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Ramchander Laxminarayanan Karva v. Jaganath Khubchand Karva And Anr.
Factual and Procedural Background
A learned Single Judge revoked leave previously granted to the Appellant to sue the Defendants/Respondents under Clause 12 of the Letters Patent and ordered the plaint to be returned so it could be presented before a court of competent jurisdiction. Revocation was sought on two grounds: (1) that the entire cause of action arose in the State of Andhra Pradesh; and (2) that the Defendants would suffer loss, hardship and difficulty if required to defend the suit in this Court. The Single Judge rejected the first contention based on a statement in the plaint that the parties had entered into a compromise within the original-side territorial jurisdiction of this Court, but accepted the second contention and revoked leave on the ground of inconvenience to the Defendants (applying the doctrine of “forum of convenience” and the principle of balance of convenience).
On appeal, the Court reviewed the Single Judge's treatment of the balance of convenience and relevant facts. The appellate Court found that the Single Judge had not sufficiently considered the entire bundle of facts pleaded in the plaint and had relied principally on the Defendants' averments that (i) they carry on business at Hyderabad and are permanent residents of Hyderabad and (ii) they would be put to irreparable loss and hardship and would find it very difficult to defend the suit in this Court. The appellate Court set aside the judgment of the Single Judge and remitted the matter to the Original Side of this Court for a re-hearing and decision on whether leave should be revoked, directing that the decision be made in accordance with law. The appeal was allowed and no costs were awarded.
Legal Issues Presented
- Whether a Single Judge properly revoked leave to sue under Clause 12 of the Letters Patent on the ground of inconvenience to the defendants (application of the doctrine of “forum of convenience” and the principle of balance of convenience).
- Whether mere residence of the defendants within another State (here, Andhra Pradesh / Hyderabad) is sufficient ground to revoke leave to sue granted under Clause 12.
- What factual material the court must examine (e.g., the plaint and the “entire bundle of facts”) when deciding whether to refuse or revoke leave under Clause 12.
Arguments of the Parties
Defendants' Arguments
- The defendants averred by affidavit that they carry on business at Hyderabad and are permanent residents of Hyderabad.
- The defendants asserted that unless the leave granted is revoked they will be put to irreparable loss and hardship and that it would be very difficult for them to defend the suit in this Court.
Respondents' Counsel's Submission
- Learned counsel for the respondents contended that the Single Judge's finding of an alleged agreement within the local limits of the original-side jurisdiction of this Court is not sufficient for the grant of leave merely on the ground that the cause of action arose in part within those local limits.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Bihar State Agro Industries Development Corporation v. Ram Chand Khosla, AIR 1982 Cal. 537 | Cited on the doctrine of “forum of convenience” and consideration of transaction locality and where documents/witnesses are situated. | The Single Judge relied on the Calcutta High Court judgment as an authority for applying the doctrine of forum convenience where transactions, documents and witnesses were at a distant place (Patna) and trial there would be more appropriate; the appellate Court recorded the same decision being cited in the impugned judgment. |
| K. Murugesan v. Seethalakshmi (1992-1-L.W. 277) | Authority indicating that if part of the cause of action arose within the jurisdiction and factual disputes require resolution, leave already granted should not be revoked. | The appellate Court noted the Bench's indication that where part of the cause of action arises within the jurisdiction and factual issues must be decided, leave should ordinarily not be revoked; this case was invoked to show limits on revocation. |
| Tuticorin Alkali Chemicals and Fertilizers Ltd. v. Cochin Silicate & Glass Industries, 1992 II MLJ 376 | Explains the principle of balance of convenience as an extension of the doctrine of forum convenience and stresses that the court must look at the plaint and the entire bundle of facts. | The appellate Court relied on this Bench's statement to emphasise that a court must consider the plaint and the whole bundle of facts when determining convenience and that residence of the defendant alone is not decisive. |
| Seshatri Row v. Nawab Ka Askur Jung Aftal Dowlah Mushral Mulk, ILR 30 Mad. 438 | Observation that even where a cause of action arises in part within local limits the court may decline to give leave; the question of convenience may be considered. | Quoted (through Tuticorin Alkali's discussion) to show that the fact that cause of action arises in part within local limits is not conclusive for granting leave and that convenience may be considered. |
| Parasaram v. Chintandas, AIR 1982 Cal. 537 | Reiterates the view that balance of convenience may be considered in applications under Clause 12. | The appellate Court recorded that this view has been reiterated in several judgments, including the Calcutta High Court in Parasaram v. Chintandas. |
| State of Rajasthan v. Swaika Properties, (1985) 3 SCC 217 : AIR 1985 SC 1289 | Supreme Court authority cited by the appellate Court in relation to the principles applicable (specific rule quoted in the opinion is not expanded in the text). | The appellate Court observed the existence of this Supreme Court authority but stated it would not decide how far the respondents' submissions would carry conviction in light of that judgment and preferred to remit the matter for reconsideration. |
Court's Reasoning and Analysis
The appellate Court's analysis proceeded as follows:
- Recognition of the Single Judge's approach: The Single Judge had accepted the defendants' contention of inconvenience and applied the doctrine of forum of convenience after observing that the parties had stated in the plaint that a compromise had been entered within the original-side territorial jurisdiction. The Single Judge relied on authorities discussing the balance of convenience.
- Principle stressed: The appellate Court emphasised that in considering applications under Clause 12 the court must examine the plaint and the entire bundle of facts pleaded; the question of convenience must be decided on facts and not on mere assumptions. The Court quoted and relied upon prior Bench decisions (including Tuticorin Alkali and Seshatri Row) to show that consideration of convenience is permissible but must be fact-based.
- Mere residence is insufficient: The Court asserted that a mere reading of Clause 12 shows that the residence of the defendants does not determine whether leave should be granted. Leave is required only when the cause of action has arisen in part within the local limits of the ordinary original jurisdiction of the court. The Court defined "cause of action" from the text: a bundle of facts that would be necessary for the plaintiff to prove to obtain relief.
- Findings about the impugned judgment: The appellate Court found that the impugned judgment did not adequately consider the full bundle of facts. It noted that the Single Judge's reasoning essentially rested on the defendants' affidavits asserting residence in Hyderabad and potential hardship. The appellate Court observed there was no detailed balancing of respective advantages and disadvantages of the parties and that the Single Judge had not properly determined on facts who would suffer if leave were granted or refused.
- Procedural restraint: Although the appellate Court could itself have examined convenience, it declined to do so on the ground that doing so would usurp the jurisdiction and discretion of the Single Judge who must decide whether to grant leave. Therefore, rather than decide the issue on appeal, the Court set aside the impugned judgment and remitted the case for a proper re-hearing on all relevant facts in accordance with law.
Holding and Implications
Holding: The appeal was allowed; the judgment of the Single Judge revoking leave was set aside, and the case was remitted to the Original Side of this Court for a re-hearing and decision on whether leave should be revoked in accordance with law. No costs were awarded.
Implications:
- Direct effect: The Single Judge's order revoking leave to sue is vacated and the matter must be reconsidered afresh by the Original Side with attention to the plaint and the entire bundle of facts. The question whether leave should be revoked remains open for determination on proper factual consideration.
- On legal principle: The Court reiterated that while the doctrine of forum convenience and the balance of convenience may be considered in Clause 12 applications, such consideration must rest on the facts pleaded (the plaint and bundle of facts) rather than on assumptions such as mere residence of the defendant. The Court emphasized that the residence of the defendant is not by itself determinative under Clause 12.
- Broader precedent: The opinion does not purport to lay down a new rule; it directs that the established principles (as discussed in prior authorities) be applied through a proper factual enquiry. The Court declined to finally decide the issue on appeal to avoid usurping the Single Judge's discretion.
1. A learned single Judge of this Court has revoked the leave granted to the Appellant herein to sue the Defendants/Respondents under Clause 12 of the Letters Patent of this Court and ordered return of the plaint to the Appellant herein for being presented before the Court of competant jurisdiction. Revocation, it is not in dispute, was sought for on the ground that the eutire cause of action arose in the State of Andhra. Pradesh and that the Defendants would be put to loss, hardship and difficulty if they had to defend the suit in this Court. The first contention, however, has been rejected by the learned single Judge on the asisofa statement in the plaint that ihe parties had entered into a compromise within the original side territorial jurisdiction of this court, but has accepted the second contention to hold that on principles when convenience of the parties h taken into account, it would be appropriate to revoke the leave to sue the Defendants in this court. The judgment of the Calcutta High Court in the case of Bihar State Agro Industries Development Corporation v. Ram Chand Khosla (AIR 1982 Cal. 537) and some other cases on the subject have been cited in the judgment on the doctrine of ‘forum of convenience’, and it can be said with certainity that the learned single Judge was not unaware of the principle that the court will ordinarily take into consideration the balance of convenience and may if the balance is definitely in favour of the defendant, apply the doctrine of ‘forum of convenience’. The Calcutta judgment cited supra is one in which, the court took notice of the transaction out of which the claim had arisen to have taken place at Patna-the place of business of the defendant firm and the relevant documents relating to the contract and the transactions all being at Patna, the defendants being at Patna and then said if the suit is tried in this court, all the said documents and witness will have to be produced before this court apart from the great inconvenience that will be caused to the appellant, it will have to incur enormous expenses considering the respective advantages and disadvantage of the parties, it appears to us that in the facts and circumstances it is in favour of this being tried by a court in Patna. A Bench of this court in the case of K. Murugesan v. Seethalakshmi (1992-1-L.W. 277) indicated while considering an appeal refusing to revoke the leave granted to sue in this court, that if not but the part of the cause of action has arisen within the jurisdiction of this court and without traversing the facts leading to the transactions within the territorial jurisdiction of court, it will not be possible to grant any relief and decids the issues of facts and law, the leave which has already been granted should not be revoked. Speaking, however, specifically on the doctrine of ‘forum of convenience’, a Bench of this court in the case of Tuticorin Alkali Chcmicals and Fertilizers Ltd. v. Cochin Silicate & Glass Industries (1992 II MLJ 376) said as follows:
“The principle of balance of convenience, which is an extension of the doctrine ‘forum convenient’ has been considedred in a judgment of this court in Seshatri Row v. Nawab Ka Askur Jung Aftal Dowlah Mushral Mulk, ILR 30 Mad. 438. It has been observed in the said judgment:
“Having regard to the wording of Art. 12, it is clear that the facts that the cause of action arises in part within the local limits is not conclusive, and that, notwithstanding that the causes of action arises in part within the local limits, the court may decline to give leave to sue”
“As regards the law of this country, so far as we are aware, it has never been held that the question of convenience is not a question which may be taken into consideration in dealing with applications under Clause 12, and we are certainly not prepared to hold that this question should be excluded from consideration”.
2. This view has been reiterated in several judgments of the courts having original jurisdiction including the judgments of the Calcutta High Court in Parasaram v. Chintandas, AIR 1982 Cal. 537. But then, in considering the balance of convenience, the court is required to see the plaint and facts stated therein. The court has to necessarily see the entire bundle of facts and then to determine the question of convenience. Stating, though with respect to grant of interlocutory injunctions, In Halsbury's Laws of England, Third Edition, Vol. 21 at pages 364 and 365, the balance of convenience is stated as follows:
“Where any doubt exists as to the plaintiff's right or if his right is not disputed, but its violation is denied, the court in determining whether an interlocutory injunction should be granted takes into consideration the balance of convenience to the parties and the nature of the injury which the defendant, on the one hand, would suffer if the injunction was granted and he should ultimately turn out to be right, and that which the plaintiff, on the other hand, might sustain if the injunction was refused and he should ultimately turn out to be right. The burden of proof that the inconvenience which the plaintiff will suffer by the refusal of the injunction is greater than that which the defendant will suffer, if it* is granted, lies upon the plaintiff”.
3. We do not say that in considering the balance of convenience as to the forum for instituting a suit, it would be necessary (like the principles of injunction) to see the ultimate injury that a party may suffer but we do find support to our view and we state in no uncertain terms that in deciding whether to refuse leave or not, it would be necessary to see on facts and not, on assumptions, who shall suffer the plaintiff or the defendant-if the leave is granted or refused, as the case may be”.
4. We are, however, constrained to observe that when parties were unaware of the rule that the doctrine of ‘forum convenient’ is one under which in deciding whether to refuse or not, it would be necessary to see on facts and not on assumptions who shall suffer-the plaintiff or the defendant-if the leave is granted or refused, yet there has beer, no consideration of this aspect in the impugned judgment except that the defendant lived within the State of Andhra Pradesh and that they would be greatly inconvenienced if they were asked to appear in a suit on the original side. Facts which appear to give rise to the impugned judgment are the averments in the affidavit of the defendants that:
i) the defendants are carrying on business at Hyderabad and they are permanent residents of Hyderabad; and
ii) unless the leave granted is revoked, the defendants will be put to irreperable loss and hardship. It will be very difficult for the defendants to defend the suit in this Hon'ble court since they are permanent residents of Hyderabad.
5. A mere reading of Clause 12 of the Letters Patent of this Court is enough to exclude any effect of the residence of the defendants when the issue before the court is whether to grant leave to sue. Leave is required only in a case in which the cause of action has arisen in part within the local limits of the ordinary original jurisdiction. Residence of the defendant within the local limits of the ordinary original jurisdiction of the court is another aspect and one should not get carried away by the assertion of the defendant in this behalf as has been pointed out by a Bench of this court in the case of Tuticorin Alkali Chemicals and Fertilizers Ltd. v. Cochin Silicate & Glass Industries (1992 II MLJ 376) cited supra. Cause of action means a fact which, if traversed, would be necessary for the Plaintiff to prove in order to support his right to judgment of the court. In other words, it is a bundle of facts, which taken with the law applicable to them, gives the plaintiff a right to relief against the defendant. In considering the balance of convenience, it has been clearly pointed out by the Bench in the case of Tuticorin Alkali Chemicals and Fertilizers Ltd. v. Cochin Silicaie & Glass Industries (1992 II MLJ 376) supra, the court is required to bee the plaint and the facts stated therein. The court has to necessarily see the entire bundle of facts and then to determine the question of conveoince. To show to us, howeei, that if entire bundle of facts are taken into account. it will be seen that the instant suit is confined to the dispute, as to the passing off the same Ammonium Chloride Tablets which has been only one of the items which has been treated under six Trade Marks and instant suit has been only one of the six suits. It has also been brought to our notice that the five other suits have been proceeding in this court being C.S No. 1012 of 1987 filed on 17-12-1987, C.S No. 975 of 1987 filed on 2-12-1987. C.S No. of 984 of 1987 filed on U-12-87, C.S No. 985 of 1987 filed on 11-12-198? and C.S No. 1000 of 1987 filed on 17-12-1987., The judgment of the trial court has not addressed itself to balance the convenience of the parlies and to see, “so as to impress upon the csspective advantage and disadvantage of the patties has been considered, it has been found that there shall begreat inconvenience to the defendant/srespondents”. Learned counsel for the respondents submitted that he has got good reasons to contened that the finding of the learned single judge on the alleged agreement within local limits of the ordinary original jurisdiction of this court is not sufficient for the grant of leave on the ground that cause of action has arisen in part within the local limits of the ordinary original jurisdiction of Ibis court. How far, however, this argument will carry conviction and how far in the light of the judgment of the Supreme Court in the cases of State of Rajasthan v. Swaika Properties ((1985) 3 SCC 217 : AIR 1985 SC 1289 and the judgment of this court in the case of K. Murugesan v. Seethalakshmi (1992-1-L.W. 277; it will go, we do not decide, since we propose, for the reasons aforesaid, to remit the case for a reconsideration whether the leave should be revoked on the question of the convenience of the parties.
6. We could ourselves examine whether in keeping with the nature of the transactions between the parties, it would be inconvenient to the defendants to defend themselves before this court or would be inconvenient to the plaintiff if he is asked to institute the suit in a court in the State of Andhra Pradesh, but we do not do so for a good Reason, for if we do so, we shall usurp the jurisdiction and discretion of the learned single Judge, who is to decide whether to grant leave or not. Since we are of opinion that a proper adjudication is necessary on all relevant facts of the ca*e before deciding whether to grant leave or not in the light of the observations in the judgments of this court as well as the judgments of the Supreme Court and we have found that it has not been done in passing the impugned judgment, we are inclined to interfere and accordingly set aside the judgment of the court below. The case is remitted to the Original Side of this Court for a re-hearing and decision on the question whether leave should be ground or not, in accordance with law. This appeal is accordingly allowed. No costs.
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