Case: Indian Mineral &amp; Chemicals Co. &amp; Others Vs. Deutsche Bank

the cause of action arose within the jurisdiction of the Calcutta High Court. The learned Single Judge dismissed the application.9. The Division Bench accepted the submission of the respondent that although the pleadings in the plaint showed that the Calcutta High Court had jurisdiction to entertain the suit, the averments in the plaint were not borne out by the letter of credit which was annexed to the plaint. The Division Bench also accepted the respondents contention that the letter of credit was to be honoured by payment "at sight" and that if the terms and conditions of credit were fully complied with, the respondent would credit the account of UCO Bank, Dusseldorf Branch upon presentation of the documents indicated in the letter of credit. Payment at sight was therefore to be made at Dusseldorf and not in Calcutta as claimed in the plaint and as such no part of cause of action had arisen within the jurisdiction of the High Court. 10. We are of the opinion that the learned Judges erred in revoking leave under clause 12 of the Letters Patent in view of the clear assertions made in the plaint and the assertions in a plaint must be assumed to be true for the purpose of determining whether leave is liable to be revoked on a point of demurrer. [See Abdulla bin Ali vs. Galappa 1982 (3) SCC 487 ; Ritu Sachdev vs. Anita Jindal AIR 1982 Cal 333 and Secretary of State vs. Golabrai Paliram AIR 1932 Cal 146 ] In the plaint the jurisdiction of the High Court was claimed on the ground that: 1) UCO Banks branch which was within the Courts jurisdiction intimated the plaintiffs that the letter of Credit had been issued by the Respondent; 2) The documents were presented by the plaintiffs to the said branch of UCO Bank; and 3) Payment was to be received by the Plaintiffs from the said branch of UCO Bank. 11. The Division Bench could have held that what was alleged to be a part of the cause of action did not form part of the cause of action at all. This the Division Bench did not do. It was not open to the Division Bench to come to a contrary factual conclusion in respect of any of these three grounds. The appeal is, therefore, liable to be allowed on this ground alone. 12. Before us the respondent has submitted that even though the documents were presented by the appellants within the jurisdiction of the Calcutta High Court as claimed by it, there was no authorisation in favour of UCO Bank to accept presentation of the documents. It is said that the UCO Bank was only an advising bank and it was neither the confirming nor the negotiating bank and the therefore there was no valid presentation of documents at Calcutta. The respondent further submitted that the letter of credit provided for payment at sight and that was not conditional upon receipt of the documents by UCO Bank in Calcutta but by its branch of Germany. Finally it is said that the letter of credit was issued in Germany, that the entire transaction took place in Germany, that the documents and witnesses were present in Germany and that, the balance of convenience was in favour of the suit being tried at Germany. 13. On the question of balance of convenience, the Learned Single Judge had, after considering the facts, held that it would not be inconvenient for the respondent to defend the suit from its Branch Office in Calcutta. On the other hand, the appellants would have to incur huge expense and that too in Foreign Exchange in the event the suit was prosecuted in Germany especially as the appellants did not have any office in Germany. The Division Bench did not consider this aspect at all. Speaking for ourselves, we see no reason to interfere with the conclusion arrived at by the Learned Single Judge. 14. On the role of UCO Bank and the validity of the presentation, the respondent has relied upon passages from Pagets Law of Banking as well as the decision of this Court in Federation Bank Limited vs. V.M. Jog Engineering Ltd. and ors. (2001) 1 SCC 663 to contend that there was no valid presentation by the appellant at the counters of UCO Bank, Calcutta. This has been countered by the appellant who has referred to Benjamins Sale of Goods. What the role of UCO Bank in fact was is a mixed question of law and fact. At present, since we have to determine the courts jurisdiction ex facie the plaint, we cannot proceed on the assumption that UCO Bank was not authorised to receive the documents or that the payment under the Letter of Credit was to be made, as far as the appellants are concerned, at Dusseldorf. Ultimately it will depend upon whether UCO Bank was acting for the Respondent or the appellants. All these matters will have to be decided on evidence and cannot be decided on an application for revocation of leave under Clause 12 of the Letters Patent. 15. The observations of Rankin CJ in Secretary of State vs. Gulab Rai Pali Ram (supra) correctly represents the law as to how the Court should approach an application for revocation of leave: "I do really protest against questions of difficulty and importance being dealt with by an application to revoke the leave under Cl. 12, Letters Patent and to take the plaint off the file. Normally it is well settled that the proper way to plead to the jurisdiction of the Court is to take the plea in the written statement and as a substantive part of the defence. Except in the clearest cases that should be the course". (p. 147) 16. In the circumstances, we are of the view that the learned Single Judge was justified in rejecting the respondents application for revocation of leave. The Division Bench should not have allowed the respondents appeal.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]10. We are of the opinion that the learned Judges erred in revoking leave under clause 12 of the Letters Patent in view of the clear assertions made in the plaint and the assertions in a plaint must be assumed to be true for the purpose of determining whether leave is liable to be revoked on a point ofThe Division Bench could have held that what was alleged to be a part of the cause of action did not form part of the cause of action at all. This the Division Bench did not do. It was not open to the Division Bench to come to a contrary factual conclusion in respect of any of these three grounds. The appeal is, therefore, liable to be allowed on this ground alone.On the question of balance of convenience, the Learned Single Judge had, after considering the facts, held that it would not be inconvenient for the respondent to defend the suit from its Branch Office in Calcutta. On the other hand, the appellants would have to incur huge expense and that too in Foreign Exchange in the event the suit was prosecuted in Germany especially as the appellants did not have any office in Germany. The Division Bench did not consider this aspect at all. Speaking for ourselves, we see no reason to interfere with the conclusion arrived at by the Learned Singlepresent, since we have to determine the courts jurisdiction ex facie the plaint, we cannot proceed on the assumption that UCO Bank was not authorised to receive the documents or that the payment under the Letter of Credit was to be made, as far as the appellants are concerned, at Dusseldorf. Ultimately it will depend upon whether UCO Bank was acting for the Respondent or the appellants. All these matters will have to be decided on evidence and cannot be decided on an application for revocation of leave under Clause 12 of the Letters Patent.In the circumstances, we are of the view that the learned Single Judge was justified in rejecting the respondents application for revocation of leave. The Division Bench should not have allowed the respondents appeal.