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Madras High Court
RAMANUJAM,PAUL
Clan Line Steamers - Appellant
Versus
Gordon Woodroffe and Co.(Madras) Pvt.Ltd. - Respondent
Decided On : 11/06/1978
LETTERS PATENT - CLAUSE 12 - LEAVE TO SUE - IMPLEADING NEW PARTY - JURISDICTION - BALANCE OF CONVENIENCE - WAIVER - SUBMISSION TO JURISDICTION - AMENDMENT OF PLAINT - NEW CAUSE OF ACTION - ADDITIONAL PARTY - DISTINCTION - GRANT OF LEAVE - CONDITIONS PRECEDENT - INTERPRETATION OF CLAUSE 12 - DISCRETION OF TRIAL JUDGE - INTERFERENCE BY APPELLATE COURT.
Fact of the Case:
The plaintiff, M/s. Gordon Woodroffe and Co. (Madras) Pvt. Ltd., filed a suit against respondents 2 to 4 for a declaration that the termination of the plaintiff's appointment as the first defendant's agents at Madras, Kakinada and Visakhapatnam together with the plaintiff's function as the first defendant's co-ordinating agent for the first defendant's trade from India and as the first defendant's controlling agent for Cuddalore, Masulipatnam, Nagapattinam and Trivandrum is illegal, void, inoperative and not binding on the plaintiff and for a permanent injunction restraining the first defendant or their agents or servants or anybody claiming under or through them from interfering with the possession and enjoyment of the property of the plaintiff, namely, Clan Line Agency for the Ports of Madras, Kakinada and Visakhapatnam, together with the plaintiffs functioning as the first defendant's co-ordinating agent for their trade from India and functioning as their controlling agent for Cuddalore, Masulipatnam, Nagapattinam and Trivandrum, and also restraining the first defendant from taking away the said agency from the plaintiff and from appointing the second or the third defendant or any other person or company or firm as their agents, or in the alternative directing the first defendant to pay a sum of Rs. one crore to the plaintiff as and for damages.
Finding of the Court:
1. The suit was filed without obtaining leave under cl.12 Letters Patent, for it is asserted in the plaint that the cause of action arose at Madras where the first defendant carries on business through its agents. 2. Subsequently Appn. No. 1771 of 1978 was filed in the present suit for impleading the Clan Line Steamers Ltd., as the 4th defendant on the ground that the proposed 4th defendant was the principal of the first defendant company which has been carrying on the business of Clan Lane Steamers Ltd., and the 4th defendant was a necessary party, inasmuch as it is the principal of the first defendant-company; and Appn. No. 1742 of 1978 was filed by the plaintiff for leave under clause 12, Letters Patent to institute the suit against the proposed 4th defendant. 3. Leave was thereupon granted on 20-4-1978. It is to revoke that leave that Appn. No. 2640 of 1978 was filed by the 4th defendant. 4. It was contended by Mr. Govind Swaminathan on behalf of the appellant first of all that since leave to sue had not been obtained when the suit was originally filed the suit is non est and consequently there can be no question of adding a new party or obtaining leave to sue in respect of that party, and secondly that it leave to sue should have been obtained at the time of the institution of the suit that defect cannot be cured by now asking for leave to sue on the ground that a new party is proposed to be added.
Issues: 1. Whether the suit is non est since leave to sue had not been obtained when the suit was originally filed? 2. Whether leave to sue can be obtained at a later stage when a new party is proposed to be added? 3. Whether the court can grant leave under Cl.12 Letters Patent and allow the proposed the defendant to be impleaded since originally the suit was instituted against the 1st defendant without obtaining leave under Cl.12, Letters Patent?
Ratio Decidendi: 1. The suit cannot be considered non est merely because leave to sue had not been obtained when the suit was originally filed. The question of whether the first defendant is carrying on business within the jurisdiction of this court through its agents and if it is eventually found that the 1st defendant is not carrying on any business within the jurisdiction of this court through its agents and as such leave to sue should have been obtained under Clause 12 Letters Patent, and for want of such leave the suit is not maintainable, the legal consequence arising from that situation would necessarily follow se has been pointed out by Padmanabhan, J. 2. Where leave under Clause 12 is necessary, the granting of such leave is a condition precedent to the court having jurisdiction to entertain the suit; and therefore such leave has to be obtained at the time of the institution of the suit. 3. In a suit when a new party is sought to be added by way of amendment, the suit is a new suit as against the added party. When amendment is allowed and order made in that behalf a new suit comes into existence. It is not emphatically the old suit. If the new suit cannot be 'received, tried and determined' by this court under Cl.12 Letters patent, except by first obtaining leave under Cl.12, Letters Patent, why should the leave be not asked for and granted by court ? Ordinarily a suit is initiated by the presentation of the plaint and when the court accepts it and has it registered and numbered, the plaint is 'received' by the court. The Code also provides that after the institution of a suit a party can be added and the law is that so far as the added parties are concerned, it is a new suit. It is only when the order adding a new party is perfected and plaint amended that the court can be said to have received a suit so far as the added party is concerned. It follows that in suits in which leave under Cl.12 Letters 'Patent is necessary before the order of amendment is prayed for, leave under Cl.12 becomes necessary if not imperative. It is a fallacy to contend that a suit can be initiated only by presentation of the plaint and the Court 'receives' a suit when it accepts the plaint and not otherwise. A suit can also be initiated against a new party by making an application for amendment and the court receives the suit as against him when after granting leave the court adds the party and then amends the plaint by bringing the new party on record. The presentation of the plaint and registration of the suit is, therefore, not the only way in which the court 'receives' a suit in law.
Final Decision: The appeal is dismissed with costs.
PAUL, J. :- This appeal has been preferred against the order of Padmanabhan J. on Appn. No. 2640 of 1978 in C.S. No. 26 of 1978, refusing to revoke the leave to sue granted to the first respondent-plaintiff under clause 12 of the Letters Patent.
2. The first respondent plaintiff, M/s, Gordon Woodroffe and Co. (Madras) Pvt. Ltd., filed the suit C.S. No. 26 of 1978 on the Original Side of this Court against respondents 2 to 4 for a declaration that the termination of the plaintiff's appointment as the first defendant's agents at Madras, Kakinada and Visakhapatnam together with the plaintiff's function as the first defendant's co-ordinating agent for the first defendant's trade from India and as the first defendant's controlling agent for Cuddalore, Masulipatnam, Nagapattinam and Trivandrum is illegal, void, inoperative and not binding on the plaintiff and for a permanent injunction restraining the first defendant or their agents or servants or anybody claiming under or through them from interfering with the possession and enjoyment of the property of the plaintiff, namely, Clan Line Agency for the Ports of Madras, Kakinada and Visakhapatnam, together with the plaintiffs functioning as the first defendant's co-ordinating agent for their trade from India and functioning as their controlling agent for Cuddalore, Masulipatnam, Nagapattinam and Trivandrum, and also restraining the first defendant from taking away the said agency from the plaintiff and from appointing the second or the third defendant or any other person or company or firm as their agents, or in the alternative directing the first defendant to pay a sum of Rs. one crore to the plaintiff as and for damages.
3. Among the allegations contained in the plaint, the material ones in so far as this appeal is concerned, are the following. By a written agreement dated 21-9-1878 entered into between the plaintiff company and the first defendant, the plaintiff was appointed the sole steamer agent for the Clan Line Steamers Ltd., U.K. and under the agreement the plaintiff acquired 1/64th share of the Clan Line Vessels 'Clan Alpine' and 'Clan Fraser' and accordingly the plaintiff invested large amounts of money for building up and expanding the cargo trade in the three ports of Madras, Kakinada and Visakhapatnam and due to the tremendous, extraordinary and special efforts made by the plaintiff, the cargo traffic had increased by leaps and bounds and the plaintiff-company was induced to enter into the aforesaid agreement on the basis that the agency was irrevocable and it was on that basis that the plaintiff expended enormous amounts for building up the agency business; and the plaintiff had always performed the terms of the agency and has always been willing and ready to perform the terms of the agreement. But on 25-10-1977, the second defendant informed Mr. Vishnu Mohan, one of the directors of the plaintiff company that he had received a notice of termination of the agency from the first defendant and on 1-11-1977, the second defendant showed the notice of termination dated 19-10-1977. The plaintiff contends that the termination of the agency is arbitrary, capricious and without any valid reason and for no sufficient cause and the reasons given in the letter of termination were totally unfounded and without any basis and the termination of the agency by the first defendant was under the erroneous assumption that there was a directive from the Reserve Bank of India to discontinue the agency activities from 1-1-1978 and the first defendant who is persisting in sticking to its decision has appointed the second defendant as its agent even after knowing that the second defendant had made misrepresentation and had manoeuvred to grab the agency for himself at the expense of the company. The plaintiff further contended that it was entitled to reasonable notice before termination of the agency and also for compensation. It might be noted that it was asserted in the plaint that the
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