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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Divyesh A. Joshi, J.
Epigral Limited (Formerly Known As Meghmani Finechem Limited) - Appellant
Vs.
Apical (Malaysia) Sdn. BHD. - Respondent
Special Civil Application No. 14334 of 2024 With Appeal From Order No. 220 of 2024
Decided On : 26-11-2024
(A) Constitution of India - Article 226 - Arbitration and Conciliation Act, 1996 - Section 45 - Jurisdiction of trial court - The trial court erred in returning the plaint without following the mandatory procedure as prescribed under Order VII Rule 10A of the CPC, failing to give prior intimation to the plaintiff. (Paras 29-34)
(B) Jurisdiction - The trial court cannot adjudicate on merits when it concludes it lacks jurisdiction; its only duty is to return the plaint. (Paras 35-42)
Facts of the case:
The writ applicant, Epirgal Limited, filed a suit against the respondent for declaration and permanent injunction regarding a sales contract for refined glycerin, claiming no valid contract existed due to lack of mutual consent and jurisdiction. (Paras 4.1-4.10)
Findings of Court:
The impugned order of the trial court was quashed and the matter was remanded for compliance with procedural requirements. (Paras 42)
Issues: Whether the trial court correctly returned the plaint without following due procedure and whether it could issue directions when lacking jurisdiction. (Paras 27-28)
Ratio Decidendi: The court emphasized that a trial court must follow prescribed procedures when returning a plaint and cannot issue directions on merits if it lacks jurisdiction. (Paras 29-36)
Result: Both petitions allowed, and the impugned orders quashed. (Para 42)
JUDGMENT :
Divyesh A. Joshi, J.
1. Since the challenge in both the captioned petitions is to the common order passed by the learned trial court in two separate applications, those were heard analogously and are being disposed of by this common judgment and order.
2. For the sake of convenience, the Special Civil Application No.14334 of 2024 is treated as the lead matter.
3. By this writ application under Article 226 of the Constitution of India, the writ applicant has prayed for the following reliefs;
(b) This Hon’ble Court be pleased to restore the file of Regular Civil Suit No.98 of 2024 before the Hon’ble Principal Senior Civil Judge, Ahmedasbad (Rural), Mirzapur at Ahmedabad or any other suitable Court as deemed proper by this Hon’ble Court;
(c) Pending hearing and final disposal of the present Petition, by ex-parte and interim order restraining Respondent from prosecuting, continuing or from taking any steps in connection with or from implementing any action with respect to SIAC Arbitration No.625 of 2023 (ARB625/23/SXG);
(d) Costs of this petition be provided for;
(e) Issue any other writ, pass any other order or grant any other relief as this Hon’ble Court may deem fit, proper and necessary in the interest of justice.”
4. Shorn of details, the facts leading to the filing of the present application are as under;
4.1 The writ applicant-Epirgal Limited is a Company incorporated under the provisions of the Companies Act, 1956 who instituted a suit being Regular Civil Suit No.98 of 2024 in its capacity as the original plaintiff. The applicant-Company is a leading integrated manufacturer of chemicals in India and has a reputation of being the first company in India to commission a manufacturing plant for production of epichlorohydrin, which was a fully imported product.
4.2 Epichlorohydrin is an intermediate chemical production of epoxy raisins which in turn has widespread application and use in several industries. One of the ways to manufacture epichlorohydrin is through the process of using refined glycerin as the raw material, and the said method is not only environmentally friendly but also cost efficient.
4.3 The respondent-Company being engaged in the manufacturing and trading of refined glycerin came into contact with the writ applicant-Company through a sales inquiry, and after making some discussions with regard to the mode and manner of delivery as well as the primary negotiations in the year 2022, the writ applicant-Company shown its willingness to purchase 3000 MT of refined glycerin from the respondent-Company, pursuant to which, the respondent-Company offered USD 1520 per MT, which was accepted by the writ applicant-Company, and accordingly, placed an order of 3000 MT of glycerin, for which, the parties did not enter into any contract at any stage.
4.4 Later, a report dated 07.07.2022 of the Independent Commodity Intelligent Services revealed a step drop in the prices of the refined glycerin. Therefore, on the very same day, the writ applicant-Company, by e-mail, informed the respondent-Company about the sudden plummeting prices of refined glycerin in the market and requested the Respondent Company to reconsider the initial offer of 3000 MT at the rate of 1520 USD per MT as the writ applicant-Company, being a new entrant, could not sustain it.
4.5 Despite the above, the respondent-Company instead of reconsidering the request of the writ applicant-Company, on 08.07.2022, deliberately issued sales contract being No.S/94/22/000991 (Sales Contract No.91) along with the proforma invoice of initial offer of USD 1530 per MT of refined glycerin for a total sum of USD 4,560,000, and requested the writ ap
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