1978 (11) TMI 161 - HC - Indian Laws

Summary

Issues Involved:
1. Revocation of leave to sue under Clause 12 of the Letters Patent.
2. Validity of the original suit without obtaining leave under Clause 12.
3. Addition of a new party and obtaining leave under Clause 12.
4. Balance of convenience in granting or revoking leave.

Issue-wise Detailed Analysis:

1. Revocation of Leave to Sue Under Clause 12 of the Letters Patent:
The appeal was filed against an order refusing to revoke the leave to sue granted to the plaintiff under Clause 12 of the Letters Patent. The plaintiff filed a suit for a declaration that the termination of its agency was illegal and sought a permanent injunction or damages. The suit was initially filed without obtaining leave under Clause 12, as it was asserted that the first defendant carried on business in Madras through its agents. Subsequently, the plaintiff filed an application to implead the Clan Line Steamers Ltd. as the fourth defendant and sought leave under Clause 12, which was granted. The fourth defendant contested this grant, arguing that leave should have been obtained at the time of the original suit's filing.

2. Validity of the Original Suit Without Obtaining Leave Under Clause 12:
The court considered whether the suit was non est (non-existent) due to the absence of leave under Clause 12 at the time of filing. It was noted that the determination of whether the first defendant carried on business within the court's jurisdiction required elaborate consideration during the trial. The court held that the suit against the first defendant could not be deemed non est at this stage. It was established that if it is later found that the first defendant did not carry on business within the jurisdiction, the legal consequences would follow, and the defect of not obtaining leave initially could not be cured subsequently.

3. Addition of a New Party and Obtaining Leave Under Clause 12:
The court examined whether leave under Clause 12 could be granted when a new party is added to the suit. It was argued that the suit against the new party (fourth defendant) should be treated as a new suit, requiring fresh leave under Clause 12. The court referred to various precedents and concluded that leave could be granted when a new party is added, even if the original suit was filed without obtaining leave. The court emphasized that the addition of a new party constitutes a new suit against that party, and obtaining leave under Clause 12 is necessary for the new party.

4. Balance of Convenience in Granting or Revoking Leave:
The court considered the balance of convenience in deciding whether to revoke the leave granted under Clause 12. It was noted that the plaintiff's choice of forum should not be interfered with unless it is shown to be mala fide or if the chosen forum would cause significant inconvenience or injustice to the defendant. The court found that the evidence regarding the subject matter of the suit was available in Madras, and there were no circumstances indicating that the plaintiff's choice of forum was mala fide. The court also noted that the balance of convenience did not overwhelmingly favor revoking the leave.

Conclusion:
The court upheld the decision of the trial judge to refuse the revocation of leave granted under Clause 12 of the Letters Patent. The appeal was dismissed with costs, affirming that the leave granted to sue the proposed fourth defendant was valid and that the balance of convenience favored allowing the suit to proceed in the chosen forum.