Forum Shopping Is Abuse Of Legal Process And Cannot Be Condoned: Delhi High Court
The Delhi High Court Bench of Justice Swarana Kanta Sharma has held that forum shopping, i.e., such conduct, where the petitioner attempts to choose a forum favourable to them after having already approached the appropriate forum, is an abuse of legal process and cannot be condoned. Brief facts of the case: The case revolves around a dispute between Michael Builders and Developers...
The Delhi High Court Bench of Justice Swarana Kanta Sharma has held that forum shopping, i.e., such conduct, where the petitioner attempts to choose a forum favourable to them after having already approached the appropriate forum, is an abuse of legal process and cannot be condoned.
Brief facts of the case:
The case revolves around a dispute between Michael Builders and Developers Pvt. Ltd. (“petitioner”) and St. Alphonsa Trust, with respect to an agreement dated 01.11.2013 for the construction of a medical college in Tamil Nadu for the Trust. After completing the construction for ₹52.13 crores, the petitioner claimed ₹20 crores as the balance. After the Trust failed to pay, the petitioner initiated arbitration proceedings before the District Court, Nagercoil.
In 2018, an agreement of settlement was reached with the Trust, wherein it agreed to pay 15.95 crores. The petitioner claimed that the outstanding liability was ₹26 crores. A consent award was passed by the arbitrator, directing the Trust to pay, but it failed to do so. As a result, the petitioner filed an execution petition before the District Judge for the attachment of the property. Then, the District Judge ordered attachment of the property in January 2024, while the Trust made a partial payment, leaving ₹13 crores as outstanding.
Even though the order was passed, the Trust applied for and obtained an Essentiality Certificate to commence a nursing and medical college on the disputed property, which led the petitioner to file a writ petition under Article 226 before the Delhi High Court, seeking the revocation of the permissions granted.
Observation of the court:
The Court highlighted that the primary dispute between the parties, centered around properties and events in Tamil Nadu. Also, the orders and the arbitral award were passed by the district court in Nagercoil and the Madras High court. Therefore, the court held that there is no justification for invoking the jurisdiction of Delhi High Court when the Courts in Tamil Nadu have already dealt with the problem and passed relevant orders. The court relied on the judgment of the supreme court in Kusum Ingots & Alloys Ltd. v. Union of India (2004) 6 SCC 254 wherein the doctrine of forum conveniens was explained as:
“Forum conveniens
30. We must, however, remind ourselves that even if a small part of cause of action arises within the territorial jurisdiction of the High Court, the same by itself may not be considered to be a determinative factor compelling the High Court to decide the matter on merit. In appropriate cases, the Court may refuse to exercise its discretionary jurisdiction by invoking the doctrine of forum conveniens.”
Furthermore, the court rejected the petitioner's argument that the mere presence of the head office of the National Medical Commission in Delhi would confer jurisdiction on the Delhi High Court. The court held that the appropriate court for the case was Tamil Nadu, where the cause of action has arisen and both the parties live. Also, the Madras High Court had already been approached by the petitioner and they have consented and obtained orders.
The court also referred the judgment of Vemparala Srikant v. General Secretary, India Bulls Centrum Flat Owners Welfare Co-Operative Society, Hyderabad, wherein it held that when the foundational facts giving rise to the cause of action arose within Telangana, it would be absurd to allow the petitions against orders of NCDRC to be filed only in Delhi High Court, which would mean that a consumer who is agitating for his rights in far of places like Assam, Manipur, etc. would have to travel to Delhi for redressal, which cannot be allowed in view of the doctrine of forum conveniens.
Further, the Court noted that the petitioner has engaged in forum shopping which was evident as the petitioner had withdrawn petitions from the appropriate forum in Tamil Nadu and refiled similar petitions in Delhi for seeking similar reliefs. The Court found this to be an abuse of legal process and did not condone such behavior.
As a result, the Court dismissed the petitions on the ground of lack of territorial jurisdiction, noting that the dispute should be adjudicated in Tamil Nadu.
Case title: MICHAEL BUILDERS AND DEVELOPERS PVT. LTD. v. NATIONAL MEDICAL COMMISSION AND ORS
Citation: 2024 LiveLaw (Del) 1121
Case Number: W.P.(C) 12049/2024 & CM APPL. 52550/2024
Advocates for the Petitioner: Mr. Mandeep Kalra, AOR, Ms. Anushna Satapathy, Ms. Chitrangada Singh, Ms. Radhika Jalan, Mr. Yashas J., Ms. Kirti Arti, Advocates
Advocates for the Respondent: Mr. T. Singhdev, Mr. Bhanu Gulati, Ms. Ramanpreet Kaur, Mr. Abhijit Chakrvarty, Ms. Anum Hussain, Mr. Tanishq Srivastava and Mr. Aabhas Sukhramani, Advs. for NMC. Ms. Archana Pathak Dave, Sr Adv, Mr. Raghunatha Sethupathy B, Mr. S. Prabhu Ramasubramanian, Mr. Santhosh K, Mr. Pramod Kumar Vishnoi, Mr. Baskar Naidu and Mr. Adhi Narayana Rao, Advocates for impleader.