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2016 Supreme(Cal) 394
IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
DEBANGSU BASAK, J.
SREI Capital Markets Limited - Plaintiff
Versus
GRID Corporation of Orissa Limited - Defendant
C.S. No. 76 of 2007
Decided On : 08-09-2016
Advocate Appeared:
For the Plaintiff : Surajit Nath Mitra, Anuj Singh, Shounak Mitra, Mr. Soumabho Ghosh
For the Defendant : Amitava Das, Debdut Mukherjee, Tapan Sil
The syndication fee clause required payment on both mobilization and disbursement, not just mobilization alone.
Headnote:
SYNDICATION FEES - INTERPRETATION OF CLAUSE - DISBURSEMENT CONDITION - JURISDICTION - PARTIAL CAUSE OF ACTION - LETTERS PATENT, 1865, CLAUSE 12 - EVIDENCE ACT, 1872, SECTION 114.
Fact of the Case:
Plaintiff sought money decree for fees allegedly remaining unpaid for services rendered in syndication of loan to be availed by defendant. Plaintiff claimed it was entitled to one-time syndication fees of 0.50% exclusive of taxes of the amount mobilized and disbursed. Defendant denied liability and raised jurisdiction issue.
Finding of the Court:
1. Syndication fee clause required payment on mobilization and disbursement of the amount, not on mobilization alone. 2. Disbursement of Rs. 300 crores did not occur, so defendant was not liable to pay syndication fee for that amount. 3. Court lacked territorial jurisdiction as part cause of action did not arise within its jurisdiction. Demand notice issued by plaintiff's advocate from within the jurisdiction did not constitute an integral part of the cause of action.
Issues: 1. Whether the syndication fees were payable only upon disbursement, as claimed by the defendant? 2. Whether the plaintiff performed its obligations under the contract? 3. Whether the financier disbursed any portion of the second tranche of Rs. 300 crores despite the defendant's request, and whether the plaintiff was aware of the same? 4. Whether the court had jurisdiction to entertain the suit.
Ratio Decidendi: 1. The syndication fee clause required payment on both mobilization and disbursement, not just mobilization alone. The word 'and' between 'mobilized' and 'disbursed' could not be read as disjunctive in the facts of the case. 2. The defendant's failure to receive the second tranche of Rs. 300 crores did not mean that the plaintiff would be denied the syndication fees. 3. The plaintiff had mobilized the sum of Rs. 600 crores as required of it to do in terms of the syndication agreement. 4. The court lacked territorial jurisdiction as the part cause of action did not arise within its jurisdiction. The demand notice issued by the plaintiff's advocate from within the jurisdiction did not constitute an integral part of the cause of action.
Final Decision: Suit dismissed for lack of jurisdiction.
1. The plaintiff has sought a money decree on account of fees allegedly remaining unpaid for services rendered. According to the plaintiff, it was engaged for the purpose of syndication of loan to be availed of by the defendant. The plaintiff had participated in the tender process and was the second lowest bidder. Since the first lowest bidder did not suit the plaintiff, the contract was awarded to the plaintiff. The plaintiff had acted in terms of the contract. The plaintiff had mobilized a sum of Rs. 600 crores. The plaintiff had raised a bill for the syndication fees on the defendant. The defendant had made a part payment in respect thereof. In the present suit the plaintiff has, therefore, sought for a balance of the bill amount.
2. The defendant has filed a written statement denying the material allegations in the plaint. The defendant has also taken the point of lack of jurisdiction of this Hon'ble Court to try the present suit.
3. By an order dated June 19, 2015 five issues were framed. Such issues are as follows:-
1. Whether this Hon'ble Court has any jurisdiction to entertain the present suit or the suit is otherwise maintainable, as framed or at all?
2. Was the syndication fees as payable to the plaintiff dependent upon the amount actually received by the defendant, as alleged in the written statement and particularly in paragraph 12 thereof?
3. Did the plaintiff not perform its obligations under the contract between the parties, as alleged in paragraph 15 of the written statement?
4. Did not the financier make disbursement of any portion of the second tranche of the said sum of Rs. 300 crores in spite of the request of the defendant and was the plaintiff fully aware of the same, as alleged in the paragraph 19 of the written statement?
5. What relief, if any, is the plaintiff entitled to?
The plaintiff has adduced evidence through one witness. The defendant did not produce any witness.
4. Learned Senior Advocate for the plaintiff has referred to the pleadings of the parties. He has referred to the plaint case and the defence taken by the defendant in its written Statement. He has referred to Exhibit 'D' being the letter dated August 2, 2003 issued by the defendant to the plaintiff. He has submitted that, Exhibit 'D' is the contract between the parties. He has referred to the clause with regard to syndication fees in Exhibit 'D' and has submitted that, the defendant is liable to pay one time syndication fees of 0.50 per cent exclusive of taxes of the amount mobilized and disbursed. He has referred to various sub-clauses under the syndication fees of Exhibit 'D' and has submitted that, the word 'and' between mobilized and disbursed has to read as disjunctive in the facts of this case. The word 'and' can be read as disjunctive in a given situation. He has submitted that, the plaintiff has mobilized the sum of Rs.600 crores as required of it to do in terms of the syndication agreement being Exhibit 'D'. It is due to the failure on the part of the defendant that apart from the first tranche of Rs.300 crores, the defendant has failed to receive the next tranche of Rs.300 crores. The failure on the part of the defendant to receive the second tranche of Rs.300 crores does not mean that, the plaintiff would be denied the syndication fees in terms of Exhibit 'D'. He has referred to various correspondence exchanged between the parties particularly Exhibits 'M, 'O', 'P', most parts of Exhibit 'U' as well as Exhibits 'V' and 'L'. He has referred to the bill raised by the plaintiff upon the defendant being Exhibit 'N'. He has submitted that, the bill being Exhibit 'N' was received by the defendant unconditionally. The defendant had made a part payment in respect of the bill raised. The defendant is liable to pay the balance of the bill amount.
5. With regard to the interpretation of the clause relating to syndication fees in Exhibit 'D', the learned Senior Advocate for the plaintiff has submitted that, although the defendant has t
