TMI Blog2011 (4) TMI 1487X X X X Extracts X X X X X X X X Extracts X X X X ..... The appellants are engaged in the manufacture and export of hosiery products. In the course of their business, the appellants availed number of loan/credit facilities from the 2nd respondent/2nd defendant. For availing facilities, appellants have provided primary securities such as stock and receivables, bills, etc., apart from collateral securities by creating equitable mortgage of their immovable properties situated at Chennai and Tirupur by depositing the title deeds. 4. Due to the slump in the market during 1994, the plaintiffs could not retain the credit facilities availed by discounting all the bills from the respondents/defendants and the appellants committed default in repaying the amount due and the accrued interest thereon. The outstanding for the 1st appellant as on 31.12.1997 was ₹ 1.702 Crores and for the 2nd appellant was ₹ 1.8229 Crores and in all, both of them have to pay total sum of ₹ 3.0031 Crores to the 2nd respondent Bank. The appellants negotiated with the 2nd respondent for One Time Settlement. One Time Settlement was arrived at and the 2nd respondent Bank agreed to receive a sum of ₹ 2.1250 Crores out of the said total sum of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the communication of the Bank dated 27.1.2000 and to direct the defendants to release the sum of ₹ 19,634,183/- with interest at the rate of 18 percent per annum. By the Order dated 27.9.2005, the learned single Judge held that whether the appellants are entitled to the discounted amount from the Norway Court towards bills of exchange or not is a disputed question of fact and dismissed the writ petition giving liberty to the appellants to approach the Civil Court questioning the claim of the respondents/defendants. The Writ Appeal preferred by the plaintiffs in W.A.No.2079 of 2005 also came to be dismissed with observation that the appellants are at liberty to approach the Civil Court. Alleging that the respondents/defendants have no right to appropriate the money credited into the 2nd defendant Bank, plaintiffs have filed suit in C.S.D.No.12201 of 2008 against the 2nd defendant for recovery of ₹ 40,90,020.95 lakhs with interest. 8. The 2nd defendant is State Bank of India, Tirupur Branch from whom the appellants/plaintiffs had availed credit facilities and had transactions. Along with the suit, appellants filed A.No.805 of 2010 seeking leave of the Court to file th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o have granted leave to file suit against the 2nd defendant. 12. The learned counsel for the respondents submitted that the Bank had all transactions only with the 2nd respondent Bank at Tirupur and entire cause of action arose outside the jurisdiction of Original Side of Madras High Court. The learned counsel would further submit that no part of cause of action has arisen in Chennai to fall within the ambit of part of cause of action to attract the jurisdiction of the Original Side of High Court. 13. The learned counsel for respondents would further submit that creation of equitable mortgage over the Royapettah property and approval of One Time Settlement by the Head Office cannot be said to be integral part of cause of action to attract the jurisdiction of the High Court. In support of his contention, the learned counsel placed reliance on a judgment of this Court in the case of SOUTH INDIAN BANK LTD. VS. M.M.T.C.LTD., ((2007) 5 MLJ 303). 14. In Paragraph No.17 of the plaint, it is averred that that even though the 2nd respondent Bank is located at Tirupur, all the Overseas transactions have taken place only through the Head Office - 1st respondent/1st defendant and 1s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expression 'cause of action' is defined in Mulla's Code of Civil Procedure: The 'cause of action' means every fact which, if traversed, it would be necessary for the plaintiff to prove in order to support his right to a 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. 18. In South-East Asia Shipping Co. Ltd. vs. Nav Bharat Enterprises Pvt. Ltd. and Ors. (1996) 3 SCC 443 it was reiterated that primacy has to be given to the place where the cause of action has in fact arisen. Cause of action must include some act done by the defendant which gives the plaintiff the right to claim relief. In that case, the respondents had filed a suit on the original side of the Delhi High Court for perpetual injunction against the appellant from enforcing a bank guarantee executed at Delhi and transmitted for performance to Bombay. The admitted position was that the contract was executed at Bombay and performance of the contract was also to be carried out in Bombay. In an appeal by Special Leave, the Supreme Court relying upon a judgment in ABC Laminart v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e proved, as distinguished from every piece of evidence which is necessary to prove each fact, comprises in ?cause of action?. It has to be left to be determined in each individual case as to where the cause of action arises. 20. Considering the situs of cause of action in respect of entertaining writ petitions under Article 226 and considering the scope of Section 20(c) C.P.C. in KUSUM INGOTS ALLOYS LTD. VS. UNION OF INDIA AND ANOTHER, ((2004) 6 SCC 254), the Supreme Court laid down the touchstone for conferment of jurisdiction on the Court: (SCC, page 261 para 18) The facts pleaded in the writ petition must have a nexus on the basis whereof a prayer can be granted. Those facts which have nothing to do with the prayer made therein cannot be said to give rise to a cause of action which would confer jurisdiction on the court. Observing that the expression cause of action is not defined in any statute, the Apex Court in Kusum Ingots (supra) emphasized that the material facts which are imperative for the suiter to allege and prove constitute the cause of action; and that the expression material facts is also known as integral facts. 21. The learned Senior Counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e State Bank of India has got branches throughout the State of Tamil Nadu. For all the Branches in the State of Tamil Nadu, the 1st respondent is the Head Office decision making authority. But to say that the Original Side of Madras High Court will have jurisdiction to entertain the suit in respect of all the branches of State Bank of India throughout the State on the ground that the 1st respondent Head Office is the decision making authority would amount to stretching the arms beyond the logical ends. We are afraid that by accepting such contention, Original Side of High Court would be overstepping its limits in assuming jurisdiction over all such transactions. 26. Mere fact that the 1st respondent is the decision making authority over the 2nd respondent and that it has approved One Time Settlement would not constitute an integral part of cause of action to confer jurisdiction. It is not every fact pleaded by the litigant that gives rise to a cause of action and only such facts as are necessary to adjudicate upon the lis would constitute a cause of action conferring territorial jurisdiction. 27. Learned Senior Counsel Mr.Duraisami has contended that where the part of cause ..... X X X X Extracts X X X X X X X X Extracts X X X X
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