Case Note & Summary
The Plaintiff, Future Corporate Resources Ltd., filed a suit in the Bombay High Court for recovery of short-term loan facilities advanced to Defendant No.1 (Aviotech Pvt. Ltd.), which were guaranteed by Defendant No.5 (Deccan Chronicle Holdings Ltd.). The Plaintiff had obtained leave under Clause XII of the Letters Patent Act, 1866 on 23rd August 2012 to file the suit in Bombay. Defendant No.5 filed Chamber Summons (L) No. 140 of 2013 seeking revocation of that leave, arguing that no part of the cause of action arose within the territorial jurisdiction of the Bombay High Court. The Court examined the facts: the Plaintiff's registered office was in Mumbai, but the loan facilities were disbursed to Defendant No.1 outside Bombay, the guarantee by Defendant No.5 was executed outside Bombay, and Defendant No.5's registered office was in Secunderabad, Andhra Pradesh. The Court held that the mere fact that the Plaintiff's registered office was in Mumbai did not confer jurisdiction. Since no part of the cause of action arose within Bombay, the leave granted under Clause XII was liable to be revoked. The Court allowed the Chamber Summons and revoked the leave granted on 23rd August 2012.
Headnote
A) Civil Procedure - Territorial Jurisdiction - Clause XII Letters Patent Act, 1866 - Revocation of Leave - The Plaintiff sought to recover loan facilities advanced to Defendant No.1, guaranteed by Defendant No.5. The Court examined whether any part of the cause of action arose within Bombay. Held that since the loan was disbursed outside Bombay, the guarantee was executed outside Bombay, and the registered offices of relevant parties were outside Bombay, no cause of action arose within jurisdiction. Leave granted earlier was revoked. (Paras 2-6)
Issue of Consideration
Whether the leave granted under Clause XII of the Letters Patent Act, 1866 to the Plaintiff to file the suit in Bombay High Court should be revoked on the ground that no part of the cause of action arose within the territorial jurisdiction of this Court.
Final Decision
The Chamber Summons is allowed. The leave granted under Clause XII of the Letters Patent Act, 1866 on 23rd August 2012 is revoked.
Law Points
- Clause XII of Letters Patent Act
- 1866
- cause of action
- jurisdiction
- revocation of leave
- territorial jurisdiction
Case Details
2013 LawText (BOM) (02) 52
Chamber Summons (L) No. 140 of 2013 in Suit No. 41 of 2013
Mr. Vishwajit Sawant along with Mr. Vaibhav Sugdare, Mr. Rohan Sawant, Mr. Samsher Garud, Mr. Agasti Vibhute and Mr. Vivek Deo, instructed by M/s. Jayakar & Partners, for the Applicant in support. Mr. Virag Tulzapurkar, Senior Advocate, along with Mr. Ventakesh Dhond, Senior Advocate, Mr. Ameet Naik and Ms. Anuja Jhunjhunwala, instructed by M/s. Naik Naik & Company, for the Plaintiff.
Deccan Chronicle Holdings Ltd. (Defendant No. 5)
Future Corporate Resources Ltd. (Plaintiff)
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Nature of Litigation
Application for revocation of leave granted under Clause XII of Letters Patent Act, 1866 to file suit in Bombay High Court.
Remedy Sought
Defendant No. 5 sought revocation of leave granted to Plaintiff to file suit in Bombay High Court.
Filing Reason
Defendant No. 5 contended that no part of the cause of action arose within the territorial jurisdiction of the Bombay High Court.
Previous Decisions
Leave under Clause XII of Letters Patent Act, 1866 was granted to Plaintiff on 23rd August 2012 by this Court (Coram: Smt. R.S. Dalvi, J.).
Issues
Whether the leave granted under Clause XII of the Letters Patent Act, 1866 should be revoked on the ground that no part of the cause of action arose within the territorial jurisdiction of the Bombay High Court.
Submissions/Arguments
Defendant No. 5 argued that the loan facilities were disbursed outside Bombay, the guarantee was executed outside Bombay, and the registered office of Defendant No. 5 is in Secunderabad, Andhra Pradesh, so no cause of action arose in Bombay.
Plaintiff argued that its registered office is in Mumbai and that the suit was properly filed.
Ratio Decidendi
For the purpose of Clause XII of the Letters Patent Act, 1866, the mere fact that the Plaintiff has its registered office in Mumbai does not confer jurisdiction on the Bombay High Court. The cause of action must arise within the territorial limits of the Court. Since the loan was disbursed outside Bombay, the guarantee was executed outside Bombay, and the Defendant No. 5's registered office is outside Bombay, no part of the cause of action arose within the jurisdiction of this Court. Hence, the leave granted under Clause XII is liable to be revoked.
Judgment Excerpts
By an order dated 23rd August 2012, this Court (Coram: Smt. R.S. Dalvi, J.) granted Leave under Clause XII of the Letters Patent Act, 1866 to the Plaintiff, to file the above suit before this Court.
The Defendant No.5 – Deccan Chronicle Holdings Limited – has now taken out the above Chamber summons praying that the said leave granted on 23rd August 2012 be revoked.
Procedural History
On 23rd August 2012, the Bombay High Court granted leave under Clause XII of the Letters Patent Act, 1866 to the Plaintiff to file Suit No. 41 of 2013. Subsequently, Defendant No. 5 filed Chamber Summons (L) No. 140 of 2013 seeking revocation of that leave. The Chamber Summons was heard and disposed of by this judgment dated 4th February 2013.
Acts & Sections
- Letters Patent Act, 1866: Clause XII
- Companies Act, 1956:
- Depositories Act, 1996:
