PARTAP SINGH Vs. BANK OF AMERICA

JUDGEMENT

(1.) The plaintiff, who by profession is a medical man, has filed this suit against the Bank of America, National Trust and Savings Association, a corporation incorporated in the United States of America having an office in Bombay, which is its principal place of business in India as recorded in the office of the Registrar of Companies under section 592(1)(e) of the Companies Act, 1956. The plaintiff's case is that the defendant-bank had issued between October, 1966, and July, 1967, three time certificates of deposit in the name of the plaintiff for three different amounts aggregating to 46,020.86 U.S. Dollars, each of which was to mature six months after the date of its issue, and was to carry interest at the rate of 5 per cent. per annum. The plaintiff's case in paragraph 16 of the plaint is that, while in London, on 26th September, 1967, he happened to lose the said three time certificates of deposit which he had kept in one envelope, and in paragraph 19 of the plaint, it is stated that the plaintiff thereafter requested the defendant-bank to issue duplicates of the lost instruments. In paragraph 20 of the plaint, it is stated that the defendant-bank at its International Banking Office at San Francisco office, however, informed the plaintiff that before the said time certificates of by a Corporate Bonding Company, and in paragraph 68 to 72 of the plaint, it is stated that the plaintiff, being in urgent need of funds and it being necessary for him to join his ailing wife in London who was in considerable distress, was under those circumstances forced to execute indemnity agreements covering the replacements of the said time certificates of deposit. It may be mentioned that there is a clause in the said indemnity agreement which provides that they could be legally enforced in Punjab in India as well as in California in the United States of America. On these facts, the plaintiff has filed the present suit in this court for a declaration that the said indemnity agreements were not enforceable and had no effect as against the plaintiff, and for a decree for 72,000 U.S. Dollars, with interest thereon at the rate of 6 percent per annum from the date off the suit till recovery thereof. The plaintiff has claimed the said amount as and by way of compensation and damages on the ground that the defendant-bank had no right to insist on furnishing any indemnity bond as a condition of furnishing replacements of the said time certificates of deposit. In paragraph 115 of the plaintiff has given particulars of the said sum of 72,000 U.S. Dollars which he has claimed as and by way of compensation and damages from the defendant-bank. Without going into the details, it may be stated that the said compensation damages are claimed by the plaintiff from the defendant-bank for mental distress, worry and anxiety and injury to feelings and deterioration in health, for loss of income from private practice during the period from December 1, 1967, to July 6, 1968, for loss of opportunity to exercise the profession between those dates, for travelling expenses as well as for cancellation of certain business arrangements and other expenses.

(2.) The defendant-bank has filed a written statement in paragraph 2 of which it has objected to the jurisdiction of this court to entertain and try the suit. In the said written statement, the defendant-bank has also denied its liability on merits, but in view of the fact that I have framed, in the first instance, only an issue in regard to jurisdiction and have decided to try it as a preliminary issue, it is unnecessary for me to set out the defence of the defendant-bank on merits to this somewhat curious suit. The preliminary issue which I have framed is as follows : "Whether this court has jurisdiction to try the suit. "As, in my opinion, the whole suit might be disposed of on this issue which is a pure issue of law only, I have postponed the settlement of the issues of law only, I have postponed the settlement of the issues of fact until after that preliminary issue has been determined, a course which is in accordance with the provision of Order 14, rule 2 of the Code of Civil Procedure.

(3.) At the hearing of the preliminary issue, it was made clear to me at the very outset that it is common ground that no part of the cause of action, in the present suit, has arisen within the jurisdiction of this court. The submissions of the plaintiff who appeared in person before me on the issue of jurisdiction were two-fold, viz., (1) the defendant-bank which is a corporation incorporated in the U.S.A. has, admittedly, office in Bombay which is its principle place of business in India, and can, therefore, be sued in this court by reason of the provisions of clause 12 of the Letters Patent of this court; and (2) the defendant-bank has, in any event, submitted to the jurisdiction of this court by what it has done both before and after the filing of this suit. It will be convenient to dispose of the second point relating to submission to jurisdiction first as, in my opinion, there is no substance in the same. It was submitted by the plaintiff that the note of the defendant-bank which amounted to waiver of the objection as to jurisdiction, even before this suit was filed, were that there was, admittedly, a clause in the agreements of indemnity under which the suit could be filed in California in the U.S.A. or in the State of Punjab in India; that the defendant-bank had, admittedly, registered with the Registrar of Companies under section 592 of the Companies Act, 1956, and the same address at which processes could be served upon it in India; and that it had, in fact, been doing business at its branch office at Bombay in India. In my opinion, even a cursory perusal of the clause in the agreements of indemnity which is relied upon would show that it applies only to a suit to enforce the indemnity, which is not the nature of the present suit, and that, in any event, it cannot possibly confer any right on the plaintiff to file this suit in Bombay which is not one of the places specifically mentioned in the said clause. The delivery of the name and address at which processes could be served on the defendant-bank in India as required by section 592 of the Companies Act, 1956, cannot possibly amount to waiver of the objection in regard to jurisdiction, for the simple reason that it was something which the defendant-bank was bound by law to do and was not a matter of volition on its part. In my opinion, the mere fact that the defendant-bank was doing business at Bombay in India also cannot amount to its having submitted to the jurisdiction of the court, no matter what may be the nature of the suit filed against it. The plaintiff has further contended that by filing an appearance in the present suit without protest, and by filing a written statement in which the Defence have been set out on merits, the defendant-bank has submitted to the jurisdiction of this court, at any rate, after the suit was filed. The decision of the Supreme Court in the case of Bahrein Petroleum Co. Ltd. v. P. J. Pappu, in my opinion, provides a complete answer to that contention of the plaintiff. In that case also, the first time an objection to jurisdiction was taken in the suit itself was in the written statement in which the defendants had also pleaded on merits (see para 5). Holding that the defendant in the said case had at no stage waived or abandoned their objection to the jurisdiction of the court in which that suit had been filed, it was stated by the Supreme Court as follows (para. 4) : "If the defendant allows the trial court to proceed to judgment without raising the objection as to the place of suing and takes the chance of a verdict in his favour, he clearly waives the objection, and will not be subsequently permitted to raise it. It is even possible to say that long and continued participation by the defendant in the proceedings without any protest may, in an appropriate case, amount to a waiver of the objection. But, in this case, we find no conduct of the defendants which amounts to a waiver, or which precludes them from raising the objection."