Madras High Court
Icici Bank Limited vs M/S.Fab N Fabrics on 29 April, 2011
Author: R.S.Ramanathan
Bench: R.S.Ramanathan
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE: 29.4.2011. CORAM THE HON'BLE MR.JUSTICE R.S.RAMANATHAN C.R.P.(PD)Nos.1551 to 1554 of 2009 and M.P.Nos.1 of 2009 (4 Nos.) ICICI Bank Limited rep by its Manager, having its corporate office at Cheran Plaza, 1st Floor, 1090, Trichy Road, Coimbatore. Petitioner in C.R.P.(PD) Nos.1551 to 1553 of 2009 ICICI Bank Limited, having its corporate office at ICICI Bank Towers, Bandra Kurla Complex, Mumbai 400 051 and branch office at Cheran Plaza, 1st Floor, 1090, Trichy Road, Coimbatore. Petitioner in C.R.P.(PD) No.1554 of 2009 vs. M/s.Fab N Fabrics, a partnership concern, rep by its Partner P.Mohan, having its office at Suriyan Nagar, ABT Road, New Extension, Tirupur 641 604. Respondent in CRP(PD) No.1551/2009 Indo Shell Cast Pvt. Ltd., rep by its Joint Managing Director Mr.J.Ganesh Kumar A-14, SIDCO Industrial Estate, Coimbatore 641 021. Respondent in CRP(PD) No.1552/2009 M/s.Freelook Fashions Pvt.Ltd., rep by its Partner Mr.P.Mohan, 244/1, Freelook Gardens, Mutnanampalayam Road, Nallur, Tirupur 641 606. Tamilnadu. Respondent in CRP(PD) No.1553/2009 M/s.Dhanavarshini Exports rep by its Partner Mr.S.Ramachandran having its office at 3, Kula Thottam, Kangayam Road, Tirupur. Respondent in CRP(PD) No.1554/2009 Civil Revision Petition No.1551 of 2009 against the order dated 22.4.2009 in I.A.No.1064 of 2008 in O.S.No.590 of 2008 passed by the I Additional District & Sessions Judge, Coimbatore. Civil Revision Petition No.1552 of 2009 against the order dated 22.4.2009 in I.A.No.1102 of 2008 in O.S.No.664 of 2008 passed by the I Additional District & Sessions Judge, Coimbatore. Civil Revision Petition No.1553 of 2009 against the order dated 22.4.2009 in I.A.No.1100 of 2008 in O.S.No.576 of 2008 passed by the I Additional District & Sessions Judge, Coimbatore. Civil Revision Petition No.1554 of 2009 against the order dated 22.4.2009 in I.A.No.1295 of 2008 in O.S.No.782 of 2008 passed by the I Additional District & Sessions Judge, Coimbatore. For petitioners : Mr.Karthik Seshadri for M/s.Iyer and Thomas For Respondent in C.R.P.(PD) Nos.1551, 1553 and 1554 of 2009 : Mr.T.R.Rajagoplan, Senior Counsel for Mr.R.Sivaraman For respondent in C.R.P.(PD)No.1552 of 2009: Mr.R.Shankaranarayanan COMMON ORDER
In all the above revisions, the revision petitioner challenges the order of the learned I Additional District and Sessions Judge, Coimbatore in rejecting the applications filed by the revision petitioners under Order VII Rules 10 and 11 of the Code of Civil Procedure to reject the plaint filed by the respective respondents.
2. The respective respondents filed the suits seeking for declaration that the derivative contracts entered into between them and the revision petitioners and the ISDA Master agreement on various dates are illegal, opposed to public policy, null, void ab initio, ultra vires, unenforceable and not binding on the plaintiffs and also sought for consequential relief of permanent injunction restraining the revision petitioners from making or enforcing any claim against them in furtherance of the derivative contract stated in the plaint.
3. In the suits, the revision petitioners filed interlocutory applications under Order VII Rules 10 and 11 to reject the plaints on the ground that the court at Coimbatore has no jurisdiction to entertain the suits and the suits filed are also barred under the provisions of section 18 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and the suit is also not maintainable and barred by section 41(b) of the Specific Relief Act.
4. It is submitted by Mr.H.Karthik Seshadri, learned counsel for the petitioners that ISDA Master agreement was executed in Mumbai within the jurisdiction of High Court of Bombay and as per section 13(b) of the said agreement, only the courts at Mumbai will have jurisdiction with respect to the disputes arising out of or in relation to the ISDA Master agreement and therefore, the respondents, having executed the ISDA Master agreement, are bound by the terms of the agreement and therefore, the Coimbatore court has no jurisdiction to entertain the suits. He further submitted that the suits are also barred by the provisions of section 18 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and the respondents filed the suits with a mala fide intention to avoid payments of amounts that are due and likely to become due under the transactions which amounts to a debt payable to the bank in terms of section 2(g) of the said Act and therefore, the jurisdiction of the court at Coimbatore is barred in view of the provisions of sections 17 and 18 of the said Act. He further submitted that the suits are also not maintainable by virtue of the provisions of section 41(b) of the Specific Relief Act which provides that an injunction cannot be granted to restrain any person from instituting or prosecuting any proceeding in a court not subordinate to that from which injunction is sought and the respondents seek for injunction restraining the revision petitioners from initiating recovery proceedings under the SARFAESI Act and therefore, it is hit by section 41(b) of the Specific Relief Act. The learned Senior Counsel also relied upon the judgments reported in the following cases in support of his contention:-
1) A.B.C.LAMINART PVT. LTD. AND ANOTHER v. A.P.AGENCIES, SALEM (AIR 1989 SC 1239)
2) B.O.I. FINANCE LIMITED v. THE CUSTODIAN AND OTHERS (AIR 1997 SC 1952)
3) HANIL ERA TEXTILES LTD. v. PUROMATIC FILTERS (P) LTD. ((2004) 4 SCC 671)
4) NAHAR INDUSTRIAL ENTERPRISES LIMITED v. HONG KONG SHANGHAI BANKING CORPORATION ((2009) 8 SCC 646)
5) INDIAN BANK v. ABS MARINE PRODUCTS (P) LTD ((2006) 5 SCC 72).
5. The learned Senior Counsel Mr.T.R.Rajagopalan appearing for Mr.R.Sivaraman, the learned counsel for the respondents in C.R.P. (PD) Nos.1551, 1553 and 1554 of 2009 and Mr.R.Shankaranarayanan, learned counsel for the respondent in C.R.P.(PD) No.1552 of 2009 submitted that the present petitions filed under Order VII Rules 10 and 11 is not maintainable and as per the provisions of Order VII Rule 11, the plaint can be rejected only on the grounds stated in the rule and even assuming that the Coimbatore court has no jurisdiction to entertain the suit as contended by the learned counsel for the petitioners, the suits cannot be rejected and the suits can only be transferred to the court having jurisdiction. The learned Senior Counsel further submitted that none of the grounds stated by the revision petitioners will come under the various clauses of Order VII Rule 11 and therefore, the plaints cannot be rejected as contended by the revision petitioners.
6. The learned Senior Counsel and Mr.R.Shankaranarayanan, the learned counsel for the respondent in one revision relied upon the judgments reported in RAJASHREE SUGARS & CHEMICALS LIMITED v. AXIS BANK LIMITED ((2008) 8 MLJ 261) and NAHAR INDUSTRIAL ENTERPRISES LIMITED v. HONG KONG SHANGHAI BANKING CORPORATION ((2009) 8 SCC 646) and submitted that the pleas taken by the revision petitioners were answered in those two judgments against them and therefore, the court below rightly dismissed the applications filed by the revision petitioners and therefore, there is nothing to interfere with the order passed by the court below.
7. Heard both the counsel. The respondents in these revisions filed various suits for declaration and consequential relief of injunction as stated above and it is admitted that the parties entered into ISDA Master agreement on various dates and that agreement was sought to be declared as illegal, opposed to public policy, void ab initio, in the suits filed by the respondent. As it is not necessary to go into the factual aspects regarding the aforesaid contract entered between the parties for the purpose of disposing these revisions, I am not going in detail regarding the terms of the said contract.
8. The first contention of the learned counsel for the petitioners is that as per section 13(b) of the ISDA Master agreement entered into between the parties, the courts at Mumbai alone has jurisdiction with respect to the disputes arising or in relation to the ISDA Master agreement and therefore, the court at Coimbatore has no jurisdiction.
9. As rightly submitted by the learned Senior Counsel for the respondents, even assuming that there is a clause in the agreement which prohibits filing of suits in a court except the court in Mumbai, that cannot be a ground for rejection of the plaints. Further, whether the court at Coimbatore has got jurisdiction or not cannot be decided at this stage as it was contended by the learned counsel for the respondents in the plaint that the contract was entered into at Coimbatore and the parties signed the contract at Coimbatore and a part of cause of action arose at Coimbatore. This, being the factual issue, in the absence of any evidence, cannot be decided at this stage.
10. Further, section 13(b) of ISDA Master agreement was considered in detail in the judgment reported in (2008) 8 MLJ 261 cited supra and in that judgment it was held that there is no exclusive jurisdiction on the Bombay Courts and the suit filed by the parties in the courts at Tamil Nadu is maintainable and this court has specifically held that the jurisdiction clause contained in the ISDA Master agreement does not confer exclusive jurisdiction upon the courts in Mumbai and the averments in the plaint proceeded on the basis that a part of the cause of action arose within Chennai within the jurisdiction of this court. In this case also, it was averred by the respondents in the plaints that a part of the cause of action arose at Coimbatore where the ISDA Master agreement was entered into between the parties and therefore, section 13(b) of the ISDA Master agreement does not confer exclusive jurisdiction upon the courts at Mumbai.
11. In the above said judgment, the learned Judge also dealt with the maintainability of the suit as per sections 17 and 18 of the Recovery of debts Due to Banks and Financial Institutions Act and held that the suit is maintainable. The learned Judge also dealt with section 41(b) of the Specific Relief Act and held that the suit is not barred by the provisions of section 41(b) of the Specific Relief Act. Therefore, in my opinion, the judgment rendered in (2008) 8 MLJ 261 is a complete answer to the pleas raised by the revision petitioners.
12. Further, the Honourable Supreme Court in the judgment reported in (2009) 8 SCC 646 cited supra, dealt with the suits filed in civil court and the application filed by the bank before the DRT and held that the suit filed in civil court is maintainable and the provisions of sections 17 and 18 of the Recovery of debts Due to Banks and Financial Institutions Act will not be a bar for filing a suit before the civil court. Hence, the court below has rightly dismissed the applications filed by the revision petitioners and therefore, the orders do not warrant any interference.
In the result, the revision petitions are dismissed. No costs. The connected miscellaneous petitions are also dismissed.
ssk To
1. I Additional District & Sessions Judge, Coimbatore.
2. The Record Keeper, V.R. Section, High Court, Chennai