Case Note & Summary
The respondent Bank, a cooperative bank incorporated under the Maharashtra Cooperative Societies Act, 1960, placed three deposits totaling Rs.100 crores with the appellant Corporation, a Madhya Pradesh state-owned company, between March 1998 and August 1999. The deposits carried interest at 16% per annum. The appellant executed promissory notes, deeds of continuing guarantee, and other documents in favor of the Bank. Despite several reminders, the appellant failed to repay the principal and interest. The appellant issued cheques which were dishonoured, leading the Bank to initiate proceedings under Section 138 of the Negotiable Instruments Act, 1881. The Bank also filed a recovery suit before the Cooperative Court No.1 at Mumbai for Rs.113,81,42,814/-. The appellant filed a writ petition challenging the jurisdiction of the Cooperative Court, which was dismissed by the learned Single Judge. The appellant then filed Letters Patent Appeals. The Division Bench held that the deposits were made in Mumbai, the cheques were issued and dishonoured in Mumbai, and therefore a part of the cause of action arose within Mumbai, giving the Cooperative Court territorial jurisdiction. The court also held that the appeal against the refusal to grant interim relief was not maintainable as it was not a 'judgment' under Clause 15 of the Letters Patent. The appeals were dismissed with no order as to costs.
Headnote
A) Cooperative Law - Territorial Jurisdiction - Section 91 Maharashtra Cooperative Societies Act, 1960 - Cause of Action - The respondent Bank deposited Rs.100 crores with the appellant Corporation in Mumbai, and the appellant executed promissory notes and issued cheques in Mumbai. The court held that since the deposits were made in Mumbai and the cheques were issued and dishonoured there, a part of the cause of action arose within Mumbai, conferring jurisdiction on the Cooperative Court. The appeal against the refusal to grant interim relief was dismissed as not maintainable. (Paras 2-5)
B) Civil Procedure - Letters Patent Appeal - Interim Order - Maintainability - The appellant challenged an order refusing to grant interim relief. The court held that such an appeal is not maintainable as it is not a 'judgment' within the meaning of Clause 15 of the Letters Patent. The appeal was dismissed on this ground as well. (Para 5)
Issue of Consideration
Whether the Cooperative Court at Mumbai had territorial jurisdiction to entertain the respondent Bank's recovery suit against the appellant Corporation, given that the appellant is based in Madhya Pradesh and the deposits were made in Mumbai.
Final Decision
Both Letters Patent Appeals are dismissed. No order as to costs.
Law Points
- Territorial jurisdiction of Cooperative Court
- Cause of action for recovery of deposits
- Section 91 of Maharashtra Cooperative Societies Act
- 1960
- Letters Patent Appeal against interim order
- Maintainability of appeal against refusal to grant interim relief
Case Details
2005 LawText (BOM) (03) 111
Letters Patent Appeal No. 36 of 2005 in Writ Petition No. 9477 of 2004 and Letters Patent Appeal No. 35 of 2005 in Writ Petition No. 9859 of 2004
Dalveer Bhandari, C.J., S.A. Bobde, J.
Mr. R.N. Singh, Advocate General of State of Madhya Pradesh, with Mr. S. Agarwal and Mr. S.K. Jain for the appellant. Mr. V.A. Thorat, Senior Advocate, instructed by M/s. Mahimtura & Co., for respondent.
Madhya Pradesh Industrial Development Corporation Ltd.
The Mumbai District Central Coop. Bank Ltd.
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Nature of Litigation
Civil appeal against dismissal of writ petition challenging territorial jurisdiction of Cooperative Court in a deposit recovery suit.
Remedy Sought
The appellant sought to set aside the order of the learned Single Judge dismissing its writ petition and to declare that the Cooperative Court at Mumbai had no jurisdiction.
Filing Reason
The appellant Corporation failed to repay deposits of Rs.100 crores made by the respondent Bank, leading to a recovery suit filed by the Bank in the Cooperative Court at Mumbai.
Previous Decisions
The learned Single Judge dismissed the writ petition filed by the appellant challenging the jurisdiction of the Cooperative Court.
Issues
Whether the Cooperative Court at Mumbai had territorial jurisdiction to entertain the recovery suit.
Whether the Letters Patent Appeal against the refusal to grant interim relief is maintainable.
Submissions/Arguments
The appellant argued that no part of the cause of action arose within Mumbai as the deposits were made in Mumbai but the appellant is based in Madhya Pradesh.
The respondent argued that the deposits were made in Mumbai, cheques were issued and dishonoured in Mumbai, and therefore the Cooperative Court had jurisdiction.
Ratio Decidendi
The court held that since the deposits were made in Mumbai and the cheques were issued and dishonoured in Mumbai, a part of the cause of action arose within Mumbai, conferring territorial jurisdiction on the Cooperative Court under Section 91 of the Maharashtra Cooperative Societies Act, 1960. Additionally, the appeal against the refusal to grant interim relief was not maintainable as it was not a 'judgment' under Clause 15 of the Letters Patent.
Judgment Excerpts
The respondent Bank on 26th March, 1998 placed with the appellant Corporation deposit of Rs. 30 crores.
Thus, all these deposits of Rs.100 crores were to carry interest at the rate of 16 per cent per annum.
The appellant Corporation executed promissory notes, deeds of continuing guarantee and other relevant documents in favour of the respondent Bank.
The appellant Corporation issued several cheques towards repayment but those cheques were dishonoured.
Procedural History
The respondent Bank filed a recovery suit before the Cooperative Court No.1 at Mumbai. The appellant filed a writ petition in the Bombay High Court challenging the jurisdiction of the Cooperative Court. The learned Single Judge dismissed the writ petition. The appellant then filed Letters Patent Appeals before the Division Bench, which were dismissed on 28 March 2005.
Acts & Sections
- Maharashtra Cooperative Societies Act, 1960: Section 91
- Negotiable Instruments Act, 1881: Section 138
- Companies Act, 1956:
