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Dhanraj Yugalkishore & Co. v. Babulal Ramchandra
Judgment Summary — Kania, J.
Factual and Procedural Background
Plaintiffs are commission agents carrying on business in Bombay. They filed a suit in Bombay to recover approximately Rs. 15,000 alleged to be due at the foot of their agency account. The parties' transactions began in 1938; up to November 1941 the plaintiffs contended the accounts were adjusted because no disputes had been raised. Some outstanding transactions remained, including items for April/May 1942 settlement.
When the plaintiffs demanded payment, the defendant responded that once outstanding transactions were closed and the balance ascertained he would pay or receive as appropriate and that the plaintiffs need not have apprehensions about the shown balance. The plaintiffs waited until the due date in April and then sent a demand letter dated 1 May 1942. The defendant replied that he had already filed a suit at Banda for accounts. The plaintiffs thus learned of the Banda suit.
The defendant had in fact filed suit No. 62 of 1942 in the Court of the Munsif at Banda on 24 March 1942. Summons in that suit were not served on the plaintiffs for a long time. The Bombay High Court was in vacation when the first date for fixing issues in the Banda Court fell in the vacation. The plaintiffs appeared in the Banda Court and suggested that the question of the Banda Court's jurisdiction be tried first. By the end of May it was decided that the jurisdictional issue could not be tried preliminarily and that all matters between the parties would be tried together; the Banda Court fixed 24 September for the trial. The plaintiffs obtained the Banda plaint and proceedings (in Urdu) and had them translated. The present Bombay suit was filed on 8 July 1942 and a notice of motion for injunction was taken out on 18 July 1942.
The defendant's suit in Banda alleged the existence of a partnership arising from forward transactions arranged at Banda, that accounts of the partnership should be made up annually at Banda, that a partner of the plaintiffs repeatedly visited Banda but omitted to bring partnership books so accounts were not made up, and claimed Rs. 500 as due on making up accounts or alternatively for taking partnership accounts. The Banda plaint alleged the partnership was dissolved by the suit. The opinion records that the allegation of partnership was unsupported by documents and that prior correspondence did not show any partnership allegation before the suit. The Banda plaint also alleged the plaintiffs kept fraudulent accounts and incorrect entries.
The present application seeks an injunction restraining the defendant from proceeding with the Banda suit.
Legal Issues Presented
- Whether this Court (the High Court on the Original Side) has jurisdiction to grant an injunction restraining the defendant from proceeding with a suit in the Munsif's Court at Banda, despite the defendant not residing or carrying on business within this Court's jurisdiction and having filed his appearance under protest.
- Whether the plaintiffs' application for injunction should be refused on account of delay in applying for the relief.
Arguments of the Parties
Defendant's Arguments
- The Court had no jurisdiction to grant the injunction because the defendant did not reside or carry on business within the jurisdiction of the High Court and (on the facts) had filed his appearance under protest; therefore the High Court should not restrain the Banda suit.
- The defendant relied on earlier authorities (specifically Vanichand v. Lakhmichand and Mulchand Raichand v. Gill & Co.) to support the contention that jurisdiction was lacking.
- Separately, the defendant contended that because of delay in making the application, the plaintiffs should be refused the injunction.
Plaintiffs' Arguments
- Permitting the defendant to proceed in Banda would be unjust, vexatious and oppressive to the plaintiffs and would result in multiplicity of suits without benefit.
- The Munsif's Court at Banda would not be able to grant the substantive relief sought in the Bombay suit except on a basis of partnership which the plaintiffs deny; therefore the Bombay suit must proceed.
- Even to determine the defendant's allegations about fraudulent entries, evidence would need to be recorded in Bombay; it would be inconvenient and oppressive to require the plaintiffs to litigate in Banda on these issues.
- The defendant's Banda suit appeared to be an attempt to forestall the plaintiffs' suit in Bombay; the plaintiffs acted promptly after learning of the Banda suit (filing in Bombay within three weeks of re-opening after vacation and moving for injunction within two weeks thereafter).
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Vanichand v. Lakhmichand | Relied upon by defendant to argue absence of jurisdiction to grant injunction where defendant does not reside or carry on business within Court's jurisdiction. | The court noted the defendant relied on this case but found the reliance misplaced and treated the precedent as not decisive of the jurisdictional objection on the facts. |
| Mulchand Raichand v. Gill & Co. | Decision where an injunction was granted against a constituent who had filed suit in another Court; contained language suggesting an answer where defendants have been served and have appeared without protest. | The court held that the defendant's argument based on a passage in this judgment involved a misunderstanding; the passage did not establish that absence of service/appearance eliminated jurisdiction to grant an injunction. |
| Carron Iron Company v. Maclaren | Described three classes of cases in which the principle of restraining foreign suits has been enforced: (1) foreign suit vexatious where complete relief may be had in the original forum; (2) foreign suit ill-calculated to answer ends of justice; (3) general grounds of equity and good conscience. | Quoted by the court (via Pratt, J.) to outline the accepted classes of cases in which injunctions against foreign suits may be granted and to frame the relevant principles. |
| A. Milton & Co. v. Ojha Automobile Engineering Co. | Held there was no objection to a Court granting an injunction because the defendant did not reside within the Court's jurisdiction; the view was expressed in terms approving a prior view (Sale, J. in Mungle Chand v. Gopal Ram). | The court expressed agreement with the view in this case and treated it as establishing that nothing in law prevents a High Court (Original Side) from granting an injunction to restrain a defendant from proceeding in another Court where on the face of the plaint the High Court has jurisdiction. |
| Mungle Chand v. Gopal Ram | Sale, J.'s view (referred to in A. Milton) that there is no objection to granting an injunction despite defendant not residing in jurisdiction. | The court noted A. Milton agreed with Sale, J.'s view and relied on that chain of authority in concluding jurisdiction to grant an injunction exists in appropriate cases. |
| Jumna Dass v. Harcharan Dass; Vulcan Iron Works v. Bishumbhur Prasad | Reportedly did not approve the view that residence within jurisdiction is irrelevant to granting injunctions (contrasting with A. Milton). | The court observed these cases did not approve the A. Milton view, but considered them among the authorities examined in later decisions; they were part of the jurisprudential context. |
| Nainmal Pratapmal v. Mohandas Kamalsey | Considered the extent of the High Court's jurisdiction to grant similar injunctions; Engineer, J. followed the principle in A. Milton. | The court noted that later courts (Engineer, J.) followed A. Milton's principle and the present judge expressly agreed with that view in reaching his conclusion on jurisdiction. |
Court's Reasoning and Analysis
The court addressed the two objections raised by the defendant in turn.
On the jurisdictional objection, the court rejected the defendant's contention that absence of residence or business within the High Court's territorial jurisdiction precluded the High Court from granting an injunction to restrain the Banda suit. The judge reviewed authority relied upon by the defendant (including Vanichand and Mulchand) and explained that those authorities were either misread or not determinative. The court accepted the reasoning in A. Milton & Co. v. Ojha Automobile Engineering Co. (and the view in Mungle Chand v. Gopal Ram as adopted there) that there is nothing in law preventing a Court on the Original Side of a Chartered High Court from granting an injunction to restrain a defendant from proceeding with a suit in another Court of competent jurisdiction, provided it appears on the face of the plaint that the High Court has jurisdiction to entertain the subject matter of the suit. The court also observed that on the affidavits before it the defendant did not assert that this Court lacked jurisdiction to try the Bombay suit.
On the objection of delay, the court analyzed the circumstances and concluded delay had not been demonstrated. The plaintiffs learned of the Banda suit only after the High Court's vacation; within three weeks of re-opening they filed the Bombay suit and within less than two weeks thereafter moved for injunction. The court attributed any later delay in hearing the notice of motion to mutual convenience and did not accept it as a ground to refuse relief.
Substantively, the court found that permitting the Banda suit to proceed would be unjust, vexatious and oppressive to the plaintiffs. The Banda Munsif's Court would be unable to grant the relief sought in the Bombay suit except possibly on a partnership basis which the plaintiffs denied; therefore, allowing the Banda suit to proceed would result in multiplicity of suits and unnecessary inconvenience. The court viewed the defendant's earlier correspondence as showing no dispute had been raised until after the defendant filed the Banda suit in March, suggesting the suit was an attempt to forestall a Bombay suit. The affidavits did not show substantial progress in the Banda proceedings (only that a hearing date—24 September—had been fixed). The court concluded the defendant would not be prejudiced by prosecution of the Bombay suit alone.
On these grounds (jurisdiction, convenience, oppression and absence of unjust delay), the court granted the injunction sought, subject to the procedural condition described below.
Holding and Implications
Holding: The Court granted the plaintiffs' application and ordered that the defendant be restrained from proceeding with suit No. 62 of 1942 in the Court of the Munsif at Banda (i.e., an injunction was granted in terms of prayer (a) of the notice of motion).
Implications and consequent directions:
- The injunction is subject to liberty being reserved to the defendant to apply for dissolution of the injunction if the plaintiffs fail to prosecute the Bombay suit diligently.
- Costs of the application were ordered to be "costs in the cause" (i.e., to be costs in the principal suit).
- The opinion did not purport to set a new legal precedent; rather it followed established authority (in particular the view in A. Milton & Co. v. Ojha Automobile Engineering Co. as applied) that a High Court on the Original Side may in appropriate cases restrain a defendant from proceeding in another Court when jurisdiction and equitable considerations so require. The judgment's practical effect is to prevent multiplicity of suits and to require the substantive dispute to be tried in Bombay.
Representation and Order
Attorneys for plaintiffs: Messrs Mobile, Parekh & Manecklal.
Attorneys for defendant: Messrs Malvi, Ranchhoddas & Co.
Order: "Order accordingly." (Record notes the formal order was made and signed N.K.A.)
Kania, J.:—
This is an application to restrain the defendant from proceeding with suit No. 62 of 1942 filed by him in the Court of the Munsif at Banda (U.P)
Plaintiffs are commission agents doing business in Bombay. Their present suit is to recover from the defendant Rs. 15,000 and odd due at the foot of the agency account. The transactions between the parties started in 1938 and up to November 1941 the account is contended to be adjusted because no disputes were raised. There were certain outstanding transactions at that time including some for April/May 1942 settlement. When the plaintiffs demanded payment the defendant replied that after the outstanding transactions were closed and the amount ascertained he would pay or receive as the case may be, and in the meanwhile the plaintiffs need not have any apprehensions about the balance shown to be outstanding against the defendant. The plaintiffs waited till the due date in April and thereafter sent their letter dated May 1, 1942, demanding the amount now claimed in the suit. The defendant in reply stated that he had already filed a suit at Banda for accounts. The plaintiffs thus came to know of the filing of the suit at Banda by the defendant.
It now appears that the defendant had filed the suit in the Court of the Munsif at Banda on March 24, 1942. The summons in that suit was not served on the plaintiffs for a long time thereafter. As the Bombay High Court was closed for the vacation and as the first date for fixing the issues in the Banda Court was in the vacation the plaintiffs appeared and suggested that the question of jurisdiction of the Banda Court should be tried first. After some discussion and some delay, at the end of May it was decided that issue could not be tried as a preliminary issue but all the matters between the parties should be tried at one time and the Court fixed September 24, for the trial. The plaintiffs got the plaint and proceedings in the Banda Court brought to Bombay, and as they were in Urdu, got them translated. The present suit was filed on July 8 and this notice of motion was taken out on July 18.
The defendant's suit in the Banda Court is based on these facts: That the defendant knew one of the partners in the plaintiff firm, that certain goods were sent for ready sale, that in respect of forward transactions a partnership between the parties was arranged at Banda and the accounts of the said partnership should be made up every year at Banda, and that though several times the plaintiffs' partner came to Banda thereafter no account was made up because that partner had omitted to bring the books of the partnership. The claim is to recover Rs. 500 as due on the making up of partnership accounts or alternative for taking the partnership accounts. In that plaint the defendant alleged that by the filing of that suit the partnership was dissolved. The allegation of partnership is not supported by any document and the correspondence read out to me clearly shows that before the suit was filed the defendant had never alleged that there was any partnership. According to his own plaint the accounts had to be made up at the end of each year but although more than two years had elapsed no accounts had been made up. The allegations in his plaint are that the plaintiffs had kept fraudulent accounts and the transactions as entered in their books were not correct.
Two objections are raised to the plaintiffs' application for stay. First, that the Court has no jurisdiction to grant the application, and, the other, that because of the delay the Court should refuse the application. On the first objection it is pointed out that the defendant does not reside or carry on business within the jurisdiction of this Court and he has filed his appearance in this suit under protest. From these facts it was argued that the Court had no jurisdiction to grant the injunction. In my opinion this contention is wrong. The defendant relied on Vanichand v. Lakhmichand and Mulchand Raichand v. Gill & Co. in support of his contention. In the first case Pratt, J., in the course of his judgment in discussing the jurisdiction of the Court to grant injunction, stated as follows (p. 957):—
“The authorities collected in that judgment [The Carron Iron Company v. Maclaren embrace three classes of cases in which this principle has been enforced. There are, firstly, when the foreign suit is vexatious and has been filed by a party to a litigation pending in England in which complete relief may be had; secondly, when the foreign suit is ill-calculated to answer the ends of justice e.g, … thirdly, the general grounds of equity and good conscience.”
The matter went in appeal but this aspect of the case was not discussed in appeal. In Mulchand v. Gill & Co. the Court granted an injunction against the constituent who had filed a suit in another Court in British India. Macleod, J. (as he then was) granted the injunction. When the matter went in appeal, Marten, J. (as he then was) discussed the question of jurisdiction, and to refute the argument advanced in that case against granting the injunction because the defendant did not reside or carry on business within the jurisdiction stated, “One short answer to this proposition is that it cannot apply where, as here, the defendants have been served and have appeared in the suit without protest.” The foundation of the defendant's argument in the present case is this observation in that judgment. In my opinion this argument is based on a complete misunderstanding of the discussion in that judgment. The learned Judge did not convey by his judgment that if that fact did not exist the Court had no jurisdiction to grant the injunction because the defendant did not reside or carry on business within jurisdiction. I may point out that in A. Milton & Co. v. Ojha Automobile Engineering Co. the extent of the Court's jurisdiction under such circumstances came to be considered. Lort Williams, J. held that there was no objection to the Court granting an injunction because the defendant did not reside within the jurisdiction or carry on business within the jurisdiction of the Court. In terms he stated that he agreed with the view expressed by Sale, J. in Mungle Chand v. Gopal Ram. It may be noticed that view was not approved in Jumna Dass v. Harcharan Dass(4) and Vulcan Iron Works v. Bishumbhur Prasad(5). All these cases came to be considered by Engineer, J. when an application for a similar injunction was made in Nainmal Pratapmal v. Mohandas Kamalsey, and he has followed the principle stated in A. Milton & Co. v. Ojha Automobile Engineering Co. I entirely agree with the view expressed in that judgment. In my opinion there is nothing in law to prevent a Court on the Original Side of a Chartered High Court from granting an injunction to restrain a defendant from proceeding with a suit in another Court, provided it was shown on the face of the plaint that the Court had jurisdiction to entertain the suit before the High Court. On the affidavits the defendant does not even venture to suggest that this Court has no jurisdiction to try the present suit. On the first question therefore the defendant's contention fails.
In respect of the second contention it should be noticed that if the defendant is permitted to proceed with the suit at Banda it would be unjust, vexatious and oppressive to the plaintiffs. The Munsif's Court will have no jurisdiction to grant the relief asked by the plaintiffs except perhaps on the footing of a partnership which is completely denied by the plaintiffs. Therefore as the plaintiffs do not accept the contention of the defendant in the Banda suit, the present suit must go on. If I refuse this application it will amount to multiplicity of suits without any benefit. That should certainly be stopped if possible, particularly under the circumstances as disclosed in this case. Even for the purpose of proving the defendant's allegations that the transactions shown in the plaintiffs' books were unwarranted and the entries were false, the whole evidence will have to be recorded in Bombay. It will be very difficult if not impossible for a commission agent to carry on his business in Bombay if hundreds of his constituents were to file suits in different places all over India and drag him all over India when they incur losses and desire to delay payment. On the ground of convenience it appears clear that the Court will be reluctant to permit such an abuse of the process of the Court, unless circumstances justify such an action. In the present case as shown by the correspondence before suit no dispute was raised by the defendant and the suit filed by him in March after that correspondence is an attempt to forestall any suit being filed by the plaintiffs in Bombay. As I have pointed out the Munsif's Court at Banda will be unable to grant the relief asked by the plaintiffs in this suit. The facts disclosed in the affidavits do not show that any substantial progress has been made in the Banda suit except that the Court has fixed September 24 as the date of hearing. I do not think the facts disclosed by the affidavits show that the defendant will be prejudiced by the prosecution of the suit in Bombay alone.
The argument that there has been delay in making this application is not justified. As I have pointed out the plaintiffs were informed of the suit at Banda only after the High Court closed for the vacation and within three weeks after the re-opening they have filed this suit and within less than two weeks thereafter the present application is made. It is true that the notice of motion has come on for hearing after a month, but that must be due to mutual convenience of the parties which cannot be treated as a ground of delay. On the ground of convenience therefore it seems to me that the defendant should be restrained from proceeding with the suit at Banda. I therefore make an order in terms of prayer (a) of the notice of motion. Liberty is reserved to the defendant to apply for the dissolution of the injunction in the event of the plaintiffs failing to prosecute the Bombay suit diligently. Costs of the application to be costs in the cause.
Attorneys for plaintiffs: Messrs Mobile, Parekh & Manecklal.
Attorneys for defendant: Messrs Malvi, Ranchhoddas & Co.
Order accordingly.
N.K.A
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