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TMI Blog1993 (2) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 380 of 1993 - - - Dated:- 3-2-1993 - N. M. KASLIWAL, KULDIP SINGH B.P. JEEVAN REDDY, JJ. For the Appellant: Harish N. Salve, Berarwale, K.J. John, Ms. Deepa Dixit For the Respondent: Raian Karanjawala, Ms. M. Karanjawala and Ms. P. Mullice JUDGMENT Special Leave granted. This appeal is directed against the Judgment of the Bombay High Court dated 24th October, 1991. Brief facts of the case are that the appellant R.S.D.V. Finance Company Private Limited (hereinafter referred to as the plaintiff) filed a summary suit against the respondent Sh. Vallabh Glass Works Limited (hereinafter referred to as the defendant ) in the ordinary original civil jurisdiction of the High Court. The case of the plaintiff was that it had deposited a sum of Rs. 10,00,000 with interest to be charged @ 19% per annum, with the defendant. The said deposit was to be for a period of 90 days. The aforesaid amount of Rs. 10,00,000 was given to the defendant company through cheque No. 933251 dated 5 th July, 1983 in the bank account of the defendant at Bombay. The defendant issued a deposit receipt for the aforesaid amount dated 11.7.1983. The aforesaid deposit receipt contained an end ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he averments made in para 13 of the plaint which clearly mentioned that the deposit was obtained by the defendant from the plaintiff at Bombay. The monies were deposited by the plaintiff with the defendant at Bombay in the defendant s account in the Bank of Baroda, Nariman Point Branch, Bombay. The cheques for repayment of the deposit were given by the defendant drawn on Bank of Baroda, Nariman Point Branch, Bombay. The plaintiff had further stated that though the entire cause of action had arisen in Bombay the plaintiff as an abundant caution was applying for approval under clause XII Letters Patent also since the registered office of the defendant was situated at Vallabh Vidya Nagar 388121, (within the State of Gujarat). The Learned Single Judge also noted that in the written statement there was no reply to paragraph 13 of the plaint and Mr. Parekh, Learned counsel appearing for the defendant in his usual fairness stated that the statements made in para 13 of the plaint were correct. The Learned Single Judge further held that the plaintiff in the suit had put its claim not only on the basis of the deposit receipt but had been cautious enough to also. base its claim on the 5 post ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt preferred an appeal against the aforesaid order of the Learned Single Judge dated 11.1.1988. The statement of the Learned counsel for the defendant in the aforesaid appeal proceedings was recorded to the effect that the only defence to the suit was to be on the point that the High Court of Bombay had nojurisdiction to entertain the suit and the defendant would not contest the plaintiff s claim on any other issue except the issue on the point of jurisdiction. The Division Bench in its order dated 19.1.1988 observed that the suit was to be tried as a commercial cause only to the aspect of jurisdiction. We have heard Learned counsel for the parties and have perused the record. In our view the Learned Division Bench was wrong in holding that in the facts and circumstances of this case the Bombay High Court had no jurisdiction to entertain the suit. The amount of Rs. 10,00,000 itself was paid by a cheque dated 5.7.1983 drawn on the Canara Bank and the said amount was deposited in the bank account of the defendant at the Bank of Baroda, Nariman Point, Bombay. On 11.7.1983 the defendant issued a deposit receipt and the said deposit receipt contained an endorsement of Subject to An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equent failure of justice. The above provision clearly lays down that such objection as to the place of suing shall be allowed by the appellate or revisional court subject to the following conditions :- (i) That such objection was taken in the Court of first instance at the earliest possible opportunity; (ii) in all cases where issues are settled then at or before such settlement of issues; (iii) there has been a consequent failure of justice. In the present case though the first two conditions are satisfied but the third condition of failure of justice is not fulfilled. As already mentioned above there was no dispute regarding the merits of the claim. The defendant has admitted the deposit of Rs. 10,00,000 by the plaintiff, as well as the issuing of the five cheques. We are thus clearly of the view that there is no failure of justice to the defendant decreeing the suit by the Learned Single Judge of the Bombay High Court, on the contrary it would be totally unjust and failure of justice to the plaintiff in case such objection relating to jurisdiction is to be maintained as allowed by the Division Bench of the High Court in its appellate jurisdiction. We may also con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amendment made in 1960, the Act was made applicable also to industrial undertakings to which any loan, guarantee or other financial assistance has been provided by the State Government. Section 3 expressly declares that on issuance of notification thereunder the specified industrial undertaking shall "be conducted to serve as a measure of preventing unemployment or of unemployment relief and undertaking shall accordingly be deemed to be a relief undertaking for the purpose of this Act". Sub-sec. (2) of Section 3 says that notification under section 3(1) shall have effect for such period not exceeding 12 months as may be specified in the notification. It is, however, renewable for a like period from time to time so, however, that all the periods in aggregate do not exceed five years. Section 4(1) is relevant for our purpose and may be set out in full : "4(1) Notwithstanding any law, usage custom, contract, instrument, decree, order, award, submission, settlement, standing order or other provision whatsoever, the State Government may, by notification in the Official Gazette, direct that :- (a)in relation to any relief undertaking and in respect of the period for which the relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndant places strong reliance upon the decisions of this Court in the State of Bihar v. Charusila Dasi [1959] Suppl. 2 SCR 601 and State of Bihar v. Bhabapritananda Ojha, [1959] Suppl. 2 SCR 624. According to the Learned counsel the said decisions conclusively establish that the suit or other proceedings at Bombay for enforcement of any remedy against the defendant relating to the said deposit cannot go on so long as the aforesaid notification is in operation. In view of the said contention it has become necessary to examine the said decisions to ascertain their ratio. In both the cases, the trusts were registered in the State of Bihar. The trust properties were situated not only in the State of Bihar but also in the State of West Bengal. The Bihar Legislature enacted Bihar Hindu Religious Trust Act, 1950 to regulate the management and functioning of the public trusts in Bihar. Action was proposed to be taken against both the trusts under the provisions of the Bihar Act. In the first case, Charusila Dasi questioned the said action inter alia on the ground that the Bihar Legislature was not competent to make a law with respect to a Trust whose properties are situated not only in Biha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the trustees in personam". In other words, the Bihar Act, in effect and substance, is directed towards regulating the management and administration of the trusts registered in the State of Bihar. The fact that such trusts also possessed properties outside the State of Bihar did not take away the competence of the Bihar Legislature which it acquired on account of territorial nexus. To the same effect is the decision in Bhabapritananda. In this case there was an additional fact. Long prior to the enactment of the Bihar Act, the Calcutta High Court had framed a scheme under Section 92 of the Civil Procedure Code relating to the temple in question. The Bihar Act, however, specifically excluded the operation of Section 92 C.P.C. Though the temple was situated in the State of Bihar some of its properties were situated within the State of West Bengal. The question again arose with respect to the competence of the Bihar Legislature to make a law controlling such a trust. It was held by the Constitution Bench that the Bihar Legislature was competent to enact the said law and since the Bihar Act expressly excluded the application of Section 92 C.P.C., the scheme framed by the Calcutta Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it has the effect of suspending the proceedings in the Bombay Court? The suit is not filed within the State of Gujarat nor are any proceedings being taken in any Court in Gujarat not, at any rate, as yet. The proceedings are being taken to establish the plaintiff s right to recover a particular sum of money from the defendant. The argument of Sri Nariman, however, is two-fold: Firstly, he says, Section 4(i)(a)(iv) suspends any right , privilege, obligation or liability accrued or incurred before the undertaking was declared a relief undertaking". If the very right/liability itself is suspended, no suit to establish or enforce such right/liability can proceed. Secondly, he says, even though the proceedings are going on in a court outside the State of Gujarat, the outcome of the proceedings are bound to affect the undertaking which is situated within the State of Gujarat. Applying the logic of Charusila Dasi, he says, the Gujarat Legislature is competent to stay the proceedings in a court outside the State so long as such proceedings are likely to have an adverse impact upon the undertaking adverse impact in the sense that it disables the undertaking being run as an employment relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the sales/purchase effected by the relief undertaking in other State shall not be liable to sales tax under the law of that other State. It cannot prevent the other State from levying and realising (by proceedings, if necessary, against the properties and assets of the undertaking situate outside the State of Gujarat) the tax due from the relief undertaking in respect of the sales and purchases effected in that State. Similarly, it cannot say that the properties of the relief undertaking situated in other States shall not be liable to property tax. Nor can it say that those properties cannot be proceeded against for realision of amounts due from the relief undertaking to third parties in pursuance of decreesiorders made by courts outside the State of Gujarat. It is true that such proceedings may ultimately affect the relief undertaking adversely; they may also tend to defeat the objective underlying the Act and the notification. But that can t be helped. That is the limitation of power. Probably, for this reason has the Parliament enacted The Sick Companies (Special Provisions) Act, 1985 . Incidently, it may be mentioned that according to the respondent company, a rehabilitatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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