[Cites 28, Cited by 0]
Orissa High Court
M/S. Heraeus Electro-Nite vs Mr. G.S. Narayan And Others .... ... on 7 January, 2026
Author: B.P. Routray
Bench: B.P. Routray
Signature Not Verified
Digitally Signed
Signed by: MANAS KUMAR PANDA
Reason: Authentication
Location: OHC, Cuttack
Date: 07-Jan-2026 14:58:54
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No.5213 of 2025
(In the matter of an application under Articles 226 and 227 of the
Constitution of India)
M/s. Heraeus Electro-Nite .... Petitioners
International N.V., Belgium and
another
-versus-
Mr. G.S. Narayan and others .... Opposite Parties
Advocate(s) appeared in this case:-
For Petitioners : Mr. S.P. Mishra, Senior Advocate
Mr. A.N. Das, Senior Advocate
Mr. N. Sarkar, Advocate
Ms. S. Rout, Advocate
Mr. A.P. Singh, Advocate
For Opposite Parties : Mr. H. Goel, Advocate along with
Mr. S.K. Jena, Advocate
Mr. D. Tripathy, Advocate
CORAM: JUSTICE B.P. ROUTRAY
JUDGMENT
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Date of Hearing : 29th October 2025
Date of Judgment : 7th January 2026
--------------------------------------------------------------------------------------
B.P. Routray, J.
1. Heard Mr. S.P. Mishra, learned Senior Advocate for the
Petitioners and Mr. H. Goel, learned Advocate for the Opposite Parties.
2. Present writ petition is directed assailing the order dated 6 th
November 2024 of learned Additional District Judge, Jharsuguda
passed in Civil Revision No.2 of 2024 and the order dated 2nd
December 2023 passed by learned Civil Judge (LR & LTV),
Jharsuguda in Civil Suit No.154 of 2013, along with further direction
to allow the application of the Petitioners under Order 7 Rule 11 of the
C.P.C. to reject the plaint in C.S. No.154 of 2013.
3. Present Opposite Parties 1 & 2 filed Civil Suit No.154 of 2013 in
the court of learned Senior Civil Judge, Jharsuguda praying for a
decree of permanent and perpetual injunction restraining the
Defendants from carrying out actions undermining and in gross
violation of the business arrangement between Defendant No.1 and the
Plaintiffs. For better appreciation, the detailed prayer of the Plaintiffs is
re-produced below:-
―(a) Declare the actions of the Defendant No.1 in promoting the
Defendant No. 3 in selling their products in Indian Market, are
illegal, wrongful, malafide and in gross violation of the terms of
business arrangements and commitments between the Defendant
No.1 and the Plaintiffs that have been existing and continuing
for over 35 years;
(b) Decree of permanent and perpetual injunction restraining the
Defendants from carrying out actions which undermine, are
contrary to or in gross violation of the business arrangements
and commitments between the Defendant No.1 and the Plaintiffs
that have been existing and continuing for over 35 years;
(c) Let a direction be passed upon the Defendant No. 1 to honor
and abide by its commitments and business arrangements with
the Plaintiffs that have been existing and continuing for over 35
years and further that all sale and supply of the Products by the
Defendant No.1 in India should be carried out exclusively
through its business arrangement and commitments with the
Plaintiffs;
(d) Let a direction be passed upon the Defendant No.1 to
continue to supply to the Plaintiffs, the Products that are being
supplied by the Defendant No.1 under the existing business
arrangements and commitments between the Defendant No.1
and the Plaintiff without and exception or disruption or stoppage
of such supplies;
(e) A decree of permanent and perpetual injunction restraining
the Defendants from selling or distributing the products in India
which are similar to and/or competing with the Products being
marketed and distributed in India under the business
arrangements and commitments between the Defendant No.1
and the Plaintiffs that have been existing and continuing for over
35 years;
(f) A decree of permanent and perpetual injunction restraining
the Defendants from issuing, circulating or making any
disparaging statement, comment or communication in the Indian
market which is harmful and detrimental to the business
arrangements and commitments between the Defendant No.1
and the Plaintiff that have been existing and continuing for over
35 years;
(g) Costs of this suit in favor of the Plaintiffs and against the
Defendants may be decreed,
(h) Any other and further reliefs to which the plaintiffs are
entitled under law and equity may also be passed.‖
4. The Petitioners are Defendants 1 & 2 in the suit, whereas present
Opposite Party No.3 is Defendant No.3 in the suit.
5. The substance of contentions of the Plaintiffs in the plaint is that,
they are carrying business with Defendants 1 & 2 for last 35 years to
sell the products of Defendant No.1 in Indian market and in order to
grow the business transaction between the parties, Plaintiff No.2 and
Defendant No.1 executed an International Exclusive Distributorship
Agreement (‗IEDA') on 9th September 2002 for promotion, sale and
marketing of the products of Defendant No.1 in India. But suddenly in
the year 2012, it came to the notice of the Plaintiffs that, Defendant
No.1 is undermining the business commitments with Plaintiff No.2 and
has made arrangements illegally with Defendant No.3 to sell and
promote the competing products in Indian market at such prices lesser
by 70% than the price offered to the Plaintiffs for similar products,
which is harmful and injurious to the business of the Plaintiffs against
the commitments of Defendant No.1. The Plaintiffs have invested huge
amount by establishing their plants and thereby facing substantial loss
in the business due to such activities of the Defendants.
6. Defendants 1 & 2 upon their appearance filed a petition under
Order 7 Rule 11(d) of the C.P.C. to reject the plaint as barred under the
law being not maintainable. In the petition, the Defendants 1 & 2 have
averred that, as per the IEDA dated 9th September 2002, the suit is not
to be construed as submission to the jurisdiction to present court of
Civil Judge (Sr. Divn.), Jharsuguda or to any other court in India.
According to said Defendants, as mentioned at Article 20 of said
IEDA, the agreement shall be governed by and construed according to
SWISS Law and the court of Basel in Switzerland shall have exclusive
jurisdiction over any dispute arising out of and in connection with the
agreement. It is thus submitted by Defendants 1 & 2 that since the
Plaintiffs have submitted to the jurisdiction of the courts at Basel in
Switzerland as per the terms of the agreement, no such suit is
maintainable in any of the courts in India. Apart from the above, the
Plaintiffs have suppressed material facts of earlier dismissal of their
suit filed in the court at Alipore, West Bengal on self-same cause of
action. It is further contended that in view of the bar to specific
performance provided in Section 14(1)(c) of the Specific Reliefs Act,
present suit at the instance of the Plaintiffs is not maintainable against
Defendants 1 & 2.
7. It is submitted on behalf of the Petitioners that both the parties
including the Plaintiffs have agreed unequivocally and submitted to the
jurisdiction of the courts at Basel relating to any dispute arising out of
and in connection with the IEDA dated 9th September 2002 and that,
the parties have volunteered to such jurisdiction of Basel court by
signing the agreement at Houthalen, Belgium. Therefore, the court at
Jharsuguda cannot be vested with jurisdiction to entertain the plaint
against Defendants 1 & 2 at the instance of the Plaintiffs. It is also
submitted that the cause of action for filing of the suit according to the
plaint averments is based on the IEDA dated 9 th September 2002 and
therefore, the prayer to reject the plaint has been illegally rejected by
both the trial court and revisional court.
8. Conversely, it is submitted by present Opposite Parties 1 & 2
(Plaintiffs) that a bare reading of the plaint averments discloses such
cause of action at Jharsuguda to maintain the suit against the
Defendants and it is incorrect to contend that the court at Jharsuguda or
any other court in India lacks jurisdiction to entertain any suit at the
instance of the Plaintiffs against the Defendants. Since Defendants 1 &
2 are carrying out their business through Defendant No.3 at
Jharsuguda, which is harmful and injurious to the business interest of
the Plaintiffs, by supplying their products to Bhusan Power and Steel
Ltd. and Vedanta Aluminum Ltd. situating within the jurisdiction of
Jharsuguda and thus carrying their business activities at Jharsuguda,
present suit cannot be said as not maintainable at Jharsuguda.
9. Before delving into the merits of contentions of the parties with
regard to rejection of the plaint, it needs to be mentioned the principles
thereof as settled in different decisions of the Hon'ble Supreme Court
of India.
10. In Modi Entertainment Network and another vs. W.S.G.
Cricket Pte, Ltd, (2003) 4 SCC 341, it is observed as follows:-
"11. In regard to jurisdiction of courts under the Code of Civil
Procedure (CPC) over a subject-matter one or more courts may have
jurisdiction to deal with it having regard to the location of immovable
property, place of residence or work of a defendant or place where
cause of action has arisen. Where only one court has jurisdiction, it is
said to have exclusive jurisdiction; where more courts than one have
jurisdiction over a subject-matter, they are called courts of available or
natural jurisdiction. The growing global commercial activities gave
rise to the practice of the parties to a contract agreeing beforehand to
approach for resolution of their disputes thereunder, to either any of
the available courts of natural jurisdiction and thereby create an
exclusive or non-exclusive jurisdiction in one of the available forums
or to have the disputes resolved by a foreign court of their choice as a
neutral forum according to the law applicable to that court. It is a well-
settled principle that by agreement the parties cannot confer
jurisdiction, where none exists, on a court to which CPC applies, but
this principle does not apply when the parties agree to submit to the
exclusive or non-exclusive jurisdiction of a foreign court; indeed in
such cases the English courts do permit invoking their jurisdiction.
Thus, it is clear that the parties to a contract may agree to have their
disputes resolved by a foreign court termed as a ―neutral court‖ or
―court of choice‖ creating exclusive or non-exclusive jurisdiction in it.
Xxx xxx xxx
19. In Spiliada Maritime case [(1986) 3 All ER 843 : 1987 AC 460 :
(1986) 3 WLR 972 (HL)] the House of Lords laid down the following
principle:
―The fundamental principle applicable to both the stay
of English proceedings on the ground that some other
forum was the appropriate forum and also the grant of
leave to serve proceedings out of the jurisdiction was that
the court would choose that forum in which the case could
be tried more suitably for the interests of all the parties
and for the ends of justice.‖ (emphasis supplied)
The criteria to determine which was a more appropriate forum, for the
purpose of ordering stay of the suit, the court would look for that
forum with which the action had the most real and substantial
connection in terms of convenience or expense, availability of
witnesses, the law governing the relevant transaction and the places
where the parties resided or carried on business. If the court concluded
that there was no other available forum which was more appropriate
than the English court, it would normally refuse a stay. If, however,
the court concluded that there was another forum which was prima
facie more appropriate, the court would normally grant a stay unless
there were circumstances militating against a stay. It was noted that as
the dispute concerning the contract in which the proper law was
English law, it meant that England was the appropriate forum in which
the case could be more suitably tried.
xxx xxx xxx
27. In the instant case, though the learned Single Judge proceeded on
the prima facie finding that the proceedings in the English courts
would be oppressive and vexatious, in our view, those findings,
recorded at the stage of passing an ad interim order, would not bind
the same learned Judge much less would they bind the appellate court
or the parties thereto at subsequent stage of the same proceeding
because it cannot operate as issue estoppel. It cannot be laid down as a
general principle that once the parties have agreed to submit to the
jurisdiction of a foreign court, the proceedings or the action brought
either in the court of natural jurisdiction or in the court of choice will
per se be oppressive or vexatious. It depends on the facts of each case
and the question whether the proceedings in a court are vexatious or
oppressive has to be decided on the basis of the material brought
before the court. Having perused the plaints in both the suits and the
contract, we are of the view that the proceeding in the English Court
for recovery of the minimum guaranteed amount under the contract
cannot, at this stage, be said to be oppressive or vexatious. It is true
that the courts would be inclined to grant anti-suit injunction to
prevent breach of contractual obligation to submit to the exclusive or
non-exclusive jurisdiction of the court of choice of the parties but that
is not the only ground on which anti-suit injunction can be granted. As
is apparent, the appellants brought the suit in the court of natural
jurisdiction for adjudication of the disputes arising under the contract
for which the parties have agreed to submit to the non-exclusive
jurisdiction of the English Court in accordance with English law
though the English Court has no nexus with the parties or the subject-
matter and is not the natural forum. But then the jurisdiction clause
indicates that the intention of the parties is to have the disputes
resolved in accordance with the principles of English law by an
English court. Unless good and sufficient reasons are shown by the
appellants, the intention of the parties as evidenced by their contract
must be given effect to. Even when the appellants had filed the suit
earlier in point of time in the court of natural forum and the
respondent brought action in the English Court which is the agreed
forum or forum of the choice having regard to the expressed intention
of the parties, no good and sufficient reason is made out to grant anti-
suit injunction to restrain the respondent from prosecuting the English
action, as such an order would clearly be in breach of agreement and
the court will not, except when proceedings in a foreign court of
choice result in perpetuating injustice aid a party to commit breach of
the agreement. To apply the principle in Donohue case [ ―Recognition
of Foreign Judgments at Common Law -- The Anti-Suit Injunction
Link‖ by Jonathan Harris] good and sufficient reasons (strong
reasons) should be shown to justify departure from the contractual
obligations. Here, two contentions have been urged : the first is that
the English Court is forum non-conveniens in view of the alleged
breach of the agreement by the respondent in the manner not foreseen.
This, in our view, is far from being a good and sufficient reason to
ignore the jurisdiction clause. Even otherwise, the fact that the parties
had agreed to resolve their disputes arising under the agreement,
shows that they had foreseen possible breach of agreement by any of
the parties and provided for the resolution of the disputes which might
arise therefrom. In the context, the foreseeability test would take in
circumstances which render approaching the forum of choice
impossible like the court of choice merging with other court and
losing its identity or a vis major etc., which would make it impossible
for the party seeking anti-suit injunction, to prosecute the case before
the forum of choice. In our view, on the facts of this case, the
foreseeability test cannot be extended to the manner of breach of the
contract so as to turn the forum of choice into forum non-conveniens.
Circumstances such as comparison of litigation expenses in England
and in India or the hardship and incurring of heavy expenditure on
taking the witnesses to the English Court, would be deemed to have
been foreseen by the parties when they agreed to submit to the
jurisdiction of the English Court in accordance with the principles of
English law and the said reasons cannot be valid grounds to interdict
prosecution of the action in the English Court of choice. And the
second is that the English Court has no connection with either of the
parties or the subject-matter and it is not a court of natural jurisdiction.
This reason can be taken note of when strong reasons are shown to
disregard the contractual obligation. It cannot be a good and sufficient
reason in itself to justify the court of natural jurisdiction to interdict
action in a foreign court of choice of the parties.‖
11. In Dahiben vs. Arvindbhai Kalyanji Bhanusali (Gajra) dead
through Legal Representatives and others, (2020) 7 SCC 366, it is
observed as follows:- Para 23, 24
―23. We have heard the learned counsel for the parties, perused the
plaint and documents filed therewith, as also the written submissions
filed on behalf of the parties.
23.1. We will first briefly touch upon the law applicable for deciding
an application under Order 7 Rule 11 CPC, which reads as under:
―11. Rejection of plaint.--The plaint shall be rejected in the
following cases--
(a) where it does not disclose a cause of action;
(b) where the relief claimed is undervalued, and the plaintiff,
on being required by the court to correct the valuation within
a time to be fixed by the court, fails to do so;
(c) where the relief claimed is properly valued but the plaint
is written upon paper insufficiently stamped, and the plaintiff,
on being required by the court to supply the requisite stamp
paper within a time to be fixed by the court, fails to do so;
(d) where the suit appears from the statement in the plaint to
be barred by any law;
(e) where it is not filed in duplicate;
(f) where the plaintiff fails to comply with the provisions of
Rule 9:
Provided that the time fixed by the court for the correction
of the valuation or supplying of the requisite stamp-papers
shall not be extended unless the court, for reasons to be
recorded, is satisfied that the plaintiff was prevented by any
cause of an exceptional nature from correcting the valuation
or supplying the requisite stamp-papers, as the case may be,
within the time fixed by the court and that refusal to extend
such time would cause grave injustice to the plaintiff.‖
(emphasis supplied)
23.2. The remedy under Order 7 Rule 11 is an independent and special
remedy, wherein the court is empowered to summarily dismiss a suit
at the threshold, without proceeding to record evidence, and
conducting a trial, on the basis of the evidence adduced, if it is
satisfied that the action should be terminated on any of the grounds
contained in this provision.
23.3. The underlying object of Order 7 Rule 11(a) is that if in a suit,
no cause of action is disclosed, or the suit is barred by limitation under
Rule 11(d), the court would not permit the plaintiff to unnecessarily
protract the proceedings in the suit. In such a case, it would be
necessary to put an end to the sham litigation, so that further judicial
time is not wasted.
23.4. In Azhar Hussain v. Rajiv Gandhi [Azhar Hussain v. Rajiv
Gandhi, 1986 Supp SCC 315, followed in Manvendrasinhji
Ranjitsinhji Jadeja v. Vijaykunverba, 1998 SCC OnLine Guj 281 :
(1998) 2 GLH 823] this Court held that the whole purpose of
conferment of powers under this provision is to ensure that a litigation
which is meaningless, and bound to prove abortive, should not be
permitted to waste judicial time of the court, in the following words :
(SCC p. 324, para 12)
―12. ... The whole purpose of conferment of such powers is
to ensure that a litigation which is meaningless, and bound to
prove abortive should not be permitted to occupy the time of
the court, and exercise the mind of the respondent. The sword
of Damocles need not be kept hanging over his head
unnecessarily without point or purpose. Even in an ordinary
civil litigation, the court readily exercises the power to reject
a plaint, if it does not disclose any cause of action.‖
23.5. The power conferred on the court to terminate a civil action is,
however, a drastic one, and the conditions enumerated in Order 7 Rule
11 are required to be strictly adhered to.
23.6. Under Order 7 Rule 11, a duty is cast on the court to determine
whether the plaint discloses a cause of action by scrutinising the
averments in the plaint [Liverpool & London S.P. & I Assn. Ltd. v.
M.V. Sea Success I, (2004) 9 SCC 512], read in conjunction with the
documents relied upon, or whether the suit is barred by any law.
23.7. Order 7 Rule 14(1) provides for production of documents, on
which the plaintiff places reliance in his suit, which reads as under:
―14. Production of document on which plaintiff sues or
relies.--(1) Where a plaintiff sues upon a document or relies
upon document in his possession or power in support of his
claim, he shall enter such documents in a list, and shall
produce it in court when the plaint is presented by him and
shall, at the same time deliver the document and a copy
thereof, to be filed with the plaint.
(2) Where any such document is not in the possession or
power of the plaintiff, he shall, wherever possible, state in
whose possession or power it is.
(3) A document which ought to be produced in court by the
plaintiff when the plaint is presented, or to be entered in the
list to be added or annexed to the plaint but is not produced or
entered accordingly, shall not, without the leave of the court,
be received in evidence on his behalf at the hearing of the
suit.
(4) Nothing in this Rule shall apply to document produced for
the cross-examination of the plaintiff's witnesses, or, handed
over to a witness merely to refresh his memory.‖
(emphasis supplied)
23.8. Having regard to Order 7 Rule 14 CPC, the documents filed
along with the plaint, are required to be taken into consideration for
deciding the application under Order 7 Rule 11(a). When a document
referred to in the plaint, forms the basis of the plaint, it should be
treated as a part of the plaint.
23.9. In exercise of power under this provision, the court would
determine if the assertions made in the plaint are contrary to statutory
law, or judicial dicta, for deciding whether a case for rejecting the
plaint at the threshold is made out.
23.10. At this stage, the pleas taken by the defendant in the written
statement and application for rejection of the plaint on the merits,
would be irrelevant, and cannot be adverted to, or taken into
consideration. [Sopan Sukhdeo Sable v. Charity Commr., (2004) 3
SCC 137]
23.11. The test for exercising the power under Order 7 Rule 11 is that
if the averments made in the plaint are taken in entirety, in
conjunction with the documents relied upon, would the same result in
a decree being passed. This test was laid down in Liverpool & London
S.P. & I Assn. Ltd. v. M.V. Sea Success I [Liverpool & London S.P. &
I Assn. Ltd. v. M.V. Sea Success I, (2004) 9 SCC 512] which reads as :
(SCC p. 562, para 139)
―139. Whether a plaint discloses a cause of action or not is
essentially a question of fact. But whether it does or does not
must be found out from reading the plaint itself. For the said
purpose, the averments made in the plaint in their entirety
must be held to be correct. The test is as to whether if the
averments made in the plaint are taken to be correct in their
entirety, a decree would be passed.‖
23.12. In Hardesh Ores (P) Ltd. v. Hede & Co. [Hardesh Ores (P)
Ltd. v. Hede & Co., (2007) 5 SCC 614] the Court further held that it is
not permissible to cull out a sentence or a passage, and to read it in
isolation. It is the substance, and not merely the form, which has to be
looked into. The plaint has to be construed as it stands, without
addition or subtraction of words. If the allegations in the plaint prima
facie show a cause of action, the court cannot embark upon an enquiry
whether the allegations are true in fact. D. Ramachandran v. R.V.
Janakiraman [D. Ramachandran v. R.V. Janakiraman, (1999) 3 SCC
267; See also Vijay Pratap Singh v. Dukh Haran Nath Singh, AIR
1962 SC 941] .
23.13. If on a meaningful reading of the plaint, it is found that the suit
is manifestly vexatious and without any merit, and does not disclose a
right to sue, the court would be justified in exercising the power under
Order 7 Rule 11 CPC.
23.14. The power under Order 7 Rule 11 CPC may be exercised by
the court at any stage of the suit, either before registering the plaint, or
after issuing summons to the defendant, or before conclusion of the
trial, as held by this Court in the judgment of Saleem Bhai v. State of
Maharashtra [Saleem Bhai v. State of Maharashtra, (2003) 1 SCC
557] . The plea that once issues are framed, the matter must
necessarily go to trial was repelled by this Court in Azhar Hussain
case [Azhar Hussain v. Rajiv Gandhi, 1986 Supp SCC 315. Followed
in Manvendrasinhji Ranjitsinhji Jadeja v. Vijaykunverba, 1998 SCC
OnLine Guj 281 : (1998) 2 GLH 823] .
23.15. The provision of Order 7 Rule 11 is mandatory in nature. It
states that the plaint ―shall‖ be rejected if any of the grounds specified
in clauses (a) to (e) are made out. If the court finds that the plaint does
not disclose a cause of action, or that the suit is barred by any law, the
court has no option, but to reject the plaint.
24. ―Cause of action‖ means every fact which would be necessary for
the plaintiff to prove, if traversed, in order to support his right to
judgment. It consists of a bundle of material facts, which are
necessary for the plaintiff to prove in order to entitle him to the reliefs
claimed in the suit.
24.1. In Swamy Atmananda v. Sri Ramakrishna Tapovanam [Swamy
Atmananda v. Sri Ramakrishna Tapovanam, (2005) 10 SCC 51] this
Court held : (SCC p. 60, para 24)
―24. A cause of action, thus, 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. It must include some act done by the defendant
since in the absence of such an act, no cause of action can
possibly accrue. It is not limited to the actual infringement of
the right sued on but includes all the material facts on which
it is founded.‖ (emphasis supplied)
24.2. In T. Arivandandam v. T.V. Satyapal [T. Arivandandam v. T.V.
Satyapal, (1977) 4 SCC 467] this Court held that while considering an
application under Order 7 Rule 11 CPC what is required to be decided
is whether the plaint discloses a real cause of action, or something
purely illusory, in the following words : (SCC p. 470, para 5)
―5. ... The learned Munsif must remember that if on a
meaningful--not formal--reading of the plaint it is manifestly
vexatious, and meritless, in the sense of not disclosing a clear
right to sue, he should exercise his power under Order 7 Rule
11 CPC taking care to see that the ground mentioned therein
is fulfilled. And, if clever drafting has created the illusion of
a cause of action, nip it in the bud at the first hearing....‖
(emphasis supplied)
24.3. Subsequently, in ITC Ltd. v. Debts Recovery Appellate Tribunal
[ITC Ltd. v. Debts Recovery Appellate Tribunal, (1998) 2 SCC 70]
this Court held that law cannot permit clever drafting which creates
illusions of a cause of action. What is required is that a clear right
must be made out in the plaint.
24.4. If, however, by clever drafting of the plaint, it has created the
illusion of a cause of action, this Court in Madanuri Sri Rama
Chandra Murthy v. Syed Jalal [Madanuri Sri Rama Chandra Murthy
v. Syed Jalal, (2017) 13 SCC 174 : (2017) 5 SCC (Civ) 602] held that
it should be nipped in the bud, so that bogus litigation will end at the
earliest stage. The Court must be vigilant against any camouflage or
suppression, and determine whether the litigation is utterly vexatious,
and an abuse of the process of the court.‖
12. In British India Steam Navigation Co. Ltd. vs. Shanmughavilas
Cashew Industries and others, (1990) 3 SCC 481, it is observed as
follows:-
―11. It is a settled principle of Private International Law governing
bills of lading that the consignee or an endorsee thereof derives the
same rights and title in respect of the goods covered by the bill of
lading as the shipper thereof had. For the purpose of jurisdiction the
action of respondent 1 is an action in personam in Private
International Law. An action in personam is an action brought against
a person to compel him to do a particular thing. If clause 3 of the bills
of lading is held to be binding on respondent 1 the choice of law by
the parties would also be binding. English courts would perhaps use
their own Private International Law to decide the dispute. In the event
of the English court alone having the jurisdiction, the application of
Indian statutes and the jurisdiction of the Indian courts would be, to
that extent, inapplicable.
xxx xxx xxx
17. According to the authors the parties to a contract in international
trade or commerce may agree in advance on the forum which is to
have jurisdiction to determine disputes which may arise between
them. The chosen court may be a court in the country of one or both
the parties, or it may be a neutral forum. The jurisdiction clause may
provide for a submission to the courts of a particular country, or to a
court identified by a formula in a printed standard form, such as a bill
of lading referring disputes to the courts of the carrier's principal place
of business. It is a question of interpretation, governed by the proper
law of the contract, whether a jurisdiction clause is exclusive or non-
exclusive, or whether the claim which is the subject matter of the
action falls within its terms. If there is no express choice of the proper
law of the contract, the law of the country of the chosen court will
usually, but not invariably, be the proper law.
xxx xxx xxx
19. The question of jurisdiction in this case ought not to be determined
by the High Court on the basis of the provisions of Section 28 of the
Indian Contract Act in the absence of a specific provision making it
applicable to transactions in international trade. The effective
operation of statutes of a country in relation to foreigners and foreign
property, including ships, is subject to limitations. In general, a statute
extends territorially, unless the contrary is stated, throughout the
country and will extend to the territorial waters, and such places as
intention to that effect is shown. A statute extends to all persons
within the country if that intention is shown. The Indian Parliament
therefore has no authority to legislate for foreign vessels or foreigners
in them on the high seas. Thus a foreign ship on the high seas, or her
foreign owners or their agents in a foreign country, are not deprived of
rights by our statutory enactment expressed in general terms unless it
provides that a foreign ship entering an Indian port or territorial waters
and thus coming within the territorial jurisdiction is to be covered. If
the Parliament legislates in terms which extend to foreign ships or
foreigners beyond the territorial limits of its jurisdiction, the Indian
court is of course bound to give effect to such enactment. However, no
such provision has been referred to in the impugned judgments.
Without anything more Indian statutes are ineffective against foreign
property and foreigners outside the jurisdiction.
xxx xxx xxx
20. The Privy Council in Sirdar Gurdyal Singh v. Rajah of Faridkote
[1894 AC 670, 684 : 10 TLR 62] decided that no territorial legislation
can give jurisdiction in a personal action which any foreign court
should recognise against absent foreigners owing no allegiance or
obedience to the power which so legislates. Lord Selborne said:
―In a personal action to which none of these causes of
jurisdiction apply, a decree pronounced in absentem by a
foreign court, to the jurisdiction of which the defendant has
not in any way submitted himself, is by international law an
absolute nullity. He is under no obligation of any kind to
obey it; and it must be regarded as a mere nullity by the
courts of every nation except (when authorised by special
local legislation) in the country of the forum by which it was
pronounced.‖
There may however be submission to the jurisdiction of an Indian
court by litigating in India. The question then is what would amount to
submission to jurisdiction.
21. Cheshire and North's Private International Law (11th edn.) on
submission to jurisdiction says:
―Despite the fundamental principle that the court cannot
entertain an action against a defendant who is absent from
England, it has long been recognised that an absent defendant
may confer jurisdiction on the court by submitting to it. This
may be done in a variety of ways, such as by the defendant
acknowledging service before actual service of the writ, or
instructing a solicitor to accept service on his behalf.
Commencing an action as a plaintiff will give the court
jurisdiction over a counter-claim. Although a defendant who
appears and contests the case on its merits will be held to
have submitted to the jurisdiction, an appearance merely to
protest that the court does not have jurisdiction will not
constitute submission, even if the defendant also seeks a stay
of proceedings pending the outcome of proceedings abroad.‖
The authors go on to say that any person may contract, either
expressly or impliedly, to submit to the jurisdiction of a court to which
he would not otherwise be subject. In case of an international contract
it is common practice for the parties, to agree that any dispute arising
between them shall be settled by the courts of another country even
though both the parties are not resident of that country. In such a case
having consented to the jurisdiction one cannot afterwards contest the
binding effect of the judgment. The defendant out of the jurisdiction
of the country may be deemed to have been served by service on his
agent within the jurisdiction. However, parties cannot by submission
confer jurisdiction on the court to entertain proceedings beyond its
authority.
22. The jurisdiction of the court may be decided upon by the parties
themselves on basis of various connecting factors.
23. Westlake says in his Treatise on Private International Law, at
page 5:
―The principal grounds for selecting a particular national
jurisdiction in which to bring an action are that the subject of
the action, if a thing, is situate, if a contract, was made, or
was to be performed, if a delict, was committed, within the
territory: hence the forum situs, or rei sitae, contractus,
delicti, the two latter of which are classed together as the
forum speciale obligationis. Or that the jurisdiction is that in
which all the claims relating to a certain thing or group of
things ought to be adjudicated on together, the forum
concursus; or that to which the defendant is personally
subject, the forum rei.‖
13. In Man Roland Druckimachinen AG vs. Multicolour Offset
Ltd. and another, (2004) 7 SCC 447, it is observed as follows:-
―9. Undoubtedly, when the parties have agreed on a particular forum,
the courts will enforce such agreement. This is not because of a lack
or ouster of its own jurisdiction by reason of consensual conferment of
jurisdiction on another court, but because the court will not be party to
a breach of an agreement. Such an agreement is not contrary to public
policy nor does it contravene Section 28 or Section 23 of the Contract
Act. This has been held in Hakam Singh v. Gammon (India) Ltd.
[(1971) 1 SCC 286 : AIR 1971 SC 740] , A.B.C. Laminart (P) Ltd. v.
A.P. Agencies [(1989) 2 SCC 163] and Modi Entertainment Network
v. W.S.G. Cricket Pte. Ltd. [(2003) 4 SCC 341] , SCC at p. 351. The
decision of the Delhi High Court in Rajendra Sethia v. Punjab
National Bank [AIR 1991 Del 285] relied on by the Commission
which holds to the contrary is, therefore, clearly erroneous.
xxx xxx xxx
18. An objection to jurisdiction can either be taken by way of
demurrer or raised as an issue in the proceeding. In the first case the
objection will have to be decided on the basis of the allegations
contained in the complaint, taking the statements contained therein to
be correct. Otherwise an objection to the jurisdiction of a court may be
raised as a preliminary issue. In such event, the issue would have to be
adjudicated upon after giving the parties an opportunity to lead
evidence. The Commission proceeded on the basis that both the
objections raised by the appellant, were by way of demurrer.‖
14. In Swastik Gases Private Limited vs. Indian Oil Corporation
Limited, (2013) 9 SCC 32, it is observed as follows:-
―32. For answer to the above question, we have to see the effect of the
jurisdiction clause in the agreement which provides that the agreement
shall be subject to jurisdiction of the courts at Kolkata. It is a fact that
whilst providing for jurisdiction clause in the agreement the words
like ―alone‖, ―only‖, ―exclusive‖ or ―exclusive jurisdiction‖ have not
been used but this, in our view, is not decisive and does not make any
material difference. The intention of the parties--by having Clause 18
in the agreement--is clear and unambiguous that the courts at Kolkata
shall have jurisdiction which means that the courts at Kolkata alone
shall have jurisdiction. It is so because for construction of jurisdiction
clause, like Clause 18 in the agreement, the maxim expressio unius est
exclusio alterius comes into play as there is nothing to indicate to the
contrary. This legal maxim means that expression of one is the
exclusion of another. By making a provision that the agreement is
subject to the jurisdiction of the courts at Kolkata, the parties have
impliedly excluded the jurisdiction of other courts. Where the contract
specifies the jurisdiction of the courts at a particular place and such
courts have jurisdiction to deal with the matter, we think that an
inference may be drawn that parties intended to exclude all other
courts. A clause like this is not hit by Section 23 of the Contract Act at
all. Such clause is neither forbidden by law nor it is against the public
policy. It does not offend Section 28 of the Contract Act in any
manner.
xxx xxx xxx
37. In my opinion, the very existence of the exclusion of jurisdiction
clause in the agreement would be rendered meaningless were it not
given its natural and plain meaning. The use of words like ―only‖,
―exclusively‖, ―alone‖ and so on are not necessary to convey the
intention of the parties in an exclusion of jurisdiction clause of an
agreement. Therefore, I agree with the conclusion that jurisdiction in
the subject-matter of the proceedings vested, by agreement, only in the
courts in Kolkata.
Xxx xxx xxx
57. For the reasons mentioned above, I agree with my learned Brother
that in the jurisdiction clause of an agreement, the absence of words
like ―alone‖, ―only‖, ―exclusive‖ or ―exclusive jurisdiction‖ is neither
decisive nor does it make any material difference in deciding the
jurisdiction of a court. The very existence of a jurisdiction clause in an
agreement makes the intention of the parties to an agreement quite
clear and it is not advisable to read such a clause in the agreement like
a statute. In the present case, only the courts in Kolkata had
jurisdiction to entertain the disputes between the parties.‖
15. It is well settled that while deciding the question of rejection of
plaint under Order 7 Rule 11 C.P.C. the averments of the plaint only is
to be taken into consideration and not the grounds of defense or the
written statement. At this stage the pleas taken by the defendants in the
written statement and the application for rejection of the plaint on
merits would be irrelevant and cannot be adverted to or taken into
consideration. The court is only to consider the averments made in the
plaint and not the strength and weakness of the Plaintiff's case. [See.
Srihari Hanumandas Totala v. Hemant Vithal Kamat, (2021) 9 SCC
99, Dahiben v. Arvindbhai Kalyanji Bhanusali (Gajra), (ibid)]. It is
stated in Srihari Hanumandas Totala (supra) that, in order to decide
whether the suit is barred by any law, it is the statement in the plaint,
which will have to be construed, and the court while deciding such an
application must have due regard to the statements in the plaint.
Whether the suit is barred by any law, it must be determined from the
statements in the plaint and it is not open to decide the issue on the
basis of any other material including the written statement.
16. In the case at hand, Defendants No.1 and 2 are contending to
reject the plain under Order 7 Rule 11 C.P.C. on the ground that the
Court at Jharsuguda has no jurisdiction to try the suit since as per the
IED Agreement dated 9th September, 2002 the parties have volunteered
to submit to the jurisdiction of the Court at Basel in Switzerland in
exclusion of the jurisdiction of any other court including the Courts in
India. It is further contended by Defendants No.1 & 2 that the plaint
story does not disclose the cause of action and the cause of action
stated in the plaint are illusory. According to Mr. Mishra, learned
senior counsel for Defendants No.1 & 2 those illusory cause of actions
stated in the plaint are not to be taken into account for maintaining the
suit at Jharsuguda. It is also contended that since the contract dated 9th
September, 2002 is determinable at the instance of either party the
claim for specific performance in support of the Plaintiffs is hit by the
provision under Section 14(1)(c) of the Specific Relief Act.
17. The copy of IED Agreement dated 9th September, 2002 has been
filed along with the plaint as the document relied by the plaintiffs.
Clause 20 of said agreement postulates that Courts at Basel shall have
exclusive jurisdiction over any dispute arising out of or in connection
with the Agreement. The entire clause reads as under:-
―ARTICLE 20 - APPLICABLE LAW AND DISPUTE
SETTLEMENT
20.1 This Agreement shall be governed by and construed
according to SWISS Law.
20.2 The courts of Basel shall have exclusive jurisdiction over any
dispute arising out of or in connection with this Agreement,
provided, however, that any action or proceeding by HEN
against DISTRIBUTOR may also be brought in any court of
competent jurisdiction where DISTRIBUTOR or any of its
assets may be located. By the execution of this Agreement,
DISTRIBUTOR irrevocably submits to the jurisdiction and
venue of such courts. Any variation from the terms of this
Agreement required by the laws of any jurisdiction in which
DISTRIBUTOR is located or engages in any activities
herenunder are set forth in SCHEDULE VIII hereto.
DISTRIBUTOR represents and warrants that, except as set
forth therein, no variations under any such laws are required
for this Agreement to constitute the valid and binding
obligation of DISTRIBUTOR enforceable in accordance with
its terms.‖
18. Thus by taking support from this clause of the agreement it is
contended by Defendants No.1 & 2 to exclude the jurisdiction of the
Court at Jharsuguda or any other court in India to deal with such
dispute between the parties arising out of the Agreement dated 9 th
September, 2002. But at the same time looking to the plaint averment
and description of parties stated therein to satisfy the reliefs prayed by
the Plaintiffs, it is not only Defendants No.1 & 2 have been arrayed as
the parties but along with them Defendant No.3 is also there to satisfy
the reliefs in the plaint in favour of the Plaintiffs. No dispute is there
that such reliefs claimed by the plaintiffs cannot be decided without
Defendant No.3 as a necessary party to the suit. Defendant No.3 is
indisputably carrying his business activities for other defendants within
the jurisdiction of Jharsuguda, as described in the plaint averments. As
per the plaint allegations Defendant No.3 is selling the same products
of Defendants No.1 and 2 at a lesser price than offered by the Plaintiffs
in the market and thereby causing harm to the business of the
Plaintiffs. So it is not only Defendants No.1 and 2, but Defendant No.3
is also a necessary party to satisfy the reliefs prayed by the Plaintiffs.
According to the plaint averments the business interest of Defendants
No.1 & 2 is integrated with Defendant No.3 being inseparable to
satisfy the claim of the Plaintiffs without Defendant No.3. It is the
undisputed principle of law that the plaint either to be rejected as a
whole in respect of all the defendants or not at all. In the event the
plaint survives against some of the defendants or properties then the
suit as a whole should proceed to trial and cannot be rejected against
particular defendant leaving others. In Madhav Prasad Aggarwal v.
Axis Bank Ltd., (2019) 7 SCC 158 it is observed as follows:-
―10. We do not deem it necessary to elaborate on all other
arguments as we are inclined to accept the objection of the
appellant(s) that the relief of rejection of plaint in exercise of
powers under Order 7 Rule 11(d) CPC cannot be pursued only in
respect of one of the defendant(s). In other words, the plaint has to
be rejected as a whole or not at all, in exercise of power under
Order 7 Rule 11(d) CPC. Indeed, the learned Single Judge rejected
this objection raised by the appellant(s) by relying on the decision
of the Division Bench of the same High Court. However, we find
that the decision of this Court in Sejal Glass Ltd. [Sejal Glass
Ltd. v. Navilan Merchants (P) Ltd., (2018) 11 SCC 780 : (2018) 5
SCC (Civ) 256] is directly on the point. In that case, an application
was filed by the defendant(s) under Order 7 Rule 11(d) CPC stating
that the plaint disclosed no cause of action. The civil court held that
the plaint is to be bifurcated as it did not disclose any cause of
action against the Director's Defendant(s) 2 to 4 therein. On that
basis, the High Court had opined that the suit can continue against
Defendant 1 company alone. The question considered by this Court
was whether such a course is open to the civil court in exercise of
powers under Order 7 Rule 11(d) CPC. The Court answered the said
question in the negative by adverting to several decisions on the
point which had consistently held that the plaint can either be
rejected as a whole or not at all. The Court held that it is not
permissible to reject plaint qua any particular portion of a plaint
including against some of the defendant(s) and continue the same
against the others. In no uncertain terms the Court has held that if
the plaint survives against certain defendant(s) and/or properties,
Order 7 Rule 11(d) CPC will have no application at all, and the suit
as a whole must then proceed to trial.
11. In view of this settled legal position we may now turn to the
nature of reliefs claimed by Respondent 1 in the notice of motion
considered by the Single Judge in the first instance and then the
Division Bench of the High Court of Bombay. The principal or
singular substantive relief is to reject the plaint only qua the
applicant, Respondent 1 herein. No more and no less.
12. Indubitably, the plaint can and must be rejected in exercise of
powers under Order 7 Rule 11(d) CPC on account of non-
compliance with mandatory requirements or being replete with any
institutional deficiency at the time of presentation of the plaint,
ascribable to clauses (a) to (f) of Rule 11 of Order 7 CPC. In other
words, the plaint as presented must proceed as a whole or can be
rejected as a whole but not in part. In that sense, the relief claimed
by Respondent 1 in the notice of motion(s) which commended to
the High Court, is clearly a jurisdictional error. The fact that one or
some of the reliefs claimed against Respondent 1 in the suit
concerned is barred by Section 34 of the 2002 Act or otherwise,
such objection can be raised by invoking other remedies including
under Order 6 Rule 16 CPC at the appropriate stage. That can be
considered by the Court on its own merits and in accordance with
law. Although, the High Court has examined those matters in the
impugned judgment the same, in our opinion, should stand effaced
and we order accordingly.
14. A fortiori, these appeals must succeed on the sole ground that
the principal relief claimed in the notice of motion filed by
Respondent 1 to reject the plaint only qua the said respondent and
which commended to the High Court, is replete with jurisdictional
error. Such a relief ―cannot be entertained‖ in exercise of power
under Order 7 Rule 11(d) CPC. That power is limited to rejection of
the plaint as a whole or not at all.‖
19. In the instant case when the reliefs claimed against Defendant
No.3 is found inseparable without Defendants No.1 & 2, the entire
contention of Defendants No.1 & 2 to bar the jurisdiction at Jharsuguda
applying Clause-20 of the Agreement dated 9th September, 2002,
where Defendant No.3 was not a party, is not found substantiated at
this stage to reject the plaint for lack of jurisdiction. The Plaintiffs have
specifically averred the action of Defendant No.3 along with
Defendants No.1 & 2 to harm the business interest of the Plaintiffs.
Because it is stated in the plaint that Defendant No.3 is selling the
products of Defendants No.1 & 2 with lesser price than the Plaintiffs
offered, so the presence of Defendant No.3 as a necessary party in the
suit has become indispensable for satisfying the reliefs claimed by the
Plaintiffs. Therefore it is not Defendants No.1 & 2 alone against whom
the Plaintiffs are claiming reliefs, but it is all the defendants to be
arrayed as parties necessarily. The alleged exclusion of jurisdiction of
Court at Jharsuguda does not apply in respect of Defendant No.3 and
therefore the contention to reject the plaint is not sustainable on this
ground.
20. It is next contended by Defendants No.1 & 2 that the causes of
actions shown in the plaint are illusory only and not existing in fact. At
this point it is relevant to refer Para-29 of the plaint and the same is
reproduced bellow:-
―29. That the cause of action in favor of the Plaintiffs and
against the Defendants first arose on the day when it came to the
knowledge of the Plaintiffs that the Defendant No.3 has been an
agent of the Defendant No.1 in India selling similar and competing
products in the Indian market. The cause of action further arose
when the Defendant No.1 offered comparative goods at a price
which were 70% lower than the price offered by the Defendants to
the Plaintiffs. The cause of action further arose when the Defendant
No.1 through the Defendant No.2 succeeded in selling the products
of the Defendant No.1 within the jurisdiction of this Hon'ble Court.
The cause of action further arose when the Defendants succeeded
in reducing the market share, value and reputation of the Plaintiffs.
Finally on 25.03.2013 when the plaintiffs issued notice to the
defendants to restrain themselves in indulging in unfair trade
practice & 25.06.2013 when, the Defendant No.1 replied &
thereafter on each & every date fulfilling of this suit.‖
21. A perusal of aforesaid statements of cause of action mentioned
in the plaint reveals that nothing of them can be considered as illusory
at the present stage. What is pleaded and objected either in the written
statement or in the application preferred by Defendants No.1 & 2
cannot be referred to for the purpose of rejection of the plaint. It might
have been alleged by the defendants about termination of such contract
dated 9th September, 2002 which are questions to be examined during
trial of the suit. Since the plaint as a whole and the story narrated
therein along with the cause of action stated are to be looked into only,
without any foreign aid beyond the plaint, nothing is seen in the plaint
averments to describe the cause of action as illusory or unreal.
Therefore on this score it would not be prudent to say so to reject the
plaint.
22. So far as the bar of law under the provisions of Section 14(1)(c)
of the Specific Relief Act is contended, it would be relevant here to
mention that for the said purpose again foreign documents beyond the
plaint averments are to be looked into because it is to be determined
whether the notice of termination, as contended by Defendants No.1 &
2, is required to be examined whether validly issued or not and
moreover perusal to the termination notice and letter is not within the
scope of the plaint and the documents appended to it. Similar is the
contentions of Defendants No.1 and 2 regarding suppression of
material fact and the plea of res judicata regarding dismissal of earlier
suit of the Plaintiffs by the Court at Alipure. It has been stated in
Srihari Hanumandas Totala v. Hemant Vithal Kamat, (supra) that,
"Since an adjudication of the plea of res judicata requires
consideration of the pleadings, issues and decision in the "previous
suit", such a plea will be beyond the scope of Order 7 Rule 11(d),
where only the statements in the plaint will have to be perused". So to
apply the principles of res judicata several factors are to be looked into
like similarity of issue and similarity of parties, etc., including finality
of decision by the competent court. These being not to be concluded at
the preliminary stage without looking beyond the scope of plaint,
cannot be considered as grounds for rejection of plaint within the ambit
of Order 7 Rule 11 C.P.C.
23. A thorough perusal of the plaint averments including the
statements of cause of action and the reliefs prayed for and plain
interpretation thereto, all such contentions raised by the Defendants
No.1 & 2 for rejection of the plaint is not found justified at this stage.
The learned Revisional Court has thus rightly concluded that the prayer
of Defendants No.1 & 2 is liable to be rejected. This Court without
finding any material error or impropriety in the impugned order is not
inclined to interfere with the same. Resultantly the writ petition is
dismissed.
24. It is made clear that any such observations made in the present
order or by the Revisional Court in the impugned order are for the
purpose of consideration of the prayer under Order 7 Rule 11 C.P.C,
and shall not influence the merits of contentions of the parties in the
final decision of the suit.
(B.P. Routray)
Judge
B.K. Barik/Secretary
M.K.Panda/PA
