9911796707
TMI Blog1991 (1) TMI 457X X X X Extracts X X X X X X X X Extracts X X X X ..... ies laws there. First application was filed by the plaintiff on 18-7-1990 along with another application (I.A. 5402/90) under Order 6, Rule 17 and Section 151 of the Code. In fact, the plaintiff filed as many as four applications under Order 6, Rule 17 and Section 151 of the Code including the present one. The other three applications were I.A. 4756/90, I.A. 5402/90 and I.A. 7372/90. All these three applications were dismissed on a statement made that the present application was comprehensive in nature. The plaintiff also filed applications seeking interim relief under 0. 39, Rules I and 2 and Section 151 of the Code and these were I.As. 4732/90 and 7371/90. Both these applications were disposed posed of without any orders being passed thereon on a statement made by learned counsel for the plaintiff that these would stand disposed of in view of an order made by the Supreme Court on 23-10-1990 in S.L.P. (Civil) No. 1374 of 1990. In this order, the Supreme Court had said that the transaction, if it took place, shall be subject to the order of the Court , while at the same time directing the High Court to finish the matter expeditiously. 2. In the third application, the defendant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e liquidators of Essal Commodities for that purpose. The contention of the plaintiff now is that the shares of Jokai Tea Company's are being sold at a throw away price when these could be sold at much higher value and, thus, reduce the liability of the plaintiff as a guarantor, and it is also contended that in the circumstances of the case, the plaintiff would stand discharged from any guarantee. 4. Leaving the allegations in the plaint at this stage, I note that Essal Commodities floated another company Shadreed Limited in England having 100% equity shares which in turn floated Frendial Limited having 100% shares which again in turn floated Jokai Tea Holdings Limited holding 100% shares. As noted above, all these companies are registered in London. Jokai Tea Holdings Limited owned 74% shares in an Indian Company called Jokai (India) Limited. Both Essal Commodities and Shadreed Limited went into liquidation. 5. P.N.B. was having office in London where it was conducting banking business. Essal (Essal Commodities) enjoyed various facilities from P.N.B. For that plaintiff gave personal guarantee, and Shadreed Limited also gave guarantee for the purpose of guaranteeing the lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een Frendial Limited and Rossal Estates Limited, a company registered at Gibraltar. Other signatories to the agreement were Essal, Jokai (London), Shadreed Limited and the defendant P.N.B. P.N.B. was only a consenting party as a pledgee. A sum of US $ 21.5 million was to be paid to P.N.B. 7. On 7-3-1990 deed of settlement regarding all global disputes between the Official Liquidator of Essal and P.N.B. was entered into by which P.N.B. agreed to pay US $ 8.5 million to official liquidator Essal from the proceeds of shares of Jokai (London). It may be noted that there were various disputes raised by the Official Liquidator of Essal, which have been set out in paras 10, 11 and 12 of the written statement. It may also be noted that on 28-3-1984 when P.N.B. applied for transfer of shares of Jokai (London) in its name it was refused. The plaintiff was a Director of Jokai (London) at that time. On 12-10-1990 money as per settlement was passed in an Island called Jersey. Mr. Khanna, during the course of arguments, said that this was so because of some pending litigation in London, which could have affected the transaction and ultimate payment of amount to P.N.B. He said still some under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fully discharged as a guarantor. And for that purpose as well plaintiff has made various other allegations, which he seeks to incorporate by amending the plaint and to add more parties as defendants to the suit. 10. Mr. Lekhi, learned counsel for the plaintiff, submitted that all the amendments he was seeking were necessary for the proper conduct of the suit and to avoid multiplicity of proceedings. He said, since during the pendency of the suit circumstances changed, present application for amendment had per force to be filed. He said all the parties particularly the companies based in England were necessary parties to these proceedings inasmuch as they were parties to the settlement regarding sale of shares as mentioned aforesaid. In any case, he said, they were proper parties. As regards Union of India, he said the Finance Minister made a statement in Parliament wherein he informed the Parliament respecting settlement between P.N.B. and Essal and the fact that R.B.I. had been asked to investigate into the matter including the sale price of the shares. Mr. Lekhi said a great deal of harm had been done to the plaintiff as the shares have been undervalued and he had a righ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e suit had for multifariousness. Moreover, service of notice under Section 80 of the Code on the Union of India is mandatory and the application, I.A. No. 5403 of 1990, does not specify any ground for me to exercise discretion under subsection (2) of Section 80. No urgent or immediate relief is sought against the Central Government. This application (I.A. 5403 of 1990) is, therefore, to be dismissed. Prayer of the plaintiff to add Union of India and Reserve Bank of India as parties to the suit is declined. 11. There is no cause of action against other defendants sought to be added arising in India. None of these defendants carries on business in Delhi, or, for that matter, any place in India. No leave of the Court has been obtained to sue them in these proceedings as required under Clause (b) of Section 20 of the Code of Civil Procedure. Admittedly, whole of the transaction sought to be challenged took place outside India. English Courts are seized of the matter to which jurisdiction all the parties have submitted. Addition of these defendants in these proceedings will cause them a great deal of harassment, hardship and unnecessary expense. Even in the application no grounds hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above discussion yields the firm conclusion that it is perfectly open to the Court to consider the balance of convenience, the interest of justice and like circumstances, when it decides the question of jurisdiction of a Court, in the light of a clause in the agreement between the parties choosing one of several Courts or forums which were available to them. Indeed, such a consideration is essential in the interests of international trade and commerce of the better relations between the countries and the people of the world. 15. It will, thus, be seen that the Court at no stage held that the jurisdiction of Visakhapatnam Court was excluded altogether on account of condition 26 aforesaid. Reference is also made by Mr. Khanna to three decisions of the Calcutta High Court, namely, Messrs Lloyds Triestino Societa Per Azinni di Navigazione Sede in Triesta v. Messrs Lakshminarayan Ramniwas, , Lakshminarain Ramniwas v. N. V. Vereenigde Nederlandsche Scbeepraartmaatschappij, , and B. R. Herman and Mohatto (India) Pr. Ltd. v. Swedish East Asia Co. Ltd., . 16. Under Section 28 of the Contract Act, every agreement by which any party thereto is restricted absolutely from enforcing his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the agreement that disputes would be decided by a foreign Court and where the evidence was readily available within the jurisdiction of the foreign Court. It is also not correct that the plaintiff should be non-suited on the ground that he has already submitted to the jurisdiction of a foreign Court. That may be a consideration for stay of the suit, but, certainly not to reject the plaint when the Court has jurisdiction in the matter. Then, Mr. Khanna submitted that since the plaintiff was an undischarged insolvent, he could not maintain the present proceedings. The plaintiff has not been declared an insolvent under the Provincial Insolvency Act as applicable. It is admitted, however, that he has been declared bankrupt under the Bankruptcy Laws of England (Bankruptcy Act 1914). Mr. Khanna said that Section 13 of the Code would be applicable and a foreign judgment on this account would be conclusive. No judgment declaring the plaintiff as bankrupt has been brought on record. Mr. Lekhi on the other hand submitted with reference to clause (d) of this section that the judgment in such a case would not be conclusive on the question of bankruptcy of the plaintiff inasmuch as the proce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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