Home Case Index All Cases Indian Laws Indian Laws + HC Indian Laws - 2021 (9) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (9) TMI 1475 - MADRAS HIGH COURTSeeking rejection of the plaint under Order VII Rule 11 of the Code of Civil Procedure, 1908 - It is submitted by the appellant that the relevant suit was filed before the Commercial Division in this High Court came to be established and, upon the Commercial Division being established, the suit was transferred from the ordinary Original Side to the Commercial Division in accordance with the said Act. HELD THAT:- It is possible that the source of the power is provided in a particular statute but the exercise thereof is under the general procedure in accordance with the Code. Again, the power to pass the order may be traced to the mandate in a particular statute though the manner of exercise of that power may not be stipulated in such statute. At any rate, even Order XLIII Rule 1 of the Code indicates the nature of the order which is appellable in certain cases and, in other cases, the order made in exercise of an authority conferred by the Code itself. The difference between the wording of, for example, subrules (a), (c) and (d) of Order XLIII Rule 1 of the Code, on the one hand, and sub-rules (f), (q), (r) and (s) of Order XLIII Rule 1 of the Code, on the other hand, is telling. While every order passed under the relevant provisions indicated in sub-rules (f), (q), (r) and (s) of Order XLIII Rule 1 of the Code is appellable, only those of a particular kind as indicated in sub-rules (a), (c) and (d) of Order XLIII Rule 1 of the Code are appellable. The obvious inference that is to be drawn is that it is the nature of the order that determines whether it would be appellable or not. There is no doubt, as the plaintiff suggests, that the trial court completely failed to construe the nature of the suit that the plaintiff herein instituted before the Bombay High Court. It is also evident that the trial court misread Section 35 of the Act of 2013 in holding that a suit under such provision “should be filed against the company AND every other individual whom the plaintiff claims to be responsible for the reports made in the prospectus.” The finding in such regard is clearly exceptionable. On a plain reading of the provision, it is apparent that the liability of the company and the several other persons indicated in Section 35(1) of the Act of 2013 are joint and several - the fact that DHFL was not a party to this suit was of little consequence and the trial court erred in founding its opinion on such flawed and irrelevant consideration. Since insolvency proceedings had been commenced against DHFL by the time the suit was instituted, DHFL could not have been impleaded as a party by virtue of Section 14 of the Code of 2016 and the punishment attracted under Section 74(2) thereof for violation of such provision. The perception by the trial court that it would be convenient for the two suits to be tried together betrays the failure to appreciate the nature of the two actions. The Bombay suit was filed under Order XXXVII of the Code as a summary action founded on the contract between the plaintiff and DHFL qua the repayment of the amount invested by way of debentures. It is trite law that a claim in damages founded on the fraudulent conduct of the defendant or defendants can scarcely be instituted under Order XXXVII of the Code. There is an averment in the plaint to the effect that the quantum of damages that may be realised in course of the present action may be adjusted against any realisation pertaining to the debentures made by the plaintiff elsewhere. That, in essence, is a legal requirement, or else, the doctrine of unjust enrichment would apply. It does not appear that the nature of the plaintiff's claim in the present action may have been fully comprehended by the trial court. The plaintiff had made a substantial investment in debentures which the plaintiff later discovered that the plaintiff may have been induced into making on the basis of the false statements and dishonest representations contained in the prospectus relating to such issue. As a consequence, the plaintiff initiated an action for recovery of the money from the concerned company itself and, subsequently, instituted the present suit for the loss and damage that the plaintiff suffered as a result of the perceived fraudulent and dishonest representations of the defendants herein. Surely, if the entire amount due to the plaintiff under the contract with DHFL was recovered by the plaintiff in the Bombay suit, the plaintiff would not be entitled to any penny in the present suit, notwithstanding the fraudulent conduct of the defendants, since the plaintiff would have recovered its investment and would not have suffered any loss or damage as a result. The principle of comity of courts may not have been a relevant consideration since the natures of the two actions were completely different. There could also be no doubt that some of the defendants were within the jurisdiction of this court at the time of the institution of this suit and Clause 12 of the Letters Patent makes no distinction as to whether the place where the defendant carries on business has any nexus with the transaction which is subject-matter of the suit - On the basis of the averments made in the plaint, it cannot be said that no part of the plaintiff's cause of action had arisen within the jurisdiction of this court. Though Section 19 of the Code may not be applied to this court since the entirety of the jurisdiction of this court to receive a suit is found in Clause 12 of the Letters Patent, the place where the loss is suffered may be a part of the cause of action. For a company, as the plaintiff herein, the loss is ultimately suffered at the registered office which is within jurisdiction. The judgment and order impugned dated April 29, 2021 cannot be sustained.
|