CR No.7179 of 2008 1 IN THE HIGH OF PUNJAB AND HARYANA AT CHANDIGARH CR No.7179 of 2008 (O&M) Date of Decision: 27.07.2010 Deutsche Bank AG. ..Petitioner Vs. M/s Nahar Industrial Enterprises Ltd. ..Respondent Coram: Hon'ble Mr. Justice Vinod K.Sharma Present: Mr.Ashok Aggarwal, Sr. Advocate, with Mr.Mukul Aggarwal, Advocate, for the petitioner. Mr.Arun Palli, Sr. Advocate, with Mr. Akshay Bhan & Mr.KVS Kang, Advocates, for the respondent. --- 1. Whether Reporters of Local Newspapers may be allowed to see the judgment? 2. To be referred to the Reporters or not? 3. Whether the judgment should be reported in Digest? --- Vinod K.Sharma,J. (Oral) The petitioner has invoked the supervisory jurisdiction of this court under Article 227 of the Constitution of India to challenge the order dated 10.12.2008 passed by the learned trial court vide which application CR No.7179 of 2008 2 moved by the petitioner under Order 7 Rules 10 & 11 of the Code of Civil Procedure (for short the Code) for rejection of the plaint was dismissed. The plaintiff/respondent filed civil suit No.146 of 2008 titled M/s Nahar Industrial Enterprises Limited Vs. Deutsche Bank AG, seeking a decree of declaration that there is no EURO/USD Enhanced Target Profit Forward Transaction dated 29.6.2007 nor is there any interest Rate Swap Transaction dated 11.7.2007 (collectively referred to as the Transactions) between the parties. It was the case of the plaintiff/respondent, that the defendant/petitioner is not bound by the transactions. Consequential relief sought by the plaintiff/respondent was, that the defendant/petitioner was not entitled to claim anything from the plaintiff/respondent under the transactions which never materialized. Consequential relief of permanent injunction was also sought restraining the defendant, their agents, representatives, employees, officers from taking any action or initiating any proceedings or from recovering any amount from the plaintiff company on the basis of said transactions. The petitioner/defendant on notice, appeared and filed an application for rejection of the plaint on the averments, that the suit filed by the plaintiff was patently false as the transactions were and still valid and were acted upon by the defendant and the plaintiff at all times and therefore, were binding and enforceable. Basic ground on which the petitioner sought rejection of plaint was, that the civil court at Ludhiana had no jurisdiction to entertain and try the present suit for the reasons, that the suit filed is not CR No.7179 of 2008 3 maintainable under section 20 of the Code as the suit by the plaintiff can be instituted in a court within the local limits of which a defendant actually carries on business and/or whole or part of cause of action arose. Plea raised was, that the defendant/petitioner was a company incorporated in Frankfurt under the laws of Federal Republic of Germany and was having its registered head office at Frankfurt and was operating in India from its main office at DB House, Hazarimal Somani Marg, Fort, Mumbai, within the jurisdiction of High Court of Bombay. Business with the plaintiff/respondent was transacted through its Treasury Department, situated in Mumbai within the jurisdiction of High Court of Bombay as per admission made in para No.17 of the plaint. The case pleaded was, that the jurisdiction of the civil court at Ludhiana was claimed on the ground that the plaintiff had its office at Ludhiana, whereas the cause of action has arisen in Mumbai and there was no transaction, whatsoever, in Ludhiana. Claim of the petitioner was, that it has no branch office within the jurisdiction of the civil court at Ludhiana. It was claimed that the transactions between the parties were entered into at Mumbai and therefore, no cause of action accrued at Ludhiana. The case further pleaded in the application was, that the plaintiff/respondent had provided to the petitioner/defendant at its Mumbai office to assure the defendant/petitioner qua the validity of the transactions and underlying. A signed Declaration- cum-Undertaking dated 6.7.2007, inter alia to represent, that transactions did not involve any contravention of Foreign Exchange Management or Reserve Bank of India Regulations. Board resolution was produced on CR No.7179 of 2008 4 record as Annexure-B. Thus, it was claimed that transactions were entered into at Mumbai. It was further pleaded that all payments under the transactions were made to the plaintiff at Mumbai and that the plaintiff/respondent corresponded with the defendant/petitioner at Mumbai office only. Second contention pleaded was, that the suit was barred under sections 17 & 18 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (for short DRT Act) read with section 34 of the Securitization and Reconstruction of Financial Assets Enforcement of Security Interest Act, 2002. Suit was also claimed to be barred under section 41 (b) of the Specific Relief Act, 1963, as the plaintiff/respondent could not seek permanent injunction restraining the defendant/petitioner, their agents, representatives, employees, officers etc. from taking any action or initiating any proceedings for recovery. The application was contested. The learned trial court rejected the application on the ground, that as per pleading in the plaint, the initial negotiations between the parties were carried out at Ludhiana but no contract materialized. The learned trial court held, that the plaintiff/respondent had office at Ludhiana and therefore, the Ludhiana court had jurisdiction as the dispute did not fall within the jurisdiction of Debt Recovery Tribunal (for short the DRT) and rejected the application. Mr.Ashok Aggarwal, learned senior counsel appearing on CR No.7179 of 2008 5 behalf of the petitioner challenged the impugned order by pleading, that the plea raised by the petitioner that the part of relief claimed was barred under section 41(b) of the Specific Relief Act has not been taken note of and therefore, at least this part of the plaint was liable to be rejected. In support of the contention, learned senior counsel for the petitioner placed reliance on the judgment of Hon'ble Delhi High Court in the case of Vasu Tech Ltd. Vs. Ratna Commercial Enterprises Ltd. & Anr. AIR 2008 Delhi 122, wherein Hon'ble Delhi High Court was pleased to lay down as under:- “18. In these circumstances, while allowing the application of the defendants under Order 7 Rule 11 CPC limited to the relief sought by the plaintiff in prayer (A) in the plaint, 1-A No.3681/2008 whereby the defendant claims that the entire suit be dismissed as infructuous, is disposed of with the direction that the following preliminary issues be framed in the suit for arguments.” However, on consideration, I find no force in the contention raised by the learned senior counsel for the petitioner. This court in CR No.2590 of 2009 ICICI Bank Ltd. Vs. M/s Garg Acrylics Ltd. & Ors. , decided on 9.10.2009, was pleased to record as under:- “......There is no provision of law which debars the plaintiffs/respondents to file a suit for declaration and CR No.7179 of 2008 6 injunction as per the provisions under Sections 34 & 38 of the Specific Relief Act. In case the suit for injunction is liable to be dismissed under Section 41(b) the said suit will be dismissed on merits at the time of final adjudication. Whether the plaintiffs/respondents can be granted an injunction restraining the defendant/petitioner from instituting or prosecuting any proceedings in accordance with law on the basis of their civil rights accruing in pursuant to the Master agreement cannot be determined, at this stage, by this Court or by a Court while deciding the application under Order 7 Rules 10 & 11 CPC.” The contention raised by the learned senior counsel for the petitioner deserves to be rejected also for the reason, that the suit filed by the plaintiff/respondent is not to restrain the defendant/respondent from instituting or prosecuting any proceedings in the court not subordinate to that from which injunction is sought, but is a suit for declaration with a consequential relief of injunction restraining the defendant/respondent from effecting any recovery on the basis of alleged contract. Mere use of words restraining the “defendants, their agents, representatives, employees, officers etc. from taking any action or initiating any proceedings or from recovering any amount from the plaintiff company on the basis of the alleged contracts” cannot lead to the conclusion that restraint is sought qua judicial proceedings as contended. CR No.7179 of 2008 7 Even otherwise, these averments have been made only in prayer clause and it is for the court at the time of final adjudication to see what relief can be granted. This relief claimed, therefore, does not fall under the provisions of Order 7 Rules 10 and 11 of the Code, at this stage to seek the rejection of the plaint. The plaintiff can seek a consequential relief in a suit for declaration to restrain recovery by forcible means and mere use of certain words can not be read to hold that a part of plaint is liable to be rejected, as contended. Reliance of the learned senior counsel for the petitioner on the judgment of Hon'ble Supreme Court in the case of Cotton Corporation of India Limited Vs. United Industrial Bank Limited and Ors. AIR 1983 SC 1272, also cannot advance the case of the petitioner as the Hon'ble Supreme Court, was not considering the question of rejection of plaint in view of prayer made in the suit, but was interpreting Section 41(b) of the Specific Relief Act. It is well settled law, that it is for the court at the time of final adjudication to see as to what relief the plaintiff is entitled to. Learned senior counsel thereafter contended, that the learned trial court has misread the provisions of Section 20 of the Code to hold, that the civil court at Ludhiana had jurisdiction to entertain the suit merely because the plaintiff has its office at Ludhiana. There is force in the contention, that plaintiff cannot claim jurisdiction on account of residence of the plaintiff, as the jurisdiction vests with the court on cause of action or part of cause of action or where the defendant resides. CR No.7179 of 2008 8 However, the impugned order cannot be set aside, on this ground as the learned trial court has also held, that as the part of cause of action arose to the plaintiff/respondent at Ludhiana, therefore, the court had the jurisdiction. This finding was supported by Mr.Arun Palli, learned senior counsel appearing on behalf for the respondent/plaintiff by referring to paras 3, 16 and 17 of the plaint which read as under:- “3. Sometime in February, 2007, one Mr.Kunal Gaind of the defendant bank visited the office of the plaintiff company at Ludhiana and approached Mr.Dinesh Gogna, one of the Directors of the plaintiff company and represented that defendant bank was offering various products by way of foreign exchange derivative transactions to manage the foreign exchange risk of the plaintiff company. Mr.Kunal Gaind also assured the plaintiff that it would recommend the transactions for which the plaintiff company would not have to make any payments and there were to be guaranteed returns. 16. Cause of action accrued to the plaintiff against the defendants on and from 1.4.2008, when the alleged claim was made by the defendants and thereafter when they wrote letter dt.17.4.2008 reasserting their false claim and finally from a week back when the defendants did not withdraw their threats and continue with the same and continue visiting the plaintiff company's office at Ludhiana and continue extending threats. CR No.7179 of 2008 9 17. This Hon'ble Court has got the jurisdiction to entertain the present suit, as the cause of action has accrued to the plaintiff against the defendants at Ludhiana, the threats are being advanced to the plaintiff at Ludhiana, in its office, within the jurisdiction of this Hon'ble Court.” Reading of the above mentioned paragraphs clearly shows that part of cause of action accrued to the plaintiff/respondent at Ludhiana, specially in view of the fact, that for deciding the application under Order 7 Rules 10 & 11 of the Code the court is required to see the pleadings in the plaint and is not to look into the defence of the defendant/respondent except in very exceptional cases. The very fact that averments have been made that transactions and discussions were held at Ludhiana, and further that letter dated 17.4.2008 raising false claim was received at Ludhiana, would give Ludhiana court jurisdiction, as it can be safely said that part of cause of action accrued to plaintiff/respondent at Ludhiana. Even otherwise, the averments made in paras No.3, 16 and 17 of the plaint referred to above, leave no manner of doubt, that as per pleaded case, part of cause of action had accrued to the plaintiff/respondent at Ludhiana, therefore, the civil court was right in holding that the plaint was not liable to be rejected for want of territorial jurisdiction. It may also be noted that the dispute raised does not fall within the jurisdiction of DRT, as the question to be determined is regarding the maintainability of the contract qua which the declaration can only be given CR No.7179 of 2008 10 by the civil court. This is not a case of recovery to be decided by the DRT. For the reasons stated, finding no merit in this revision petition, it is ordered to be dismissed but with no order as to costs. The learned trial court while dismissing the application, had permitted the petitioner/defendant to file written statement by 7.01.2009 . Keeping in view that the order was stayed by this court, the petitioner/defendant is now granted one month's time to file the written statement from today. This shall, however, be treated to be the last opportunity for filing of written statement. Revision dismissed. 27.07.2010 (Vinod K.Sharma) rp Judge