Bhaskar Bhattacharya, J. - (1.) THIS appeal is at the instance of a plaintiff in a suit for declaration and injunction and is directed against order dated November 11, 2010 passed by a learned Single Judge of this Court by which His Lordship allowed the application filed by the defendant No.2 for return of the plaint on the ground of want of territorial jurisdiction to entertain the suit. A separate application filed by defendant No.2 for the selfsame relief on the ground of separate agreement for exclusion of jurisdiction of this Court was, however, not gone into in view of the fact that the other application has been allowed. Being dissatisfied, the plaintiff has preferred the present appeal and at the same time, the defendant No.2 has filed cross-objection thereby alleging that it was the duty of the learned Single Judge to further hold that in view of the agreement between the parties, this Court had no territorial jurisdiction. Both the aforesaid appeal and the cross-objection were, thus, heard one after the other and we propose to dispose of both the appeal and the crossobjection by this common order.
(2.) THE appellant before us filed before the learned Single Judge a suit being C.S. No.31 of 2009 thereby praying for the following reliefs: (a) Instrument of purported sale of 30 lakh warrants dated 11th February, 2009 be declared illegal, null and void; (b) Deed of purported assignment dated 11th February, 2009 declared illegal, null and void; (c) Decree for delivery up and cancellation of the purported instrument of sale dated 11th February, 2009 claimed to have been executed by the defendant no.1 in favour of the defendant no. 2 for the alleged sale of the 30 lakh warrants; (d) Decree for delivery up and cancellation of the purported deed of assignment dated 11th February, 2009 claimed to have been executed by the defendant no.1 in favour of the defendant no.2 for the alleged assignment of the pledge agreement dated July 7, 2008 with the security of the said 30 lakh warrants; (e) Perpetual injunction restraining the defendant no.2 and each of their men, agents and servants from in any manner giving effect or further to the purported instrument of sale dated 11th February, 2009 of the said 30 lakh warrants and/or the purported deed of assignment dated 11th February, 2009 in any manner whatsoever; (f) Perpetual injunction restraining the defendant no.2 and each one of their mean, agents and servants from claiming any benefit or interest on the said 30 lakh warrants or effecting any further sale and/or transfer of the said 30 lakh warrants issued by the Company in favour of the plaintiff; (g) Interim injunction; (h) Receiver; (i) Costs; (j) Further and/or other reliefs. The case made out by the appellant in the plaint of the said suit may be summed up thus: a) The plaintiff is a company incorporated under the Companies Act, 1956 having its registered office at Chatterjee International Centre, 11th Floor, 33A, Jawaharlal Nehru Road, Kolkata- 700071 within the aforesaid jurisdiction and carries on business, inter alia, as an investment company. The plaintiff is one of the promoters of Orissa Sponge Iron & Steel Ltd. (hereinafter referred to as the Company) having its registered office at OSIL House, Gangadhar Meher Marg, Bhubaneshwar-751024 outside the aforesaid jurisdiction. b) On or about 20th December, 2007, the plaintiff as promoter of the company issued, inter alia, 30 lakh warrants bearing distinctive Nos.4098918 to 7098917 with statutory lock-in period of three years until 19th December, 2010. In terms of the issue of the said warrants which were issued, inter alia, in favour of the plaintiff, the holder thereof though not a registered member/debenture holder of the company is entitled to all benefits/privileges and entitlement arising out of any future bonus/right issue in the same manner and to the same extent as the company may choose to give them subject to the warrant holder exercising its right and being allotted equity shares against the same. The holder of the warrant have a right against each warrant to apply, pay for and seek allotment of one equity share of Rs.10/- per warrant at a premium of Rs.215 and such option to be exercised within 18 months from the date of allotment of the warrants that is on or before June 19, 2009. c) In or about September, 2007 the plaintiff approached Unitech Group for financial assistance and upon such request being made, Unitech Group arranged for funds from the defendant no.1 who agreed to make inter-corporate deposit with the plaintiff of Rs.3.10 crore on or about 27th September, 2007 for a period of one year to be repaid at an interest of 13.50% per annum subject to the plaintiff issuing the following documents, namelya) Two undated several cheques for Rs.3.10 crore and Rs.32,36,679/- towards principal and interest for 365 days respectively and a demand promissory note; b) A money receipt; and c) A certified copy of the Board Resolution of the plaintiff and certified copy of Memorandum and Articles of Association of the plaintiff. The aforesaid offer was made by the defendant no.1 and the same was accepted by the plaintiff in the course of discussions and negotiations that were held and concluded by and between the plaintiff and defendant no.1 at the plaintiffs office at Chatterjee International Centre, 11th Floor, 33A, Jawaharlal Nehru Road, Kolkata-700071 situated within the aforesaid jurisdiction. d) The plaintiff in compliance of the aforesaid conditions and for granting of inter-corporate deposit by the defendant no.1 under cover of letter dated 22nd September, 2007 furnished to the defendant no.1 all the said documents as were required by the defendant no.1 including two undated cheques bearing no.523358 and no.523359 for Rs.3.10 crore and Rs.32,36,679/- both drawn on State Bank of India, Park Street Branch, Kolkata within the aforesaid jurisdiction. The said letter issued by the plaintiff accepting the conditions for grant of inter corporate deposit by the defendant no.1 was issued from its office at 33A, Jawaharlal Nehru Road, Kolkata 700016, within the aforesaid jurisdiction and sent to the defendant no.1 at its office at H-72, Connaught Circus, New Delhi outside the aforesaid jurisdiction. e) In the circumstances, as aforesaid, the contract for grant of inter corporate loan by the defendant no.1 to the plaintiff of a sum of Rs.3.10 crore for a period of one year commencing from 27th September, 2007 to 26th September, 2008 with interest at the rate of 13.50% per annum was concluded at the office of the plaintiff situated at Chatterjee International Centre, 11th Floor, 33A, Jawaharlal Nehru, Road, Kolkata-700071 within the aforesaid jurisdiction. f) In pursuance of the contract, as aforesaid, the defendant no.1 made such inter corporate deposit of Rs.3.10 crore by transfer of funds through inter-banking system named RTGS in the bank account standing in the name of the plaintiff maintained with the State Bank of India, Park Street Branch, Kolkata within the aforesaid jurisdiction. g) In or about June July, 2008 the defendant no.1 further represented to the plaintiff and required the plaintiff to furnish security for repayment of the said inter corporate deposit of Rs.3.10 crore made by the defendant no.1 in the Company. The aforesaid representations were made by the defendant no.1 to the plaintiff at the plaintiffs office at 33A, Jawaharlal Nehru Road, Kolkata within the aforesaid jurisdiction, and were accepted by the plaintiff in the course of discussions held and concluded at the office of the plaintiff at Jawaharlal Nehru Road, Kolkata within the aforesaid jurisdiction. h) In terms of the aforesaid agreement by and between the parties as stated aforesaid, the plaintiff on or about 7th July, 2008 as the pledgor executed a Deed of Pledge with the defendant no.1 as the the pledgee. Under the said Deed of Pledge, the plaintiff agreed to deposit by way of pledge 30 lac warrants issued in the name of the plaintiff with the defendant no.1 as security for repayment of the said inter corporate deposit amount of Rs.3.10 crore together with any interest, additional interest and/or liquidated damages or any part thereof, with the conditions that on repayment of such deposit by the pledgor, the pledgee shall upon the request and cost of the pledgor return the said warrants to the pledgor. The said Deed of Pledge was signed by the director of the plaintiff at the office of the plaintiff at 33A, Jawaharlal Nehru Road, Kolkata 700016 within the aforesaid jurisdiction and the same was made over to the defendant no.1 enclosing therewith the original warrant certificate and the said Deed of Pledge accompanied by the original warrant certificate were received by the defendant no.1 at its office in New Delhi outside the aforesaid jurisdiction. The defendant no.1 has however, failed to send back a copy of the Deed of Pledge duly signed by it to the plaintiff. i) The plaintiff before expiry of the period of repayment of the said inter-corporate deposit approached the defendant no.1 for extension of the time for repayment by a further period of 90 days and the defendant no.1 in the course of discussions held both at the office of the plaintiff within the aforesaid jurisdiction and at New Delhi outside the aforesaid jurisdiction agreed to extend the time period for repayment of Rs.3.10 crore by 90 days at the interest rate of 22% per annum subject, however, to the payment of interest for the current year up to 24th September, 2008 by 25th September, 2008. The aforesaid discussions were held in the presence of a representative of Unitech Group which was instrumental in enabling the plaintiff to obtain the said inter corporate deposit from the defendant no.1. The aforesaid decision of the defendant no.1 to extend the time for repayment would be evidenced by the email dated September 23, 2008. j) On or about September 17, 2008 the plaintiff issued a certificate of deduction of income tax at source payment on interest which it was obliged to make for the period from September, 2007 to March 31, 2008. The income tax deducted at source certificate was forwarded by the plaintiff from its said office at 33A, Jawaharlal Nehru Road, Kolkata within the aforesaid jurisdiction to the defendant no.1 outside the aforesaid jurisdiction, under cover of a letter dated 17th September, 2008. k) On February 11, 2009, the plaintiff was informed by its Banker that the two undated cheques for Rs.3.10 crore and Rs.32,36,679/- respectively issued in favour of the defendant no.1 were presented for payment by the defendant no.1 and have been returned unpaid. Immediately, on the very next day, the plaintiff by an email sent from its office at 33A, Jawaharlal Nehru Road, Kolkata 700071, within the aforesaid jurisdiction informed the defendant no.1, outside the aforesaid jurisdiction, that the plaintiff shall repay its dues within 7(seven) days. A further email message was again issued on February 13, 2009 reiterating assurance to pay off the dues of the defendant No.1 within seven days and requested the defendant No.1 to grant such time. The plaintiff was and still is ready and willing to pay off the dues of the defendant No.1 and take back the said 30 lac warrants pledged with the defendant No.1. l) On 13th February, 2009 the plaintiff received a letter dated 11th February, 2009 at its office within the aforesaid jurisdiction wherefrom the plaintiff was shocked and surprised to learn that the defendant No.1 had purported to execute an instrument in writing allegedly dated 11th February, 2009 and claimed to have sold the warrants pledged by the plaintiff in favour of the defendant No.1 and claims to have assigned the debt payable by the plaintiff along with the security of the said 30 lac warrants in favour of defendant No.2 situated outside jurisdiction. m) According to the plaintiff, the purported sale of warrants pledged by the plaintiff with the defendant No.1 and the assignment of the debt along with the said underlying security of the 30 lac warrants in favour of the defendant No.2 by and under instrument dated 11th February, 2009 is wholly illegal, null and void and liable to be cancelled, inter alia, amongst others on the following (a) The plaintiff being the registered owner of the said warrants the same could not have been sold by the defendant No.1 as the pledge thereof; (b) The said warrant cannot be sold save and except under an instrument of transfer which can only be executed by the registered holder thereof; (c) In any event, reasonable notice of the sale admittedly not having been given by the defendant No.1 to the plaintiff of the alleged sale of the pledged warrants as is required under Section 176 of the Contract Act, the alleged sale even assuming to have been made is bad in law; (d) The said warrant being under lock in period of three years up to 19th December, 2010 could not be transferred, and any purported transfer if made being in violation of the mandatory provisions under the SEBI Act, 1992 is void and bad in law; (e) The defendant No.1 at all material times despite being fully aware of the above is wrongfully seeking to contend that it has sold the said warrants to the defendant No.2 within the said lock-in period of three years. The defendant No.1 could not have validly or legally sold the said warrants before 19th December, 2010 and the sale purported to have been effected of the said warrants is void, bad in law and of no effect whatsoever and does not and cannot confer any right upon the defendant No.2. This limitation is obvious from the face of the warrant certificate itself; (f) The defendant No.1 has no right and/or authority to assign the loan in favour of the defendant No.2 without the consent of the plaintiff, and the same if so done cannot bind the plaintiff and the plaintiff hereby avoids the same; (g) Further and in any event, a purported assignment of loan cannot have the effect of transfer the security in respect of the said loan to a third party; (h) The purported sale of the warrant is also in violation of the Takeover Code issued by the Securities & Exchange Board of India (SEBI Takeover Code); n) The plaintiff is entitled to legal character and/or right in the said 30 lakh warrants subject to the pledge in favour of the defendant No.1 but the defendant No.1 in acting in the manner as aforesaid is denying and/or is interested to deny plaintiffs right in respect thereof; o) The defendant No.1 by purporting to claim to have effected sale of the said warrants and/or having assigned the debt payable by the plaintiff in favour of the defendant No.2 is invading and/or threatening to invade the plaintiffs right in the said 30 lakh warrants. The invasion is such that compensation in money would not afford adequate remedy and an injunction is necessary to prevent multiplicity of proceedings. p) According to the plaintiff, the purported deed dated 11th February, 2009 be declared null and void and the same be delivered up and/or cancelled. The said deed dated 11th February, 2009 if left outstanding shall cause irreparable loss and prejudice to the petitioner. q) The purported sale of the warrant by the defendant No.1 to the defendant No.2 is null and void and no effect can be given to the same. The plaintiff accordingly seeks a declaration to this effect. r) The said claim of the defendant No. 1 regarding its absolute interest in the suit property came to the knowledge of the plaintiff for the first time only upon receipt of the letter dated 11th February, 2009 from the defendant No.1. s) The plaintiff is entitled to seek a decree for perpetual injunction restraining the defendant No.2 from exercising any right under the said warrants or the said Deed of Pledge or the alleged assignment thereof in any manner whatsoever. t) The plaintiff is also entitled to a decree for perpetual injunction restraining the defendant No.2 from causing any further sale and/or transfer of the original 30 lakh warrants issued by the company in the name of the plaintiff. u) No part of the cause of action is barred by laws of limitation. v) Inasmuch as a part of the cause of action as pleaded in paragraphs 1, 3, to 12 arose within the jurisdiction of this learned Court and those pleaded in paragraphs 1, 4, 8 to 11 and 12 arose outside the aforesaid jurisdiction of this learned Court, the plaintiff is entitled to and prays leave order Clause 12 of the Letters Patent.
(3.) IN the aforesaid suit, the defendant No.2 entered appearance and filed an application being G.A. No.747 of 2009 and thereby praying for revocation of the leave granted under Clause 12 of the Letters Patent and for rejection of the plaint or in the alternative for return of the plaint for presentation before the appropriate forum on the ground that no part of cause of action had arisen within the territorial jurisdiction of this Court and that the plaintiff had suppressed the agreement between the plaintiff and defendant No.1 that the dispute relating to the subject-matter of the suit should be tried exclusively by the Court at New Delhi. The said application was opposed by the plaintiff by filing Affidavit-in- Opposition denying the allegations contained in the application for revocation of the leave under Clause 12 of the Letters Patent regarding the alleged agreement for ouster of jurisdiction of this Court and confirmation of such right upon the Court situated at New Delhi. According to the plaintiff, the said letter had been issued by defendant No.1 and had addressed to the plaintiff and there was no confirmation by the plaintiff of the acceptance of such terms and conditions more particularly of the jurisdictional clause in order to make the jurisdictional clause binding upon the plaintiff. However, the signature of Sri P. K. Mohanty, the representative of the plaintiff on the said letter, was not disputed by the plaintiff. An Affidavit-in-Reply was given by the defendant No.2 and thereby reiterating the statement contained in the application for return of the plaint. As pointed out earlier, the learned Single Judge by the order impugned came to the conclusion that the dispute involved in the suit related to the transfer of shares by defendant No.1 in favour of defendant No.2 and as such, that part of the cause of action had arisen wholly outside the territorial jurisdiction of this Court and at the same time, both the defendant No.1 and defendant No.2 also reside outside the territorial limit of the Court. In such view of the matter, the learned Single Judge was of the view that real cause of action for grant of relief claimed in the suit did not accrue within the jurisdiction of this Court and consequently, the plaint was returned for presentation before the appropriate forum. In view of the aforesaid finding made by His Lordship, His Lordship did not deal with the other question regarding ouster of jurisdiction of this Court by specific agreement between the parties as pleaded in the application.;