Judgment:
Sanjib Banerjee, J.
1. The principal application taken up for consideration is the one by the first two defendants for revocation of the leave granted under Clause 12 of the Letters Patent or, in the alternative, for dismissal of the suit or, in the further alternative, for rejection of the plaint. In GA No. 649 of 2002 the State of Andhra Pradesh and the Andhra Pradesh Industrial Infrastructure Corporation Ltd. claim that the plaintiffs have no cause of action; that this Court did not have the authority to receive the suit; and, that the claim is, in any event, barred by the laws of limitation.
2. There are two other applications that have also been taken up. GA No. 1189 of 2009 is the plaintiffs' application for amendment of the plaint on formal grounds since the name of the second plaintiff has been changed during the pendency of the suit and the third, fourth and fifth plaintiffs have apparently merged in the first plaintiff. The third application, GA No. 1234 of 2009, is by the plaintiff under Section 89 of the Civil Procedure Code seeking a direction that the disputes in the suit be referred for redressal by an alternative forum.
3. The applying defendants insist that the suit could never have been brought before this Court and the specious grounds narrated for invoking the territorial jurisdiction of this Court should result in the immediate revocation of the leave granted under Clause 12 of the Letters Patent. The applying defendants say that there is a more fundamental ground for arresting the progress of the suit. According to them, all disputes arising out of a memorandum of understanding between the second plaintiff and the first defendant stood resolved pursuant to a memorandum of settlement filed before the High Court of Andhra Pradesh and accepted by such Court.
4. On January 28, 1994 the second plaintiff, a company incorporated in the United Kingdom, entered into a memorandum of understanding with the Government of Andhra Pradesh that contemplated the setting up of an international economic enclave including an industrial township in that state, a business centre and an international resort in Visakhapatnam, an international business district in Hyderabad and a utility company to upgrade and induct technology in the State of Andhra Pradesh. The memorandum recorded that the State Government was desirous of promoting industrial growth in the State and had offered incentives for the improvement of infrastructural facilities to generate downstream investment and industrialisation. The memorandum of understanding envisaged execution of the individual projects by infrastructure companies to be incorporated in the State. Land was to be developed by the entities to be floated by the second plaintiff upon the State Government providing the same. It is the common case that after some money was paid by the second plaintiff, or by companies set up by the second plaintiff, and some land was acquired and allotted, the projects ran into rough weather.
5. By a notice of March 3, 1997 the Government of Andhra Pradesh required the second plaintiff and/or the companies floated for the purpose of executing the work under the memorandum of understanding to show cause as to why the memorandum should not be cancelled. Such show-cause notice was preceded by letters dated February 18, 1997 and February 24, 1997 issued by the second defendant herein evidencing the Government's intention to either not continue with the project or remove the second plaintiff and its associate companies from the project. The third, fourth and fifth plaintiffs herein along with a common shareholder and director of the three companies instituted WP No. 5107 of 1997 in the High Court of Andhra Pradesh challenging the show-cause notice of March 3, 1997 and the corporation's letters of February 18 and February 24, 1997.
6. Upon such petition under Article 226 of the Constitution of India being received, the High Court apparently expressed a desire that the matter should be amicably resolved. It is thereafter that the second plaintiff and the three companies that had been incorporated for carrying out the work under the memorandum of understanding (the third, fourth and fifth plaintiffs herein) negotiated with the State of Andhra Pradesh and its industrial infrastructure corporation and arrived at a settlement on June 24, 1998. The memorandum of settlement sets out the names of the parties thereto. Of the parties to the present suit, the first plaintiff and the third defendant are not mentioned in the settlement. The second to the fifth plaintiffs herein were represented in the memorandum by the sixth petitioner to the writ proceedings. The settlement recorded the execution of the memorandum of understanding of January 28, 1994 and the purpose therefor; that the Government had agreed to acquire and allot plots of land at Hyderabad, Visakhapatnam and elsewhere in the state for the projects; that some land had been acquired by the Government or its agencies and allotted to the second plaintiff herein or its associates against a total consideration of Rs. 20,36,52,500/-; and, that 'certain disputes arose between the parties which led to the issuance of letters of cancellation dated 18.2.97 and 24.2.97 by APIIC and the show cause notice dated 3.3.97 by the State Government to DMG.' The second plaintiff herein was referred to in the settlement as DMG.
7. The memorandum narrated that during the hearing of the writ petition, the High Court of Andhra Pradesh had suggested an out of court settlement; that an empowered committee was set up by the State Government for 'settling the disputes outside court;' and, that the parties had thereafter 'decided to settle the matter out of court on certain terms and conditions.' The terms were recorded at Clause 16 of the memorandum and need to be reproduced here:
16. Terms & Conditions:
16(1) In view of such disputes and since both parties not being able to fully meet their respective commitments in terms of MOU, APIIC on behalf of State Government and on its own behalf shall make payment of Rs. 30,95,74,238/- by crossed DDs in the names of DMIL, DMHL & DMIPL as detailed hereunder towards full and final settlement of the issue.
Rs. PDMIL 27,48,65,504.00DMHL 3,45,12,854.00DMIPL 1,95,880.00-----------------30,95,75,238.00-----------------16(2) The APIIC shall make the said payments on the 30th of June 1998. If payment is made earlier to 30th June, 1998 suitable adjustment in the amount payable will be made and upon payment thereof the projects shall stand called off.
16(3) On signing of this Memorandum, the MOU dt.28-01-1994 shall stand cancelled and DMG shall hand over possession of 35 hectares of land at Madhapur to APIIC, 4 hectares of land in Budha Purnima to HUDA and Government lands 12.15 hectares at Yendada and 1.335 hectares at Lankalapalem at Visakhapatnam, to Collector Visakhapatnam and shall not claim any right or interest over such lands. DMG shall also not claim any right in respect of land offered to it by APIIC in Lemarthy Village of Visakhapatnam District.
16(4) On signing of this Memorandum and after receipt of the full payment by DMG, DMG shall request the Hon'ble High Court to allow withdrawal of W.P. No. 5107/97 pending in the Andhra Pradesh High Court, and for this purpose the parties shall make a joint application for disposal of W.P. No. 5107/97 in terms of this Memorandum. Each party shall bear its own expenses in the litigation.
8. The payment of a total sum of Rs. 30,95,74,238/- followed on or about June 24, 1998 with identically-worded receipts issued by the third, fourth and fifth plaintiff companies herein acknowledging receipt of payment 'towards full and final settlement of refund of land cost paid to government of A.P., in pursuance of Agreement dt. 24-6-1998....' A possession certificate was executed on June 24, 1998 evidencing possession of the lands originally made over to the third, fourth and fifth plaintiffs herein being returned to the second defendant herein.
9. On or about May 21, 2001 the present suit was instituted for the following reliefs:
a) Decree for Rs. 8.45 Crores in favour of the plaintiff No. 1 and/or the plaintiffs;
b) Decree for Rs. 270.00 crores in favour of the plaintiff No. 3 and/or the plaintiffs;
c) Decree for Rs. 118.00 crores in favour of the plaintiff No. 5 and/or the plaintiffs;
d) Interim and further interest;
e) Perpetual injunction restraining the defendant Nos. 1 and 2 and each one of them starting or continuing or permitting the defendant No. 3 to start or continue with any project similar to that proposed by the plaintiffs to the defendant No. 1 in the State of Andhra Pradesh and/or the City of Hyderabad or Visakhapatnam;
f) Attachment;
g) Receiver;
h) Injunction;
i) Cost;
j) Further and/or other reliefs.
10. Writs of summons in the suit were served on the first and second defendants by September 20, 2001 and they applied for the effective dismissal of the suit on February 19, 2002. The said defendants' application appears to have gone into cold storage for several years and was dismissed for default in May, 2008. It was only after the application was restored did the plaintiff take further steps by seeking amendment of the plaint and asking for the reference of the disputes for resolution outside court.
11. The applying defendants are indignant that this action could have been initiated and carried to this Court. They insist that upon the memorandum of settlement being executed and being worked out, no cause of action under the memorandum of understanding subsisted. They suggest that not only is the suit mischievous, it has been instituted in a court which has no nexus with the plaintiffs' alleged cause of action and should be regarded as a vexatious litigation. The applying defendants claim that the memorandum of settlement was the complete resolution of all disputes arising under, or in connection with, the memorandum of understanding of January 28, 1994 and upon the third, fourth and fifth plaintiffs receiving payment in terms thereof and surrendering possession of the lands, nothing survived in respect of the transactions or purported claims pertaining to the memorandum of understanding. They submit that it would be ridiculous to suggest that the Government of Andhra Pradesh paid nearly 150 per cent of the amount expended by the companies set up by the second plaintiff only to be faced with a future claim on account of alleged breach of contract and damages. It is the applying defendants' case that the memorandum of understanding and all matters connected therewith were given a quiet and formal burial by the memorandum of settlement of June 24, 1998.
12. The first and second defendants question the propriety of the plaintiffs bringing the action before this Court. They say that the first plaintiff is a complete stranger to the memorandum of understanding and the transactions thereunder as it was neither a party to the memorandum of understanding nor was it otherwise referred to in the memorandum of settlement or any letter or document exchanged with the applying defendants in the interregnum. They submit that the situs of the registered office of the first plaintiff, which is a complete stranger to the transactions relating to the memorandum of understanding, appears to have been made the fundamental basis for invoking the territorial jurisdiction of this Court. The applying defendants state that apart from the fact that the memorandum of settlement was the end of the matter, even if the second to the fifth plaintiffs had a cause of action in damages on account of alleged breach of the terms of the memorandum of understanding, this Court would not be competent to receive such action. According to them, it is the admitted position that the memorandum of understanding was executed in Hyderabad; that there is no dispute that the memorandum of settlement was also arrived at in Hyderabad; and, the entirety of the work contemplated under the memorandum of understanding was to be in the State of Andhra Pradesh.
13. The applying defendants refer to paragraph 41 of the plaint where the plaintiffs have invoked the territorial jurisdiction of this Court on the basis of a part of the cause of action as pleaded in paragraphs 2, 7, 8, 15, 22, 23, 26 and 28 of the plaint having arisen with jurisdiction and a part of the cause of action as pleaded elsewhere having arisen outside jurisdiction.
14. At paragraph 2 of the plaint it has been averred that the first plaintiff 'had its Head Office and carries on its entire work from 52, Chowringhee Road, Calcutta - 700071' and that the Indian operations of the second plaintiff (DMG, which is a UK company) are carried on at the same office in Calcutta. At paragraph 7, the plaintiffs say that the proposal was formulated by DMG through the first plaintiff in Calcutta within jurisdiction; that the first plaintiff 'within jurisdiction felt it necessary and duly set up the plaintiff Nos. 3 to 5;' and, that the proposal was forwarded by or through the first plaintiff from Calcutta to the first defendant in January-February, 1994. At paragraph 8, the plaintiffs suggest that the first defendant was aware of the concept for the projects having been conceived and the proposal prepared in Calcutta within jurisdiction.
15. At paragraph 15 of the plaint the plaintiffs narrate the steps allegedly taken by the plaintiffs following the execution of the memorandum of understanding. It has been claimed that the first plaintiff caused the third, fourth and fifth plaintiffs to be incorporated and for the purpose of such incorporation the first plaintiff incurred expenditure of Rs. 9,00,388/- in Calcutta within jurisdiction. The plaintiffs aver that all steps for the formation of the three companies and for hiring and employing the staff were undertaken by the first plaintiff in Calcutta within jurisdiction. They say that the head offices of the three new companies are at 52, Chowringhee Road within jurisdiction and the tax returns of such companies are filed within jurisdiction. The refrain through the several sub-paragraphs of paragraph 15 of the plaint is that the plaintiffs took steps pursuant to the memorandum of understanding with 'funds provided by the plaintiff No. 1 at Calcutta within jurisdiction.' The plaintiffs state that they obtained expert advice relating to the commercial viability, marketing and resource management of the projects in Calcutta within jurisdiction.
16. In the immediate subsequent paragraphs of the plaint, the plaintiffs have referred to the alleged failure on the part of the first and second defendants to take meaningful steps for the implementation of the projects and the issuance of the show-cause notice by the Government of Andhra Pradesh and the two letters of February, 1997 by the second defendant herein. The writ petition filed before the High Court of Andhra Pradesh is referred to at paragraph 20 of the plaint and the orders sought therein have been set out. At paragraph 22 the plaintiffs have referred to the steps taken during the pendency of the writ petition and have alleged that the first defendant apparently made an offer to the first plaintiff within jurisdiction to refund the price paid by the plaintiffs for the land on condition that the writ petition be withdrawn. At paragraph 23 the plaintiffs claim that board resolutions were passed by the plaintiffs at their head offices at Chowringhee Road within jurisdiction to accede to the request of the State of Andhra Pradesh to accept payment on account of land cost for withdrawing the writ petition. Clause 16 of the memorandum of settlement of June 24, 1998 has been set out at paragraph 23 of the plaint.
17. According to the plaintiffs, the settlement that is reflected in the document executed on June 24, 1998 related only to the possession of the land. The plaintiffs' understanding of the settlement is captured at paragraph 26 of the plaint:
26. The said settlement related only to possession of the land in entering into the said settlement the plaintiff Nos. 3, 4 & 5 at Calcutta within the jurisdiction aforesaid have reserved their rights to claim compensation for the losses incurred and did not abandon its rights or intend to do so.
18. Finally, the plaintiffs have invoked the territorial jurisdiction of this Court on the basis of the averments at paragraph 28 of the plaint. They claim that the defendants 'have caused loss and damage to the plaintiffs and/or DMG at Calcutta within jurisdiction and are liable to reimbursement (sic, reimburse) the expenses incurred by the plaintiff and/or DMG at Calcutta within jurisdiction....'
19. The applying defendants point out that the settlement has not been challenged as it could not have been. They say that the suit is one for damages on account of breach of contract where the place of performance has no nexus with this Court or even this State. They assert that the plaintiffs have not pleaded that the contract was breached at any place within jurisdiction. They submit that the balance of convenience is overwhelmingly against the continuation of the suit in this Court if it is assessed that the plaintiffs have any cause at all to pursue. They refer to paragraph 27 of the plaint where it has been averred as follows:
27. By reason of the wrongful acts of the defendants and breaches mentioned hereinbefore in paragraph 16 the plaintiffs have suffered loss and damages and are entitled to compensate therefor.
20. Paragraph 16 of the plaint does not mention any date. The plaintiffs have particularised the acts of the defendants amounting to breach of their obligation under the memorandum of understanding. They say that the first defendant failed to contribute 50 per cent of the costs incurred for conducting the feasibility studies; that the first defendant failed to make available to the plaintiffs necessary studies, surveys and data in its possession; that the first defendant failed to provide infrastructure facilities for the projects; that the first defendant provided no assistance regarding telecommunication service or banking or financial services; that the first defendant took no steps to promote the projects; that the first defendant made no logistical arrangements for visits to the proposed sites; that the first defendant failed to accord pioneering status to the project; that the first defendant failed to assist the second plaintiff to obtain requisite financial assistance; that the first defendant did not take steps to attract foreign investment or expertise; that the first defendant failed to permit construction of a beach resort in the coastal regulatory zone despite having allotted land in such restricted zone; that the first defendant failed to provide the plaintiffs any fiscal incentives or tax benefits; that the first defendant neglected to provide unencumbered land in Hyderabad and concealed the fact that the lands allotted in Hyderabad to the plaintiffs were subject to litigation; that the first defendant failed to hand over possession of the entirety of the lands in Visakhapatnam; that despite the first defendant having obtained funds from the plaintiffs it failed to construct roads to give adequate access to the project site at Madhapur, Hyderabad; and, that the first defendant failed to provide a single-window clearance in respect of the said projects.
21. Though the particulars furnished in paragraph 16 bear no date, the opening sentence of the following paragraph is a complete giveaway as to when the acts complained of had taken place:
17. Being fully aware of the breaches committed by itself as also by the defendant No. 1, the defendant No. 2 wrongfully by a notice dated February 18, 1997 purported to withdraw its offer for allotment of lands made by the letter dated July 10, 1995....
22. At paragraph 18 of the plaint the plaintiffs have referred to a subsequent letter of March 3, 1997 by which the first defendant called upon the plaintiffs to show-cause within 15 days as to why the allotments of land made to the plaintiffs should not be cancelled. The chronology of events in the plaint continues with the narration as to the institution of the writ petition at paragraph 20, the interim orders passed by the High Court of Andhra Pradesh at paragraph 21 and the steps taken culminating in the settlement and the working out of the settlement at paragraphs 22 to 25.
23. The plaintiffs contend that their cause of action for the present suit arose only upon the memorandum of settlement having been executed. Apart from the plaintiffs asserting that the payment in excess of Rs. 30 lakh received by them under the settlement was only on account of the land cost paid and the interest thereon, the plaintiffs have made a positive statement at paragraph 26 of the plaint that notwithstanding the memorandum of settlement, they had reserved their right to claim compensation for the loss occasion to them and did not abandon or intend to abandon such right by accepting the settlement. It is the plaintiffs' contention that the settlement merely covered what was in issue in the writ petition and nothing more. They say that the writ petition was confined to the letters of February, 1997 issued by the second defendant herein and the show-cause notice of March 3, 1997 issued by the government of Andhra Pradesh. They say that till such time that the memorandum of understanding remained alive there was a likelihood of the projects being completed and the plaintiffs making a profit therefrom albeit at a lower rate than originally estimated. The plaintiffs argue that it was only upon the memorandum of settlement being executed that it was apparent that the plaintiffs could make no profits in respect of the transactions under the memorandum of understanding and since the plaintiffs had not expressly waived or abandoned their right to claim damages, the cause of action for claiming damages arose only upon the settlement being concluded. The plaintiffs submit that since the suit was instituted well within the period of three years from the execution of memorandum of settlement, there was no question of the claim being barred by the laws of limitation.
24. The plaintiffs suggest that, at any rate, as to whether the memorandum of settlement permitted a subsequent claim for damages to be made would entail ascertainment of the intention of the parties to the settlement and an involved construction of the memorandum of settlement. According to them, they should be permitted to lead evidence on such issue if it arises upon written statements being filed and since the memorandum of settlement did not clearly preclude any further claim in respect of matters arising out of the memorandum of understanding, the defendants should be required to carry such challenge to the trial.
25. On every subsequent reading of the plaint, the claim appears to be more frivolous than had seemed upon the previous reading. The settlement appears to have been unreserved. The agreement was rescinded by mutual consent and the parties were absolved of further obligations under the memorandum of understanding. It is apparent from the plaint that the acts of breach complained of had occurred prior to the issuance of the two letters and the show-cause notice that had prompted the third, fourth and fifth plaintiffs herein to institute proceedings under Article 226 of the Constitution before the High Court of Andhra Pradesh. Even a cursory perusal of the writ petition would reveal that the acts complained of in the present plaint had been referred to therein. It would defy logic, therefore, that despite narrating the myriad grievances against the State of Andhra Pradesh, the third, fourth and fifth plaintiffs (along with the second plaintiff) rescinded the agreement against payment of a sum which was well in excess of the expenses incurred on account of cost of land and yet such plaintiffs reserved the right to make a claim in damages at a subsequent stage. If it is the plaintiffs' case that it was the terms of settlement that gave rise to their cause of action for damages as it was only upon the execution of the settlement that the projects were called off, one would have to be blind to ignore that the further performance of the agreement was arrested by mutual consent. Rather than a right to claim in damages for previous breach being alive in such circumstances unless specifically excluded, conventional wisdom would be that there would be no such right unless specifically reserved. The statement in paragraph 26 of the plaint flies in the face of the written memorandum of settlement and Clause 16 thereof. As a corollary, the period of limitation has to be counted from the dates of the acts of alleged breach. It is evident from paragraph 17 of the plaint that the acts of breach detailed in the immediate preceding paragraph had been committed prior to the second defendant issuing the two letters in February, 1997. Since paragraph 27 of the plaint specifically refers to 'the wrongful acts of the defendants and breaches mentioned hereinbefore in paragraph 16' as the basis for the plaintiffs' claim for damages, there is substantial merit in the applying defendants' assertion that such claim is barred by the laws of limitation.
26. But it is not necessary to conclusively hold that the plaintiffs have no cause of action or that the suit is barred by the laws of limitation, even though the applying defendants' challenges on such score appear to be insurmountable. Since the defendant Nos. 1 and 2 have sought revocation of leave granted under Clause 12 of the Letters Patent, it is such jurisdictional issue that needs to be first addressed before proceeding, if necessary, to assess other matters touching upon the merits.
27. The twin arguments that the applying defendants have run in questioning the authority to this Court to receive the action are that no part of the plaintiffs' alleged cause of action has arisen within jurisdiction; and that even if a small part has arisen within, the subject matter of the suit has no nexus with this Court and it would be overwhelmingly inconvenient for the State of Andhra Pradesh and its corporation to contest this suit here. It is thus that the averments in the plaint for the purpose of attracting the jurisdiction of this Court have to be gone over again.
28. That the first plaintiff 'had its Head Office' or 'carries on its entire work' within jurisdiction as pleaded in the second paragraph of the plaint is no part of the plaintiffs' alleged cause of action and cannot be made the basis for invoking the territorial jurisdiction of this Court. As to whether the three new plaintiff companies were set up by the first plaintiff from within jurisdiction (these companies admittedly have their registered offices in the State of Andhra Pradesh) or that any alleged proposal for the projects was forwarded to the first defendant from Calcutta is wholly immaterial. The memorandum of understanding required the new companies to be incorporated in the State of Andhra Pradesh (Clause 2.2). Further, upon the execution of the memorandum of understanding in Hyderabad such document would reflect the acceptance of the proposal in Hyderabad and the place where the proposal may have emanated from would no longer be relevant. That the first defendant was allegedly aware of the projects having been conceived of in, and proposed from, Calcutta, as pleaded in paragraph 8 of the plaint, is equally specious for founding the territorial jurisdiction for instituting the suit thereon. Paragraph 15 of the plaint details the measures allegedly taken by the plaintiffs in furtherance of the memorandum of understanding. That the first plaintiff incurred any expenditure in Calcutta within jurisdiction or that the steps that were required to be taken by the parties to the memorandum of understanding had been funded by the first plaintiff in Calcutta are irrelevant considerations for invoking the jurisdiction of this Court. The averments at paragraph 22 of the plaint, of the first defendant having allegedly made an offer to the first plaintiff within jurisdiction to refund the price of land, cannot be made the basis for instituting a suit for breach of the memorandum of understanding and damages therefor. For one, the memorandum of settlement is not under challenge. Secondly, the offer allegedly made by the first defendant to the first plaintiff for refund, even if believed, culminated in a written settlement being reached in Hyderabad and the offer that allegedly preceded the settlement is of no consequence thereafter. It is of equal irrelevance that board resolutions were allegedly passed by the plaintiffs at meetings held in Calcutta to accede to the request of the State of Andhra Pradesh to accept refund of the land cost. Paragraph 26 of the plaint is unintelligible insofar as it does not clearly reflect what is supposed to have happened within jurisdiction. If it is the plaintiffs' case that the settlement was entered into within jurisdiction it is clearly belied by the recording in the memorandum of settlement that such settlement was entered into at Hyderabad. If the expression 'within the jurisdiction' at paragraph 26 implies that the plaintiffs reserved their rights to claim compensation and such reservation was in Calcutta within jurisdiction, it is immaterial to the cause of action for damages on account of alleged breach of contract; for the right to sue would not accrue from the right therefor being reserved but would arise consequent upon the breach.
29. The thin thread on which this suit now hangs is the assertion at paragraph 28 of the plaint that the plaintiffs are entitled to be reimbursed by the defendants within jurisdiction. Before proceeding to assess as to whether the heady principle of a debtor being obliged to seek a creditor to make payment at the creditor's place would apply, it needs to be appreciated that paragraph 28 does not invoke the principle in terms. What the plaintiffs have claimed is that the defendants are liable to reimburse the plaintiffs 'the expenses incurred by the plaintiff and/or DMG at Calcutta within jurisdiction.' To start with, 'the expenses incurred' bit jars in the context of a claim for damages on account of breach. Again, in the light of the admission that the sum of Rs. 20,36,62,500/- expended by DMG and/or the third, fourth and fifth plaintiffs had been refunded in more than equal measure following the memorandum of settlement, the expression 'expenses incurred' seems out of place. If then one were to ascribe a legal meaning to the averments at paragraph 28 of the plaint and understand it to imply the invocation of the debtor being obliged to seek the creditor principle, as the plaintiffs would have one believe, the question that arises is whether the principle would be available to a claimant for an unliquidated amount.
30. The plaintiffs have cited, in this context, a Division Bench judgment of this Court reported at : AIR 1964 Cal 418 (State of Punjab v. A.K. Raha (Engineers) Ltd.). The applying defendants have sought to distinguish the dictum on facts in that the plaintiff in that suit had abandoned the unliquidated part of its claim and had only pressed the claim on account of an unpaid bill. The judgment was rendered on an appeal against a decree directing an enquiry as to the amount due and payable to the plaintiff in respect of its claim. The first head of claim was for a sum of Rs. 31,949.12 on account of excess deductions from running bills and the other heads of claim, for a further amount in excess of Rs. 3 lakh, was on account of price of work done, refund of security deposit and damages. Paragraph 2 of the report records that the claim of damages was abandoned by the plaintiff in course of the appeal and the plaintiff's claim remained only on account of refund of security deposit and price of work done under the contract. The plaint in that case made out that as the contract contained no provision as to where the final payment was to be made, it was the duty of the defendant to make such payment at the registered office of the plaintiff in Calcutta. The trial court held that since there was no place of payment agreed to, the money was payable at the plaintiff's Calcutta office either under Section 49 of the Contract Act or in accordance with the common law rule that the debtor must seek the creditor and make the payment at the creditor's place. It was in such context that the matter was assessed by the appellate court as would appear from the following passage from paragraph 4 and from paragraph 6 of the report:
(4) ...We cannot find any necessary implication in the contract that the plaintiffs were obliged to receive payment of their final bill at any one of the numerous treasuries of the Punjab Government in the Punjab. Mr. Ghosh did not make any other positive suggestion with regard to the place of payment of the final bill. On the other hand, we find that the plaintiff company had all along their registered office in Calcutta. They had a temporary establishment at Nangal during the progress of the work; but with the conclusion of the work the temporary establishment was closed down. Before the commencement of the work the defendant sent to the plaintiffs at their registered office at Calcutta the tender notice, the request in writing to send the security deposit and also the order to commence work. After the conclusion of the work, the plaintiff company sent all their communications to the defendant from their registered office at Calcutta. The final bill was sent by the plaintiff company from their registered office where their measurements and calculations were available. In the light of these surrounding circumstances and on a fair reading of the contract, we think that the obligation under the contract to pay to the plaintiff company the amount due on their final bill by necessary implication involved the obligation to pay them at their registered office at Calcutta where their measurements and calculations were available. The breach of this obligation therefore took place at Calcutta.
(6) It is to be observed that in the written statement the defendant admitted that a sum of Rs. 11,582 was due to the plaintiff. In other words, a part of the plaintiff's entire demand under their final bill was admitted. No portion of this admitted demand was paid before the institution of the suit. The defendant was under an obligation to pay the debt to the plaintiffs at their registered office at Calcutta and the breach of this obligation took place at Calcutta....
31. The defendant in that case had not applied for revocation of leave granted under Clause 12 of the Letters Patent. The defendant contended in the appeal that it had urged a point of jurisdiction that no part of the plaintiff's cause of action had arisen within jurisdiction and it had not founded its challenge on such score on a point of inconvenience (paragraph 8). What weighed with the Division Bench was that an admitted amount remained unpaid and the defendant as debtor was obliged to seek the plaintiff-creditor and make payment of the amount due at the plaintiff's place. It is not necessary to consider the applying defendants' argument here that the judgment hinged on the plaintiff in that case having abandoned its claim for damages. What is apparent is that since the defendant ran a high case in the appeal that no part of the plaintiff's cause of action had arisen within the jurisdiction of this Court, such contention was liable to be disregarded merely on the basis of the defendant's admission of indebtedness as regards a part of the claim and the consequent application of the common law rule that a debtor must seek his creditor and make the payment at the creditor's place.
32. There is an unascertained, unliquidated claim in damages that has been made by the plaintiffs here. The common law rule of debtor being liable to seek the creditor to make payment at the creditor's place was applied in the A.K. Raha (Engineers) Ltd. case on the admitted amount due. Even if the principle is extended to any claim for a liquidated amount, it cannot be stretched so far as to be applied to an unliquidated claim for damages as in the present case.
33. In any event, it is obvious that this Court has no nexus with the subject matter of the suit. Since the averments in a plaint have to be taken to be true and correct for the purpose of assessing a point of demurer as the present one, the incredible case run in the plaint of the first plaintiff's association with the transactions, improbable as it is, has to be accepted at this stage. But to accept that the situs of the first plaintiff (even that is unclear; since the plaint does not aver that the first plaintiff has its registered office within jurisdiction) and it having allegedly made funds available to the other plaintiffs to enable the other plaintiffs to discharge their obligations under the memorandum of understanding as the basis for instituting the suit in this Court, would amount to doing violence with the accepted principles for founding a suit in a particular forum. Further, the facts here are such that the usual principle that the defendant has to show overwhelming inconvenience to dislodge a plaintiff from his chosen forum, would not apply. The facts here are such that the inconvenience is obvious and the onus would be on the plaintiff to demonstrate otherwise. The memorandum of understanding was executed in Hyderabad, the projects were to be implemented in the State of Andhra Pradesh and the memorandum of settlement was entered into in Hyderabad. The plaintiffs' reliance on the judgment reported at : AIR 1978 Cal 397 (Sanjay Trading Co. v. Dal Chemical N.V.) that the plaintiff as dominus litus must enjoy the choice of forum is inappropriate on the facts obtaining in the present case.
34. Since it is on the question of jurisdiction that the progress of the suit is liable to be arrested, the two other challenges brought by the first two defendants, that the plaintiffs have no cause of action and that the suit is otherwise barred by the laws of limitation, are - despite the obvious temptation - not conclusively pronounced upon since that would amount to a pronouncement touching upon the merits by a court having found that it had no authority to receive the action in the first place.
35. Several other judgments have been cited which, in the context of the view taken, need not be dealt with more elaborately. The plaintiffs have referred to judgments reported at : AIR 1982 Cal 333 (Ritu Sachdev v. Anita Jindal) and : 2008 (2) CHN 466 (Salkia Estate Development Pvt. Ltd. v. Pratap Properties Ltd.) for the principle that difficult questions should not be addressed on an application of the present nature and should be postponed to trial. The plaintiffs have also placed a judgment reported at : (2004) 2 SCC 663 (NTPC Ltd. v. Reshmi Constructions, Builders & Contractors) to suggest that if disputed question of facts arise, they need to be resolved only at the trial. Judgments reported at : (2004) 1 SCC 12 (Citi Bank NA v. Standard Chartered Bank), : (1982) 1 SCC 625 (BHEL v. Amar Nath Bhan Prakash) and (2002) 1 AC 251 (Bank of Credit and Commerce International SA v. Ali) have been cited by the plaintiffs for the proposition that as to whether there has been accord and satisfaction would be a disputed question of fact touching upon the intention of the parties. The applying defendants have referred to a judgment reported at : AIR 1999 Cal 179 (Hindusthan Zinc Ltd. v. Gujarat NRE Coke Ltd.) where, as in the present case, the assessment as to whether this Court had the jurisdiction to receive the suit turned on the averments made in the plaint.
36. Even without going into the alleged cause of action or the sustainability of the claim, it is apparent that the jurisdiction of this Court has been scandalously invoked. No part of the plaintiffs alleged cause of action arose within jurisdiction, nor could it have been imagined that the invocation of this jurisdiction would have passed muster on the basis of the averments in the plaint. The State of Andhra Pradesh and its second defendant corporation have been unnecessarily dragged to this Court in a vexatious manner. That the suit has been pending here for nine years is no ground to allow the harassment to continue any further, particularly as the first and second defendants had launched the challenge within a reasonable time of the service of the writs of summons. There is no connection between the plaintiffs' claim and this Court and the invocation of this jurisdiction, on the specious pretext that it has been, amounts to abuse of process and needs to be heavily dealt with. Mischievous plaintiffs with imaginary causes of action cannot be permitted to walk away with the mere dismissal of the actions. Indeed, it would be opposed to public policy if such plaintiffs were not packed off with their just desserts; it would send out a wrong signal for others to emulate such inglorious practice.
37. The leave granted under Clause 12 of the Letters Patent is revoked. CS No. 284 of 2001, as a consequence, can no longer be continued in this Court. GA No. 649 of 2002 is allowed in part. GA No. 1189 of 2009 and GA No. 1234 of 2009 fail in the wake of the leave granted under Clause 12 of the Letters Patent being revoked. For the palpably ridiculous basis for launching the suit in this Court, the plaintiffs will pay costs assessed at Rs. 5 lakh to the first defendant. It will be open to the first plaintiff to meet such costs with 'funds provided by (it) at Calcutta within jurisdiction.'
38. Urgent certified photocopies of this judgment, if applied for, be supplied to the parties subject to compliance with all requisite formalities.
Later:
39. The plaintiffs seek a stay of the operation of the order which is declined.