SANJIB BANERJEE, J. : –

The principal application taken up for consideration is the one by the first two defendants for revocation of the leave granted under clause 12 of the Letters Patent or, in the alternative, for dismissal of the suit or, in the further alternative, for rejection of the plaint. In GA No. 649 of 2002 the State of Andhra Pradesh and the Andhra Pradesh Industrial Infrastructure Corporation Ltd claim that the plaintiffs have no cause of action; that this Court did not have the authority to receive the suit; and, that the claim is, in any event, barred by the laws of limitation.

There are two other applications that have also been taken up. GA No. 1189 of 2009 is the plaintiffs’ application for amendment of the plaint on formal grounds since the name of the second plaintiff has been changed during the pendency of the suit and the third, fourth and fifth plaintiffs have apparently merged in the first plaintiff. The third application, GA No. 1234 of 2009, is by the plaintiff under Section 89 of the Civil Procedure Code seeking a direction that the disputes in the suit be referred for redressal by an alternative forum. The applying defendants insist that the suit could never have been brought before this Court and the specious grounds narrated for invoking the territorial jurisdiction of this Court should result in the immediate revocation of the leave granted under clause 12 of the Letters Patent. The applying defendants say that there is a more fundamental ground for arresting the progress of the suit.

According to them, all disputes arising out of a memorandum of understanding between the second plaintiff and the first defendant stood resolved pursuant to a memorandum of settlement filed before the High Court of Andhra Pradesh and accepted by such Court.

On January 28, 1994 the second plaintiff, a company incorporated in the United Kingdom, entered into a memorandum of understanding with the Government of Andhra Pradesh that contemplated the setting up of an international economic enclave including an industrial township in that state, a business centre and an international resort in Visakhapatnam, an international business district in Hyderabad and a utility company to upgrade and induct technology in the State of Andhra Pradesh. The memorandum recorded that the State Government was desirous of promoting industrial growth in the State and had offered incentives for the improvement of infrastructural facilities to generate downstream investment and industrialisation. The memorandum of understanding envisaged execution of the individual projects by infrastructure companies to be incorporated in the State. Land was to be developed by the entities to be floated by the second plaintiff upon the State Government providing the same. It is the common case that after some money was paid by the second plaintiff, or by companies set up by the second plaintiff, and some land was acquired and allotted, the projects ran into rough weather.

By a notice of March 3, 1997 the Government of Andhra Pradesh required the second plaintiff and/or the companies floated for the purpose of executing the work under the memorandum of understanding to show cause as to why the memorandum should not be cancelled. Such show-cause notice was preceded by letters dated February 18, 1997 and February 24, 1997 issued by the second defendant herein evidencing the Government’s intention to either not continue with the project or remove the second plaintiff and its associate companies from the project. The third, fourth and fifth plaintiffs herein along with a common shareholder and director of the three companies instituted WP No. 5107 of 1997 in the High Court of Andhra Pradesh challenging the show-cause notice of March 3, 1997 and the corporation’s letters of February 18 and February 24, 1997. Upon such petition under Article 226 of the Constitution of India being received, the High Court apparently expressed a desire that the matter