2023 (6) TMI 854 - HC - Companies Law

Jurisdiction of Court to entertain the suit - doctrine of forum conveniens - Invoice is raised from Delhi for the work performed within the State of Maharashtra - Seeking a decree alongwith interest compounded annually - rejection of Plaint on the ground of jurisdiction - seeking deletion of names from the array of Defendants - HELD THAT - The essential prerequisite for invoking clause 8 is the existence of a dispute. In the facts of the present case, the record bares out that infact the Defendants had at no point of time, prior to the filing of the Affidavit in Reply to the Summons for Judgment never raised any dispute whatsoever qua any of the said invoices - the Defendants have also received the Plaintiffs letter dated 8th April, 2020 and legal notice dated 14th August, 2020 both of which have remained unanswered and undisputed. Thus, in the facts of the present case, there infact exists no dispute and hence the Defendants reliance upon clause 8 is not only entirely misconceived but also malafide. The invoices do not either expressly or by implication provide that the moneys are payable in Delhi. The invoices infact set out the modes of payment acceptable to the Plaintiff, i.e., either by account payee cheque, demand draft or NEFT/RTGS - Merely because the details of the receiving bank are within the jurisdiction of another city, this fact alone would not mean (a) that the amounts are payable in that city and (b) that part of the cause of action had arisen in that city. Additionally, even assuming that the only mode for payment under the said invoices was via RTGS/NEFT, the same would not by itself amount to monies being payable in Delhi under the contract. The details of the Plaintiff s bank are set out only to facilitate the payment by electronic mode and nothing else. This by no stretch of imagination can be construed to mean that the amounts due under the said invoices were payable in Delhi. The common law proposition is undoubtedly based on the doctrine of forum conveniens, it is basis this that the Plaintiff has filed the present suit in this Court only to be told by the Defendant who neither disputes nor denies the Plaintiffs claim that Suit must necessarily be instituted in a Court which for the Plaintiff is clearly not forum conveniens and within which, no part of the cause of action has arisen. Such a contention must only be stated to be rejected. Challenge to the Jurisdiction Bombay High Court rejected.

Summary

Issues Involved:
1. Summons for Judgment No. 38 of 2022.
2. Interim Application No. 123 of 2023 under Order VII Rule 11 of CPC for rejecting the Plaint on the ground of jurisdiction.
3. Interim Application No. 131 of 2023 under Order-I Rule 10(2) of CPC for deletion of Defendant Nos. 2 and 3 from the array of Defendants.

Issue-wise Summary:

1. Summons for Judgment No. 38 of 2022:
The Plaintiff sought a decree for Rs. 1,13,06,080/- along with 20% compounded annual interest based on tax invoices issued to Defendant No. 1. The Plaintiff argued that the Defendants had not disputed the invoices or raised any discrepancies as per Clause 3 of the invoices and had failed to make payments despite repeated reminders and a legal notice. The Plaintiff maintained that the invoices constituted a written contract, thus justifying a Summary Suit. The court found no defense from the Defendants and deemed the defenses taken in the Affidavit in Reply as frivolous and vexatious.

2. Interim Application No. 123 of 2023:
Defendant No. 1 sought rejection of the Plaint on jurisdictional grounds, arguing that the invoices specified disputes were subject to Delhi jurisdiction and that payments were to be made to a bank in New Delhi. The Plaintiff countered that no part of the cause of action arose in Delhi and that the entire cause of action was within Maharashtra. The court concluded that the Defendants had not raised any dispute regarding the invoices prior to the suit, making the reliance on the jurisdiction clause inapplicable. The court also found that the provision of bank details in New Delhi was merely for convenience and did not confer jurisdiction. The application was dismissed.

3. Interim Application No. 131 of 2023:
Defendant Nos. 2 and 3 sought deletion from the array of Defendants, arguing that under Section 27(3) of the LLP Act, obligations of a limited liability partnership are solely its obligations. The Plaintiff argued that Defendant Nos. 2 and 3, being at the helm of Defendant No. 1, were liable under Section 27(2) of the LLP Act. The court found that the suit was based on non-payment of invoices and not on any wrongful act by Defendant Nos. 2 and 3, making their joinder contrary to the LLP Act. The application was allowed, and Defendant Nos. 2 and 3 were deleted from the suit.

Conclusion:
The court dismissed Interim Application No. 123 of 2023, allowed Interim Application No. 131 of 2023, and made the Summons for Judgment absolute. The suit was decreed in favor of the Plaintiff, awarding Rs. 1,13,06,080/- with 12% interest from the date of filing till realization. The court also ordered a refund of court fees as per rules and directed that the decree be drawn up and sealed expeditiously.