IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORDINARY ORDINARY ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION APPEAL APPEAL APPEAL NO. 215 OF 2008 NO. 215 OF 2008 NO. 215 OF 2008 IN IN IN NOTICE NOTICE NOTICE OF MOTION NO. 467 OF 2007 OF MOTION NO. 467 OF 2007 OF MOTION NO. 467 OF 2007 IN IN IN SUIT SUIT SUIT NO. 3537 OF 2004 NO. 3537 OF 2004 NO. 3537 OF 2004 Quadricon Pvt. Ltd. ] a company incorporated under the Companies] Act, 1956, having its office at 1, Sushila] Sadan, Opp.HICO, Mogul Lane, Mahim (W), ] Mumbai - 400015 (through their Chief ].. Appellant Financial Officer Rajesh A. Bhagat.) ](Ori.Pltffs.) Versus Shri Bajrang Alloys Ltd., ] a company incorporated under the Companies] Act, 1956, having its office and factory ] at 521/C, Urla Industrial Complex, ] Raipur 493 221 (M.P.) through its Director] Anand Goel. ]..Respondents Mr. Zaal Andhyarujina with Mr. Hitesh Jain i/b M/s. Thakordas & Madgavkar for the appellant. Mr. M.S. Doctor with Mr. Darshan Mehta i/b M/s. Dhruve Liladhar & Co, for the respondents. CORAM: S.B. MHASE & R.V. MORE, JJ. DATE OF RESERVING: 04TH SEPTEMBER, 2008 DATE OF PRONOUNCEMENT: 17TH MARCH, 2009 ORAL JUDGMENT : [Per S.B. Mhase, J.] 1. This appeal is directed against the judgment and order dated 12th December, 2007, passed in Notice of Motion No.467 of 2007 in Suit No.3537 of 2004. Suit No.3537 of 2004 has been filed by the plaintiff- appellant. The respondent-defendant took out Notice of : 2 : Motion No. 6456 of 2005, raising a preliminary issue of jurisdiction under section 9(A) of the Code of Civil Procedure and for a declaration that this court does not have jurisdiction to try the suit and consequently for an order that the plaint be returned under Order VII Rule 10 of the Code of Civil Procedure, 1908 (for short "CPC"). 2. By order dated 26th April, 2006, Notice of Motion No.745 of 2005 was dismissed by a learned single Judge. The defendant filed Appeal No.896 of 2006 against the said order. The said appeal was disposed of by an order dated 13th December, 2006 by the Division Bench. While dismissing the appeal the Division Bench held that it was open to the defendant to make an application for rejection of the plaint under order VII Rule 1 of the CPC and if such an application is made, it would be considered uninfluenced by the order dated 26th April, 2004. In the circumstances, the defendant took out Notice of Motion No.467 of 2007 for an order rejecting the plaint under Order VII Rule 11 of the CPC. 3. In the present matter, the plaint was presented on 29th September, 2004 and it was admitted on 10th December, 2004. At that time, the leave application under clause 12 of the Letters Patent was : 3 : not filed by the appellant, but when the defendant raised an exception to the jurisdiction of this court by filing Notice of Motion No.745 of 2005, the appellant filed an Affidavit-in-reply on 27th March, 2006, wherein the appellant stated that the appellant intended applying for leave under clause 12 and, accordingly, the appellant filed a leave application under clause 12 of the Letters Patent on 27th March, 2006. The said application has been considered and rejected by the learned single Judge by the impugned order. Since the leave is rejected, the plaint automatically stood rejected. 4. It is an admitted position on record, while this appeal was being heard, that part of the cause of action has arisen in Mumbai and part of the cause of action arose outside Mumbai. Before the learned single Judge, the respondent has raised a ground that no part of the cause of action has arisen within the jurisdiction of this court and that a material part of the cause of action has not arisen within the jurisdiction of this court. The single Judge has ultimately recorded a finding thus: "Thus independent of where the alleged forgery took place, the cause of action has also arisen in Mumbai where the Bill of : 4 : Exchange was sought to be used. In the circumstances, a material part of the cause of action has arisen within the jurisdiction of this court." This finding recorded by the learned single Judge has not been challenged by the respondent. Therefore, ultimately on the basis of a concession and finding referred to above, we have to proceed in the matter on the fact that part of cause of action has arisen in Mumbai while part of the cause of action has arisen outside Mumbai. It is also an admitted position on record in view of the application made by the appellant seeking leave of this court under clause 12 of the Letters Patent, that the present suit requires a leave of the court under clause 12 before presentation of the suit and, therefore, by an application dated 27th March, 2006, the appellant is seeking such a leave to file the suit. 5. There is no dispute amongst the counsel for both sides that the present suit requires leave under clause 12 of the Letters Patent. However, in the present matter, though the suit was presented on 29th September, 2004 and it was admitted on 10th December, 2004, leave under clause 12 of the Letters Patent was not prayed for and/or applied for by the appellant and the suit was admitted on 10th December, 2004 without : 5 : such a leave being obtained and/or granted. The application for obtaining leave under clause 12 of the Letters Patent was, for the first time, applied for on 27th March, 2006 i.e. at the time of filing a reply to the Notice of Motion No.745 of 2005 filed by the respondent. These factual aspects of the matter are also not in dispute. Under these circumstances, the application for leave under section 12 of the Letters Patent was argued and the learned single Judge, after having considered the various judgments which were placed before the learned single Judge, has rejected the application of the appellant seeking leave under clause 12 of the Letters Patent to file a suit. Therefore, this court has been called upon to consider the validity and legality of the order so far as it rejects the appellant’s application dated 27th March, 2006 seeking leave to file suit under clause 12 of the Letters Patent under the above referred facts and circumstances. 6. The learned counsel for the appellant has relied upon order IV Rule 1 of the CPC and more specifically order IV Rule 1 sub-rule(3) and submitted that the plaint shall not been deemed to be duly instituted unless it complies with the requirements specified in sub-rule (1) and (2). Thus, the learned counsel submitted that the relevance of this sub-rule is : 6 : highlighted by the fact of insertion of the words "duly instituted" and "deemed to be". According to him, these two words clearly widen the scope of enquiry with regard to whether the leave ought to be granted or not at the threshold and whether these words imply that the leave can be granted after the physical institution of the suit if the circumstances discovered subsequent to the filing of the suit so warrant. The learned counsel also relied upon Rules 45, 47 and 283 of The Bombay High Court (Original Side) Rules, 1980 (for short "Original Side Rules") to buttress the submission which the learned counsel has made on the basis of Order IV Rule 1 referred to above. He submitted that when the suit was drafted by the earlier Advocate for jurisdiction purpose, paragraph 48 was drafted which was as follows : "The plaintiffs state and submit that they have their registered office in Mumbai and carry on business in Mumbai. The cause of action arose in Mumbai inasmuch as the negotiations between the plaintiffs and defendants were held in Mumbai. The letter of credit was opened by the plaintiffs through their bankers Canara Bank, Colaba Branch, Mumbai. The Bill of Exchange was sent by the defendants to the plaintiffs bankers in Mumbai. This Hon’ble Court has, accordingly, jurisdiction to entertain, try and dispose of the suit." 7. The learned counsel submitted that these averments in paragraph 48 of the suit show that the : 7 : entire cause of action for the suit has arisen in Mumbai and, therefore, leave under clause 12 of the Letters Patent was not necessary. He submitted that when the objection was raised by the respondent, more specifically as stated in paragraph 7 of the Notice of Motion No.467 of 2007 that the appellant realised that the entire cause of action has not arisen within Mumbai, but it is partly within Mumbai and partly outside Mumbai and, therefore, leave under clause 12 is necessary. The learned counsel submitted that with the change in Advocate immediately the application for leave under clause 12 was submitted. He submitted that, therefore, a physical presentation of the suit and admission of the plaint cannot be said to be an admission of the plaint or institution of the suit because in the absence of leave under clause 12 it can be said that the suit was not instituted in accordance with law and thus, the learned counsel tried to make out a distinction between a de facto institution of the suit and a de jure institution of the suit. In short, he submitted that the suit which was instituted and/or numbered without compliance of clause 12 leave of the Letters Patent cannot be said to have been instituted in view of sub-rule(3) Rule 1, Order IV of the CPC. Therefore, he submitted that the suit will have to be treated and will have to be deemed at the stage of lodging only and the : 8 : application under clause 12 can be considered by the court and since the suit is at the stage of lodging only, as per his contention, this court can grant validly the permission under clause 12 of the Letters Patent. In short, he submitted that the suits which require permission under clause 12 of the Letters Patent, if instituted without such permission, is a nonest in law and/or a nullity and, therefore, the application to grant leave under clause 12 of the Letters Patent can be entertained by this court. To support his contention that leave can be obtained till the institution of the suit, he relied upon the following case laws - 1890 XV ILR Bom., 93 1890 XV ILR Bom., 93 1890 XV ILR Bom., 93 in the matter of Rumpurtab Samurthroy & anr. Vs. Premsukh Chandamal & ors.; 1931 Vol.XXXIV BLR, 236 1931 Vol.XXXIV BLR, 236 1931 Vol.XXXIV BLR, 236 in the matter of Devidatta Ramniranjan Das Vs. Sriram Narayandas; AIR AIR AIR 1962, 1962, 1962, SC, 199 SC, 199 SC, 199 in the matter of Hira Lal Patni Vs. Sri Kali Nath; AIR 2003, Bom 331 AIR 2003, Bom 331 AIR 2003, Bom 331 in the matter of M/s. Tranasia Biomedicals Limited Vs. M/s. Revijay Clinical Laboratory & Hospital; and an unreported judgment in the matter of M/s. Shiv Silk Mills Vs. B.N. Khanna & sons & ors. decided on 8th December, 1996 by Mridul, J. to show that the leave in that case was granted after the admission of the suit to the Registrar. Thus, in short, the learned counsel for the appellant submitted that the mistake was committed by the earlier Advocate : 9 : as a result of which the proceeding was a nullity or nonest in law and, therefore, it will have to be deemed that the suit was not instituted and admitted in law and, therefore, it will have to be deemed that the application for leave under clause 12 has been made by the appellant at the stage of lodging or institution of the suit wherein this court can grant such leave to file a suit. The learned counsel also submitted before this court that the cases which hold that leave to institute a suit under clause 12 of the Letters Patent is required was necessary to be obtained prior to the admission of the suit have not considered the provisions of the Order IV Rule 1 and more specifically, sub-rule (3) which was inserted by the Legislature with effect from 1st July, 2002 and, therefore, in the light of sub-rule (3) Rule 1 of Order IV, CPC, those precedents cannot be said to be a good law in this respect. He, therefore, submitted that in the light of the above referred provisions of the CPC, it is necessary to consider the earlier law in this respect. 8. The learned counsel for the respondent opposed all the above referred arguments. He submitted that the reliance of the appellant on Order IV Rule 1 for non compliance of clause 12 of the Letters Patent is misconceived. He submitted that Order IV Rule 1 speaks : 10 : about as to when the suit shall be instituted. He further submitted that every suit shall be instituted by presenting a plaint to the court or such officer as it appoints in this behalf. According to him, sub-rule (2) of Rule 1 contemplates that the rules contained in Order VI and VII so far as they are applicable to the suit in question shall be complied and sub-rule (3) provides that the plaint shall not be deemed to be duly instituted, unless it complies with the requirements specified in sub-rules (1) and (2) of Rule 1 of Order IV. He submitted that the deeming effect which has been provided in sub-rule (3) of Rule 1 of Order IV is in respect of non compliance of the rules contained in Orders VI and VII. It does not speak about the non- compliance of clause 12 of the Letters Patent. He further submitted that the jurisdiction clause was drafted by the plaintiffs showing that the entire cause of action has arisen in Mumbai when, in fact, only a part of the cause of action has arisen in Mumbai and rest outside Mumbai. Thereby, the plaintiff himself has selected and pleaded a wrong pleading in respect of the jurisdiction in order to avoid attraction of clause 12 of the Letters Patent so far as obtaining of the leave is concerned. He, therefore, submitted that it was an intentional pleading on the part of the plaintiffs and his earlier Advocate to take the suit out of the : 11 : clutches of clause 12 leave and, therefore, they have drafted paragraph 48 of the plaint to show that the entire cause of action has arisen in Mumbai which does not require leave of this court. He further submitted that since Rule 1 of Order IV does not make any reference to the non compliance of clause 12, the deeming effect as desired in sub-clause (3) of Rule 1 cannot be given to the plaint in hand and, therefore, he submitted that the arguments of the learned counsel is misconceived. He submitted that it is well settled law under clause 12 of the Letters Patent that the permission or the leave to institute the suit cannot be granted by the court after the suit has been admitted. He submitted that after the suit is lodged and prayer for admission of the suit, there is a window left out for compliance of the objections wherein the plaintiffs could have complied with the objection in respect of the leave to be obtained under clause 12 and thus could have protected his suit. However, he submitted that once the said window is closed as a result of the admission of the suit, thereafter the said leave under clause 12 cannot be obtained. In support of his contentions he relied upon the following case laws - 4(1931) 34 BLR 236 4(1931) 34 BLR 236 4(1931) 34 BLR 236 in the matter of Devidutt Ramniranjandas Vs. Sriram Narayandas; (1933) 36 BLR 84 (1933) 36 BLR 84 (1933) 36 BLR 84 in the matter of Ramgopal Chunilal Vs. Ramsarup Baldevdas; (1986) MLJ 237 (1986) MLJ 237 (1986) MLJ 237 in the : 12 : matter of Union Bank of India Vs. Sunpac Corporation & ors.; (1989) MLJ, 124 (1989) MLJ, 124 (1989) MLJ, 124 in the matter of Rhoda Jal Mehta & ors. Vs. Homi Framroze Mehta & ors.; 1993 (1) BCR 1993 (1) BCR 1993 (1) BCR 501 501 501 in the matter of Noorjahan Vs. Sadrunnisa; 2004 2004 2004 (4) (4) (4) BCR 53 BCR 53 BCR 53 in the matter of Air India Limited Vs. Caribjet Inc.; 2005 (3) BCR 94 2005 (3) BCR 94 2005 (3) BCR 94 in the matter of Caribjet Inc. Vs. Air India Limited and lastly he on an unreported judgment in Summary Suit (Lodg.) No.213 of Summary Suit (Lodg.) No.213 of Summary Suit (Lodg.) No.213 of 1999 1999 1999 in the matter of Nath Steel Equipment Pvt. Ltd. Vs. Bangalore Heart Hospital. Lastly, he submitted that the order passed by the learned single Judge is just and proper and, therefore, the appeal deserves to be dismissed. 9. Clause 12 of the Letters Patent of Bombay reads thus : "12. 12. 12. Original jurisdictions as to suits Original jurisdictions as to suits Original jurisdictions as to suits - And We do further ordain that the said High Court of Judicature at Bombay, in the exercise of its ordinary original civil jurisdiction, shall be empowered to receive, try and determine suits of every description, if, in the case of suits for land or other immovable property such land or property shall be situated, or in all other cases if the cause of action shall have arisen, either wholly, or, in case the leave of the Court shall have been first obtained, in part, within the local limits of the ordinary original jurisdiction of the said High Court or if the defendant at the time of the commencement of the suit shall dwell or carry on business, or personally work for gain, : 13 : within such limits; except that the said High Court shall not have such original jurisdiction in cases falling within the jurisdiction of the Small Cause Court at Bombay, or the Bombay City Civil Court." 10. On a plain reading of clause 12 it appears that the suits which are within the jurisdiction of the Small Cause Court at Bombay or the Bombay City Civil Court cannot be entertained by the High Court on its original side though the cause of action for such a suit has wholly arisen within the limits of Bombay. The High Court of Judicature at Bombay shall be empowered to receive, try and determine suits of every description in case of suits for land or other immovable property, such a land shall be situated within the local limits of the ordinary original jurisdiction of the High Court or, if the defendant at the time of commencement of the suit shall dwell or carry on business or personally work for gain within such limits. Secondly, the High Court of Judicature at Bombay shall also be empowered to receive, try and determine suits of every description in all other cases (other than referred to in the above sentence) if the cause of action shall have arisen wholly within the local limits of the ordinary jurisdiction of the said High Court or if the defendant at the time of commencement of the suit shall dwell or carry on business or personally works for gain within : 14 : such limits and, thirdly, the High Court of Judicature at Bombay shall be empowered to receive, try and determine suits of every description in its ordinary original civil jurisdiction in all other cases (in addition to the cases referred above). On obtaining first the leave of the High Court, the High Court of Judicature at Bombay shall be empowered to receive, try and determine suits of every description if the cause of action shall have arisen in part within the local limits of ordinary original jurisdiction of the High Court or if the defendant at the time of commencement of the suit shall dwell or carry on business or personally work for gain within such limits. Thus, the above analysis will point out that while dealing with the original jurisdiction of the High Court of Bombay if the civil suit is in respect or the land or other immovable property situated within the area of Bombay then the High Court of Judicature at Bombay has jurisdiction to receive, try and determine such a suit and for such a suit, a prior permission or a leave to institute the suit is not necessary. If the suit is otherwise than the land or immovable property then for the purposes of jurisdiction, cause of action is to be taken into consideration and, in that circumstance, if the cause of action has taken wholly within the local limits of ordinary original jurisdiction of the High Court then : 15 : prior permission or leave to institute the suit is not required. However, if the suit is otherwise than the land or immovable property of which the cause of action has partly taken place within the local limits or the ordinary original jurisdiction of the High Court, then such a suit requires a prior permission or leave of the court to institute such a suit. 11. Thus, on a proper analysis what we find is that only in respect of the suits of which the cause of action has partly taken place within the ordinary original jurisdiction of the High Court requires a prior permission or a leave to institute the suit. All other suits excepting the suits which can be entertained by Small Cause Court or Bombay City Civil Court can be instituted straight away in the High Court which do not require prior permission or a leave to institute such suits. Thus, what emerges is that in respect of the suits wherein partly the cause of action has arisen within the ordinary original jurisdiction of the High Court, the High Court gets a jurisdiction to entertain such a suit only after the plaintiff seeks a leave of the High Court. In the absence of such a leave, the High Court does not possess jurisdiction to receive, try and determine such suits. In short, the vesting of jurisdiction depends upon the fact as to whether the : 16 : High Court has granted leave to institute such a suit. If the High Court grants leave to institute the suit of such nature, the High Court gets a jurisdiction to entertain and decide the said suit. However, if the High Court refuses such leave, such a suit cannot be entertained and decided by the High Court. 12. In view of the submission of the learned counsel for the appellant, the following provisions of the CPC are required to be considered along with the above referred clause 12 of the Letters Patent. Rule 1 of Order IV of the CPC reads thus: "1. 1. 1. Suit to be commenced by plaint Suit to be commenced by plaint Suit to be commenced by plaint - (1) Every suit shall be instituted by presenting a [plaint in duplicate to the Court] or such officer as it appoints in this behalf. (2) Every plaint shall comply with the rules contained in Order VI and VII, so far as they are applicable. (3) The plaint shall not be deemed to be duly instituted unless it complies with the requirements specified in sub-rules (1) and (2)." Sub-rule (3) is inserted with effect from 1st July, 2002 under the Civil Procedure Code Amendment Act of 1999. 13. The relevant provisions from the Original Side Rules are as follows : : 17 : "45. 45. 45. Plaint to