Ksl And Industries Limited vs Cuffe Parade
2013 Latest Caselaw 378 Bom

                                     1                            AO.1341-2013

    Dond
             IN THE HIGH COURT OF JUDICATURE AT BOMBAY




                                                                        
                     CIVIL APPELLATE JURISDICTION

                   APPEAL FROM ORDER NO.1341 OF 2013




                                                
                                  WITH 
                    CIVIL APPLICATION NO.1604 OF 2013




                                               
    1. KSL And Industries Limited 
    Having its Corporate Office at 
    Raghuvanshi Mills Compound,
    11/12, Senapati Bapat Marg,
    Lower Patel (W), Mumbai-400013




                                        
    and Registered Office at 69-A,
                         
    Dhanu Udyog Industrial Area,
    Piperia, Silvassa (U.T.),
    Dadra & Nagar Haveli.
                        
    2.  Saurabh Kumar Tayal
    Having his office at Raghuvanshi Mills
    Compound, 11/12, Senapati Bapat
    Marg, Lower Parel (W), Mumbai-400013.                  ..Appellants.
       


           Vs.  
    



    Punjab National Bank
    Having its Head Office at 7, Bhikaji Cama
    Palace, New Delhi 110 066 and its





    Hong Kong Branch at Unit 1003, 10th floor
    Li Po Chun Chambers, 189 Des Voeux Road
    Central Hong Kong and local branch
    Large Corporate Branch, Market Tower 'E'





    Cuffe Parade, Mumbai-400005.                           ..Respondent.
                                  ---

    Mr. Ajit Anekar a/w Mr. Yogendra Singh h/f
    Auris Legal for Appellants. 
    Mr. Pankaj Vijayan i/b Intra Legal for Respondent.
                                  ---

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                                             2                              AO.1341-2013


                                                CORAM :  ANOOP V. MOHTA, J.

                                                DATE     :  18 DECEMBER 2013.




                                                         
    ORAL JUDGMENT:

Heard the learned Counsel appearing for the parties for

ad-interim anti-suit injunction.

2 The Appellants-Original Plaintiffs have challenged

impugned Order dated 25.11.2013 whereby the learned Judge, City

Civil Court, Greater Mumbai, refused to grant any ad-interim relief

in an anti-suit injunction filed by the Appellants-Plaintiffs in respect

of the proceeding instituted by the Respondent-Defendant- Punjab

National Bank in High Court of Hong Kong Special Administrative

Region Court of First Instance being Action No.1888 of 2013 for

recovery of US $11,448,985.28.

3 At this stage, the question is whether Indian Court can

pass any anti-suit injunction/order. Pursuant to the writ of summons,

the Appellants-Plaintiffs forwarded the acknowledgement within the

time prescribed. Now the next steps is to file defence within next 28

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3 AO.1341-2013

days. The last date of filing of decence is on or about 26 December

2013, failing which, the consequenced is foreign decree/judgment to

follow. In view of the provisions of Sections 13, 14 and 44A of the

Code of Civil Procedure (CPC), such decree/judgment is executable

in India as being Hong Kong reciprocating country.

4 After going through the documents and considering the

rival submissions of the parties, specially in the background that

none appeared for Respondent in the Trial Court though notice was

given by the Appellants and here in this court the Respondent is

represented through an Advocate, but there is no reply and/or

affidavit filed opposing the ad-interim injunction so sought. The time

is sought for filing reply. The matter is accordingly adjourned to 23

December 2013. To be placed high on board.

5 The issue is still remain, whether to pass ad-interim relief

as sought by the Appellants even in this background. Both the parties

have read and referred judgment of Supreme Court - Modi

Entertainment Network Vs. W.S.G. Cricket Pte. Ltd. 1 and other 1 AIR 2003 SC 1177

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4 AO.1341-2013

judgments in support of their respective case: the Appellants for

granting ad-interim relief and Respondent for opposing the same,

basically for want of jurisdiction of Indian Court to pass such

injunctive order pending the proceedings at Hong Kong Court. The

prayers in the Notice of Motion and in the suit are basically against

the Respondent not to take further steps against the Appellants-

Plaintiffs in the proceedings so initiated pending before the Hong

Kong Court. Similar prayer is made in the Civil Application. It is

therefore clear that the Appellants-Plaintiffs are not seeking stay of

any proceedings initiated at Hong Kong Court. The prayer is only

against the Respondent-Bank from taking any further steps in the

matter.

6 The submission is revolving around Section 41(b) of

Specific Relief Act, whereby the Court cannot grant any injunction

having effect of restraining any person/party from instituting or

prosecuting any proceeding in a court not subordinate to that from

which the injunction is sought. The word "Court" is well settled.

The provision of the Specific Relief Act so read and referred covers

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5 AO.1341-2013

and governs the case/proceedings initiated in India. There is no

specific bar, that Indian Court cannot pass, at any point of time, any

injunction and/or such anti-injunction order in a suit or proceeding

pending in the foreign counties. The Apex Court in Modi

Entertainment Network (supra) has considered this aspect, specially

in para-9 in the following words:

"9. The Courts in India like the Courts in England are Courts of both law and equity. The principles governing

grant of injunction- an equitable relief- by a Court will also govern grant of anti-suit injunction which is but a species of injunction. When a Court restrains a party to a

suit/proceeding before it from instituting or presecuting a case in another Court including a foreign Court, it is called anti-suit injunction. It is a common ground that the Courts in India have power to issue anti-suit

injunction to a party over whom it has personal jurisdiction, in an appropriate case. This is because

Courts of equity exercise jurisdiction in personam. However, having regard to the rule of comity, this power will be exercised sparingly because such an injunction

though directed against a person, in effect causes interference in the exercise of jurisdiction by another Court."

7 The basic requirement even as per above judgment, is

that the facts and circumstances is required to be considered by the

Court while passing such anti-suit injunction. There is no total bar. In

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6 AO.1341-2013

the present case, admittedly the transaction/document executed

after due discussion with Respondent-Bank in India. Their head-

office is at New Delhi and the branch office with whom the

Appellants-Plaintiffs entered into transaction/agreements having

their branch office is at Mumbai. As the requirement is of dollars,

therefore after due discussion the transaction/document executed by

the Punjab National bank with Hong Kong branch, the guarantee

executed by Appellant No.2 with Respondent-Hong Bank.

The governing law and jurisdiction clause is as under:

"This guarantee shall be governed by the law of Hong Kong in all respects and the Guarantor hereby submits to the non-exclusive Jurisdiction of the courts of Hong

Kong. Nothing in this guarantee precludes you from brining any suit, action or proceedings ("Proceedings") in

any other jurisdiction nor will the bringing of Proceedings in any one or more jurisdictions preclude the bringing of Proceedings in any other jurisdiction"

8 From the plain reading of this clause, it is very clear that

parties agreed that in all aspect the guarantor submits to the "non-

exclusive jurisdiction of the courts of Hong Kong". It is further

agreed that nothing in this guarantee precludes the parties from

bringing any suit or proceeding in any other jurisdiction. This itself

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7 AO.1341-2013

means that the parties have not agreed for the specific court

jurisdiction. On the contrary, this clause itself permits and provides

an option to the parties to fight and/or invoke the proceedings in

any court available. The contract and/or agreement and further

proceedings may be governed by law of Hong Kong, but that itself,

in my view, no way needs that the other side and/or anyone else can

not raise objection with regard to the jurisdiction of the courts of

Hong Kong, basically when there is no exclusive jurisdiction clause

of any particular court. The principle of "cause of action or part of

cause of action" as contemplated in India law just cannot be

overlooked.

9 The Appellants have filed the anti-suit injunction having

its registered office in Mumbai. The properties, movable and the

immovable are situated at various places of India including Mumbai.

There are correspondences on record to show that the parties have

exchanged the documents from their respective offices in Mumbai.

                                                                                       7 / 13





                                             8                               AO.1341-2013




                                                                                  
    10            The Court, at this stage, is not concerned with the merit 




                                                          

of the respective claims of the matter. The Court needs to consider

the same in accordance with law. In a suit so filed, the learned Judge

has refused to grant ad-interim order by holding that Indian Court

has no jurisdiction to pass any order in the pending action so

initiated by the Respondent in Hong Kong Court, which in my view

is not acceptable at this stage of the proceedings, especially when

the averments so made in the plaint and the supporting affidavit

remained uncontroverted. Though notice was given to the

Respondent-Defendant, they failed to appear. The plain reading of

the plaint if we take note of, considering the law even as read and

referred by the learned Counsel for the parties, especially in the case

of Modi Entertainment Network (supra). There is no exclusive

jurisdiction given to the Hong Court in view of non-exclusive

jurisdiction clause itself. The Apex Court has considered the same. As

there is no total bar, I am inclined to observe in the present facts and

circumstances of the case, at this ad-interim stage, this Court has

jurisdiction to pass restrainment order against the Respondent-Bank

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9 AO.1341-2013

who is definitely Indian entity and falls within the ambit of Section

2(v) of Foreign Exchange Management Act, 1999 (FEMA) i.e "the

person resident of India".

11 The Code of Civil Procedure in India, in normal situation,

permits and provides the person like Respondent to file a suit where

the Defendants' registered office and/or property and/or place

where they do the business. The purpose is always to provide full

opportunity to all parties. Having once agreed such non-exclusive

clause, and knowing fully the place of business of the Appellants-

Plaintiffs in Mumbai, so also situation of their movable and

immovable properties, out of the choice so available, the Respondent

for whatever may be the reason, chosen Hong Kiong court as Court

for filing their claim. It is permissible for the Court to consider the

position of Indian law and so also "the doctrine of convenience",

which at ad-interim stage, just cannot be concluded without giving

an opportunity to both the parties, to put their rival contentions with

regard to the jurisdiction and/or continuation of such proceedings in

Hong Kong Court.

                                                                                    9 / 13





                                            10                               AO.1341-2013




                                                                                  
    12            Once option is given, the Appellants are entitled to file 




                                                          

suit and/or initiate proceedings of their choice. But if the

case/defence is made out, the Court in India can consider the

objections so raised, in view of specific clause so referred above. The

Supreme Court in "Modi Entertainment Network (supra) so referred

and relied by the learned counsel for the Respondent along with

others, was in a situation where the parties have agreed for neutral

forum/Court though there was non-exclusive clause. In this

background therefore to say that the Indian Court has no jurisdiction

at this ad-interim stage of the proceeding, is incorrect.

13 The learned Counsel appearing for the Respondent-Bank

has relied on judgment of Punjab-Haryana High Court in Rakesh

Kumar Vs. Ms. Ashima Kumar2 wherein the following observations

are made:

"that the Foreign Court cannot be treated as a Court subordinate to the Panchkula Court. Therefore, in terms of Section 41(a) and (b) of the Specific Relief Act, 1963, injunction cannot be granted".

2 AIR 2007 PH 63

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11 AO.1341-2013

14 We consider at this stage the facts and circumstances of

this case apart from the non-exclusive clause so referred above. The

Appellants and the Respondent-Defendant have definitely legal entity

within the jurisdiction of this Court. The suit filed by the branch of

Punjab National Bank at Hong Kong is the issue. The filing of the suit

at Hong Kong therefore in the background required to be tested and

so also the proceeding so initiated based upon the same. The

Respondent-Bank therefore, in my view, is amenable to the personal

jurisdiction of this Court, also for the following averments (para-26)

in the plaint:

"The Decree/Award that may be passed will have to be enforced in Mumbai. The Plaintiffs are based in Mumbai,

their assets are situated in Mumbai and elsewhere in India. Further, the ECB Loan was utilized in Mumbai; part payment of any amount of Rs.7.50 Crore (Approx)of

the ECB Loan was made by the Plaintiffs in Mumbai and the same was credited to the Defendant's account in Mumbai; and the restructuring of the loan was taken up by the CDR Empowered Group in Mumbai and the request for keeping the loan outside the purview of CDR

was made in Mumbai. Therefore, substantial part of the cause of action for the present Suit has arisen in Mumbai. The Defendant has its branch/office within the territorial jurisdiction of this Hon'ble Court and as such this Hon'ble Court exercises personal jurisdiction over the Defendant. Further, this Hon'ble Court is a Court having natural jurisdiction over the parties and in respect of the

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12 AO.1341-2013

disputes involved in the suit. Therefore, this Hon'ble Court has territorial as well as pecuniary jurisdiction to

receive, entertain and try the present Suit."

15 The injunction if not granted against the Respondent-

Defendant, would cause great injustice and hardship as such foreign

judgment in view of the provision of Section 44-A of CPC, the

Appellants-Plaintiffs have no option, but to face foreign judgment

which is executable in India. The issue of jurisdiction even otherwise

can be agitated by any party in the proceedings. There is no total bar

and therefore to file such suit in India, whether maintainable or not,

required to be decided after hearing both the parties.

16 Therefore, considering the aspect of convenience of the

parties and undisputed position on record, without touching to the

merits of the matter, such proceedings initiated at Hong Kong Court

whether oppressive or vexatious and/or forum non convenience, is

again a matter which just cannot be decided in such fashion without

even waiting for reply of the Respondent-Defendant.

                                                                                     12 / 13





                                        13                           AO.1341-2013




                                                                          
    17          Therefore, taking overall view of the matter at this stage, 




                                                  

I am inclined to restrain the Respondent-Defendant from taking any

further steps in respect of pending proceeding i.e. Action No.1888 of

2013 pending before the Hong Kong Special Administrative Region

Court of First Instance till the next date.

Stand over to 23 December 2013. To be placed high on

board for final disposal.

(ANOOP V. MOHTA, J.)

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