guarantee.
(C) The Hon'ble Court be pleased to grant an injunction restraining the Defendants from acting upon or enforcing the letter dated 10.10.2016 and invoking the Bank Guarantee bearing No.074915FGPER0002;
(D) The Defendant No.1 be restrained to make any claims under the Bank Guarantee bearing No.074915FGPER0002 and the Defendant No.2 be restrained from making payment to the Defendant No.1 in furtherance of letted dated 10.10.2016, under the above Bank Guarantee."
That in the said suit the original plaintiff also submitted the application Exh.5 for interim injunction restraining the original defendant No.2 Bank from making any payment to the original defendant No.1, under the Bank Guarantee in question and also restraining the original defendant No.2 from acting upon the letter dated 10.10.2016. The original plaintiff also prayed for an interim injunction restraining the original defendant No.1 from enforcing the Bank Page 4 of 30 HC-NIC Page 4 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT Guarantee in question and from insisting for payment under the Bank Guarantee in any manner whatsoever. That the said suit and the application Exh.5 was instituted on 19.10.2016. That the Commercial Court, Vadodara issued the notice on interim relief making it returnable on 08.11.2016.
[3.3] Feeling aggrieved in issuing the notice on interim relief only and not granting any adinterim injunction, the original plaintiff preferred Appeal From Order before this Court being Appeal From Order No.412/2016. This Court initially granted adinterim injunction as prayed. That the said Appeal From Order came to be disposed of by this Court vide order dated 11.11.2016 directing the Commercial Court, Vadodara to decide the application below Exh.5 in time bound manner and directed to continue the ex parte adinterim injunction granted till the final disposal of the application Exh.5. While disposing of the said Appeal From Order, this Court also observed that the continuation of the adinterim injunction shall be without prejudice to the rights and contentions of the respective parties in the application Exh.5 as well as in the main suit and without prejudice to the contentions of the original defendant No.1 that the Commercial Court, Vadodara and/or even any other Court in Gujarat has no territorial jurisdiction.
[3.4] That thereafter the said application Exh.5 has been dismissed by the Commercial Court, Vadodara mainly on the ground that in view of the clause 6 of the Supply / Purchase Agreement by which both the parties agreed to submit to the jurisdiction of the Court of Singapore, which shall have exclusive jurisdiction over such disputes, the Commercial Court, Vadodara has no territorial jurisdiction. That on the basis of the findings recorded by the learned Commercial Court while disposing of the application Exh.5 and holding that the Commercial Page 5 of 30 HC-NIC Page 5 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT Court, Vadodara has no territorial jurisdiction, the learned Commercial Court has passed the order below Exh.1 and has dismissed the suit by observing that as observed while disposing of the application Exh.5, the Commercial Court, Vadodara has no territorial jurisdiction and therefore, the suit is liable to be dismissed. Consequently, the Commercial Court, Vadodara has dismissed the suit for want of territorial jurisdiction.
[3.5] Feeling aggrieved and dissatisfied with the impugned order passed by the learned Commercial Court below Exh.5, the original plaintiff has preferred the Appeal From Order No.471/2016.
[3.6] Feeling aggrieved and dissatisfied with the impugned order passed below Exh.1 in dismissing the suit, the original plaintiff has preferred the present First Appeal No.2897/2016.
[4.0] Shri R.S. Sanjanwala, learned Senior Advocate has appeared on behalf of the original plaintiff and Shri Mihir Joshi, learned Senior Advocate has appeared on behalf of the respondent No.1 herein - original defendant No.1.
[5.0] Shri Sanjanwala, learned Senior Advocate appearing on behalf of the original plaintiff has vehemently submitted that in the facts and circumstances of the case, learned Commercial Court has materially erred in dismissing application Exh.5 and consequently in dismissing the suit on the ground that the Commercial Court, Vadodara would not have territorial jurisdiction.
[5.1] It is vehemently submitted by Shri Sanjanwala, learned Senior Advocate appearing on behalf of the original plaintiff that the Page 6 of 30 HC-NIC Page 6 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT Commercial Court, Vadodara has materially erred in not properly appreciating the fact that the Commercial Suit before the learned Commercial Court was for an appropriate injunction with respect to the Bank Guarantee and more particularly against the defendant No.2. It is submitted that admittedly the defendant No.2 is not a party to any of the agreement / contract between the plaintiff and defendant No.1. It is submitted that therefore qua the relief with respect to Bank Guarantee against defendant No.2, suit shall still be maintainable before the Commercial Court, Vadodara.
[5.2] It is further submitted by Shri Sanjanwala, learned Senior Advocate appearing on behalf of the original plaintiff that merely because the party to the contract / agreement have agreed and chosen the Singapore Court as appropriate Forum, still the Commercial Court, which can be said to be natural Court would still continue to have the jurisdiction. It is submitted that it is not the case that the learned Commercial Court lacks inherent jurisdiction.
[5.3] Relying upon the decision of the Hon'ble Supreme Court in the case of Modi Entertainment Network & Anr. vs. W.S.G. Cricket Pte. Ltd. reported in (2003)4 SCC 341, it is submitted that as held by the Hon'ble Supreme Court in the said decision, in a case where more than one Forums are available, the Court in exercise of its discretion to grant antisuit injunction will examine as to which is the appropriate forum (forum conveniens) having regard to the convenience of the parties and may grant antisuit injunction in regard to proceedings which are oppressive or vexatious or in a forum non conveniens. It is further submitted by Shri Sanjanwala, learned Senior Advocate appearing on behalf of the original plaintiff that in the aforesaid decision it is further observed by the Hon'ble Supreme Court that with a view to prevent Page 7 of 30 HC-NIC Page 7 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT injustice in circumstances such as which permit a contracting party to be relieved of the burden of the contract; or since the date of the contract the circumstances or subsequent events have made it impossible for the party seeking injunction to prosecute the case in the Court of choice because the essence of the jurisdiction of the Court does not exist or because of a vis major or force majeure and the like, the Court of natural jurisdiction can grant antisuit injunction.
It is submitted that the aforesaid aspect has not been appreciated by the Commercial Court, Vadodara at all and without focusing on the aforesaid aspect and straightway relying upon and considering Clause 6 of the Supply / Purchase Agreement the learned Commercial Court has mechanically held that the Commercial Court, Vadodara shall not have territorial jurisdiction. It is further submitted by Shri Sanjanwala, learned Senior Advocate that in the present case the Commercial Court, Vadodara has not properly appreciated the fact that as the suit before the learned Commercial Court was for permanent injunction restraining the defendant No.2 from encashing the Bank Guarantee in favour of the defendant No.1 and that the defendant No.2 Bank is not a party to any of the contract either Supply Contract or Purchase Contract, the plaintiff cannot file the suit at the Singapore Court against the defendant No.2 and therefore, the Commercial Court, Vadodara being natural Court would have territorial jurisdiction to decide and grant such a relief against the defendants, more particularly with respect to the Bank Guarantee. It is further submitted by Shri Sanjanwala, learned Senior Advocate appearing on behalf of the original plaintiff that in the present case neither Order VII Rule 10 nor Order VII Rule 11 of the Code of Civil Procedure, 1908 (hereinafter referred to as "CPC") shall be applicable. It is submitted that as such in the present case Commercial Court, Vadodara has not exercised the power under Order VII Rule 11 of the CPC. It is submitted that in the present case Order VII Rule 10 of the Page 8 of 30 HC-NIC Page 8 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT CPC also shall not be applicable as it cannot be said that the Commercial Court, Vadodara being a natural Court would lack inherent jurisdiction. It is submitted that as held by the Hon'ble Supreme Court in the case of Modi Entertainment Network & Anr. (Supra), in an exceptional case being made out, despite the ouster clause 6 of the Supply / Purchase Agreement, the suit shall still be maintainable before the natural Court. It is submitted that therefore Order VII Rule 10 of the CPC shall not be applicable at all. Relying upon para 26 of the decision in the case of Modi Entertainment Network & Anr. (Supra), it is submitted that if all the parties to the suit are not party to the agreement having ouster clause, the suit before the Court of natural jurisdiction will still be maintainable.
[5.4] Shri Sanjanwala, learned Senior Advocate appearing on behalf of the original plaintiff has vehemently submitted that as the suit was for permanent injunction with respect to the Bank Guarantee and the original defendant No.2 is not a party to the agreement / contract containing the ouster clause, the suit against the defendant No.2 shall still be maintainable before the Commercial Court, Vadodara having territorial jurisdiction and therefore, the Commercial Court, Vadodara ought not to have held that it has no territorial jurisdiction. In support of his above submissions, he has heavily relied upon the decision of the Hon'ble Supreme Court in the case of Sukanya Holdings (P) Ltd. vs. Jayesh H. Pandya and Anr. reported in (2003)5 SCC 531 (Paras 8 to
17).
[5.5] It is further submitted by Shri Sanjanwala, learned Senior Advocate appearing on behalf of the original plaintiff that in the present case neither any separate application was filed by the defendant either to frame the preliminary issue whether the Commercial Court, Vadodara Page 9 of 30 HC-NIC Page 9 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT would have any territorial jurisdiction or not and/or to dismiss the suit on the ground that the Commercial Court, Vadodara would not have territorial jurisdiction and on the basis of the defence while deciding the application Exh.5 and on the findings recorded by the Commercial Court, Vadodara while deciding the application Exh.5, the Commercial Court, Vadodara has dismissed the suit by observing that while deciding the application as it is held that the Commercial Court, Vadodara would not have territorial jurisdiction and the suit is liable to be dismissed and is accordingly dismissed, which is not permissible. It is submitted that therefore no opportunity has been given to the original plaintiff to show cause why the plaint / suit may not be rejected on the ground that the Commercial Court, Vadodara would not have territorial jurisdiction in view of the ouster clause mentioned in Clause 6 of the Supply / Purchase Agreement.
[5.6] It is further submitted that during the course of the hearing of application Exh.5 the submissions were made on behalf of the defendant No.1 with respect to the territorial jurisdiction in view of the ouster clause contained in Clause 6 and while deciding the application Exh.5, the Commercial Court, Vadodara has dismissed the suit which is not permissible. In support of his above submissions, Shri Sanjanwala, learned Senior Advocate has heavily relied upon the decision of this Court in the case of Mukeshkumar Mohanlal Mashru vs. Dilipkumar Mohanlal Mashru & Ors. rendered in Civil Revision Application No.462/1998. It is submitted that in the case before the learned Single Judge, the learned trial Court dismissed the suit on the ground of limitation, solely relying upon the observations made while deciding the interim injunction application Exh.5. Not approving the above and confirming the order passed by the first Appellate Court quashing and setting aside the order passed by the learned trial Court, this Court has Page 10 of 30 HC-NIC Page 10 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT observed and held that whatever the observations are made while deciding the interim injunction application Exh.5, are always tentative and while deciding the interim injunction application only and if the learned trial Court is of the opinion that the suit is required to be dismissed on the ground that the same is barred by limitation, in that case, the same can be done on an appropriate application by defendant requesting to frame preliminary issue with respect to the limitation or in application under Order VII Rule 11(d) of the CPC and after giving opportunity to the respective parties. It is submitted that in the aforesaid decision it is further observed and held by this Court that without framing preliminary issue it was not permissible for the learned trial Court to dismiss the suit, solely relying upon the observations made while deciding the application Exh.5. It is submitted that in the present case similar situation has arisen and the Commercial Court, Vadodara has dismissed the suit solely relying upon the observations made while deciding application Exh.5.
[5.7] Relying upon another decision of this Court in the case of Lark Laboratories Ltd. vs. Nabros Pharma Pvt. Ltd. reported in 2009(2) GLR 1376 (Para 14), it is submitted that in the case of a composite suit having multiple cause of action and with respect to some of the prayers the suit is permissible within the territorial jurisdiction of the concerned Court where the suit is filed and with respect to some of the reliefs there is a lack of jurisdiction of the Court in which the suit is filed, in that case, the plaintiff is required to be given an opportunity to amend the plaint and delete the relief for which the Court has no jurisdiction and to continue the suit with respect to the remaining reliefs. He has also relied upon another decision of this Court in the case of M/s. Tec Papers Pvt. Ltd. Thro' Director, Yogesh Shivshanker vs. Ahmedabad Municipal Corporation & Anr. reported in 2009(3) GLH 511.
Page 11 of 30HC-NIC Page 11 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT Making above submissions, it is vehemently submitted by Shri Sanjanwala, learned Senior Advocate appearing on behalf of the original plaintiff that the Commercial Court, Vadodara has materially erred in dismissing the application Exh.5 solely on the ground that the Commercial Court, Vadodara would not have any territorial jurisdiction in view of ouster clause contained in Clause 6 of the Supply / Purchase Agreement. It is submitted that the Commercial Court, Vadodara has not examined the application Exh.5 on merits. Therefore, it is requested to quash and set aside the impugned order passed below Exh.5 and remand the matter back to the Commercial Court, Vadodara to decide application Exh.5 afresh and on merits.
[5.8] Making above submissions, Shri Sanjanwala, learned Senior Advocate appearing on behalf of the original plaintiff has submitted that in absence of any application by the defendant either under Order VII Rule 10 of the CPC and/or any application to frame the preliminary issue with respect to territorial jurisdiction of the Commercial Court, Vadodara and solely relying upon the observations made while deciding the application Exh.5 that the Commercial Court, Vadodara would not have territorial jurisdiction, the Commercial Court, Vadodara has dismissed the suit which is not permissible and therefore, it is requested to allow the First Appeal and quash and set aside the impugned order passed by the Commercial Court, Vadodara dismissing the suit.
[6.0] Present Appeal From Order and First Appeal are vehemently opposed by Shri Mihir Joshi, learned Senior Advocate appearing on behalf of the original defendant No.1.
[6.1] It is vehemently submitted by Shri Joshi, learned Senior Advocate appearing on behalf of the original defendant No.1 that in the facts and Page 12 of 30 HC-NIC Page 12 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT circumstances of the case and more particularly considering Clause 6 of the Supply / Purchase Agreement and when the parties have chosen Singapore Court as a neutral Court / Forum, no error has been committed by the Commercial Court, Vadodara in holding that the Commercial Court, Vadodara would not have territorial jurisdiction.
[6.2] It is vehemently submitted by Shri Joshi, learned Senior Advocate appearing on behalf of the original defendant No.1 that as such basically the suit was against the original defendant No.1 only and with respect to the breach of contract by the original defendant No.1. It is submitted that the entire cause of action is one i.e. against the original defendant No.1 only and by clever drafting the relief is sought against the original defendant No.2 also. It is submitted that to get out of the ouster clause contained in Clause 6 of the Supply / Purchase Agreement and only with a view to see that the suit is maintainable at Vadodara, the relief is sought against the original defendant No.2 also. Shri Joshi, learned Senior Advocate appearing on behalf of the original defendant No.1 has taken us to the averments in para 34 onwards of the suit in support of his submissions that the suit is basically against the original defendant No.1 and the entire cause of action is pleaded against the original defendant No.1 only. It is submitted that therefore considering Clause 6.2 of the Supply / Purchase Agreement, when both the parties to the contract agreed to resolve the dispute by a neutral Court at Singapore, thereafter it is not open for the plaintiff to contend contrary to the Agreement more particularly Clause 6. It is submitted that any other act / conduct on the part of the plaintiff, contrary to the agreement, more particularly Clause 6 of the Supply / Purchase Agreement would be such which can be termed as breach of contract. It is submitted that therefore in the facts and circumstances of the case the Commercial Court, Vadodara has not committed any error in holding that in view of Page 13 of 30 HC-NIC Page 13 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT Clause 6 of the Supply / Purchase Agreement, the Commercial Court, Vadodara shall not have any territorial jurisdiction.
[6.3] Now, so far as the submissions on behalf of the original plaintiff that there was no separate application submitted by the original defendant No.1 either under Order VII Rule 10 of the CPC and/or to raise the preliminary issue with respect to the territorial jurisdiction of the Commercial Court, Vadodara, it is vehemently submitted by Shri Joshi, learned Senior Advocate appearing on behalf of the original defendant No.1 that as such while passing the order under Order VII Rule 10 of the CPC, no separate application is required. It is submitted that if the Court finds that it has no territorial jurisdiction in that case in exercise of power under Order VII Rule 10 of the CPC, the Court can reject / return the plaint.
[6.4] It is further submitted by Shri Joshi, learned Senior Advocate appearing on behalf of the original defendant No.1 that even otherwise in the present case the parties are not taken by surprise. It is submitted that at the time of hearing of Appeal From Order No.412/2016 before this Court, the original defendant No.1 categorically submitted that the original defendant No.1 may be permitted to contend that the Commercial Court, Vadodara shall not have any territorial jurisdiction and that while disposing of the said Appeal From Order even this Court also specifically observed that it will be open for the original defendant No.1 to take a plea that the Commercial Court, Vadodara shall not have any territorial jurisdiction. It is submitted that therefore the Commercial Court, Vadodara has not committed any error in considering the issue with respect to territorial jurisdiction of the Commercial Court, Vadodara and has not committed any error in giving specific finding with respect to territorial jurisdiction of the Commercial Court, Page 14 of 30 HC-NIC Page 14 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT Vadodara.
Relying upon the decision of the Hon'ble Supreme Court in the case of T. Arivandandam vs. T. V. Satyapal and Anr. reported in (1977)4 SCC 467, it is submitted that as held by the Hon'ble Supreme Court, fraudulent and frivolous litigations are to be nipped in the bird. It is submitted that therefore, the Commercial Court, Vadodara is justified in concluding the said issue with respect to the jurisdiction of the Commercial Court, Vadodara at the earliest.
[6.5] Now, so far as the reliance placed upon the decision of the Hon'ble Supreme Court in the case of Modi Entertainment Network Ltd. (Supra) is concerned, it is submitted by Shri Joshi, learned Senior Advocate appearing on behalf of the original defendant No.1 that as per Order VI Rule 4 of the CPC, the special facts such as whether the proceedings are oppressive or vexatious or in a forum non conveniens are specifically required to be pleaded in the suit / plaint. It is submitted that there are no specific averments pleaded in the suit. It is submitted that therefore in absence of any such pleading and considering Clause 6 of the Supply / Purchase Agreement when the Commercial Court, Vadodara has held that the Commercial Court, Vadodara shall not have territorial jurisdiction and consequently has dismissed the suit, the same is not required to be interfered with by this Court in exercise of appellate jurisdiction.
[6.6] Now, so far as the impugned order passed below Exh.5 by the Commercial Court, Vadodara is concerned, Shri Joshi, learned Senior Advocate appearing on behalf of the original defendant No.1 has submitted that though the Commercial Court, Vadodara has not considered application Exh.5 on merits and has dismissed the application solely on the ground that the Commercial Court, Vadodara Page 15 of 30 HC-NIC Page 15 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT shall not have any territorial jurisdiction, Shri Joshi, learned Senior Advocate has requested to consider the case on merits by this Court and consider the observations made by the Commercial Court, Vadodara on jurisdiction as prima facie observations / findings. It is vehemently submitted by Shri Joshi, learned Senior Advocate that as such no case is made out by the plaintiff to restrain the bank from encashing the Bank Guarantee.
[6.7] It is further submitted by Shri Joshi, learned Senior Advocate appearing on behalf of the original defendant No.1 that the original plaintiff has not produced on record the communication / letter dated 24.06.2016 addressed by Drew and Napier to the plaintiff by which the original plaintiff was informed that if notwithstanding the express provisions of the contract, the plaintiff elect to commence proceedings against their client in any jurisdiction other than Singapore, ensure that copy of the letter is placed before the relevant Court at the time such proceedings are commenced. It is submitted that said crucial document has not been produced on record. It is submitted that such a conduct on the part of the plaintiff disentitles the plaintiff from getting any injunction.
[6.8] It is further submitted that even otherwise if the plaintiff wants to rely upon the first contract, the plaintiff has to go before the Singapore Court alone.
[6.9] It is further submitted by Shri Joshi, learned Senior Advocate appearing on behalf of the original defendant No.1 that as such no cause has been shown to restrain the Bank from encashing the Bank Guarantee. It is submitted that there are no allegations of breach of terms of the Bank Guarantee.
Page 16 of 30HC-NIC Page 16 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT [6.10] It is submitted that even as per the decision of the Hon'ble Supreme Court in the case of South East Asia Shipping Co. Ltd. vs. Nav Bharat Enterprises Pvt. Ltd. reported in (1996)3 SCC 443 the cause of action with respect to the Bank Guarantee can be said to have arisen where the Bank is situated. It is submitted that therefore also, the Commercial Court, Vadodara would not have any territorial jurisdiction.
[6.11] Shri Joshi, learned Senior Advocate appearing on behalf of the original defendant No.1 has heavily relied upon the decisions of the Hon'ble Supreme Court in the case of South East Asia Shipping Co. Ltd. (Supra); U.P. State Sugar Corporation vs. Sumac International Ltd. reported in (1997)1 SCC 568; Dwarikesh Sugar Industries Ltd. vs. Prem Heavy Engineering Works (P) Ltd. reported in (1997)6 SCC 450 in support of his submissions that no case is made out for grant of injunction restraining the Bank from encashing the Bank Guarantee.
[6.12] Shri Joshi, learned Senior Advocate appearing on behalf of the original defendant No.1 has further submitted that even in para 11 after considering the decisions of the Hon'ble Supreme Court in the case of South East Asia Shipping Co. Ltd. (Supra) and even Modi Entertainment Network & Anr. (Supra), the Commercial Court, Vadodara has observed that no cause of action has arisen within the territorial jurisdiction of Commercial Court, Vadodara.
[6.13] It is further submitted by Shri Joshi, learned Senior Advocate appearing on behalf of the original defendant No.1 that even in para 57 the plaintiff has specifically pleaded in the suit/plaint that they are going to invoke the Dispute Resolution Clause as provided for in the contract. It is submitted that therefore the plaintiff have accepted Page 17 of 30 HC-NIC Page 17 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT that the dispute is to be resolved as per the contract between parties more particularly Dispute Resolution Clause No.6. It is submitted that therefore also no error has been committed by the Commercial Court, Vadodara in holding that the Commercial Court, Vadodara shall not have any jurisdiction and therefore, the Commercial Court, Vadodara has rightly not granted the injunction as prayed for.
Making above submissions it is requested to dismiss the present Appeal From Order as well as the First Appeal.
[7.0] In reply to the submissions made by Shri Joshi, learned Senior Advocate appearing on behalf of the original defendant No.1, Shri Sanjanwala, learned Senior Advocate appearing on behalf of the original plaintiff has vehemently submitted that in the present case the Bank Guarantee has been issued at Vadodara and even the payment was also received at Vadodara and therefore, so far as suit is concerned, it can be said that part cause of action has arisen within the jurisdiction of Commercial Court, Vadodara. Shri Sanjanwala, learned Senior Advocate appearing on behalf of the original plaintiff has submitted that the averments in the plaint as a whole are required to be considered and therefore, considering Section 20(3) of the CPC, the suit is maintainable where the part cause of action has arisen i.e. the Commercial Court, Vadodara.
Making above submissions it is requested to allow the present Appeal From Order as well as the First Appeal by quashing and setting aside the impugned orders passed below Exh.5 and Exh.1 and remand the matter to the Commercial Court, Vadodara.
[8.0] Heard learned Counsels appearing for respective parties at length.
At the outset it is required to be noted that the Commercial Suit was preferred by the original plaintiff before the Commercial Court, Page 18 of 30 HC-NIC Page 18 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT Vadodara for the following reliefs.
"(A) This Hon'ble Court may be pleased to declare that the Defendant No.2 has no right whatsoever to invoke the Bank Guarantee bearing No.074915FGPER0002 in favour of the Defendant No.1 or acting upon the letter of the Defendant No.1 dated 10.10.2016;
(B) It may be further declared that the Defendant No.2 is under no obligation to honour the Bank Guarantee bearing No.074915FGPER0002 since the plaintiff has completed all its obligations under the supply contract and hence, the Bank is discharged of its obligations to honour the Bank Guarantee.
(C) The Hon'ble Court be pleased to grant an injunction restraining the Defendants from acting upon or enforcing the letter dated 10.10.2016 and invoking the Bank Guarantee bearing No.074915FGPER0002;
(D) The Defendant No.1 be restrained to make any claims under the Bank Guarantee bearing No.074915FGPER0002 and the Defendant No.2 be restrained from making payment to the Defendant No.1 in furtherance of letter dated 10.10.2016, under the above Bank Guarantee."
That in the said suit the original plaintiff submitted the application Exh.5 and prayed the following injunction:
"(A) Pending hearing and final disposal of the suit, the Defendant No.2 be restrained from making any payment to the Defendant No.1, under the Bank Guarantee bearing No.074915FGPER0002, the Defendant No.2 be further restrained from acting upon the letter dated 10.10.2016;
(B) The Defendant No.1 be restrained from enforcing the Bank Guarantee bearing No.074915FGPER0002 and from insisting for payment under the said guarantee in any manner whatsoever;"
[8.1] That at the time of hearing of application Exh.5 a plea was taken by the original defendant No.1 that in view of Clause 6 of the Supply / Purchase Agreement, only the Court at Singapore would have jurisdiction to entertain and resolve the dispute between the parties and consequently the Commercial Court, Vadodara shall not have any Page 19 of 30 HC-NIC Page 19 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT territorial jurisdiction. That solely relying upon Clause 6 of the Supply / Purchase Agreement (ouster clause), the Commercial Court, Vadodara has rejected the application Exh.5 and consequently on the basis of the findings recorded while deciding application Exh.5, the Commercial Court, Vadodara has passed the order below Exh.1 and has also dismissed the suit.
It is an admitted position that in the suit neither there was any application submitted by the original defendant No.1 either under Order VII Rule 10 of the CPC and/or to raise the preliminary issue with respect to territorial jurisdiction of the Commercial Court, Vadodara and solely relying upon the observations / findings recorded while deciding application Exh.5, the Commercial Court, Vadodara has dismissed the suit. The order passed by the Commercial Court, Vadodara below Exh.1 dismissing the suit is the subject matter of First Appeal No.2897/2016 and the order passed below Exh.5 by the Commercial Court, Vadodara rejecting application Exh.5 is the subject matter of Appeal From Order No.471/2016.
[8.2] First, we shall deal with First Appeal No.2897/2016 and consider whether in the facts and circumstances of the case, the Commercial Court, Vadodara is justified in dismissing the suit solely relying upon the observations / findings recorded while deciding the application Exh.5 to the effect that the Commercial Court, Vadodara shall not have any territorial jurisdiction. As observed hereinabove neither any separate application was submitted by the original defendant No.1 either under Order VII Rule 10 of the CPC and/or to raise the preliminary issue with regard to the territorial jurisdiction of the Commercial Court, Vadodara and/or any application to dismiss the suit for want of territorial jurisdiction of the Commercial Court, Vadodara. In light of the above the impugned order passed by the Commercial Court, Vadodara dismissing the suit is required to be considered.
Page 20 of 30HC-NIC Page 20 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT [8.3] Identical question came to be considered by this Court in the case of Mukeshkumar Mohanlal Mashru (Supra). In the case before the learned Single Judge the trial Court dismissed the suit on the ground of limitation, solely relying upon the observations made while deciding interim injunction application Exh.5. The learned first Appellate Court quashed and set aside the judgment and decree passed by the learned trial Court dismissing the suit on the ground of limitation by observing that without framing the issue with respect to limitation and even if preliminary issue and solely relying upon the observations made while deciding interim injunction application, the learned trial Court ought not to have dismissed the suit. In the revision application before this Court while confirming the order passed by the first Appellate Court, it is observed by the learned Single Judge of this Court that the learned trial Court was not justified in dismissing the suit on the ground of limitation, solely relying upon the observations made while deciding interim injunction application Exh.5. In para 4, it is observed and held as under:
"[4] Having heard learned advocates appearing on behalf of the respective parties and considering the order passed by learned Trial Court as well as learned Appellate Court, it appears to the Court that learned Trial Court was not justified in dismissing the suit on the ground of limitation solely relying upon observations made while deciding the interim injunction application Exh.5 application. It cannot be disputed that whatever the observations are made while deciding interim injunction application Exh.5 are always tentative and while deciding interim injunction application only and if the learned Trial Court is of the opinion that the suit is required to be dismissed on the ground that the same is barred by limitation, in that case, the same can be done on application by defendant requesting to frame preliminary issue with respect to limitation or in application under Order 7 Rule 11(d) of the Code of Civil Procedure and after giving an opportunity to the respective parties. However without framing preliminary issue, it was not permissible for the learned Trial Court to dismiss the suit solely relying upon the observations made while deciding application Exh.5. Under the circumstances, no illegality has been committed by learned Appellate Court in quashing and setting aside the judgement and decree passed by learned Trial Court Page 21 of 30 HC-NIC Page 21 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT dismissing the suit and remanding the same to the learned Trial Court."
Therefore, in the present case the Commercial Court, Vadodara is not justified in passing the order below Exh.1 and dismissing the suit, solely relying upon the observations made while passing the order below Exh.5, in absence of any application by the original defendant No.1 either under Order VII Rule 10 of the CPC and/or raising the preliminary issue with respect to the territorial jurisdiction of the Commercial Court, Vadodara and/or in absence of any application by the original defendant No.1 to dismiss the suit for want of territorial jurisdiction of Commercial Court, Vadodara. Thus, as such no opportunity has been given to the plaintiffs to show cause why the suit may not be dismissed on the ground of lack of territorial jurisdiction by the Commercial Court, Vadodara. If a proper and appropriate application would have been made by the original defendant No.1 and the plaintiff would have been given an opportunity to show cause why the suit may not be dismissed on the ground of lack of territorial jurisdiction of Commercial Court, Vadodara, in that case the plaintiff would have shown the cause and would have pleaded / submitted that despite Clause 6 of the Supply / Purchase Agreement, still for the relief sought against the original defendant No.2 and with respect to the Bank Guarantee, the suit for injunction shall still be maintainable at the Commercial Court, Vadodara. In absence of such opportunity the Commercial Court, Vadodara is not justified in dismissing the suit.
[8.4] Now, so far as the submission on behalf of the original defendant No.1 that no separate application is required under Order VII Rule 10 of the CPC is concerned, at the outset it is required to be noted that, we are of the prima facie opinion that in the facts and circumstances of the case Order VII Rule 10 of the CPC shall not be applicable. Order VII Rule 10 Page 22 of 30 HC-NIC Page 22 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT of the CPC shall be applicable in a case where the Court in which the suit is filed is lacking inherent jurisdiction. Considering paras 24 and 26 of the decision of the Hon'ble Supreme Court in the case of Modi Entertainment Network & Anr. (Supra) and the decision of the Delhi High Court in the case of Piramal Healthcare Limited (Formerly known as Nicholas Piramal India Ltd.) vs. Diasorin S.P.A reported in (2010) 172 DLT 131 prima facie it cannot be said the Court at Vadodara who can be said to be a natural Court, lacks inherent jurisdiction. It might be a different thing that in view of ouster clause agreed by and between the parties and so stated in the contract / agreement and the agreement between the parties to select the neutral Court / Forum, the natural Court may not exercise the jurisdiction and may relegate the parties to the contract to go before the neutral Forum / Court selected by them. However, it cannot be said that the natural Court would lack total inherent jurisdiction.
[8.5] Even as held by the Hon'ble Supreme Court in the case of Modi Entertainment Network & Anr. (Supra) in an exceptional case being made out despite the ouster clause the natural Court can exercise the jurisdiction. After discussing the law on the point the Hon'ble Supreme Court in para 24 has laid down the following principles.
"(1) In exercising discretion to grant an antisuit injunction the court must be satisfied of the following aspects :
(a) the defendant, against whom injunction is sought, is amenable to the personal jurisdiction of the court;
(b) if the injunction is declined the ends of justice will be defeated and injustice will be perpetuated; and
(c) the principle of comity respect for the court in which the commencement or continuance of action/proceeding is sought to be restrained must be borne in mind;
(2) in a case where more forums than one are available, the Court in exercise of its discretion to grant antisuit injunction will examine as to which is the appropriate forum (forum conveniens) having regard to the convenience of the parties and may grant antisuit injunction in Page 23 of 30 HC-NIC Page 23 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT regard to proceedings which are oppressive or vexatious or in a forum nonconveniens;
(3) Where jurisdiction of a court is invoked on the basis of jurisdiction clause in a contract, the recitals therein in regard to exclusive or nonexclusive jurisdiction of the court of choice of the parties are not determinative but are relevant factors and when a question arises as to the nature of jurisdiction agreed to between the parties the court has to decide the same on a true interpretation of the contract on the facts and in the circumstances of each case; (4) a court of natural jurisdiction will not normally grant antisuit injunction against a defendant before it where parties have agreed to submit to the exclusive jurisdiction of a court including a foreign court, a forum of their choice in regard to the commencement or continuance of proceedings in the court of choice, save in an exceptional case for good and sufficient reasons, with a view to prevent injustice in circumstances such as which permit a contracting party to be relieved of the burden of the contract; or since the date of the contract the circumstances or subsequent events have made it impossible for the party seeking injunction to prosecute the case in the court of choice because the essence of the jurisdiction of the court does not exist or because of a vis major or force majeure and the like; (5) where parties have agreed, under a non exclusive jurisdiction clause, to approach a neutral foreign forum and be governed by the law applicable to it for the resolution of their disputes arising under the contract, ordinarily no anti suit injunction will be granted in regard to proceedings in such a forum conveniens and favoured forum as it shall be presumed that the parties have thought over their convenience and all other relevant factors before submitting to non exclusive jurisdiction of the court of their choice which cannot be treated just an alternative forum;
(6) a party to the contract containing jurisdiction clause cannot normally be prevented from approaching the court of choice of the parties as it would amount to aiding breach of the contract; yet when one of the parties to the jurisdiction clause approaches the court of choice in which exclusive or non exclusive jurisdiction is created, the proceedings in that court cannot per se be treated as vexatious or oppressive nor can the court be said to be forum nonconveniens; and (7) the burden of establishing that the forum of choice is a forum nonconveniens or the proceedings therein are oppressive or vexatious would be on the party so contending to aver and prove the same."
In para 26 the Hon'ble Supreme Court has further observed as under:
Page 24 of 30HC-NIC Page 24 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT "26. A plain reading of this clause shows that the parties have agreed that their contract will be governed by and be construed in accordance with English law and they have also agreed to submit to the nonexclusive jurisdiction of English Courts (without reference to English conflict of law rules). We have already observed above that recitals in regard to submission to exclusive or nonexclusive jurisdiction of a court of choice in an agreement are not determinative.
However, as both the parties proceeded on the basis that they meant nonexclusive jurisdiction of the English Courts, on the facts of this case, the Court is relieved of the interpretation of jurisdiction clause. Normally, the court will give effect to the intention of the parties as expressed in the agreement entered into by them except when strong reasons justify disregard of the contractual obligations of the parties. In Donohue's case (supra) although the parties to the agreement stipulated to submit to the exclusive jurisdiction of the English Courts, the House of Lords found that it would not be in the interests of justice to hold the parties to their contract as in that case strong reasons were shown by the respondent. It was felt necessary that a single trial of all the claims of the parties by one forum would be appropriate and as all the parties to the New York proceedings were not parties to the agreement stipulating exclusive jurisdiction of the English Court and as all the claims before the New York court did not arise out of the said contract so they could not have been tried in the English Court. It was urged that in the circumstances parallel proceedings one in England and another in New York would have to go on which might result in inconsistent decisions. Those facts were considered as strong reasons to decline to grant antisuit injunction though the parties had agreed to the exclusive jurisdiction of the English Court. In contrast in SABAH's case (supra) even though GOP filed the suit first in the court of natural jurisdiction and sought antisuit injunction against SABAH restraining them from proceeding with the action brought by them in the English Court, the Court of Appeal found that non exclusive jurisdiction clause in the agreement of guarantee executed by GOP was binding on them. The action of GOP in filing the suit earlier in the court of natural jurisdiction was held to be clearly in breach of contract and in the context of the nonexclusive jurisdiction clause, oppressive and vexatious unless the GOP could show strong reasons as to why parallel proceeding would be justified. The only ground urged for continuance of proceeding in Pakistan Court was that it was a convenient forum which was considered not strong enough for the GOP to disregard the contractual obligation of submission to the jurisdiction of the English Court for resolution of disputes. The Court of Appeal, upheld the antisuit injunction granted by the learned Judge at the first instance as also the order declining to stay the English suit."
Page 25 of 30HC-NIC Page 25 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT In para 27 the Hon'ble Supreme Court has further observed that it cannot be laid down as general principles that once the parties have agreed to submit to the jurisdiction of a foreign court, the proceedings or the action brought either in the court of natural jurisdiction or in the court of choice will per se be oppressive or vexatious. It is observed that it depends on the facts of each case and the question whether the proceedings in a Court are vexatious or oppressive has to be decided on the basis of the material brought before the Court. In the case of Piramal Healthcare Limited (Supra), the Delhi High Court has observed that when a Court directs the plaintiff to approach to a foreign Court / neutral Court; it issues such a direction not because the natural Court has no jurisdiction, but in the given circumstances it takes a view that parties should be held to their bargain. Ina given case equaly the natural Court may choose not to held parties to their bargain.
[8.6] Thus, considering the above it cannot be said that there shall be a total lack of jurisdiction of the natural Court i.e. in the present case the Commercial Court, Vadodara. Therefore, in a case where the suit is filed before a natural Court and as observed hereinabove the natural Court would not loose the jurisdiction and/or it cannot be said that there shall be a total lack of jurisdiction of the natural Court, therefore we are prima facie of the opinion that Order VII Rule 10 of the CPC shall not be applicable.
[8.7] Even otherwise even considering the provisions of Order VII Rule 10 of the CPC the suit is not required to be dismissed. If the trial Court is of the opinion that it has no territorial jurisdiction, in that case, the trial Court may return the plaint to the plaintiff to present it before appropriate Court having jurisdiction. However, the Court cannot Page 26 of 30 HC-NIC Page 26 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT dismiss the suit under Order VII Rule 10 of the CPC.
[8.8] In the present case as observed hereinabove, solely relying upon the observations made while deciding the application Exh.5, the Commercial Court, Vadodara has dismissed the suit which as observed hereinabove is not permissible. No opportunity has been given to the plaintiff to show cause why the suit may not be dismissed on the ground of lack of territorial jurisdiction by the Commercial Court, Vadodara. As observed hereinabove no application has been preferred to raise the preliminary issue with respect to territorial jurisdiction of the Commercial Court, Vadodara. If the appropriate application would have been submitted by the original defendant No.1 to dismiss the suit on the ground of lack of territorial jurisdiction of the Commercial Court, Vadodara and the plaintiff would have been given the opportunity, the plaintiff would have submitted that despite the ouster clause still for the reliefs sought in the plaint the suit shall still be maintainable before the Commercial Court, Vadodara and the natural Court would have jurisdiction to entertain such a suit for relief of injunction as prayed. In absence of such application and the opportunity given to the plaintiff, the Commercial Court, Vadodara is not justified in dismissing the suit. Under the circumstances, the impugned order passed by the Commercial Court, Vadodara below Exh.1 dismissing the suit cannot be sustained and the same deserves to be quashed and set aside.
[8.9] It is also required to be noted that as such the Commercial Court, Vadodara has dismissed the suit solely considering the observations / findings recorded while deciding application Exh.5. As per the settled proposition of law any observations made while deciding the interim injunction application are tentative and prima facie while Page 27 of 30 HC-NIC Page 27 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT deciding the interim injunction application Exh.5 only. Therefore, if the Commercial Court, Vadodara was of the opinion that the suit itself is liable to be dismissed on the ground that it has no territorial jurisdiction, in that case, the same can be done after following proper procedure and/or on appropriate application by the defendant and that too after giving opportunity to the plaintiff to show cause why the suit may not be dismissed and/or returned to present it before appropriate Court having jurisdiction. However, solely relying upon the observations made while deciding interim injunction application Exh.5, findings which are always tentative and prima facie, the Court is not justified in dismissing the suit.
Appeal From Order No.471/2016 [9.0] Now, so far as the impugned order passed below Exh.5 by the Commercial Court, Vadodara is concerned, at the outset and as observed hereinabove, the Commercial Court, Vadodara has dismissed the application Exh.5 solely and mainly on the ground that the Commercial Court, Vadodara has no territorial jurisdiction in view of Clause 6 of the Supply / Purchase Agreement. For the reasons stated herein above and as observed hereinabove, Commercial Court, Vadodara is not justified in holding that in view of Clause 6 of Supply / Purchase Agreement, Commercial Court, Vadodara lacks total jurisdiction. We have also observed and held that the Commercial Court, Vadodara has not properly appreciated the decision of the Hon'ble Supreme Court in the case of Modi Entertainment Network & Anr. (Supra). Therefore, for the reasons stated above, the matter is required to be remanded back to the Commercial Court, Vadodara to decide the application Exh.5 afresh more particularly the Commercial Court, Vadodara has gone into the merits whether the plaintiff is entitled to the injunction as prayed or not and has rejected the application Exh.5 on the aforesaid ground alone.
Page 28 of 30HC-NIC Page 28 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT Under the circumstances, without further expressing anything on merits whether the plaintiff is entitled to the injunction as prayed or not, the impugned order passed by the Commercial Court, Vadodara is required to be quashed and set aside and the matter is required to be remanded back to the Commercial Court, Vadodara to decide application Exh.5 afresh in accordance with law and on merits.
[10.0] In view of the above and for the reasons stated above, both, present Appeal From Order and the First Appeal are allowed. Impugned order dated 05.12.2016 passed by the Commercial Court, Vadodara, Vadodara below Exh.5 rejecting the same holding that the Commercial Court, Vadodara, Vadodara had no territorial jurisdiction is hereby quashed and set aside. The impugned order dated 05.12.2016 passed by the Commercial Court, Vadodara, Vadodara below Exh.1 dismissing the Commercial Suit No.288/2016 considering the observations / findings recorded while deciding the application Exh.5 that the Commercial Court, Vadodara, Vadodara would not have any territorial jurisdiction is also hereby quashed and set aside. Matters are remanded to the Commercial Court, Vadodara to decide the application Exh.5 afresh. It will be open for the original defendant No.1 to submit appropriate application either to raise the preliminary issue whether the Commercial Court, Vadodara, Vadodara would have any territorial jurisdiction or not and/or an appropriate application to dismiss the suit contending inter alia that in view of the clause 6 of the Supply / Purchase Agreement, the Commercial Court, Vadodara would not have any territorial jurisdiction and/or the Commercial Court, Vadodara may not exercise the jurisdiction. As and when such application is made the Commercial Court, Vadodara to consider the same in accordance with law and at the earliest and preferably within a period of 4 weeks from submitting such Page 29 of 30 HC-NIC Page 29 of 30 Created On Sat Aug 12 02:17:45 IST 2017 C/AO/471/2016 CAV JUDGMENT application/s. The Commercial Court, Vadodara to decide and dispose of the application Exh.5 afresh in accordance with law and on merits also within a period of 6 weeks from today.
In view of disposal of main Appeal From Order and First Appeal, Civil Application Nos.12991/2016 and 12999/2016 for stay respectively in Appeal From Order and First Appeal are also disposed of.
Sd/ (M.R. SHAH, J.) Sd/ (B.N. KARIA, J.) FURTHER ORDER At the time of pronouncement of the present judgment and order, learned Counsel appearing on behalf of the respondent No.1 herein - original defendant No.1 has brought to the notice of this Court that it has come to their knowledge that after the present Appeal From Order and the First Appeal were heard by this Court and kept CAV for orders, the plaintiff has already approached now the Singapore Court and have obtained some interim injunction. If that be so, it will be open for the defendant No.1 to point out the same before the Commercial Court, Vadodara and the Commercial Court, Vadodara to consider the same in accordance with law.
Sd/ (M.R. SHAH, J.) Sd/ (B.N. KARIA, J.) Ajay Page 30 of 30 HC-NIC Page 30 of 30 Created On Sat Aug 12 02:17:45 IST 2017