Appeal (L) No. 128 of 2013 in Chamber Summons (L) No. 139 of 2013 in Petition No. 799 of 2012 in Suit No. 40 of 2013. Case: Deccan Chronicle Holdings Ltd. Vs PIL Industries Ltd. & Ors., [Alongwith Appeal (L) No. 125 of 2013 in Chamber Summons (L) No. 140 of 2013 in Petition No. 801 of 2012 in Suit No. 41 of 2013]. High Court of Bombay (India)

Case NumberAppeal (L) No. 128 of 2013 in Chamber Summons (L) No. 139 of 2013 in Petition No. 799 of 2012 in Suit No. 40 of 2013
CounselFor Appellant: Mr. Praveer Diwan, Mr. Harish Pandya i/b. Mr. Chakrapani Misra, Ms. Meghna Rajadhyaksha, Mr. Rohit Sayaraman i/b. Khaitan & Co. and For Respondents: Mr. V. R. Dhond, Senior Advocate, Mr. Abhishek Kale and Ms. Shubhra Swami i/b. Naik & Co. and Mr. S. S. Deshpande, Court Receiver and Mr. N. A. Bandodkar, Adv.
JudgesD. Y. Chandrachud and M. S. Sonak, JJ.
IssueCivil Procedure Code
Judgement DateOctober 01, 2013
CourtHigh Court of Bombay (India)

Judgment:

D. Y. Chandrachud, J.

1. Both the Appeals arise from a judgment and order of a learned Single Judge dated 4 February 2013 on Chamber Summons which were taken out by the Appellant for revoking the leave which was granted by the learned Single Judge under Clause 12 of the Letters Patent. Both the learned Counsel have urged before the court the facts of the first of the two appeals and are agreed that since the issue is similar, the judgment will govern both the appeals. The Appellant in both the Appeals is the original First Defendant. The Appellant availed of financial facilities from Future Capital Holdings Limited, the Seventh Respondent (the Original Seventh Defendant). The Second, Third and Fourth Respondents furnished personal guarantees. Though the original loan facilities were provided to the First Defendant by the Seventh Defendant the Plaintiff claims under a Deed of Assignment dated 3 August 2012 by which the loan facilities and all the receivables, rights and benefits of the Seventh Defendant have been assigned to the Plaintiff. A loan facility agreement was entered into between the First and the Seventh Defendant on 11 July 2012. The claim in the suit is for the recovery of an amount of Rs. 125 crores which is claimed to be due and payable to the Plaintiff or, alternatively, to the Seventh Defendant. The Plaintiff seeks in prayer (c) of the plaint a declaration of the existence of a valid and subsisting mortgage of immovable properties. The Plaintiff seeks, in the event that it is held that a valid mortgage by deposit of title deeds has not been created, a decree for specific performance of the agreement to create a mortgage by depositing title deeds. On this basis, the Plaintiff has sought the enforcement of the mortgage by the sale of properties and the application of the net sale proceeds in satisfaction of the claim of the Plaintiff. In the alternate, and in the event that specific performance is refused, the Plaintiff has sued for damages quantified at Rs. 300 crores. Consequential reliefs have been claimed in the suit.

2. The suit was presented on 23 August 2012. After the suit was presented an application was made for leave under clause 12 of the Letters Patent on 23 August 2012 which was granted. The suit has been lodged on 25 August 2012 before the registry.

3. An application was made before the learned Single Judge for revocation of the leave which was granted under clause 12 of the Letters Patent. The Chamber Summons for revocation has been dismissed by the impugned order dated 4 February 2013.

4. Learned Counsel appearing on behalf of the Appellants submits that:

(i) Leave under clause 12 of the Letters Patent has to be taken prior to the receipt of the plaint by the court and leave if taken subsequently is not proper. In the present case the learned Single Judge has observed in paragraph 7 of the judgment that the petition seeking leave under Clause 12 was filed after the suit was filed. Hence leave could not have been granted;

(ii) Leave under clause 12 cannot be granted if the Plaintiff has sought title in which case the issue of title has to be decided;

(iii) No leave under clause 12 can be granted where a suit is for damages;

(iv) Before leave can be granted, the cause of action must enure to the benefit of the Plaintiff. Where the cause of action has accrued in favour of one of the Defendants, no leave can be granted; and

(v) The clause of jurisdiction in the loan facility agreements excludes by implication the jurisdiction of all other courts other than those at Hyderabad. Though the clause of jurisdiction recognises a non exclusive jurisdiction in the Courts of Hyderabad, the words "non exclusive" will render the entire clause redundant. Hence parties must be construed to have had the intent to confer exclusive jurisdiction only on the courts at Hyderabad.

5. Clause 12 of the Letters Patent is thus:

12. Original jurisdiction as to suits.- and We do further ordain that the said High Court of Judicature at Bombay, in the exercise of its ordinary original civil jurisdiction, shall be empowered to receive, try and determine suits of every description, if, in the case of suits for land or other immovable property such land or property shall be situated, 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 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; except that the said High Court shall not have such original jurisdiction in cases falling within the jurisdiction of the Small Cause Court at Bombay, or the Bombay City Civil Court.

6. Clause 12 empowers this court in the exercise of its ordinary original civil jurisdiction to receive, try and determine suits of every description if (i) in the case of "suits for land or other immovable property" such land or property be situated within the...

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