Case Note & Summary
The appeal arose from a summary suit filed by Rabo India Finance Limited (Plaintiff) against Gouri Prasad Goenka (Defendant) based on guarantees executed by the Defendant in favor of the Plaintiff for credit facilities granted to a company of which the Defendant was a director. The Plaintiff instituted Summary Suit No.1450 of 2011 under Order XXXVII of the Code of Civil Procedure, 1908, and obtained leave under Clause XII of the Letters Patent to sue the Defendant, who was resident outside the court's ordinary jurisdiction. The Defendant took out Chamber Summons No.2125 of 2011 seeking revocation of that leave, contending that no part of the cause of action arose within the territorial jurisdiction of the Bombay High Court. The Defendant argued that the Deeds of Guarantee were executed in Kolkata, contained no jurisdictional clause, and were separate from the Credit Facility Letters. The learned Single Judge dismissed the Chamber Summons on 12 March 2012, leading to the present appeal. The legal issue was whether the Single Judge erred in refusing to revoke the leave. The Defendant's submissions emphasized that the guarantee deeds were independent contracts without a Mumbai jurisdiction clause, and that the Credit Facility Letters' terms were not binding on the Defendant. The Plaintiff countered that the plaint averred that disbursements were made in Mumbai and part payments were received there, and that the Credit Facility Letters contained a Mumbai jurisdiction clause. The Division Bench held that the plaint's averments, if taken as true, disclosed a part of the cause of action within Mumbai. The court noted that the Defendant's challenge was premature at the summary stage, as the factual basis for jurisdiction would be tested at trial. The appeal was dismissed, affirming the Single Judge's order.
Headnote
A) Civil Procedure - Territorial Jurisdiction - Clause XII Letters Patent - Leave to Sue - Revocation - The court considered whether leave granted under Clause XII of the Letters Patent should be revoked when the defendant contended that no part of the cause of action arose within the court's jurisdiction. The plaintiff had pleaded that disbursement of credit facilities and part payments were made in Mumbai. The court held that the averments in the plaint, if taken as true, disclosed a part of the cause of action within jurisdiction, and the defendant's challenge based on the absence of a jurisdictional clause in the guarantee deeds did not warrant revocation at the summary stage. (Paras 1-5) B) Civil Procedure - Summary Suit - Order XXXVII CPC - Leave to Defend - The court noted that in a summary suit, the grant of leave under Clause XII is based on the plaintiff's averments. The defendant's application for revocation must demonstrate that the plaint ex facie discloses no cause of action within jurisdiction. The court found that the plaint contained sufficient averments regarding disbursement and payments in Mumbai, and the defendant's denial of those facts did not make the leave void ab initio. (Paras 3-5) C) Contract Law - Guarantee - Jurisdictional Clause - The defendant argued that the Deed of Guarantees did not contain a jurisdictional clause and were separate agreements. The court held that the guarantee deeds were executed in consideration of the credit facilities, and the terms of the credit facility letters, including the jurisdiction clause, could be read together. The plaintiff's claim that the credit facility letters contained a Mumbai jurisdiction clause was a matter for trial. (Paras 2-5)
Issue of Consideration
Whether the learned Single Judge was justified in dismissing the Chamber Summons for revocation of leave granted under Clause XII of the Letters Patent, on the ground that no part of the cause of action arose within the territorial jurisdiction of the Bombay High Court.
Final Decision
The appeal is dismissed. The order of the learned Single Judge dated 12 March 2012 dismissing the Chamber Summons for revocation of leave under Clause XII of the Letters Patent is affirmed.
Law Points
- Clause XII Letters Patent
- cause of action
- summary suit
- leave to sue
- revocation of leave
- guarantee
- jurisdiction
