PVR v. Proteus LLP | Payee's Bank Account Being In A Particular City Does Not Mean Bill Is Payable In That City: Bombay High Court

Justice Arif S Doctor decreed PVR’s commercial summary suit against one Proteus LLP and directed Proteus to pay its dues for screening ads at PVR’s multiplexes in Pune and Mumbai, while dismissing Proteus’ challenge to Bombay HC’s jurisdiction in the matter.

“In today’s times of electronic transfers payment can be effected from anywhere in the world. Merely because the details of the receiving bank are within the jurisdiction of another city, this fact alone would not mean (a) that the amounts are payable in that city and (b) that part of the cause of action had arisen in that city”, the court held.

The court, however, did not put any liability of Shardul Bayas and Abhinay Deo, partners of the defendant firm Proteus LLP.

Proteus had disputed Bombay HC’s jurisdiction to decide the suit on the ground that the money was payable at Delhi, and all disputes were subject to Delhi jurisdiction only, as per the terms of the invoices.

PVR screened ads at its multiplexes in Mumbai and Pune as per purchase orders given by Proteus LLP between December 2019 and February 2020. As per the terms of the invoices issued by PVR, Proteus had to notify any discrepancy in the bills within 5 days of receipt, otherwise the bill would be deemed to be accepted. Further, if payment is not done even after 7 days from the due date, the bill amount was to be doubled with an interest of 20 percent.

Proteus did not point out any discrepancy in the invoices or pay its dues despite repeated follow-ups and reminders, according to PVR. Therefore, PVR issued a legal notice on August 14, 2020 demanding payment of Rs. Rs.1,13,06,080/- along with interest at 20 percent. Proteus neither responded to the legal notice nor made any payments. After mediation failed, PVR filed the present suit. PVR also impleaded two partners of Proteus LLP as defendants.

According to Clause 8 of the invoice terms, all disputes were subject to Delhi jurisdiction only. The court said that existence of a dispute is a prerequisite for invoking Clause 8. Proteus never raised any dispute regarding the invoices before filing its reply affidavit in the suit, the court noted. Thus, no dispute exists and Proteus’ reliance on Clause 8 is mala fide, the court held.

Proteus contended that the amount is payable in Delhi as PVR’s bank is in New Delhi. The court said that the invoices merely set out various acceptable modes of payment such as account cheque, demand draft, RTGS/NEFT etc. PVR’s bank details in the invoices are only meant to facilitate electronic payment and nothing more, the court opined. Even if only RTGS/NEFT mode of payment had been provided in the invoices, it would not by itself amount to the monies being payable in Delhi, the court added.

Proteus argued that PVR’s Head Office is in New Delhi, and thus courts in New Delhi have the jurisdiction due to the common law principle ‘debtor must seek out its creditor’ which implies that a creditor (PVR in this case) can file a suit where it is located without having to chase a debtor across the country. The court opined that accepting this argument would turn the principle on its head, as PVR has already filed the suit as per principle of forum conveniens. Further, the work against which the invoices were issued was done within Maharashtra. i.e., within Bombay HC’s jurisdiction, the court said.

“The common law proposition is undoubtedly based on the doctrine of forum conveniens, it is basis this that the Plaintiff has filed the present suit in this Court only to be told by the Defendant who neither disputes nor denies the Plaintiffs claim that Suit must necessarily be instituted in a Court which for the Plaintiff is clearly not forum conveniens and within which, no part of the cause of action has arisen. Such a contention must only be stated to be rejected”, the court held.

The invoices were raised in the name of Proteus LLP and nothing else. Thus, under section 27(3) of the Limited Liability Partnership Act, obligation of payment is solely of Proteus LLP, court held. The court rejected PVR’s contention that as per section 27(2) of the LLP Act, Bayas and Deo are liable for their individual acts and omission as they were at the helm of the affairs of Proteus LLP. The court said that the suit is based on payment of invoices and not for any claim/damages on the basis of any wrongful act or omission by Bayas and Deo.

The court noted that there was no submission on merits of the case and directed Proteus LLP to pay Rs. 1,13,06,080/- along with 12% interest from the date of filing of the suit till payment.

Advocate Abhijeet A Desai along with Advocates Karan Gajra and Vijay Singh represented PVR.

Advocates Abhinav Chandrachud, Samsher Garud, and Juhi Valia represented Proteus LLP.

Case no. – Commercial Summary Suit No. 53 of 2023

Case Title – PVR Ltd. v. M/S Proetus Ventures LLP and Ors.