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2004 Supreme(SC) 664

2004(4) Supreme 662
SUPREME COURT OF INDIA
(From Calcutta High Court)
Mrs. Ruma Pal & P. Venkatarama Reddi, JJ.
Indian Mineral & Chemicals Co. & Ors. -Appellants
versus
Deutsche Bank -Respondent
Civil Appeal No. 3421 of 2004
(Arising out of SLP (C) No. 14136 of 2003)
Decided on 4-6-2004
Counsel for the Parties :
For the Appellants : Jaideep Gupta, Sr. Advocate, N. Dubey, Ms. Indra Sawhney, Advocates.
For the Respondent : Gopal Subramanium, Sr. Advocate, L.K. Bhushan, K.G. Gopalkrishnan and Rahul Prasanna Dave, Advocates.

Headnote:Letters Patent, 1865-Clause 12-Revocation of leave to file suit in Calcutta High Court on ground that no part of cause of action as pleaded had arisen-Appellant plaintiff had supplied goods to German Company and payment was to be made by letter of credit-Respondent had issued letter of credit at instance of German Co. in appellant s favour-Division Bench while allowing application for revocation of leave found that letter of credit was to be honoured by payment "at sight" and was to be made at Dusseldorf and not in Calcutta-Appeal-Division Bench erred in coming to contrary factual conclusion in respect of grounds pleads in plaint-What was the role of UCO Bank, in which credit of letter of credit was to be made, in fact was a mixed question of law and fact-Matters were to be decided on evidence and could not be decided on application-Impugned order was liable to be set aside.

       Held : In the plaint the jurisdiction of the High Court was claimed on the ground that:

        (1) UCO Bank s branch which was within the Courts jurisdiction intimated the plaintiffs that the letter of Credit had been issued by the Respondent.

        (2) The documents were presented by the plaintiffs to the said branch of UCO Bank; and

        (3) Payment was to be received by the Plaintiffs from the said branch of UCO Bank.

       The Division Bench could have held that what was alleged to be a part of the cause of action did not form part of the cause of action at all. This the Division bench did not do. It was not open to the Division Bench to come to a contrary factual conclusion in respect of any of these three grounds. The appeal is, therefore, liable to be allowed on this ground alone. (Paras 10 and 11)

       What the role of UCO Bank in fact was is a mixed question of law and fact. At present, since we have to determine the court s jurisdiction ex facie the plaint, we cannot proceed on the assumption that UCO Bank was not authorised to receive the documents or that the payment under the Letter of Credit was to be made, as far as the appellants are concerned, at Dusseldorf. Ultimately it will depend upon whether UCO Bank was acting for the Respondent or the appellants. All these matters will have to be decided on evidence and cannot be decided on an application for revocation of leave under Clause 12 of the Letters Patent. (Para 14)

       

JUDGMENT

Ruma Pal, J.-Leave granted.

2. The appellant is a partnership firm of which the other appellants are its partners. By the impugned order, the Division Bench has allowed the respondent s application for revocation of leave which had been granted under clause 12 of the Letters Patent 1865 to the appellants to file a suit against the respondent in the Calcutta High Court. Leave was revoked on the ground that no part of the cause of action as pleaded in the plaint had arisen within the original jurisdiction of the Court. The plaint was consequently directed to be taken off the file and returned to the appellants for presentation to the Court having jurisdiction to entertain the suit.

3. The suit had been filed in 1995 by the appellants against the respondent alleging that the appellant had supplied goods pursuant to an agreement between the appellant No.1 and a German Company, named Kleinsorge (hereinafter referred to as the Company ). Payment for the goods supplied was to be made by way of letter of credit. The letter of credit was accordingly issued by the respondent at the instance of the Company in favour of the appellant No.1 for an amount of DM 41,06,080 The goods were supplied by the appellants to the Company. The plaint goes on to state (wherein the appellants are referred to as "the plaintiffs" and the respondent as "the defendant"):

"8. The said letter of credit was sent by the defendant to the UCO Bank, 4 & 4/1, Red Cross Place, Calcutta- 700 001 within the aforesaid jurisdiction and the defendant advised the UCO Bank requesting the UCO Bank to advise the said credit to the plaintiff No.1 without adding its confirmation. In other words, the UCO Bank was acting as the Advising Bank only.

11. On 15th September 1992 and 30th October, 1992, the plaintiffs presented the documents stipulated in the aforesaid letter of credit at the UCO Bank, 4 and 4/1, Red Cross Place, Calcutta-700 001 within the aforesaid jurisdiction.

12. The plaintiffs state that the plaintiffs presented the entire set of documents relating to the shipped goods as required by the aforesaid letter of credit and the said documents were forwarded by the Advising Bank to the issuing Bank being the defendant. The defendant received the said documents in Germany, outside the aforesaid jurisdiction. The plaintiffs reasonably expected to receive the payment under the said letter of credit within a short period of time.

There was no discrepancy in the said documents and till date, no complaint has been received from either the defendant or the Advising Bank or the purchaser in that regard. Payment under the said letter of credit was to be made at the office of the UCO Bank at 4 & 4/1, Red Cross Place, Calcutta- 700 001, within the aforesaid jurisdiction."

4. On the allegation that inspite of request and demand, the respondent did not make any payment under the letter of credit, the appellants filed the suit for an amount of Rs. 7,01,670.36, further interest and other reliefs after obtaining leave under clause 12 of the Letters Patent.

5. Clause 12 of the Letters Patent which applies to the original jurisdiction of the Calcutta High Court empowers the High Court in exercise of its ordinary civil jurisdiction to receive, try and determine suits, inter-alia, 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".

6. After the suit was filed an application was presented by the appellants under Chapter XIII-A of the Original Side Rules which provides for summary decision in suits to recover a debt or a liquidated demand. Rule 6 of Chapter XIII-A provides that unless the defendant satisfies the Court by way of affidavit or otherwise that he has a good defence to the claim on its merits or discloses such facts as may be deemed sufficient to entitle him to defend, then the court may make an order refusing leave



















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