Case: Baldota Brothers Vs. Libra Mining Works

The material facts relevant to the question raised are as follows : The appellants agreed to purchase from the respondents iron ore under four contracts. They also entered into three contracts with the respondents to act as their selling agents, and one of these contracts was dated August 10, 1956, and the other two were of August 30, 1956. All the said contracts expressly provided that all suits and legal proceedings in respect of disputes arising out of or in relation to the said contracts were to be instituted in Courts in Bombay City only. On January 23, 1957, the respondents filed a suit O. S. No. 16 of 1957, in the Kakinada Court against the appellants for the recovery of a sum of Rs. 5,150 alleged to be balance due under the contract dated August 10, 1956, along with interest thereon, and sum of Rs. 46,562 alleged to be balance due for goods supplied under the contract dated October 17, 1956. It may be mentioned at this stage that there is a controversy between the parties as regards the contract dated October 17, 1956, the respondents alleging that the parties entered into a new contract on the said date in cancellation of that dated August 30, 1956, and the appellants stating that the alleged contract was not in cancellation of the earlier contract of August 30, 1956 but was only to confirm the terms of the earlier contract with a concession shown to the respondents enabling them to supply only 3,000 tons of iron ore instead of 7,000 tons. The said suit was filed on January 23, 1957. To that suit, the appellants, their partners and the Manager of their firm were made parties. Notices were served on them on August 8, 1957. At first there was an order for ex parte hearing, but later on the ex parte order was set aside. The appellants (defendants in the Kakinada Court) filed theiron September 17, 1957, denying inter alia, the existence of the contract dated October 17, 1957, and also pleading that the Kakinada Court had not jurisdiction to entertain the suit. On November 25, 1957, issues were framed, and one of them was whether the Kakinada Court had jurisdiction to entertain the suit. On January 21, 1958 i.e., one year after the institution of the suit in the Kakinda Court, the appellants filed a suit, Suit No. 62 of 1958, on the Original Side of the Bombay High Court claiming to recover a sum of Rs.from the respondents. In that suit, the appellants claimed the following four items, totalling a sum of Rs,The first item is alleged to represent the amount settled as payable by the respondents to the appellants on the settlement of the disputes between them in regard to the aforesaid contracts. Items 2 and 3 are the amounts alleged to have been paid by the appellants for and one behalf of the respondents to the persons who purchased goods of the respondents towards destinational shortage. The last item is said to be the amount paid by the appellants to the clearing agents of the respondents firm by honouring a hundi drawn on the respondents by the clearing agents. The Kakinda suit was posted for hearing on September 12, 1958; but the appellants took out a notice of motion in the Bombay High Court on September 2, 1958 and obtained interim injunction restraining the respondents from proceeding with the Kakinada suit pending the disposal of the suit in the Bombay High Court. In the affidavit filed in support of the notice of motion the appellants alleged that the whole cause of action arose in Bombay, that the Kakinda Court had no jurisdiction to entertain and try the suit as it was agreed to between the parties that disputes under the contracts should be decided only in Courts in the Bombay City and that the whole object of the respondents was to drag the appellants to the Kakinda Court and thereby defeat and delay the payment of the dues to the appellants. They also alleged therein that the proceedings adopted by the respondents were vexations, oppressive and were in abuse of the process of the Court. The respondents filed a counter stating that theof the suit in the Bombay High Court and that in the Kakinada Court were totally different, that the conduct of the appellants in obtaining interim injunction after the date of hearing was fixed in the Kakinada Court at their request was dishonest and that the respondents were "trying all sorts of device" to prevent the disposal of the Kakinada suit. In support of their allegation that the Kakinada Court had jurisdiction to try the suit, they relied upon a letter dated October 17, 1956, whereunder, it was said, a new contract was entered into between the appellants and the respondents in respect of 3000 tons of iron ore, and they further alleged that the Bombay Court had no jurisdiction in respect of the said goods as the entire cause of action arose only within the jurisdiction of the Kakinada Court. Mody J., who heard the application, by an order dated October 25, 1958, dismissed it without recording any reasons for doing so. We are informed by the learnedthat the well established practice of the Bombay High Court on the Original Side has been ordinarily not to give any reasons for the dismissal of such applications, presumably because it was held by the Bombay High Court that no appeal lay against an order dismissing a petition for injunction on the ground that such orders did not come within the meaning of the word "judgment" used in the Letters Patent. As no appeal lay under the Letters Patent, the appellants directly approached this Court and obtained special leave under Art. 136 of the Constitution.

Reasoning:
There is therefore no distinction in the scope of the exercise of the power under Art 136 of the Constitution at the stage of application for special leave and at the stage when the appeal is finally disposedtherefore, hold that unless this Court is satisfied that the appeal raises a question that justifies the exercise of its discretionary jurisdiction under Art. 136 of the Constitution, the appeal is liable to be dismissed without further investigation into the merits of theis an underlying fallacy in this argument. This appeal is not against the final decree in the suit, but only against the interlocutory order in an application for injunction pending the disposal of the suit. The Bombay High Court did not decide, either expressly or by necessary implication, that the Kakinada Court had jurisdiction to decide the suit. That plea was taken in the Kakinada suit and a specific issue was raised thereon, and the said issue falls to be decided on oral and documentary evidence. If the Kakinda Court holds that it has no jurisdiction, that suit will be dismissed. If, on the other hand, it comes to the conclusions that it has jurisdiction and decides the case on merits, it will have done so only on its finding that the suit contract is that entered into between the parties on October 17, 1956, and that the said contract does not contain a clause conferring sole jurisdiction on the Bombaycannot, therefore, appreciate the argument that the Bombay Court, by refusing to issue an injunction, has decided on the rights of parties, though, if the contention of the appellants is ultimately upheld by the Kakinada Court, they may be put to somethe present case, though the learned Judge has not given any reason for his order, the affidavits filed by the parties disclose that a substantial question of fact falls to be decided for sustaining the plea of exclusive jurisdiction of the Bombay High Court, and that the application was filed at a belated stage after the Kakinada suit was ripe for hearing. The appellants may have a good case on merits, on which we do not, and cannot, express any opinion, for the question falls to be decided on evidence, and it may be also that they have good reason to account for the long delay in filing their application. But the learned Judge must have taken into consideration all the relevant circumstances, and, in exercise of his discretion, refused to give an injunction. It is not possible to say that under such circumstances, the question raised in one that attracts the discretionary jurisdiction of this Court. We understand from our brother, Sarkar, J., who was one of the members of the bench which granted leave, that special leave was granted in this case as the order of Mody J., assumed the correctness of the proposition that a chartered High Court can issue an injunction restraining the disposal of a suit filed earlier in another Court in or outside its territorial jurisdiction, notwithstanding the fact that the subsequent suit attracts the provisions of S. 10 of the Code of Civil Procedure and the said point is of sufficient importance. That point does not arise now, as we have held that even on the assumption that the Bombay High Court has jurisdiction to issue an injunction, the order made in exercise of its jurisdiction is purely a discretionary one.