Delhi High Court
Transport Corporation Of India ... vs Reserve Bank Of India & Anr on 2 May, 2018
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 2nd May, 2018.
+ CS(OS) 361/2012
TRANSPORT CORPORATION OF INDIA LTD ..... Plaintiff
Through: Ms. Diya Kapur, Mr. Rishabh Sharma
and Ms. Varnika Chawla, Advs.
Versus
RESERVE BANK OF INDIA & ANR ..... Defendants
Through: Mr. Akhil Sibal, Sr. Adv. with Mr.
Neeraj Yadav, Mr. Davesh Bhatia and
Mr. Saurabh Kumar, Advs. for D-2.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
OA No.81/2017
1. The defendant No.2 Yes Bank Limited, who alone is contesting this
suit, by this Chamber Appeal, impugns the order dated 21 st February, 2017
of the Joint Registrar allowing IA No.25111/2015 of the plaintiff under
Order XI Rules 12 & 13 of the Code of Civil Procedure, 1908 (CPC) and
directing the appellant/defendant to file affidavit of discovery in Form 5
Appendix C with necessary modifications within eight weeks therefrom.
2. The Chamber Appeal came up before the Court first on 27 th February,
2017 when notice thereof was ordered to be issued. The senior counsel for
the appellant/defendant and the counsel for the plaintiff were heard on 25th
April, 2018 when after full arguments, the counsel for the plaintiff confined
the discovery sought from the appellant/defendant to only of documents in
para 9(f) of IA No.25111/2015 and gave up the claim for discovery qua other
OA No.81/2017 in CS(OS) 361/2012 Page 1 of 5
documents mentioned in paras 6&9 of the application and orders on the said
aspect were reserved.
3. The plaintiff has instituted the present suit for (i) declaration that
USD-CHF Derivative Transaction dated 20th September, 2007 is voidable at
the instance of the plaintiff and is void, unenforceable and/or not binding on
the plaintiff; and, (ii) consequently, seeking to recover Rs.6,92,55,342/- paid
by the plaintiff to the appellant/defendant pursuant to the aforesaid
transaction.
4. The plaintiff seeks declaration of the transaction aforesaid as void on
the ground of the same being unconscionable, in contravention of law and
public policy including the Comprehensive Guidelines on Derivatives, the
Master Circular on Interbank dealing and the Foreign Exchange
Management (Foreign Exchange Derivative Contract) Regulations.
5. The following issues were framed in the suit on 24th August, 2015:
"1. Whether the USD/CHF transaction dated 20.09.2007 is
voidable at the option of the plaintiff (under Section 19
and/or Section 19A of the Indian Contract Act)? OPP
2. Whether defendant No.2 is liable to the plaintiff for an
amount of Rs.6,92,55,342/- with interest, from the date of
payment? OPP
3. Whether the Banking Licencee of defendant No.2 is liable
to be cancelled by defendant No.1? OPP
4. Whether the USD/CHF transaction dated 20.09.2007 is
void under Section 23 and/or Section 24 of the Indian
Contract Act? OPP
5. Whether the present suit is barred by limitation? OPD
6. Whether this Court has no territorial jurisdiction to
adjudicate the present suit? OPD
OA No.81/2017 in CS(OS) 361/2012 Page 2 of 5
7. Whether there is accord and satisfaction achieved in
respect of the transactions in issue or, discharge of the
contract by virtue of performance of obligations
undertaken therein or, by mutual agreement? OPD
8. Whether the transaction was conducted in pursuance to
the ISDA agreement dated 06.09.2007 and the deal
confirmation dated 20.09.2007? OPP
9. Relief."
and on 28th September, 2015, the following additional issue was
framed:
"8A. Whether defendant No.2 is liable for fraud or deceit in
respect of the USD/CHF transaction dated 20th September,
2007? OPP"
6. The plaintiff, in para 9(f) of IA No.25111/2015, seeks discovery from
the appellant/defendant of:
"f. Records of „exactly off-setting transactions‟/ „back-to-
back mirror transactions‟ entered into with other banks
by Defendant No.2, including details of the counter-
parties involved and the profits/margins/ commissions or
any other amounts received by Defendant No.2 from
these counter-parties."
7. The learned Joint Registrar, in the impugned order, has jointly dealt
with the documents at serial No.9(a) to 9(f) and has not separately given any
reason qua the documents in para 9(f); it has been reasoned (i) that the said
documents are relevant to enable the plaintiff to prove its allegation that the
transaction was designed to cause loss to the customers; (ii) the record of the
profits/margins earned by the appellant/defendant in respect of the
OA No.81/2017 in CS(OS) 361/2012 Page 3 of 5
transactions with the plaintiff as well in respect of transactions with other
parties will also be relevant as it would give an overall picture of the manner
in which the transactions were affecting the customers of the
appellant/defendant; (iii) the documents are also relevant in view of
guidelines of the Reserve Bank of India (RBI).
8. The appellant/defendant, in this Chamber Appeal, qua the documents
in para 9(f) of the application has pleaded that the documents pertain to other
customers who are neither party nor privy to the transaction between the
plaintiff and the appellant/defendant and the learned Joint Registrar erred in
allowing third party documents.
9. The senior counsel for the appellant/defendant opposes the said
discovery on the same pleas.
10. Per contra, the counsel for the plaintiff drew attention to para 28 of the
written statement where the appellant/defendant has pleaded that in terms of
Guidelines and Directives issued by RBI in this regard, the
appellant/defendant was under an obligation to enter into an exactly off-
setting transactions and option deals with another person and that it covered
the transaction with the plaintiff in entirety by entering into various
transactions at the same time with another person and that the
appellant/defendant in this process was able to comply with the RBI
Mandate, while being able to service the plaintiff and that the bank benefited
to the extent of fees/margins made between the two sets of transactions.
11. I have considered the aforesaid contentions.
12. Though no specific issue has been framed qua the aforesaid plea but it
is quite obvious that what is sought from the appellant/defendant in para 9(f)
OA No.81/2017 in CS(OS) 361/2012 Page 4 of 5
of the application is exactly what the appellant/defendant has pleaded in its
defence to the suit. The relevance of the documents sought in para 9(f) of
the application thus cannot be questioned by the appellant/defendant and the
appellant/defendant having itself taken the said plea, cannot urge that the
said discovery infringes third party rights. Even if that be so, it would be
open to the appellant/defendant to seek confidentiality, if any required qua
the documents so discovered.
13. Accordingly, the Chamber Appeal, insofar as against the order
directing the appellant/defendant to make disclosure of the other documents
mentioned in paras 6 & 9 of IA No.25111/2015 is allowed on consent and
the order of the Joint Registrar to that extend is set aside and the appeal,
insofar as directing disclosure of the documents in para 9(f) of the
application supra is concerned, is dismissed.
14. The appeal is disposed of.
CS(OS) 361/2012 & IAs No.2767/2012 (u/S 151 CPC) & 13775/2016 (of
D-2 u/S 151 CPC)
15. List before the Joint Registrar on 14th May, 2018 for fixing the dates
for evidence.
RAJIV SAHAI ENDLAW, J.
MAY 02, 2018
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