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1985 Supreme(Cal) 96

High Court Of Calcutta
C. K. BANERJEE
KANTHAL INDIA LTD. - Appellant
Versus
ANANT PRASAD BHATIA - Respondent
Suit 158  Of  1984
Decided On : 03/15/1985

Advocates Appeared:
B.K.CHATTERJI, GOUR ROY CHOWDHURY, SURHID ROY CHOWDHURY

A court has jurisdiction to entertain a suit if the plaint discloses a cause of action against the defendants and the court has inherent jurisdiction to entertain the suit. An application for amendment of the plaint should be allowed if the amendments sought are necessary and relevant for the purpose of determining the real controversy between the parties and the delay in filing the application is not such as to disentitle the plaintiff to make the application.

Headnote:

CONTRACT - JURISDICTION - AMENDMENT OF PLAINT - CAUSE OF ACTION - CIVIL PROCEDURE CODE, 1908 - ORDER 6, RULE 17 - LETTERS PATENT, 1865 - CLAUSE 12 - WITHDRAWAL OF MONEY FROM BANK ACCOUNT - LIABILITY OF DEFENDANTS - AMENDMENT OF PLAINT TO SHOW JURISDICTION - DELAY IN FILING APPLICATION FOR AMENDMENT.

Fact of the Case:

Plaintiff, a company, filed a suit against three defendants, including the first defendant, a director of the plaintiff, and the second defendant, the branch manager of the plaintiff's Varanasi unit. The plaintiff alleged that the first defendant, in collusion with the second defendant, wrongfully withdrew Rs. 65,000 from a special account maintained by the plaintiff with the Punjab National Bank in Varanasi. The plaintiff claimed that it had suffered damages as a result of the defendants' actions and sought recovery of the amount withdrawn. The defendants filed applications for revocation of leave granted under Clause 12 of the Letters Patent, arguing that the court lacked jurisdiction to entertain the suit and that the plaint did not disclose any cause of action against them. The plaintiff filed an application for amendment of the plaint to address the jurisdictional issue.

Finding of the Court:

The court held that the plaint disclosed a cause of action against the defendants and that the court had jurisdiction to entertain the suit. The court noted that the plaintiff had pleaded that the defendants had knowledge of the withdrawal of authority to receive any further money on behalf of the defendant 3 in the said special account, and that the defendants had acted in collusion and conspiracy to withdraw the amount. The court also noted that the plaintiff had pleaded that it had suffered damages as a result of the defendants' actions, including reputational damage and adverse remarks by its auditors. The court further held that the delay in filing the application for amendment was not such as to disentitle the plaintiff to make the application, and that the amendments sought were necessary and relevant for the purpose of determining the real controversy between the parties.

Issues: 1. Whether the court had jurisdiction to entertain the suit. 2. Whether the plaint disclosed a cause of action against the defendants. 3. Whether the application for amendment of the plaint should be allowed.

Ratio Decidendi: 1. The court has jurisdiction to entertain the suit because the plaintiff has pleaded a cause of action against the defendants and the court has inherent jurisdiction to entertain the suit. 2. The plaint discloses a cause of action against the defendants because the plaintiff has pleaded that the defendants acted in collusion and conspiracy to withdraw the amount from the special account, and that the plaintiff has suffered damages as a result of the defendants' actions. 3. The application for amendment of the plaint should be allowed because the amendments sought are necessary and relevant for the purpose of determining the real controversy between the parties and the delay in filing the application is not such as to disentitle the plaintiff to make the application.

Final Decision: The court dismissed the applications for revocation of leave under Clause 12 of the Letters Patent and allowed the application for amendment of the plaint.

C. K. BANERJEE, J.


( 1 ) THESE are three applications. The two applications are for revocation of leave under cl. 12 of the Letters Patent taken out by the defendants Nos. 1 and 2 respectively. The other is an application for amendment of the plaint taken out by the plaintiff. By consent of the parties all the three applications are taken up and are heard together.

( 2 ) MR. Biswaroop Gupta, learned Counsel for the defendant 1 in the application taken out on his behalf for revocation of leave under cl. 12 of the Letters Patent submitted that on the basis of the plaint filed in this suit no cause of action against the defendant 1 arose within the jurisdiction of this Court. Therefore, so far as the said defendant is concerned this Court has no jurisdiction to entertain or try the suit. Mr. Gupta also urged that in any event the plaint does not disclose any cause of action whatsoever against the defendant No. 1. Therefore, no leave could be granted under cl. 12 of the Letters Patent inasmuch as the suit itself was not maintainable against the defendant 1. Similar contentions were also raised by Mr. Gour Roy Chowdhury, learned counsel for the defendant 2 on whose behalf the other application for revocation of leave under cl. 12 of the Letters Patent has been taken out.

( 3 ) TO appreciate the rival contentions of the parties in all these applications it is necessary to note what case the plaintiff has made out in the plaint as against the defendants. There are three defendants in this suit. The third defendant B. M. Singh and Sons is the sole selling agent of the products of the plaintiff and as such it has been made a party to this suit but no relief has been claimed against it in this suit as will appear from para 22 of the plaint, but the defendant 3 has been joined in this suit as the plaintiff has been advised to impaled the said defendant, as his presence is necessary for complete adjudication of the disputes. Thus the defendant 3 is a defendant, which in common parlance is known as pro forma defendant. The case of the plaintiff as laid in the plaint is that the defendant 2 was the Branch Manager of the plaintiff of its Varanasi Unit. The defendant 1 was a director of the plaintiff and is the father of the defendant 2. By a written agreement dated 1st June, 1973 made within the jurisdiction of this Court in Calcutta the plaintiff appointed the defendant 3 as the sole selling agent of its products and as such agent the defendant 3 became entitled to receive from the plaintiff certain commission on percentage basis on the value of the products of the plaintiff sold. It is next pleaded that with effect from Aug. 1978 the defendant 3 appointed or engaged the defendant 1, inter alia, as its agent to watch the interest of the defendant 3 at Varanasi and the defendant 3 agreed to pay to the defendant 1 one per cent of the commission due to the defendant 3 from the plaintiff in respect of the Varanasi unit. The plaintiff was informed of the said arrangement between the defendant 3 and the defendant 1 by a letter dt. 4th Dec. , 1978 by the defendant 3 which was received by the plaintiff at its registered office in Calcutta within the jurisdiction of this Court. It is also pleaded that the plaintiff duly made all payments to the defendant 1 and to the defendant No. 3 in terms of the above arrangement. It is next pleaded that the above arrangement was modified or varied with effect from 1st Aug. , 1980 by an agreement between the defendant 1 and the defendant 3. One of such variation was that from Aug. , 1980 every month an amount equivalent to about 1% of the commission due to the defendant 3 for the preceding month would be paid to the defendant 1 and this would be treated as payment on defendant 3's special account. The other variation was that all amounts paid to the defendant 1 by the plaintiff's Varanasi unit on behalf of defendant 3 should be confirmed by the plaintiff's Calcutta office as per existing practice and the said a








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