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2013 Supreme(Del) 225
High Court of Delhi
PRADEEP NANDRAJOG & VEENA BIRBAL, JJ.
Tata Motors Limited
Versus
JSC VTB Bank
FAO(OS) Nos. 364, 393, 394 of 2012
Decided on : 21-02-2013
For the Appellant:Arvind Nigam, Sr. Advocate instructed by Darpan Wadhwa, Arush Khanna, Ms. Jaishree Shukla, Advocates.
For the Respondent:Rakesh Tiku, Sr. Advocate instructed by Rajiv Nanda, Advocate.
Territorial jurisdiction is established by suing a corporation at its sole office in India, and the explanation to Section 20 of the Code of Civil Procedure is a deeming provision.
Headnote:
Amendment - Territorial Jurisdiction - Reserve Bank of India Act 1934 - UCP 600 - Section 20 of the Code of Civil Procedure - Article 3 of UCP 600
Fact of the Case:
Tata Motors Ltd. filed suits against JSC VTB Bank for non-payment under Letters of Credit issued by the bank's branch in Russia. The defendant's description in the suits raised issues of territorial jurisdiction.
Finding of the Court:
The court allowed amendments to clarify the defendant's description, emphasizing that a corporation must be sued in its own name and at its sole office in India to establish territorial jurisdiction.
Issues: The issues revolved around the inapt description of the defendant, the interpretation of Section 20 of the Code of Civil Procedure, and the application of UCP 600 in determining territorial jurisdiction.
Ratio Decidendi: The court clarified that a corporation must be sued at its sole office in India to establish territorial jurisdiction, and the explanation to Section 20 of the Code of Civil Procedure is a deeming provision. The court also emphasized that Article 3 of UCP 600 is limited to documentary credits and does not make branches of a bank separate entities in all respects.
Final Decision: The court allowed the amendments, set aside the impugned decision, and dismissed the interim applications. The suits were restored, and the appellant was entitled to a refund of the Court Fees paid in the appeals.
Pradeep Nandrajog, J.
FAO(OS) 364/2012 & CM No.21076/2012; FAO(OS) 393/2012 & CM No.21078/2012; and FAO(OS) 394/2012 & CM No.21071/2012
1. Not a misdescription but an inapt description of the defendant in the three suits filed by the appellant has necessitated CM No.21076/2012, CM No.21078/2012 and CM No.21071/2012 to be filed, one each in the three captioned appeals, invoking the amendment jurisdiction of Civil Courts to amend the plaint; not by way of additional pleadings of fact or of law, but clarificatory in nature: to blow away the clouds casting a shadow on the very maintainability of the suit.
2. Tata Motors Ltd. filed three suits against the same defendant, described in the memo of parties as under:-
“JSC VTB Bank
A Corporation with a place of business/banking office in India registered under the Reserve Bank of India Act 1934 as a foreign Bank at the Taj Mahal Hotel, Mezzanine Floor 1, Mansingh Road, Delhi-110011.”
3. And suffice would it be for us to highlight that the description of the defendant discloses that it is a foreign bank, having a place of business at Taj Mahal Hotel, Mansingh Road, New Delhi which is a banking office in India, registered under the Reserve Bank of India Act 1934 as a foreign bank.
4. Para 3 of the plaint in each suit reads as under:-
“That the Defendant is a banking corporation registered under the Reserve Bank of India Act 1934 having a branch office in New Delhi where it operates/carries on business within the territorial jurisdiction of this Hon’ble Court.”
5. The foundation of the action in the three suits are three Letters of Credit (one in each suit) issued by JSC VTB Bank from its branch located at Ekaterinburg, Russia at the instance of Closed Joint Stock Companies incorporated under the laws of Russia. The Letters of Credit were subject to Uniform Customs Practice for Documentary Credit (2007 Revision); UCP 600. The grievance raised in the plaint is that the defendant has refused to discharge its liability under the letters of credit raising flimsy objections which are not sustainable as per law. As per the plaint, the Letters of Credit were issued by the Ekaterinburg Branch of the bank at Russia and the bill of exchange was drawn by the plaintiff and sent through its collecting bank to the said branch at Russia for payment. The objections were raised by said branch. Money decree has been claimed pertaining to the letters of credit.
6. Not being relevant for the purpose of the present appeals we are not noting the dispute raised by the issuing bank when the letter of credit were required to be honoured when the plaintiff raised the bill of exchange.
7. The three suits, invoking the summary jurisdiction of this Court, resulted in notices being served upon the defendant in the form prescribed as per the Civil Procedure Code, inviting applications under Order 7 Rule 10 read with Rule 11 and Section 151 of the Code of Civil Procedure being filed by the respondent, inter-alia, questioning the territorial jurisdiction of this Court by highlighting that as per the pleadings in the three plaints, Tata Motors Ltd. had itself pleaded that the three Letters of Credit were issued by JSC VTB Bank, Ekaterinburg branch, Russia and when the Bill of Exchange was drawn invoking the credit, the same was refused by said branch. It was highlighted that the plaint admitted the fact that the branch at New Delhi was registered with the Reserve Bank of India under the Reserve Bank of India Act 1934 and was thus a separate juristic entity.
8. Tata Motors Ltd. relied upon sub-Clause (a) of Section 20 read with the explanation thereto of the Code of Civil Procedure 1908 by highlighting that the Russian Bank had sole office in India at Delhi which was exclusively carrying on banking business of the defendant at New Delhi i.e. the bank could be sued at the place of its sole office in India i.e. at New Delhi.
9. Vide impugned order dated February 17, 2012, the three interim applications file
