AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2004 (3) TMI 25
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....fendant be ordered and decreed to pay to the plaintiff the sum of Rs. 96,16,74,416 (rupees ninety six crores sixteen lakhs seventy four thousand four hundred and sixteen only) being the balance amount which has been demanded from the plaintiff by the demand dated February 19, 2001, or such other amount as the plaintiff is required to pay to the income-tax authorities on account of the tax liabilities of the defendant, together with interest thereon at the rate of 21 per cent, per annum, from the date hereof till payment and/or realisation as per particulars of claim exhibit W-1 hereto. (c) that the defendant be ordered and decreed to pay to the plaintiff the sum of Rs. 132,65,21,397 (rupees one hundred and thirty two crores sixty five lakhs twenty one thousand three hundred and ninety seven only) which has been demanded from the plaintiff by the demand dated March 27, 2000, or such other amount as the plaintiff is required to pay to the income-tax authorities on account of the defendant, together with interest thereon at the rate of 21 per cent, per annum from the date thereof till payment and/or realisation as per particulars of claim exhibit X hereto. (d) for costs ; (e) for s....
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....at the fact that the wet lease agreement dated October 22,1995, was made in Mumbai, is incorrect; as the same was executed in Delhi. In so far as the second statement of fact made, that the agreement has been in operation all over India including in Mumbai, contends learned counsel for the defendant that, that fact is not relevant for considering the cause of action for institution of the suit and therefore, of no consequence. In so far as the third fact stated that, payment was made under the wet lease agreement at Mumbai, even this is incorrect; as now it is accepted that the payments have been made in London. The fourth and last fact stated in para. 30 that, tax deduction at source was made in Mumbai by the plaintiff, cannot be a relevant fact for deciding the cause of action for institution of the suit, for which reason, the same will be of no avail. On this argument, it is contended that no part of the cause of action has arisen in Mumbai. It is also contended that the fact that the tax deduction at source was made at Mumbai was a unilateral act of the plaintiff and is of no avail in deciding the cause of action. Reliance is placed on the decision of our High Court in Crown Fr....
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....decision reported in-Adcon Electronics P. Ltd. v. Daulat [2001] 7 SCC 698 (para. 9) as to the purport of clause 12 of the Letters Patent and it was argued that in the facts of the present case, the court had rightly invoked that power while granting leave under clause 12. It was argued that on reading the plaint as a whole, it is obvious that the case made out by the plaintiff is that the plaintiff was required to pay the amount towards tax dues of the defendant, and having paid that amount, the plaintiff was entitled to ask for reimbursement of the same having regard to the legislative scheme of the provisions of the Income-tax Act. In other words, it is a case of reimbursement or for restitution of the amount paid by the plaintiff by virtue of the provisions of the Income-tax Act and it can be safely assumed, at least on the basis of the pleadings at this stage that a material part of the cause of action has arisen in Mumbai. In so far as the argument advanced on behalf of the defendant that leave already granted by this court should be revoked on the doctrine of "forum convenience" of the defendant, even the same is devoid of merit. Learned counsel contends that the only case ma....
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....om 353 and Ramgopal Chunilal v. Ramsarup Baldevdass [1934] 36 Bom LR 84 to contend that this argument clearly overlooks the marked difference between the terms "lodging/filing/presentation" of the plaint on the one hand and "acceptance/admission" of the plaint on the other. The latter is "receiving" the plaint and the former is not. To buttress this submission, learned counsel has drawn analogy also from the provisions of Order IV, rule 1 of the Code of Civil Procedure, 1908, and rule 986 of the High Court (Original Side) Rules. It is next contended that since the concerned judge has already exercised discretion in favour of the plaintiff and having regard to the pleadings on record a formidable case having been made out by the plaintiff, it will be inappropriate to revoke the leave already granted. It is lastly contended that having regard to the relevant dates, as established from the record, it is obvious that the present chamber summons is not a bona fide application, but is an afterthought only to thwart the hearing of the notice of motion filed by the plaintiff, which has matured for hearing. This allegation is made in the reply affidavit filed on behalf of the plaintiff, whi....
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....e apex court in the case of A.B.C. Laminart P. Ltd. [1989] 2 SCC 163. In para. 12, the court has stated the legal position thus: "12. A cause of action means every fact, which if traversed, it would be necessary for the plaintiff to prove in order to support his right to a judgment of the court. In other words, it is a bundle of facts which taken with the law applicable to them gives the plaintiff a right to relief against the defendant. It must include some act done by the defendant since in the absence of such an act no cause of action can possibly accrue. It is not limited to the actual infringement of the right sued on but includes all the material facts on which it is founded. It does not comprise evidence necessary to prove such facts, but every fact necessary for the plaintiff to prove to enable him to obtain a decree. Everything which if not proved would give the defendant a right to immediate judgment must be part of the cause of action. But it has no relation whatever to the defence which may be set up by the defendant nor does it depend upon the character of the relief prayed for by the plaintiff." It was argued on behalf of the defendant that the above observations in....
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.... its taxes while it was carrying on business in India." The averments in para. 9 will have to be understood in the context of the document exhibit F. Reliance was placed on paragraphs 6 to 8 of the said document exhibit F. The same reads thus: "6. In view of such a good profitability of the venture the earlier NOC issued by Income-tax Department dated September 9, 1996, requires to be reassessed. In any case it was at best only tentative tax deduction subject to a final determination of income at the time of assessment of income of Caribjet after its return of income was filed. It was issued on the presumption that the agreement was to continue and the non-resident was to file its return of income in India and the tax liability as and when determined, in future was to be paid by Caribjet. Now the ground situation has changed drastically. No further operations are to be carried out by Caribjet and whatever payments are received by Caribjet would be beyond the reach of Indian tax laws in the absence of an appropriate deduction of tax at source. 7. At this stage it becomes very significant to examine the track record of Caribjet in complying with Indian tax laws. In this connection....
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....to the payment now awarded by the Arbitration Tribunal and the sum total would be the total receipts of Caribjet arising from this particular agreement. Appropriate and adequate credit would be given for the tax deduction amount till now at 2.75 per cent, for payments made till first week of September, 1996." It will be useful to revert to para. 11 of the plaint, which reads thus: "The Deputy Commissioner of Income-tax by his summons dated January 24, 2000, called upon the plaintiff under the provisions of section 131 of the Income-tax Act to produce details of the payments made to the defendant from 1994-95 up to 1998-99 (which includes the tenure of the wet lease agreements dated November 16, 1994, and October 22, 1995) and also called upon the plaintiff to produce copies of all agreements entered into with the defendant." Para. 12 of the plaint reads thus: "The Deputy Commissioner by his order dated February 9, 2000, issued under section 281B of the Income-tax Act directed the plaintiff not to remit any monies to the defendant or to deposit any monies in the escrow account or any other account in India and also provisionally attached the said amounts payable under the quantum....
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....e plaintiff to show cause as to why it should not be treated as an agent of the defendant under section 163 of the Income-tax Act." In para. 23, reference is made to letter-cum-show-cause notice issued by the Deputy Commissioner of Income-tax dated March 15, 2001, addressed to the Principal Officer of the plaintiff, stating that prima facie, the amount received by the defendant from the plaintiff under the award was taxable in India. The b plaintiff was called upon to show cause why the plaintiff should not be treated as an agent of the defendant under section 163 of the Income-tax Act. The averments in paras. 25 and 26 are also of some significance. The same read thus: "25. In the circumstances the plaintiff submits that the plaintiff and c the defendant are bound by the terms of the wet lease agreement including clause 11.1 thereof. It is submitted that the plaintiff has complied with all the terms under the said wet lease agreement and the provisions of the Income-tax Act, 1961. The plaintiff submits that it has deducted tax at source from the payments it has made to the defendant and has paid over these sums to the tax authorities. Apart from the provisions of clause 11.1 of ....
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.... already made submission. The plaintiff apprehends that in the event that the defendant does not pay its tax liabilities in India, the plaintiff would be assessed as a representative assessee and the entire tax due and payable on the assessment of the defendant of its operation in India would become payable by the plaintiff under sections 160 and 161 of the Income-tax Act, 1961. 26. The plaintiff submits that the defendant be ordered and decreed to pay to the plaintiff the sum of Rs. 5,00,00,000 (rupees five crores only) which has been paid by the plaintiff on the demand dated February 19, 2001, to the income-tax authorities on account of the tax liabilities of the defendant, together with interest thereon at the rate of 21 per cent, per annum, from the date hereof till payment and/or realisation as per particulars of claim." On fair reading of the aforesaid averments in the plaint, to my mind, it is more than clear that the case made out by the plaintiff is that the defendant was liable to pay the tax dues as adjudicated by the income-tax authority in respect of the transaction under the wet lease agreement dated October 22, 1995, which liability had arisen within the jurisdicti....
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....f the aforesaid averments, to my mind, it is obvious that part or a material part of the cause of action has arisen in Mumbai. Moreover, the application for leave clearly sets out the relevant facts and asserts that the plaintiff has paid a sum of rupees five crores to the tax authorities in Mumbai on behalf of the defendant and wishes to recover the same and such other amounts, as the plaintiff may be called upon to pay to the tax authorities, on account of the tax liability of the defendant. If that is so, this court was obviously empowered to grant leave to institute the suit under clause 12 of the Letters Patent. That takes us to the purport of clause 12 of the Letters Patent. The same has been considered by this court on several occasions. It will be useful to straightaway advert to the decision of the apex court in the case of Adcon Electronics P. Ltd. [2001] 7 SCC 698. In para. 7, the court has reproduced clause 12 of the Letters Patent. In para. 9, the purport of the said provision has been considered which reads thus: "9. Thus, it is clear that under clause 12 of the Letters Patent, the High Court in exercise of its ordinary original jurisdiction will have power to recei....
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.... has been rightly placed on the decisions of the apex court in Manohar Lai Chopra, AIR 1962 SC 527 and in the case of Ramp Dayawala and Sons P. Ltd., AIR 1981 SC 2085. It is relevant to note that in the case of Manohar Lai Chopra, AIR 1962 SC 527 in para. 34, the court has expounded that the mere fact that the court is situate at a long distance from the place of residence of the respondent, is not sufficient to establish that the suit has been filed in that court in order to put the respondent to trouble and harassment and to unnecessary expense. In the case of Ramji Dayawala and Sons P. Ltd., AIR 1981 SC 2085, in para. 28, the court has considered the settled legal position. Applying the principle stated therein, to my mind, the argument canvassed on behalf of the defendant to G invoke the doctrine of "forum convenience" of the defendant, cannot be countenanced. It is rightly submitted on behalf of the plaintiff that even in the decision of the Calcutta High Court pressed into service in the case of Madanlal Jalan, AIR 1949 Cal 495, the court accepted the complaint made in that case that the suit was filed in that court only to harass the other side, but yet declined to revoke t....
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....2002] 5 Bom CR 1. The opinion expressed in this judgment is that there can be no question of granting post facto leave. There can be no dispute that, the said proposition is the view which has prevailed since long. Even so, this decision will be of no avail in the present case, as would be explained a little later. The next decision is in the case of Manubhai Vadilal Shah v. Hiralal Karsondas Bhakta [2000] 2 Bom CR 445. The question considered in this judgment is whether the pleadings regarding jurisdiction are curable. The court has taken the view that it is not possible to accept the stand that such a defect can be cured by adducing evidence and by amending the pleadings. So understood, even this decision will be of no avail to the present case. Much emphasis was placed on the decision in the case of Noorjahan w/o Altaf Ahmed [1993] 1 Bom CR 501. This decision mainly relies on the observations made by another single judge in the case of Rhoda Jal Mehta, AIR 1989 Bom 359. In so far as Noorjahan's case [1993] 1 Bom CR 501 is concerned, the issue examined by the court was in relation to the following facts. The suit was instituted by the plaintiff in "December, 1984". When the suit ....
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.... every description, if in the case of suits for land (omitting unnecessary words) the land is situate, or in all other cases, 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 civil jurisdiction of the High Court, the rest of the clause is not material. The words 'empowered to receive, seem to me to be important and the meaning is that the court on the ordinary original civil jurisdiction has no jurisdiction even to receive a plaint where a part of the cause of action only shall have arisen within the local limits of its jurisdiction unless leave of the court shall have been first obtained." In this judgment, the main issue considered by the court was whether leave under clause 12 is a condition precedent, and the same should be obtained prior to receiving the plaint. It will be appropriate to advert to the opinion expressed by Sir John Beaumont, Kt., Chief Justice at page 239, which reads thus: "In my judgment the words of clause 12 of the Letters Patent are quite clear and make the obtaining of leave a condition precedent to the entertainment by this....
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....nfusion between the two stages, viz., of the presentation of the plaint and of its admission to the register of suits after the removal of the defects, if any, which is responsible for the faulty procedure adopted by the office. In some cases this procedure may affect the period of limitations which under the Limitation Act runs from the date of the presentation of the plaint and not from the date of its admission. A reference in this behalf can usefully be made to Ramgopal Chunilal v. Ram sarup Baldevdass, AIR 1934 Bom 91; [1934] 36 Bom LR 84". I would adopt the view taken in the aforesaid decision, which in turn, is supported by the Division Bench judgment of this court in Ramgopal Chunilal's case, AIR 1934 Bom 91; [1934] 36 Bom LR 84. The same judges constituted the Division Bench of this court, which decided the case of Devidatt Ramniranjandas AIR 1932 Bom 291, on which strenuous emphasis was placed by the defendant. At page 87 of the decision, the court has noted the distinction between the terms "presentation" of the plaint and "admission or receipt" of the suit. The same reads thus: "I think, that the argument of the appellant really involves a confusion between 'presenta....