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2021 Supreme(Mad) 462
IN THE HIGH COURT OF JUDICATURE AT MADRAS
P.T. ASHA, J.
B.S. Krishnan & Another – Appellant
Versus
M/s. Peevees Exim Company Private Ltd., Kerala – Respondent
A. Nos. 977 of 2020 in 1134 of 2004 & 1277, 1278 of 2020 in C.S. No. 290 of 2004
Decided On : 03-02-2021
For the Applicants :S. Raveekumar, Advocate.
For the Respondent:R. Venkatavaradan, Advocate.
The court upheld the validity of the leave granted to sue defendants residing outside the jurisdiction, emphasizing the part cause of action that had arisen within its jurisdiction. The court also clarified that the sale of properties was voluntary and not in execution of the decree, rejecting the claim for restitution.
Headnote:
Revocation of Leave - Recovery Suit - CPC 144, 151 - The court dismissed the applications seeking revocation of leave, restitution of properties, and appointment of a Court Commission. The court found that a part cause of action had arisen within its jurisdiction, and therefore, the leave granted to sue the defendants residing outside the jurisdiction was valid. The court also held that the sale of properties was voluntary and not in execution of the decree, thus rejecting the restitution claim. The applications were dismissed with no costs awarded.
Fact of the Case:
The plaintiff filed a suit for recovery of a sum from the defendants, who had executed a personal guarantee and offered their properties as collateral security. The defendants failed to make the payments, leading to the suit. The defendants later filed applications seeking revocation of leave, restitution of properties, and appointment of a Court Commission.
Finding of the Court:
The court found that the leave granted to sue the defendants residing outside the jurisdiction was valid, as a part cause of action had arisen within its jurisdiction. The court also rejected the claim for restitution of properties, stating that the sale was voluntary and not in execution of the decree. The applications were dismissed with no costs awarded.
Issues: The main issues were the validity of the leave granted to sue defendants residing outside the jurisdiction, and the claim for restitution of properties sold voluntarily by the defendants.
Ratio Decidendi: The court held that a part cause of action had arisen within its jurisdiction, justifying the grant of leave to sue the defendants residing outside the jurisdiction. The court also found that the sale of properties was voluntary and not in execution of the decree, rejecting the claim for restitution.
Final Decision: The applications seeking revocation of leave, restitution of properties, and appointment of a Court Commission were dismissed with no costs awarded.
JUDGMENT :-
(Prayer in A.No.977 of 2020: Judges summons filed under Order XIV Rule 8 of the Original Side Rules read with Clause 12 of the Letters Patent to revoke the leave against the 1st respondent / 1st defendant granted in A.No.1134 of 2004 dated 12.03.2004.
A.No.1277 of 2020: Judges summons filed under Order XIV Rule 8 of the Original Side Rules read with Section 144 & 151 of CPC to pass on order of restitution of the properties morefully described in the schedule appended hereunder as well as compensation which could be assessed by a process of this Court.
A.No.1278 of 2020: Judges summons filed under Order XIV Rule 8 of the Original Side Rules read with Order XXVI Rule 9 and Section 151 of CPC to appoint a Court Commission to make an inventory and assess the damages, if any caused to the properties morefully described in the schedule appended hereunder, with the help of a qualified Government approved Civil Engineer, and to file a report before this Court.)
1. The defendants 1 and 4 in the suit had filed the above applications for the following reliefs:
(a) To revoke the leave granted against the 1st defendant granted in A.No.1134 of 2004 dated 12.03.2004.
(b) The restitution of the schedule mentioned properties as well as compensation to be paid by the plaintiff
(c) To appoint a Court Commission to make an inventory and assess the damages, if any, caused to schedule mentioned properties with the help of a qualified Government approved Civil Engineer and file a report before this Court. The parties are referred to in the same array as in the suit.”
2. The brief facts preceeding the filing of these applications are as follows:
The plaintiff had filed a suit C.S.No.290 of 2004 on the file of this Court for recovery of a sum of Rs.3,94,72,726/- from the defendants 1 to 3 as guarantors of the 4th defendant company. The suit was filed after obtaining leave from this Court to sue defendants 1 to 3 who were residing outside the jurisdictions of this Court.
3. The plaintiff would submit that they had opened Letters of Credit for the supply of RBD Palmolein for use in the manufacture of edible oils by the 4th defendant. The plaintiff had supplied 1098.7478 metric tonnes of Palmolein to the 4th defendant by purchasing the same under a Letters of Credit drawn in favour of one Sri Maruthi Enterprises. The plaintiff had raised an invoice for a sum of Rs.2,56,00,824/-.
4. Thereafter, a further quantity of 499.774 metric Tonnes of Palmolein was also supplied, for which the plaintiff had raised an invoice for Rs.1,15,13,807/-. In all the 4th defendant had to pay a sum of Rs.3,71,14,631/-. The defendants 1 to 3 had executed a personal guarantee in favour of the plaintiff undertaking to repay the amounts that are due and payable by the 4th defendant. Their properties were offered as collateral security by a mortgage by deposit on title deeds.
5. The 4th defendant had only made a payment of Rs.80,00,000/- on different dates and thereafter no amounts were received from them. The plaintiff had issued several reminders to the 4th defendant calling upon them to pay the balance due however no due was paid.
6. The plaintiff would submit that on account of this non-payment they had suffered a huge loss since they had opened Letters of Credit through Bank for the import of the RBD Palmolein. The plaintiff had therefore issued a notice to the defendants 1 to 4 and defendants 2 and 3 dated 14.11.2002 calling upon them to make the payment. Some of them had issued a reply denying the liability as well as the mortgage.
7. Thereafter, the plaintiff had issued another notice dated 09.12.2002, informing the defendants that the disputes could be settled through arbitration and also putting them on notice about the appointment of the arbitrator.
8. However, defendants 1 to 3 had sent a reply dated 03.01.2003 inter alia contending that there was no arbitration agreement binding them and that the arbitration agreement signed by the 1st defendant on behalf of the 4th def
