TaxTMI 
TaxTMI 
2021 (9) TMI 1475
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....A (CAD) Nos.3 and 4 of 2021 : Mr.Arun C.Mohan For the appellant in OSA (CAD) No.19 of 2021 : Mr.Lakshmi Kumaran For the appellant in OSA (CAD) Nos.24 to 27 of 2021 : Mr.Nithyaesh Natraj For the appellants in OSA(CAD) Nos.29 and 30 of 2021 : Mr.Vijay Narayan Senior Advocate for Mr.P.Giridharan For the appellant OSA No. 208 of 2021 : Mr.N.L.Rajah Senior Advocate for M/s.Aditya Reddy For 1st respondent in OSA (CAD) Nos.1 and 2 of 2021 : Mr.Lakshmi Kumaran For 2nd respondent in OSA (CAD) Nos.1 and 2 of 2021 : Mr.Arun C.Mohan For respondents 1 to 5 in OSA (CAD) No.3 of 2021 : Mr.AR.L.Sundaresan Senior Advocate for M/s.Suhrith Parthasarathy For respondents 1 to 5 in OSA (CAD) No.4 of 2021 : Mr.AR.L.Sundaresan Senior Advocate for M/s.Arun Karthik Mohan For respondents 1 to 5 in OSA (CAD) No.19 of 2021 : Mr.AR.L.Sundaresan Senior Advocate for M/s.Suhrith Parthasarathy For 1st respondent in OSA (CAD) No.24 of 2021; 7th respondent in OSA (CAD) No.25 of 2021; 7th respondent in OSA (CAD) No.26 of 2021; 8th respondent in OSA (CAD) No.27 of 2021 : Mr.Rohan K.George For respondents 2 to 4 in OSA (CAD) Nos.24, 25 and 27 of 2021; respondents 1 to 3 in OSA (CAD) No.2....
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.... the suit was transferred from the ordinary Original Side to the Commercial Division in accordance with the said Act. 4. OSA (CAD) Nos.1, 2, 3, 4 and 19 of 2021 arise out of the same suit which may loosely be seen as a trademark infringement and passing-off action. Two of the appeals are by the plaintiffs and the three others by two of the defendants, one of the defendants having filed two appeals. OSA (CAD) No.1 of 2021 is a proposed appeal against an order dated April 27, 2021 returning the plaint for it to be filed elsewhere. OSA (CAD) No.2 of 2021 is an appeal against an order dated March 29, 2021 by which the injunction initially granted in the suit was modified. OSA (CAD) No. 3 of 2021 is proposed against an order dated April 27, 2021 refusing to reject the plaint under Order VII Rule 11 of the Code. OSA (CAD) No.4 of 2021 is a proposed appeal against that part of the order dated April 27, 2021 which refused to strike off the relevant defendant from the array of parties under Order I Rule 10 of the Code. OSA (CAD) No.19 of 2021 is against the order dated March 29, 2021 by which the application filed by the appellant for vacating the interim injunction was only dismissed. ....
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.... purpose of the said Act is not only to expedite the resolution of commercial claims, but also to project a much needed reform in the system to attract foreign investment in this country, particularly to those wary of the tardy judicial process here. Apart from case management measures being required to be undertaken under the said Act, Section 4(2) of the said Act instructs that Chief Justices of High Courts "shall nominate such Judges of the High Court who have experience in dealing with commercial disputes to be Judges of the Commercial Division." Similarly, under Section 3(3) of the said Act "persons having experience in dealing with commercial disputes" will be appointed to man Commercial Courts either at the level of the District Judge or a court below the level of a District Judge. 11. The 253rd Report of the Law Commission of India, published early in 2015, commended the enactment which was initially styled as the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015, before being rechristened by its shorter present name by an amendment of 2018. 12. Most of the definition provision in Section 2 of the said Act is taken up in....
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....hat makes the provisions of the Code "as amended by this Act" to be followed "in the trial of a suit in respect of a commercial dispute of a Specified Value." 17. Chapter VII of the said Act contains the miscellaneous provisions that range from the collection and disclosure of data by Commercial Courts and Commercial Divisions in Section 17 to the power of the High Courts to issue directions in Section 18 and the usual provisions of rule-making authority; removal of difficulties; and, repeal and savings. There are also provisions requiring the State Government to provide necessary infrastructure for Commercial Courts and Commercial Divisions and for establishing necessary facilities for training and continuous education of Judges who may be appointed to the Commercial Courts and Commercial Divisions, including the appellate fora. Such final Chapter of the said Act spanning from Section 17 to Section 23 includes Section 21, which gives the said Act overriding effect: "21. Act to have overriding effect Save as otherwise provided, the provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in f....
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....ision, the amended provision, and Section 8 of the said Act, which has considerably more bearing on the present discussion than the heading of such provision may suggest: Pre-amended Section 13: "13. Appeals from decrees of Commercial Courts and Commercial Divisions (1) Any person aggrieved by the decision of the Commercial Court or Commercial Division of a High Court may appeal to the Commercial Appellate Division of that High Court within a period of sixty days from the date of judgment or order, as the case may be: Provided that an appeal shall lie from such orders passed by a Commercial Division or a Commercial Court that are specifically enumerated under Order XLIII of the Code of Civil Procedure, 1908 (5 of 1908) as amended by this Act and section 37 of the Arbitration and Conciliation Act, 1996 (26 of 1996). (2) Notwithstanding anything contained in any other law for the time being in force or Letters Patent of a High Court, no appeal shall lie from any order or decree of a Commercial Division or Commercial Court otherwise than in accordance with the provisions of this Act." Present Section 13: "13. Appeals from decree....
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....and (1A) have been created out of the original sub-section (1) of Section 13 of the said Act. 23. It must also be noticed in this context that by virtue of Section 2(2) of the said Act, the words and expressions used in the said Act, but not defined therein, would carry the same meanings as assigned to them by the Code and the Indian Evidence Act, 1872. 24. The words "decree", "judgment" and "order" are defined thus in the Code: "2. Definitions.- In this Act, unless there is anything repugnant in the subject or context,- ... (2) "decree" means the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be either preliminary or final. It shall be deemed to include the rejection of a plaint and the determination of any question within section 144, but shall not include- (a) any adjudication from which an appeal lies as an appeal from an order, or (b) any order of dismissal for default. Explanation.-A decree is preliminary when further proceedings have to be taken before ....
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....inary issue of maintainability than what the merits of the matters otherwise deserved. 29. Some of the appeals in the present bunch of 13 are clearly maintainable, but they have been clubbed with other appeals arising out of the same order or same suit so that appeals arising out of the individual suits can all be comprehensively dealt with. Two major questions of law arise: whether and to what extent has the scope of an intra-court appeal in a Chartered High Court been curbed by the appeal provision in the said Act; and, whether the appeal provision in the said Act would govern suits instituted prior to the Commercial Division being established in this Chartered High Court. 30. On the scope of appellability, several of the appellants or would-be appellants exhort that nothing in the appeal provision in the said Act can be seen to whittle down the scope of appellability as ordinarily understood in the exercise of the ordinary original civil jurisdiction of this court as the width and generality of sub-section (1A), which is relevant here, is not truncated by the proviso thereto in the absence of any word or expression of restriction appearing in the proviso. In the same vein,....
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....appellants, is that since an appeal under Section 13(1A) of the said Act is provided against a "judgment or order", if the relevant judicial pronouncement can be regarded as a judgment as understood in legal parlance, it would be amenable to an appeal. 35. In the context of the proviso to sub-sections (1) and (1A) of Section 13 of the said Act, the submission is that such provision merely indicates certain orders that would be appellable and the proviso cannot be understood to mandate or imply that no appeal would lie against a judicial pronouncement that can be considered as a judgment. Again, such submission has been adopted or repeated by the other appellants and particular emphasis has been laid on the fact that there are no restrictive words used in the proviso like "only" or "not from any other order". 36. In effect, it is suggested by the appellants that since the words "judgment" and "order" have been used with a disjunctive "or" in between, the word "orders" in the proviso must be seen to be confined in its reference only to the word "order" appearing both in sub-sections (1) and (1A) of Section 13 of the said Act and the proviso cannot be seen to apply to or affect ....
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....ed by a Commercial Division or the Commercial Court as are specifically enumerated under Order XLIII of the Code of Civil Procedure, 1908 (5 of 1908) as amended by this Act and section 37 of the Arbitration and Conciliation Act, 1996 (26 of 1996)." We are not convinced that the province of our jurisdiction, in the present case, allows us to so legislate. To our mind, therefore, sub-section (1A) of Section 13 of the Commercial Courts Act allows appeals to be preferred against all judgements and orders of the Commercial Division of the High Court, to the Commercial Appellate Division thereof, and the proviso, to the said subsection merely clarifies that, in the case of orders specifically enumerated in Order XLIII of the CPC, such appeals shall lie." [Emphasis in original.] 40. The next judgment placed by the first lot of appellants is rendered by a Full Bench of this Court and reported at (2021) 2 MLJ 561 (The District Collector v. N.Udayappan). The principal issue referred to the Full Bench pertained to the maintainability of an appeal against an order rejecting a review petition. The following passage from the judgment has been placed, which may not be relevant in the context o....
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....t to a suit instituted prior to the said Act coming into effect. The judgment in such case followed the principle recognised in the celebrated case of Colonial Sugar Refining Co. Ltd (1905 AC 369), which dictum has been followed in this country, particularly in the judgments of Hoosein Kasam Dada (India) Ltd (AIR 1953 SC 221) and Garikapati Veeraya (AIR 1957 SC 540). This appellant also suggests that, in any event, the appeal would be maintainable under the said Act since nothing in Section 13 thereof prohibits the same. The submission in such regard is as made by the first lot of appellants and is buttressed by several further judgments that have been placed. 43. In the judgment reported at 2016 SCC OnLine Bom 9019 (Hubtown Limited v. IDBI Trusteeship Service Limited), a Division Bench of the Bombay High Court considered Section 13 of the said Act prior to such provision being amended in 2018. The appeal provision in Section 13 of the said Act contained then the word "decision", which has now been replaced by the expression "judgment or order", in the material part of such provision. In such context, the Division Bench opined that "decision ... includes judgment/order passed by....
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....rt of the defendant-appellant in seeking to file his written statement was not explained and there is no explanation even at this stage as to why the written statement could not be filed within time. The plaintiff exhorts that merely because the court may have the authority to extend the time to file the written statement would not imply that the extension would be granted for the mere asking and despite the defendant not making out any case as to the sufficiency of the cause that prevented the defendant from filing the written statement within time. 49. The plaintiff's submission is also without prejudice to the contention that the appeal is not maintainable under the said Act. The plaintiff asserts that the suit was not filed at a time when the said Act had not been enacted or had not come into operation. The plaintiff maintains that merely because the Commercial Division was established in this court later, it would not imply that a suit filed earlier, when the said Act had already come into operation, would be governed by the Code and not by the said Act, despite the automatic transfer of the suit to the Commercial Division in view of the nature of the dispute and the va....
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....cation for deletion of a party would be maintainable. The earlier of the two appeals is against the dismissal of the application in the nature of demurrer; while the later appeal is against the dismissal of the application for deleting the appellant as a party defendant to the suit. 52. In Kandla Export Corporation, the Supreme Court has taken a clear view on the matter on the basis of the pre-amended appeal provision in Section 13 of the said Act. The issue that arose in that case was whether an appeal, which was not maintainable under Section 50 of the Arbitration and Conciliation Act, 1996, would nonetheless be maintainable under Section 13(1) of the said Act as it stood prior to its 2018 amendment. Upon proceedings being launched under Section 48 of the Act of 1996 before a court in Gandhidham-Kutch, an application was filed before the High Court of Gujarat for transfer of the proceedings to the High Court. The petition was transferred to the High Court and the objections raised by the appellant in resisting enforcement of the foreign award were repelled by the Commercial Division of the High Court of Gujarat. An appeal was preferred under the said Act, which was dismissed o....
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....ivision and Commercial Appellate Division in this court were constituted only in 2018. On such aspect of the matter, the Division Bench set out what it perceived to be the ratio decidendi in the judgment in Rubinetterie Bresciane Bonomi Spa as follows: "Consequently, the right of appeal under the Letters Patent should continue to be available to all Orders passed in any proceedings in all suits pending on the date of commencement of Commercial Courts Act, subject however to the test they must be 'judgments' within the meaning of Clause 15 thereof." (Paragraph 14 of Rubinetterie Bresciane Bonomi Spa) "To sum it up: (a) A right of appeal under Clause 15 of the Letters Patent is available from all Orders passed in any proceedings in any suit pending on the date of commencement of Commercial Courts Act." (Paragraph 19 of Rubinetterie Bresciane Bonomi Spa) 55. The next lot of appellants are the two sets of parties in an infringement and passing-off action. OSA (CAD) No.1 of 2021 is against an order returning the plaint. OSA (CAD) No.2 of 2021 is against an order passed on an injunction application and OSA (CAD) No.19 of 2021 is the defendant's appeal ag....
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....ssing an application for rejection of the plaint filed under Order VII Rule 11 of the Code. The suit was filed on or about December 1, 2017, a few days after the Commercial Division was established on the Original Side of this court on November 29, 2017. According to the defendant-appellant, the plaintiff has no cause of action and the suit is otherwise not maintainable since a negative declaration has been sought to the effect that the plaintiff's packaging of its product does not amount to infringing the defendant's get-up or packaging. 59. At this stage, it is necessary to notice which of the appeals would clearly be maintainable notwithstanding the apparently restricted scope of appeal in Section 13 of the said Act. 60. OSA (CAD) No.1 of 2021, which is directed against an order returning the plaint, would be maintainable under Order XLIII Rule 1(a) of the Code as, by the order impugned, the plaint pertaining to the suit has been returned for it to be filed elsewhere. OSA (CAD) No.2 of 2021 would also be maintainable since the order impugned is an order of injunction and an appeal from such order is provided under sub-rule (r) of Order XLIII Rule 1 of the Code. For....
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....sion is that since there are no restrictive words used in the proviso to sub-sections (1) and (1A) of Section 13 of the said Act, the court will not go out of its way to impose the restrictions, since the proviso is only clarificatory in that it expressly provides for the orders covered by Order XLIII of the Code to be appellable in addition to decrees and other orders that may amount to judgment within the meaning of Clause 15 of the Letters Patent. The intervenor suggests to the court that the word "order" in the expression "judgment or order" is not covered by the proviso to Section 13(1) and (1A); but such word "order" is covered by the reference to arbitration matters in Section 13(2) of the said Act. In other words, he submits that the word "orders" in the said proviso covers, on the one hand, orders passed in suits which may be considered as judgment within the meaning of Clause 15 of the Letters Patent; and, on the other hand, orders passed in arbitration matters which are covered by Section 37 of the Act of 1996. 66. The intervenor refers to a judgment reported at (2016) 9 SCC 524 (Arun Dev Upadhyaya v. Integrated Sales Service Limited). In that case, an award passed in....
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....tion 15(5) of the Commercial Courts Act as it stood then. The matter was taken up in the Commercial Division of the High Court and the objections filed against the prayer for enforcement were rejected. An intra-court appeal was dismissed on the ground that the said Act did not provide any additional right of appeal not otherwise available to the appellants under the provisions of the Act of 1996. It is such order which was carried to the Supreme Court. Upon referring to the provisions of the said Act, as it stood then, and the Act of 1996, the Supreme Court observed that, in view of the dictum in Fuerst Day Lawson Ltd and the Act of 1996 being a self-contained code, the provision of Section 13(1) of the said Act, as it stood then, "being a general provision vis-a-vis arbitration relating to appeals arising out of commercial disputes, would obviously not apply to cases covered by Section 50 of the Arbitration Act." (Paragraph 20 of the report). 69. A Division Bench judgment of the Calcutta High Court reported at 2017 Cri LJ 4775 (Laxmi Narayan Udyog Limited v. Omendra Kumar Chowdhury) has been brought by the intervenor for the legal principle enunciated at paragraph 28 of the rep....
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.... the order itself: that in respect of an arbitration matter, the scope of appeal would be confined to what is specifically indicated as appellable in the Act of 1996 in view of the previous Supreme Court judgment in such regard in Fuerst Day Lawson Ltd. The observations in paragraphs 13 and 14 of the report in Kandla Export Corporation, it is submitted by the intervenor, may be seen as obiter. 73. In his usual fairness, the intervenor has also drawn the attention of the court to the famous judgment reported at AIR 1962 SC 256 (Union of India v. Mohindra Supply Co.), though such judgment detracts from the wide scope of appellability that the intervenor otherwise canvasses. In the case of Mohindra Supply Co., disputes arising under a contract were referred to arbitration. The award was filed in the court of the Subordinate Judge, First Class, Delhi, whereupon the award-debtor, the then Governor- General of India in Council, applied for setting aside the award. The order refusing to set aside the award was carried to the Lahore High Court by way of an appeal. After the dominions of India and Pakistan were set up, the matter was transferred to the Circuit Bench of the East Punjab Hi....
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....t. "17. Under the Code of 1908, the right to appeal under the Letters Patent was saved both by Section 4 and the clause contained in Section 104(1), but by the Arbitration Act of 1940, the jurisdiction of the Court under any other law for the time being in force is not saved; the right of appeal can therefore be exercised against orders in arbitration proceedings only under Section 39, and no appeal (except an appeal to this Court) will lie from an appellate order." [Emphasis in original] 76. The fundamental tenets of statutory interpretation instruct that attention should be paid to what has been said as also to what has not been said, so that a construction which requires additional words to be read into a provision or a construction that renders certain words meaningless may be avoided. However, the rule is subject to exceptions though words cannot be read into a statute unless it is absolutely necessary to do so. 77. At the same time, high authorities instruct that the object of the legislation has to be borne in mind and the occasion on which the words are used and the object that is endeavored to be attained by the provision or the legislation ought also to be ....
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....cree has not been provided for in the said Act, there is no doubt that there is no express provision in such regard and it is only by inference that an appeal against a decree passed in a civil suit pertaining to commercial disputes may be maintainable. That is because the said Act, in Section 16 thereof, makes the provisions of the Code applicable. The provisions of the Code recognise the right of appeal against a decree and, by inference, such provision has to be read into the said Act despite it not expressly providing for an appeal from a decree. There is also a reference to "an appeal against the decree of the Commercial Court" at the end of Section 8 of the said Act, which points to the fact that the said Act permits an appeal from a decree though neither Section 8 nor Section 13 thereof can be said to expressly confer such right. 82. As noticed earlier, the recommendation by the Law Commission bifurcated the appeal provision: one against orders and the other against decrees; and the form in which the Bill was taken to the Parliament dropped the suggested provision pertaining to appeals from decrees. In a sense, the conscious exclusion of such express provision must be see....
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....t expressly provides and carves out as an exception. Equally, a proviso may be used as a guide in the selection of one or the other of two possible constructions of the words in the substantive provision, as it has been judicially recognised that the terms of an intelligible proviso may throw considerable light on the ambiguous import of the statutory words. It is a balance which has to be struck between the two main principles which operate in understanding the impact of a proviso on the enactment. To repeat, the apparently opposing principles being: when the words of the enactment are clear, the proviso may not be read to detract therefrom; and, if the enactment appears to be ambiguous, the proviso may be used as a tool to resolve the ambiguity. At any rate, a proviso may not be seen as a surplusage, in the sense that the proviso would have no impact on the operation of the enactment. 86. The Code permits appeals only against decrees and certain orders. By definition, an order cannot be regarded to be a decree or a decree an order, in terms of the Code. The word "judgment" is only the statement given by the Judge, according to its definition in the Code, in support of the conc....
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.... or otherwise of making an exception for intra-court appeals in the Chartered High Courts and excluding the same in other High Courts. 90. The second reason appears to be the clinching answer since the word "judgment" in the relevant expression could not have been used to imply something in a few High Courts and something altogether different in the remaining High Courts. Seen in such light, the non-obstante clause in sub-section (2) of Section 13 of the Act read with the overriding provision in Section 21 of the said Act would prohibit appeals against any judicial pronouncement otherwise than in accordance with the provisions of the said Act. Indeed, the expression "or Letters Patent of a High Court" may have been used by way of abundant caution in the context of the line of cases culminating in P.S.Sathappan, though the nonobstante clause without such expression may have carried the same impact. 91. It is thus that one needs to return to the proviso to subsections (1) and (1A) of Section 13 of the said Act to understand whether the restrictions which ought to be implied therein would be permissible or not. The context required a discussion on subsection (2) of Section 13 of....
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....able. That would fly in the face of the statute, particularly the intention expressly conveyed by Section 8 of the said Act. 94. It is time to return to the authorities cited by the appellants or would-be appellants as to whether they instruct that appeals from orders other than as construed in the immediate preceding paragraphs would be maintainable under the said Act. 95. Of the several judgments carried by the parties to court having a bearing on the aspect of appellability under the said Act, most of them have been referred to in the preceding discussion. Four other judgments on the issue of appellability need also to be noticed. In the judgment reported at (2020) 4 SCC 234 (BGS SGS Soma JV v. NHPC Limited), the Supreme Court relied on the observation at paragraphs 13 and 14 of the report in Kandla Export Corporation and opined that Section 13 of the said Act must be construed in accordance with the object sought to be achieved by the said Act and any construction of Section 13 of the said Act, which leads to further delay, instead of the expeditious conclusion of the lis, should be eschewed. In that case, a petition under Section 34 of the 1996 Act was retuned by the Spe....
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....rovision of law is couched in a negative language implying a mandatory character, the same is not without exceptions; and, when a court is called upon to interpret the nature of the provision, it may, keeping in view the entire context in which the provision came to be enacted, hold the same to be directory, though worded in the negative form. That matter also pertained to the delay in filing a written statement; but in an election petition. The submission of the relevant appellant by placing the judgment is that if it is possible, in the interest of justice, to read down negative words and make for exceptions, the absence of negative words in the proviso to sub-sections (1) and (1A) of Section 13 of the said Act should guide the court to interpret such provision as being permissive of appeals rather than restricting the scope of appellability. 98. A recent judgment of this court reported at 2020 (3) CTC 461 (Sri Narasu's Coffee Company Pvt. Ltd v. Narasu's Saarathy Enterprises Pvt. Ltd) has been cited by one of the respondents in the appeals arising out of the return of the plaint in the suit for damages. In that case, the would-be appellant before the Division Bench of....
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....ted and appeals that lay prior to the said Act coming into effect would no longer be permissible in respect of civil suits involving commercial disputes of the specified value. The situation under the said Act is similar to the position that was recognised in Mohindra Supply Co. Just as all matters pertaining to arbitration were carved out of the Code of 1908 and placed in the Act of 1940, the said Act in this case has to be seen as the complete code for civil suits involving commercial disputes of the specified value. 101. However banal or clichéd it may sound, it bears repetition that an appeal is a creature of the statute. Judicial precedents - Judge-made laws - do not confer any right of appeal; only statutes do. Judicial precedents merely interpret statutes to ascertain whether there is a right of appeal in a particular situation. As a statute may confer a right, a subsequent statute may abridge the same or even take away the right. The said Act and Section 13 thereof must be seen in such light. 102. It is also necessary, for completeness, to notice the contrary philosophy in P.S.Sathappan where the majority opinion was that Section 104(1) of the Code specifically....
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....No.30 of 2021 is found to not be maintainable as the order impugned is the dismissal of an application to reject the plaint under Order VII Rule 11 of the Code. Nonetheless, the objections raised by the appellant may be urged at the trial. 105. OSA No.230 of 2019 is not maintainable as such appeal is also directed against an order refusing to reject the plaint. Though the appellant in this case claimed that the suit was filed on December 1, 2017, at a time when the Commercial Division was not established in this court, it is evident from the Tamil Nadu Government Gazette (Extraordinary) published on November 29, 2017 that the Commercial Division of the High Court of Judicature at Madras was set up on and with effect from the date of the publication of the notification in the said gazette. However, the objection as to maintainability of the suit may be raised by the defendant at the trial. 106. Though OSA No.208 of 2021 was filed in this court on or about November 10, 2017 and prior to the Commercial Division in this court being set up, in view of the previous Division Bench judgment of this court in Magic Frames that the appeal provision under Section 13 of the said Act would....
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....tiffs were entitled to initiate the action herein. The suit was filed in this court for infringement of trademark and passing-off on the basis of the branch office of the plaintiff firm and the sale of the infringing product within the territorial limits of this court. The judgment referred to the case made out in the plaint and the grounds asserted by the defendants in seeking to demonstrate that the subject-matter of the suit had no nexus with this court, before concluding that the "sporadic presence of the goods within the jurisdiction of this Court ... not sufficient to confer jurisdiction upon this court if the 'connecting factor principle' is applied." 110. The court noticed that four out of the five plaintiffs resided at Mallur in Namakkal District and the fifth plaintiff also had its registered office at Mallur. The first defendant had its registered office in Salem and the second defendant also resided in Salem. According to the trial court, the products of both the plaintiffs and the defendants were manufactured outside the jurisdiction of this court and the marketing of such products, which, according to the trial court, was a chain of events, also commenced o....
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....t done by the defendant since, in the absence of such an act, no cause of action can possibly accrue. It is such observation, found in the last sentence of paragraph 13 of the report that the defendants commend to this court: "13. While scrutinising the plaint averments, it is the bounden duty of the trial court to ascertain the materials for cause of action. The cause of action is a bundle of facts which taken with the law applicable to them gives the plaintiff the right to relief against the defendant. Every fact which is necessary for the plaintiff to prove to enable him to get a decree should be set out in clear terms. It is worthwhile to find out the meaning of the words "cause of action". A cause of action must include some act done by the defendant since in the absence of such an act no cause of action can possibly accrue." 114. On a reading of the plaint, it does not appear that the subject-matter of the suit has any real connection with Chennai. In fact, the residential premises within jurisdiction, which is shown to be the branch office of one of the plaintiffs, began with its first purported transaction and the document in such regard has been relied upon to ....
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....aimed by the plaintiffs over such device marks, but did not continue the injunction in general against the word mark "VARALAKSHMI". The plaintiffs are aggrieved in the order of injunction being curtailed, so to say, and the defendants are aggrieved that the injunction was continued at all, albeit in the truncated form. 117. At paragraph 37 of the impugned judgment, the court gave liberty to the plaintiffs to introduce fresh pleadings and observed that "the injunction granted to the plaintiffs with respect to the device complained in the plaint" could only be maintained, since the packaging material produced by the defendants were quite dissimilar to the packaging material attributed to the defendants in the plaint. 118. The trial court noticed that there were previous disputes even before the formal separation of the businesses of the two brothers in the use of the word mark "VARALAKSHMI". It is in such circumstances that the initial injunction came to be modified by the impugned order, though the plaintiffs were given liberty to incorporate fresh pleadings and claim reliefs and interlocutory orders on the basis thereof. 119. There is an element of discretion available at ....
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....hat unless the present suit was carried to the Bombay High Court, there was a serious possibility of conflict of judgments. 123. The cause-title to the suit indicates the plaintiff appellant's registered office to be in Chennai. Of the 11 defendants, the offices of the sixth defendant company, the seventh defendant company, the ninth defendant limited liability partnership firm and the 11th defendant company are shown to be in Chennai. According to the plaintiff, the suit is founded on the right conferred under Section 35 of the Companies Act, 2013 upon the substantial investment of the plaintiff of Rs.200 crore in a debenture issue, pertaining to a company that has not been impleaded in this suit, being completely lost. At paragraph 123 of the plaint, it is alleged that the "suit has been filed on the fraud and deceit perpetrated inter alia by the Defendant No.1 to 11." The immediate preceding paragraph in the plaint discloses that the plaintiff had filed a commercial suit before the Bombay High Court against Dewan Housing Finance Limited (DHFL) for the recovery of the amount due in respect of non-convertible debentures in DHFL that had been invested in by the plaintiff. Pa....
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....tiff, the debenture issue was a scam and it is reported that a sum in excess of Rs.95,000 crore was lost to the market upon DHFL going bust. The plaintiff had invested Rs.200 crore in the debenture issue for a period of seven years yielding interest at 9.5 per cent per annum. The plaintiff clarifies that the suit before the Bombay High Court was a summary suit based on the investment in the debentures and the failure on the part of DHFL to make the payments in terms of the agreement between the parties. The plaintiff submits that it is for such reason that the suit was filed under Order XXXVII of the Code as, according to the plaintiff, DHFL could not have had any defence to the claim, since the clause in the agreement made DHFL liable to repay the entire amount of investment and interest upon any event of default taking place and the event of default was undisputable as DHFL had failed to make the first tranche of payment in terms of the relevant agreement. 126. The plaintiff says that DHFL was the subject-matter of insolvency proceedings before the National Company Law Tribunal and only an insignificant fraction of the colossal debts due from DHFL to its secured creditors had ....
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....he plaint was not conclusively dealt with and it was left to be decided by the Bombay High Court along with the other interlocutory applications. 130. The plaintiff maintains that the suit was well-founded on the statutory tort recognised in Section 35 of the Act of 2013 and the plaintiff had due mandate to proceed against the first defendant promoter of DHFL; the second and third defendants, who were directors of DHFL; the fourth and fifth defendants, who were the Chief Executive Officer and the Chief Finance Officer of DHFL, respectively; the sixth and seventh defendants, which were the credit rating agencies that had rated the debenture issue so high that the plaintiff was induced to invest therein; the eighth, ninth and tenth defendants, who were the auditors of the company at the time of the issue or within a proximate period prior to the debenture issue; and, the eleventh defendant, who was the debenture trustee. According to the plaintiff, all such persons are liable under Section 35 of the Act of 2013. The plaintiff submits, on a reading of Section 35 of the Act of 2013, that such provision makes the directors of the relevant company who have authorised themselves to be ....
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....nveniently and readily available in Mumbai and, it is on such consideration, that the trial court exercised its discretion in returning the plaint for the plaintiff to carry it to the Bombay High Court. The defendants also suggest that when the ground of forum non conveniens was crying out of every page of the plaint and the trial court exercised the discretion available to return the plaint, the appellate court would scarcely interfere in such exercise of 134. The defendants have referred to several precedents to sustain the judgment and order impugned. A judgment reported at AIR 1953 SC 23 (Keshardeo Chamria v. Radha Kissen Chamria) has been cited to contend that since Order VII Rule 10 of the Code does not apply to this High Court, the power exercised by the trial court to return the plaint must be seen to be upon invoking Section 151 of the Code. At paragraph 15 of the reported case, the Supreme Court observed that an order under Section 151 simpliciter would not be appellable. The court reasoned that only certain specific orders mentioned in Section 104 and Order XLIII Rule 1 of the Code would be appellable "and no appeal lies from any other orders (vide Section 105 CPC)." ....
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....3 and 43 of the report. 140. One of the defendants lays great stress on the fact that the plaintiff had sought leave under Clause 12 of the Letters Patent not to institute the suit in this court, but to sue the defendants. It is necessary to immediately deal with such technical argument before proceeding to notice the remaining legal authorities carried by the defendants to bear on the issue. Clause 12 of the Letters Patent mandates the leave of the court to be "first obtained" if the cause of action, in part, has arisen within the local limits of the ordinary original jurisdiction of this court. However inarticulately worded the prayer for leave under Clause 12 of the Letters Patent may have been, when the court granted the leave, it was the leave to institute the suit in this court. 141. The defendants next rely on a judgment reported at (2003) 6 SCC 659 (Shiv Shakti Coop. Housing Society v. Swaraj Developers and others) for the proposition that a right of appeal is statutory and it does not inhere in any person. Such proposition is placed in the context that the authority exercised to return the plaint in this case is under Section 151 of the Code and no appeal would lie f....
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....eceive a suit - if any of the defendants, at the time of the institution of the suit, does not dwell or carry on business or personally work for gain within the territorial limits of this court, the practice is to obtain leave under Clause 12 of the Letters Patent by pleading that a part of the cause of the action has arisen within the jurisdiction of this court. And - so it appears to have been in the present case. 145. The defendants also place reliance on a judgment of this court reported at 2006-4-L.W.343 (V.Selladurai v. N.Nethaji), where the court considered the applicability of Section 19 of the Code to this court in the context of Clause 12 of the Letters Patent. In that case, an action for defamation was instituted in this court, though the impugned publication had been made only in the Trichy edition of a Tamil newspaper and only one of the defendants had a place of business within the jurisdiction of this court. Though Section 19 of the Code is referred to in the judgment, it does not form any part of the ratio decidendi, as the Division Bench held that since a part of the cause of action of the plaintiff had arisen within jurisdiction and leave had been sought under ....
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....he contention deserves to be rejected out of hand, notwithstanding Sections 15Y and 20A of the Act of 1992 and Section 24 of the Act of 2013. 150. There is no doubt that the relevant provisions give exclusive authority to SEBI in respect of certain matters, but it would be too much of a stretch to read that the right conferred by Section 35 of the Act of 2013 had only to be pursued before SEBI. Indeed, Section 37 of the Act of 2013 is a complete answer in such regard as it provides that "A suit may be filed or any other action may be taken under section 34 or section 35 or section 36 by any person ... affected by any misleading statement or the inclusion or omission of any matter in the prospectus." Surely, nothing in any law confers SEBI, the market watchdog, the authority to receive a suit. Further, the provision makes a distinction between "A suit" and "any other action". 151. A judgment reported at 113 CWN 379 (Secretary, Department of Atomic Energy, Government of India v The Controller General of Patents, Designs and Trademarks) has been placed for the principle of forum conveniens discussed therein in the context of a petition under Article 226 of the Constitution of In....
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....ether an appeal is maintainable therefrom rather than the source of the power exercised to pass the order. 155. It is possible that the source of the power is provided in a particular statute but the exercise thereof is under the general procedure in accordance with the Code. Again, the power to pass the order may be traced to the mandate in a particular statute though the manner of exercise of that power may not be stipulated in such statute. At any rate, even Order XLIII Rule 1 of the Code indicates the nature of the order which is appellable in certain cases and, in other cases, the order made in exercise of an authority conferred by the Code itself. The difference between the wording of, for example, subrules (a), (c) and (d) of Order XLIII Rule 1 of the Code, on the one hand, and sub-rules (f), (q), (r) and (s) of Order XLIII Rule 1 of the Code, on the other hand, is telling. While every order passed under the relevant provisions indicated in sub-rules (f), (q), (r) and (s) of Order XLIII Rule 1 of the Code is appellable, only those of a particular kind as indicated in sub-rules (a), (c) and (d) of Order XLIII Rule 1 of the Code are appellable. The obvious inference that is....
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....elevant consideration. Since insolvency proceedings had been commenced against DHFL by the time the suit was instituted, DHFL could not have been impleaded as a party by virtue of Section 14 of the Code of 2016 and the punishment attracted under Section 74(2) thereof for violation of such provision. 158. In fact, the plaintiff's Bombay suit, for all practical purposes, does not survive upon the resolution plan pertaining to DHFL being approved by the NCLT. 159. The perception by the trial court that it would be convenient for the two suits to be tried together betrays the failure to appreciate the nature of the two actions. The Bombay suit was filed under Order XXXVII of the Code as a summary action founded on the contract between the plaintiff and DHFL qua the repayment of the amount invested by way of debentures. It is trite law that a claim in damages founded on the fraudulent conduct of the defendant or defendants can scarcely be instituted under Order XXXVII of the Code. 160. There is sufficient basis to the plaintiff's contention that the impugned judgment is perverse. It may do well to notice some of the paragraphs from the judgment, particularly paragraph 1....
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.... 164. Again, the discussion at paragraphs 120 and 121 of the judgment is somewhat confusing. There is an averment in the plaint to the effect that the quantum of damages that may be realised in course of the present action may be adjusted against any realisation pertaining to the debentures made by the plaintiff elsewhere. That, in essence, is a legal requirement, or else, the doctrine of unjust enrichment would apply. It does not appear that the nature of the plaintiff's claim in the present action may have been fully comprehended by the trial court. The plaintiff had made a substantial investment in debentures which the plaintiff later discovered that the plaintiff may have been induced into making on the basis of the false statements and dishonest representations contained in the prospectus relating to such issue. As a consequence, the plaintiff initiated an action for recovery of the money from the concerned company itself and, subsequently, instituted the present suit for the loss and damage that the plaintiff suffered as a result of the perceived fraudulent and dishonest representations of the defendants herein. Surely, if the entire amount due to the plaintiff under the ....
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....no possibility of the defendant therein, DHFL, ever paying interest in the future in view of the fact that the company was tainted with fraud. "140. In the suit in Chennai, the fact that DHFL is tainted with fraud and that facts had been misrepresented in the prospectus will also be the crux of the evidence let in by the plaintiff. Viewed from any angle, evidence overlaps." 167. In considering whether to allow a plaintiff to pursue its action in a court, upon a challenge in the nature of a demurrer thrown by a defendant, several grounds may be relevant. It could be that the jurisdiction of the court may not have been attracted by the averments in the plaint; or the ground of overwhelming inconvenience may be made out; or any form of prohibition whether in law or by agreement may be cited; or even the principle of comity of courts may be alluded to, among others. However, a court already in receipt of an action cannot shoo away the plaintiff lightly on vague and general grounds of inconvenience, particularly since the law gives the plaintiff the right to choose the forum. In the present matter, no case of inconvenience was made out by the any of the defendants for the tr....
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....he defendants range from the promoters to directors and auditors of company DHFL and experts, whose independent opinions weigh with investors seeking to invest in the market. At the trial, a large number of documents may be produced on behalf of the plaintiff to assert that the statements in the prospectus were false and misleading or material facts had been suppressed therein; and the defendants may also rely on voluminous papers to justify the contents of the prospectus. Even though no overwhelming ground of inconvenience was made out by the defendants - at least, none has been referred to in the impugned judgment - it is difficult to accept that in the present day and age, the plaintiff will be called upon to abandon his chosen forum, which may otherwise have authority to receive the suit, and directed to go Mumbai to file the suit on the ground that a large number of documents, more readily available in Mumbai, may have to be brought at the trial. 172. For the reasons aforesaid, the judgment and order impugned dated April 29, 2021 cannot be sustained and none of the grounds indicated therein is acceptable for the plaintiff herein to be shown the door and required to carry th....