Radhey Lal Murarka vs Diamond Sugar Mills Ltd.

Chakravartti, C.J.—This is an appeal by one of the two Defendants in a suit pending on the Original Side of this Court against an order of Bose, J., dated July 3, 1953, by which the learned Judge dismissed the Appellant''s application for revocation of the leave granted to the Plaintiffs in the suit under Clause 12 of the Letters Patent. The grounds upon which the Appellant challenges the order of the learned Judge will be stated a little later.

The suit was brought by two companies, one of which is the Diamond Sugar Mills, Limited, which may be called the principal company, and another, the Murarka and Sons, Limited, which is a private limited company, acting as managing agents of the first Plaintiff. The Defendants in the suit were the Appellant, Radheylal Murarka, and another person, named Chini Lall Murarka, who were alleged to have been managing directors of the second Plaintiff, Murarka and Sons, Limited, at all material times. The Appellant was also alleged to have been a director of the first Plaintiff. The real Plaintiff, however, was the mill company, because it is stated in para. 16 of the plaint that the second Plaintiff had been joined only in order that the Court might adjudicate upon all the questions involved in the suit completely and effectually in the presence of all necessary parties.

The suit was for the recovery of a sum of Rs. 16,81,776-1-6 pies, for the return of certain goods and articles, or in the alternative, for a decree for Rs. 5,00,000 as the price thereof; if Necessary, accounts and certain other ancillary reliefs. Briefly stated, the case of the Plaintiffs was that the Defendants had advanced or given credit for large sums of money, amounting to over Rs. 10,00,000, to various firms which were really their benamdars, that they had also advanced large sums to certain agencies opened by them, and, lastly, that they had removed large quantities of stores, electric fittings, furniture and other articles. It was staled that both the Defendants carried on business and otherwise personally worked for gain within the original jurisdiction of this Court, but it was also stated that they occupied a fiduciary position in relation to the Plaintiffs and were liable to account in Calcutta where the registered office of the mill company was situated.

The suit was filed on November 26, 1947, and summons was served on the Appellant on January 6, 1948. Thereafter, the Appellant made an application for a stay of the suit on the ground that the matters in dispute between the parties had to be referred to arbitration in accordance with a certain agreement, but it appears to have transpired in the course of the hearing of that application that no such agreement could be traced. Nevertheless, the parties agreed in the suit itself that the matters in controversy be referred to arbitration and an order to that effect was made on July 29, 1948. Unfortunately, the reference to arbitration came to nothing. The first arbitrator was Mr. Sarat Chandra Bose who died before the arbitration could be completed and then there was a fresh reference to the arbitration of Sir Badridas Goenta. That reference also proved in fructuous and after the time for making the award had expired, the Plaintiffs made an application to the Court for superseding the arbitration. The application was granted and the Defendants in the suit, including the Appellant, were directed to file their written statements within a fortnight. No written statements were filed within the time granted and on May 5, 1953, the Appellant applied for an extension of time to file his written statement. A fortnight''s time was granted, but instead of filing his written statement, the Appellant took out a Master''s summons on May 18, 1953, in respect of the application out of which the present appeal has arisen. The extended time granted for filing written statement expired on May 20, 1953.

The Appellant''s application was, as I have already stated, an application for revocation of the leave granted under Clause 12 of the Letters Patent. That such leave was granted appears from an endorsement on the plaint itself signed by a learned Judge of this Court, but beyond the endorsement, there is no other material before us as regards the grounds actually made out before the learned Judge on the basis of which the order granting the leave was made. We were informed in the course of the argument that although it had been decided by my learned brother as 1ong ago as August 30, 1950, that an application for leave under Clause 12 of the Letters Patent should be made directly before a learned Judge sitting in Chambers, the old practice of the Master drawing up an endorsement and presenting it to a Judge for his signature as a matter of course had been continuing. If so, the position is unsatisfactory in the extreme and ought to be set right without any further delay. The leave contemplated by Clause 12 of the Letters patent is a leave granted by the Court and it is obviously an order which is required to be made by a Judge in the exercise of his judicial discretion and in the course of the performance by him of his judicial duties. It is, therefore, plainly necessary that it must be a Judge and no one else who should consider an application for such leave and who should apply his mind and make the appropriate order after he has done so in accordance with such exercise of his discretion as appears to him to be called for. What is said to be going on instead, however, is that the Master draws up an endorsement on some representation made by the solicitor presenting the plaint and thereafter a Judge of the Court signs the endorsement almost mechanically. The practice is unsatisfactory in the extreme; but if an endorsement does bear the signature of a Judge, it is impossible to hold judicially in any particular case that he did not exercise his own discretion before he appended his signature to the endorsement drawn up by the Master. That being so, however undesirable the practice prevailing on the Original Side in this regard may be, we have no materials before us on which it could be held that no discretion had, in fact, been exercised by a learned Judge of the Court in the present case. We must, therefore, proceed on the footing that the leave was in fact granted by a Judge of this Court in the proper exercise of his discretion, irrespective of whether he was right or wrong, particularly since the Appellant did not make any case before the learned Judge below that the procedure followed in asking for and granting the leave had not been a proper procedure and that, in fact, no leave had been granted by a Judge on any proper application made to him.

Before the learned Judge below it appears to have been contended that there was no scope for any leave under Clause 12 of the Letters Patent in the present case, inasmuch as the plaint was representing the Defendants as persons carrying on business within the jurisdiction of this Court and inasmuch as that fact would be sufficient for conferring the necessary jurisdiction, so that no jurisdiction created by leave granted under Clause 12 was required. The only other ground urged appears to have been the usual one namely, that the balance of convenience was in favour of the suit being tried not by this Court, but by some Court at Gorakpur where the Defendants were said to be residing and where all the necessary evidence was said to be situated. The learned Judge repelled both the contentions of the Appellant. He held, in the first place, that there was nothing in Clause 12 of the Letters Patent to preclude a Plaintiff from alleging that the Defendants resided within the jurisdiction of the Court and at the same time asking for leave under Clause 12 of the Letters Patent on the ground that a part of the cause of action also had arisen within the Court''s jurisdiction. As regards the second contention, the learned Judge held that the question of the balance of convenience could not be decided at the present stage, inasmuch as the facts upon which that question depended were themselves in dispute. Incidentally, he pointed out that while the Appellant was contending in the present case that it would cause him great hardship and inconvenience if this suit was tried by this Court, he himself had brought a number of suits against a number of parties in this very Court, including one against the very Plaintiffs of the present suit. By way of giving further grounds in support of his conclusion that the Appellant''s application could not succeed, the learned Judge referred to the delay in making the application and to the circumstance that by causing the matters in controversy in the suit to be referred to arbitration, the Appellant had really made use of the existence of the suit and thereby debarred himself from challenging the propriety of the leave granted under Clause 12. The learned Judge also pointed out that revocation of the leave could serve no useful purpose in the facts of the present case, inasmuch as the suit would have to proceed, in any event, in view of the allegation that both the Defendants were carrying on business within the jurisdiction of the Court. On those various grounds the learned Judge rejected the Appellant''s application.

Before us Mr. Das urged three points. He argued, in the first instance, that it ought to be held on a true construction of Clause 12 of the Letters Patent that if a Plaintiff made a case that the Defendants were residing or carrying on business within the original jurisdiction of this Court, he could not at the same time be permitted to allege that a part of the cause of action had arisen within the Court''s jurisdiction and, on the basis of such an allegation ask for leave under Clause 12. It was contended, in the second place, that in any event, no alternative case of a part of the cause of action having arisen within the jurisdiction of the Court had, in fact, been made in the plaint. It was urged, thirdly, that the balance of convenience lay plainly on the side of the suit being tried not by this Court by the Court at Gorakhpur.

I am unable to accept any of these contentions as sound, but before I do so I may recall that there are two Defendants in the suit and one of them has not joined the Appellant in his application. It is thus clear that not only must the suit proceed in this Court in any event, for the reason that both the Defendants are alleged to be carrying on business within the jurisdiction of this Court, but it also must proceed at least as against the second Defendant who is not challenging the leave granted. In such circumstances, the Appellant cannot succeed, unless the makes out that the provisions of law are such that the leave granted cannot possibly be upheld and that we are bound to order its revocation.

The first argument founded on what is called the true construction of Clause 12 of the Letters Patent does not at all appeal to me. That clause sets out various contingencies in which this Court will be entitled to try and determine suits in the exercise of its ordinary original civil jurisdiction. We are not concerned in this case with suits for land or other immovable property. With regard to other suits the provision is that the Court shall be empowered to try and determine them

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 within such limits.

There is an exception to the clause which is not material for the present purpose. From the portion which I have just read from Clause 12, it will appear that in the case of suits, other than suits for land or immovable property, this Court will have jurisdiction to try and determine them without any leave, if the cause of action arises wholly within the original jurisdiction of the Court or if the Defendant dwells or carries on business within such jurisdiction. The necessity for leave arises only in the third case, which is where the cause of action has arisen within the Court''s jurisdiction only in part. I am entirely unable to see why a Plaintiff cannot say that he is entitled to institute and prosecute his suit in this Court as a matter of right on the basis of certain facts, which he alleges to be true and say, at the same time, that in any event, there are certain other circumstances which entitles him to ask for the leave of the Court and invoke the Court''s jurisdiction with the aid of such leave. It is a common feature of legal procedure that a party can make alternative cases. Mr. Das contended that great mischief would result if a Plaintiff was allowed to make alternative cases, both of which might be false and if he made a false case which would entitle him to maintain a suit in this Court as of right and also a false case on the basis of which he obtained leave, the Defendant would be dragged into Court for nothing and the parties would be at liberty to create for this Court what Mr. Das called "a roving jurisdiction", coextensive with the whole of India. I do not see any merit in that contention, inasmuch as a Plaintiff can bring a Defendant unnecessarily into this Court by making a false allegation even as regards his residence within the Court''s jurisdiction. We are really not concerned with questions of convenience or hardship when we are trying to construe Clause 12 of the Letters Patent and to ascertain what it really intends. As I have already said, I see nothing whatever to preclude the construction that a Plaintiff is well entitled to say that his suit is maintainable in this Court as of right and that, alternatively, there is a further ground which makes it possible for the Court to entertain the suit, provided leave is granted. I, accordingly, do not think that the leave granted by the trial Court can be held to have been wrongly granted for the first reason advanced by Mr. Das.

To negative the second contention of Mr. Das, one has to refer only to paras. 11 and 13 of the plaint. They alleged that the Defendants were accountable to the Plaintiff in Calcutta and the basis of fact on which that case is made is that the registered office of the mill company is situated in this city and the Appellant is a director of the company. I am unable to see how, in view of the two paragraphs I have mentioned, it can possibly be said that the alternative case of a part of the cause of action having arisen, within the Court''s original jurisdiction was not to be found in the plaint.

The third ground relates to the balance of convenience. Mr. Das drew our attention to para. 14 of the petition and particularly to Clause (c) and (d) of the paragraph which, he says, had not been traversed by the Plaintiffs. The clauses relied upon by Mr. Das are vague in the extreme, using nothing more than general language to say that the entire evidence relating to the allegations in the plaint was situated at Gorakpur and Pipraich. No finding can be made in favour of the Appellant on allegations of so vague a character. The question of the balance of convenience is not always an easy one to decide but on the facts of the present case I am entirely in agreement with the learned Judge below that the question cannot be decided satisfactorily on the application, because the facts upon which the true determination of the question depends are themselves in dispute. For one thing, according to the Plaintiffs, the account books of the mill company are or ought to be in Calcutta, whereas, according to the Appellant they are elsewhere. One part of the allegations in the plaint about which the evidence can be said to be substantially outside Calcutta is the allegation contained in para. 9 and relating to the removal of certain articles belonging to the Plaintiff-company. But even assuming that the evidence relating to that allegation would have to be called largely or wholly from outside the Court''s jurisdiction, that fact would not entitle us to hold that, in the sum, the balance of convenience was in favour of the suit being tried elsewhere, I may conveniently, in this connection, refer to what was said by Harries, C.J., and myself in Ridhkaran Kabra v. A. Karamally and Sons and Anr. Appeals Nos. 83 and 84 of 1948decided on November 19, 1948 (Unreported).

The Court has to take the field of enquiry to be that envisaged by the whole plaint, and it has to take into account the whole mass of evidence which will have to be given by the Plaintiff to prove his case, and by the Defendants to meet it. The court may-also take into consideration the inconvenience likely to be caused to the parties by having to attend personally throughout the trial as also the expense and any other local or special condition in the one forum or the other. If on taking into consideration all these facts, it appeared that that part of the evidence which could be more conveniently given in another court was so much larger and the inconvenience of compelling the Defendant in bringing that evidence to this Court was so much greater that it would be oppressive in the extreme to compel him to do so, then a balance of convenience would be established in favour of the Defendant.

If those principles are applied, it will appear quite clearly that even if the evidence bearing upon a part of the allegations contained in the plaint be situated outside the jurisdiction of this Court, that fact cannot prove the balance of convenience to be in favour of the suit being tried elsewhere, if the evidence bearing upon the whole of the allegations, such evidence being that to be adduced by the Plaintiff as well as by the Defendant, does not make out such balance of convenience.

I am also of opinion that the learned Judge was perfectly right in holding that the Appellant had debarred himself from, questioning the leave granted by having made use of the suit for the purpose of taking the matters in controversy to arbitration. I have already mentioned the fact that the reference to arbitration was made at the instance of the Appellant and his co-Defendant in the suit. There was some question before us as to the actual terms of the order made by the Court, but we have been supplied with a copy of the actual order from which it appears that the parties filed a petition in which they stated that they had "agreed to refer the above-named suit to arbitration on the terms and conditions in the said petition mentioned." It is thus clear that it was the suit itself which was caused to be referred to arbitration and the reference was caused by the Appellant himself. There could have been nothing to refer to arbitration unless the suit had been brought and the Appellant utilised the suit for the purpose of. submitting the dispute between him and the Plaintiffs to the arbitration of chosen arbitrators. It appears to me that, on those facts, the case comes clearly within the principle of the decision of the Supreme Court in the case of Chittaranjan Mukherji v. Barhoo Mahto (1950) 87 C.L.J. 420. Indeed, even a cursory glance at the dates exposes the weakness of the Appellant''s case. The summons of the suit was served upon him on January 6, 1948, and the period between that date and June 6, 1952, was spent by him in an attempt to obtain an award on the suit itself. After the reference had proved, in fructuous and the order for reference had been superseded, the time arrived for him to file his written statement and he avowed two dates fixed for the purpose to elapse without filing any. It was not till May 18, 1953, after spending about five years with the suit that he awoke to the fact that the suit could not be entertained by this Court and that leave under Clause 12 of the Letters Patent ought not to have been granted. In my view, the petition is an afterthought, resorted to by the Appellant long after he had been apprised of the institution of the suit and after he had spent a considerable time in exploiting the suit for purposes which he hoped would be favourable to himself.

For all the reasons given above, this appeal must fail. It is accordingly dismissed with costs.

The Appellant will have a fortnight''s time from today to file his written statement.

S.R. Das Gupta, J.

I agree.