PUNJAB & HARYANA HIGH COURT
Ajit Singh, J.
State Bank Of India
Versus
Sakow Industries Faridabad (Pvt.) Ltd., New Delhi
Civil MISCELLANEOUS No. 49 of 1975,
Decided On : MAY 10, 1976
TRANSFER OF SUIT - S. 22, 23(3) AND 151 OF THE CODE OF CIVIL PROCEDURE - TRANSFER OF SUIT FROM BALLABHGARH COURT TO CALCUTTA COURT - COMMON QUESTIONS OF FACT AND LAW - INTEREST OF JUSTICE.
Fact of the Case:
The State Bank of India (SBI) filed an application for transfer of a suit from the Court of the Subordinate Judge 1st Class, Ballabhgarh, to the Court of the Subordinate Judge at Alipore, District 24 Parganas (West Bengal). SBI had advanced loans to Messrs. Sakow Industries (Private) Limited (the Company) and its Directors, Shri S.P. Mehta and Shrimati Nirmala Devi Mehta, who had personally guaranteed the loans. The Company had also pledged, hypothecated, and charged its assets as security for the loans. However, the Company failed to repay the loans despite persistent demands from SBI.
Finding of the Court:
The Court found that the Company had broken the locks of SBI's godowns at Khaikhli and put the locks of Messrs. Sakow Trading and Industrial Corporation, a sister partnership concern of the Company. The Company had also started carrying on its unit at Faridabad in a different name, Messrs. Sakow Industries (Faridabad) Private Limited, to defraud SBI of the huge amount due from the Company. The Court also found that the Directors of Sakow Industries (Faridabad) Private Limited were related to the Directors of the Company.
Issues: 1. Whether the suit should be transferred from Ballabhgarh Court to Calcutta Court. 2. Whether the common questions of fact and law in both cases warrant transfer.
Ratio Decidendi: The Court held that the common questions of fact and law arose in both cases, one pending in Ballabhgarh Court and the other pending in Alipore Court. The entire amount of loans was granted by SBI through its Ballyguange Branch at Calcutta, and the entire evidence to be led by both parties was available at Calcutta only. The Court also found that the Ballabhgarh suit was filed by the plaintiff-Company mala fide to harass SBI as a counter-blast and to prevent the Receivers from taking possession of the godowns of the Company.
Final Decision: The Court allowed the petition and transferred Suit No. 844 of 1972 (now No. 63 of 1974) pending in the Court of the Subordinate Judge 1st Class, Ballabhgarh, to the Court at Calcutta in which the connected case between SBI and the Company was pending.
1. The State Bank of India has filed the present application under Ss. 22 and 23(3) read with Sec. 151 of the Code of Civil Procedure for transfer of Suit No. 844 of 1972 pending in the Court of the Subordinate Judge Ist Class, Ballabhgarh, to the Court of the Subordinate Judge at Alipore, District 24 Parganas (West Bengal). It is alleged in the application that the petitioner-Bank through its Ballyguange Branch at Calcutta advanced to one Messrs. Sakow Industries (Private) Limited (hereinafter referred to as the `said Company ) various types of loans amounting to about Rs. 53 lakhs for the Industrial units of the said Company in Calcutta in the State of West Bengal and Faridabad in the State of Haryana. The said loans also included the loans advanced to Messrs. Tochi and Asavari carrying on business at 36, Industrial-cum-Housing Estate, Faridabad. These concerns were owned by Shri S.P. Mehta, who is Director of the said Company. All the liabilities of the loans were taken over by the said Company later on. It is also alleged in the petition that the loans advanced to the said Company were personally guaranteed by its two Directors, namely, Shri S.P. Mehta and Shrimati Nirmala Devi Mehta (wife of Shri S.P. Mehta). The said Company also pledged, hypothecated, charged its goods machinery, produce, merchandise, bills and book-debts etc. with the petitioner-Bank lying in the godowns of the said Company at Rajpur and Khaikhli in the State of West Bengal and at 36, Industrial-cum-Housing Estate, Faridabad, as security for the repayment of the loans. The said-Company also agreed to mortgage with the petitioner-Bank their lands and buildings at 36, Industrial-cum-Housing Estate, Faridabad as security. It was also agreed upon that if the said Company does not abide by the financial discipline regarding the repayment of the aforesaid loans, the petitioner-Bank shall be entitled to call for the entire amount of loans including interest and other charges accrued thereon and to take physical possession of all the goods, produce, stocks, merchandise etc. The whole amount advanced to the said-Company by the petitioner-Bank amounted to about Rs. 53 lakhs. Not a single penny out of the loans advanced was returned by the said-Company in spite of persistent demands made by the petitioner-Bank.
2. In order to realise the loans, the petitioner-Bank filed a civil suit in the High Court at Calcutta in its ordinary civil jurisdiction for the recovery of a sum of Rs. 53,05,463.02 against the said Company and the two guarantors, namely, Shri S.P. Mehtra and Mrs. Nirmala Devi Mehta (State Bank of India V/s. Sakow Industries (Private) Ltd., Suit No. 542 of 1972). The High Court appointed two Receivers on November 24, 1972, to take possession of the godowns of the said-Company. The Receivers succeeded in taking possession of the godowns at Rajpur but were not allowed to take possession of the godown at Khaikhli. They however, did not attempt to take possession of the godowns at Faridabad. The aforesaid suit was filed in the High Court at Calcutta on 23.11.1972, whereas the said-Company changed its registered office from 10, Middleton Row, Calcutta, to 13, Lower Range, Calcutta, on 16.11.1972. As the new registered office of the said-Company did not fall within the original side territorial jurisdiction of the Calcutta High Court, the said-Company raised an objection regarding the jurisdiction of the Calcutta High Court and the petitioner-Bank, in view of the said objections, withdrew the aforesaid suit from the Calcutta High Court with liberty to file a fresh suit on the same cause of action against the defendants in a proper forum vide order of the High Court dated 18.12.1972. During the interval that elapsed between the withdrawing of the suit from the High Court and filing of the fresh suit in the Alipore Court, it was found by the petitioner-Bank that the said-Company had broken the locks of the petitioner-Bank from their godowns at Khaikhli i
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