SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Audio Icon Pause Audio Icon
judgment-img

2001 Supreme(Mad) 36

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE A. RAMAMURTHI
T. Vetriselvan
Versus
Tamil Nadu Merchantile Bank Ltd., having its registered office at Tuticorin, rep. By its Chairman and 3 others
Application Nos.855 of 2000 and 856 and 4371 to 4373 ,4631 of 2000
Decided on : 10-01-2001

Advocates Appeared:
M/s.S. Subbiah, D. Sathyasri and Tamizharasi, Advocate for Plaintiff. Mr.B. Chandrasekaran for Defendants No.1 Mr. King and Partridge for Defendant No.2

Headnote:

Jurisdiction - Cause of Action - Companies Act - [JURISDICTION] - [Companies Act, Section 297, Section 299] - The court considered the jurisdictional issue and the cause of action under the Companies Act, specifically Sections 297 and 299. The court found that the opinion given by the solicitors firm did not constitute a cause of action for maintaining the suit within the jurisdiction of the court. The court also highlighted the protection of professional communications under Section 126 of the Evidence Act and concluded that there was no cause of action for the plaintiff to proceed against the second defendant. The court revoked the leave granted and rejected the plaint in respect of the second defendant.

Fact of the Case:

The plaintiff filed a suit against the bank and a solicitors firm to declare a resolution passed by the bank as null and void, claiming damages. The defendants filed applications to revoke the leave granted, strike out the name of the second defendant from the plaint, and reject the plaint for lack of cause of action.

Finding of the Court:

The court found that the opinion given by the solicitors firm did not constitute a cause of action for maintaining the suit within the jurisdiction of the court. The court revoked the leave granted and rejected the plaint in respect of the second defendant.

Issues: The issues included whether the leave granted was liable to be revoked, whether the pleadings against the second defendant were scandalous and frivolous, whether there was a cause of action, and whether the name of the second defendant should be struck out from the plaint.

Ratio Decidendi: The court held that the opinion given by the solicitors firm did not constitute a cause of action for the plaintiff to proceed against the second defendant. The court also emphasized the protection of professional communications and concluded that there was no cause of action for the plaintiff to proceed against the second defendant.

Final Decision: The court allowed the defendants' applications to revoke the leave granted, strike out the name of the second defendant from the plaint, and reject the plaint for lack of cause of action. The court dismissed the original applications as unnecessary.

Judgment :

1. O.A.Nos. 855 and 856 of 2000 have been filed by plaintiff to pass an order of temporary injunction, restraining the first defendant from in any way interfering with his functioning and also to pass a temporary injunction restraining D1 from in any way filing up the post of director in D1 Bank.

2. A.Nos.4371 to 4373 of 2000 have been filed by D2 to strike off his name from the plaint, to reject the plaint as there is no cause of action arising at Madras and also to strike out the pleadings, which are unnecessary, scandalous, frivolous and vexatious, which may tend to prejudice the image and reputation as contained in paras 72, 77, 78, 88, 89, 90, 93, 94, 100 and 191 and A.No.4631 of 2000 has been filed by Dl to revoke the leave granted in A.No.3558 of 2000 dated 7.9.2000.

3. Thecase in brief for disposal of all the applications is as follows:-

The plaintiff filed the suit to declare the resolution dated 27.6.2000 passed at the Board Meeting of Dl Bank as null and void and plaintiff claimed damages of Rs.10 lakhs. The suit is not maintainable before this court as Dl and other defendants except D2 are not residents within the jurisdiction of this Court. The plaintiff already filed OS.No.224/2000 on the file of the DMC Tuticorin involving the same issues and Dl withdrew the suit with a liberty to file a fresh suit for impleading the Company Secretary of the Dl-Bank on the same cause of action. However, contrary to the conditional liberty granted by the Court, the plaintiff has filed the present suit by making M/s.King & Partridge, Advocates, Chennai as a party to the proceedings allegedly on the ground that Dl acted on their opinion. The entire cause of action alleged in the plaint is against the Bank. Only with a view to bring the suit within the jurisdiction of this Court, M/s.King & Partridge has been impleaded as D2 alleging that the opini on rendered by them would constitute ‘cause of action’. An opinion held either by the counsel or by a party could in no event constitute a cause of action for maintaining the suit. On the cause of action alleged in seeking leave, no leave could be granted in law for maintaining the suit within the jurisdiction of this Court. The leave granted by this Court vide order dated 7.9.2000 is liable to be revoked. The suit is an abuse of process of Court. The plaintiff is also well aware that this Court in CRP.No.30/98 has given directions to various Subordinate Courts to the effect that the institution of suit against the Bank pertaining to AGM/Board/ Committee meetings of the Bank could be only before the court in whose jurisdiction the Office of the Bank is situated. The plaintiff in order to circumvent the said order has come out with a strange plea that an opinion rendered by the counsel could constitute ‘cause of action’ and as such the leave has to be revoked.

4. D2contended that the allegations made in the suit filed by the plaintiff are frivolous, vexatious and tend to prejudice their reputation. Dl-Bank sought their opinion in their letter dated 7.6.2000 on issue whether the plaintiff participation in the Board Meetings and the decision taken therein while considering the agenda item with regard to the transaction of D3 and D4 will attract the provisions of Section 297 and Section 299 of the Companies Act. The Bank also furnished the report of the Committee of Executives constituted with top Executives of the Bank to investigate on the issue. After perusing the papers, the opinion was tendered by D2. The plaintiff has filed the suit solely on the alleged cause of action based on the opinion given by the law Firm. There is no privity of contract between the plaintiff and D2. It is for Dl to take note of the opinion and decide whether to take any decision regarding the issues. The plaintiff has averred unnecessary scandalous remarks in various paragraph of the plaint. D2 reserves their rights to file a suit for damages for defamation against the plaintiff. Moreover the plaintif





































Click Here to Read the rest of this document

1
2
3
4
5
6
7
8
9
10
11
SupremeToday Portrait Ad
supreme today icon
logo-black

An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers

Please visit our Training & Support
Center or Contact Us for assistance

qr

Scan Me!

India’s Legal research and Law Firm App, Download now!

For Daily Legal Updates, Join us on :

whatsapp-icon Back to top