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

2. The appellant is a partnership firm of which the other appellants are its partners. By the impugned order, the Division Bench has allowed theapplication for revocation of leave which had been granted under Clause 12 of the Letters Patent 1865 to the appellants to file a suit against the respondent in the Calcutta High Court. Leave was revoked on the ground that no part of the cause of action as pleaded in the plaint had arisen within the original jurisdiction of the Court. The plaint was consequently directed to be taken off the file and returned to the appellants for presentation to the Court having jurisdiction to entertain the suit.3. The suit had been filed in 1995 by the appellants against the respondent alleging that the appellant had supplied goods pursuant to an agreement between the appellant No. 1 and a German Company, named Kleinsorge (hereinafter referred to as thePayment for the goods supplied was to be made by way of letter of credit. The letter of credit was accordingly issued by the respondent at the instance of the Company in favour of the appellant No.1 for an amount of DM 41,06,080. The goods were supplied by the appellants to the Company. The plaint goes on to state (wherein the appellants are referred to asnd the respondent as8. The said letter of credit was sent by the defendant to the UCO Bank, 4 & 4/1, Red Cross Place,001 within the aforesaid jurisdiction and the defendant advised the UCO Bank requesting the UCO Bank to advise the said credit to the plaintiff No. 1 without adding its confirmation. In other words, the UCO Bank was acting as the Advising Bank only.11. On 15th September 1992 and 30th October, 1992, the plaintiffs presented the documents stipulated in the aforesaid letter of credit at the UCO Bank, 4 and 4/1, Red Cross Place,001 within the aforesaid jurisdiction.12. The plaintiff state that the plaintiffs presented the entire set of documents relating to the shipped goods as required by the aforesaid letter of credit and the said documents were forwarded by the Advising Bank to the issuing Bank being the defendant. The defendant received the said documents in Germany, outside the aforesaid jurisdiction. The plaintiffs reasonably expected to receive the payment under the said letter of credit within a short period of time.There was no discrepancy in the said documents and till date, no complaint has been received from either the defendant or the Advising Bank or the purchaser in that regard. Payment under the said letter of credit was to be made at the office of the UCO Bank at 4 & 4/1, Red Cross Place,001, within the aforesaid. On the allegation that inspite of request and demand, the respondent did not make any payment under the letter of credit, the appellants filed the suit for an amount of Rs. 7,01,670.36, further interest and other reliefs after obtaining leave under Clause 12 of the Letters Patent.5. Clause 12 of the Letters Patent which applies to the original jurisdiction of the Calcutta High Court empowers the High Court in exercise of its ordinary civil jurisdiction to receive, try and determine suits,, 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. After the suit was filed an application was presented by the appellants under Chapterof the Original Side Rules which provides for summary decision in suits to recover a debt or a liquidated demand. Rule 6 of Chapterprovides that unless the defendant satisfies the Court by way of affidavit or otherwise that he has a good defence to the claim on its merits or discloses such facts as may be deemed sufficient to entitle him to defend, then the Court may make an order refusing leave to defend and may forthwith pronounce judgment in favour of the plaintiff. If a triable issue is disclosed by the defendant then under Rule 9 leave to defend may be granted unconditionally or subject to such terms as to giving security, or time or mode of trial or otherwise as the Judge may think fit.7. On 24th December, 1997 a learned Single Judge of the Calcutta High Court held that theaffidavit in opposition to the application under Chapterdisclosed a prima facie defence. As such unconditional leave to defend was granted. Directions were given for filing of a written statement, disclosure of documents and the trial of the suit. The written statement was ultimately filed by the respondent after extensions of time were sought and obtained, on 31st July 1998. The respondent filed its documents on 10th August 1999 and the suit has been ready for hearing since that date.8. On 30th August 1999, the respondent made an application for revocation of leave under Clause 12 of the Letters Patent on the ground that no part of 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 thecontention that the letter of credit was to be honoured by paymentnd 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 ‘atwas 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.

Court's reasoning:
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 v. Galappa , 1982 (3) SCC 487 ; Ritu Sachdev v. Anita Jindal , AIR 1982 Cal 333  and Secretary of State v. Golabrai Paliram , AIR 1932 Cal 146 .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.On the role of UCO Bank and the validity of the presentation, the respondent has relied upon passages fromLaw of Banking as well as the decision of this Court in Federation Bank Limited v. 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 toSale 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 thejurisdiction 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 theapplication for revocation of leave.