2022/DHC/005038
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Reserved On: 14th November, 2022
Judgment Delivered On:22nd November, 2022
+ CS(COMM) 521/2020 & I.A. 11083/2020(O-XXXIX R-1 & 2 of
CPC)
ARORA TOOLS PVT LTD ..... Plaintiff
Through: Mr. Mohit Chaudhary with Mr. Kunal
Sachdeva and Mr. Parkhar Mithal,
Advocates.
versus
VARDEX TOOLINGS PRIVATE LIMITED
& ORS. ..... Defendants
Through: Mr. Shubham Kulshrestha with
Mr.Pinak Bhagwat and Mr. Farhad
Dalal, Advocates.
Mr. Aman Varma, Advocate for
defendant No.3 to defendant No.5.
CORAM:
HON'BLE MR. JUSTICE AMIT BANSAL
JUDGMENT
AMIT BANSAL, J.
I.A. 25/2022(of defendant no.1 u/O-VII R-10 & 11(a)&(d) of CPC) & I.A. 26/2022(of defendant no.2 u/O-VII R-10 & 11(a)&(d) of CPC)
1. These applications seek return/rejection of the plaint on the grounds that (i) this Court lacks territorial jurisdiction to entertain the present suit; and, (ii) no cause of action has been made out against the defendants in the plaint.
Signature Not Verified Digitally Signed By:AMIT BANSAL CS(COMM) 521/2020 Signing Page 1 of 6 18:21:07 Date:22.11.2022 2022/DHC/005038
2. Notices in these applications were issued on 12th April, 2022. Despite opportunity being granted by the Court, no reply has been filed on behalf of the plaintiff.
3. The present suit was filed as a commercial suit against the defendants seeking, inter alia, reconciliation of accounts and damages on account of loss caused to the plaintiff. In the plaint, it has been pleaded by the plaintiff that the plaintiff was appointed as a distributor for the National Capital Region (NCR) by the defendants no.1 and 2 in respect of their products in the year 2006. The plaintiff used to issue purchase orders on the defendant no.1 and in turn, the defendant no.1 supplied goods to the plaintiff for onward sale.
4. Defendant no.1 is an Indian subsidiary of a company based in Israel. Defendant no.2 operates in India through the defendant no.1. As a distributor, the plaintiff was entitled to commission on sale as well as turnover discount from the defendant no.1. Plaintiff continued to be a distributor of the defendants no.1 and 2 till the end of 2019, when disputes arose between the parties on account of the amount of turnover discount payable to the plaintiff.
5. In the present applications, the defendants no.1 and 2, have primarily sought rejection of the suit on the ground of lack of territorial jurisdiction. Reliance is placed on the invoices raised by the plaintiff on the defendant no.1 (page 232 of the documents filed with the plaint) to show that the same was subject to Haryana jurisdiction only. It is further submitted that the various purchase orders were issued by the plaintiff to the defendant no.1 from Gurgaon. Accordingly, it is submitted that this Court does not have the territorial jurisdiction to adjudicate the present suit.
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6. Per contra, counsel for the plaintiff submits that the cause of action for filing the present suit is not based on the invoices raised by the parties but on the relationship of distributorship between the plaintiff and the defendants. Reliance is placed on the certificate of distributorship issued by the defendants no.1 and 2 in favour of the plaintiff, wherein it has been stated that the plaintiff has been appointed as "authorised channel partner for the distribution of VARGUS products in National Capital Region" (page 6 to 7 of the documents filed with the plaint). Reliance is also placed on the demand notice dated 17th August, 2020 issued by the defendant no.1 to the plaintiff, wherein the address of the registered office of the plaintiff is shown as Delhi.
7. I shall now proceed to deal with the rival contentions of the parties.
8. A perusal of the plaint reveals that the cause of action for filing the present suit is not based on invoices or purchase orders raised by either party. The cause of action is primarily based on the plaintiff being appointed as the distributor for the NCR by the defendants no.1 and 2 in respect of the products of the defendants no.1 and 2. The case of the plaintiff is that the plaintiff had developed the market for the goods of the defendants in North India and the plaintiff had wrongly removed it as a distributor and appointed the defendants no.3 to 6 as the new distributors. Hence, damages have been claimed in the suit. The certificate filed by the plaintiff, which is signed by the officials of the defendants no.1 and 2, clearly shows that the plaintiff was the distributor of the defendants' goods in the NCR. Further, the demand notice sent to the plaintiff by the defendant no.1 also records the address of the plaintiff in Delhi.
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9. In view of my findings above that the present suit is not based on the invoices/purchase orders, no reliance can be placed on the purchase orders as well as invoices for the purposes of determining territorial jurisdiction. Accordingly, no reliance can be placed on the judgment of A.B.C Laminart (P) Ltd. And Anr. v. A.P. Agencies, Salem (1989) 2 SCC 163.
10. When dealing with applications filed under Order VII Rules 10 and 11 of CPC, reference only has to be made to the averments made in the plaint and the documents filed along with the plaint. In my considered view, taking into account the averments made in the plaint and the documents filed along with the plaint, the plaint can neither be returned under Order VII Rule 10 of the CPC nor rejected under provisions of Order VII Rule 11 of the CPC qua the defendants no.1 and 2.
11. Accordingly, I.A. 25/2022 and I.A. 26/2022 are dismissed.
12. Needless to state, any observations made herein are only for the purposes of deciding the present applications and would have no bearing on the final adjudication of the suit.
CS(COMM) 521/2020 & I.A. 5672/2022(of defendant no.4 u/O-VII R-10 & 11(a)&(d) of CPC), I.A. 5710/2022(of defendant no.5 u/O-VII R-10 & 11(a)&(d) of CPC) & I.A. 5711/2022(of defendant no.3 u/O-VII R-10 & 11(a)&(d) of CPC)
13. The captioned applications have been filed on behalf of the defendants no.3 to 5 seeking return/rejection of the plaint on the grounds that (i) this Court lacks territorial jurisdiction to entertain the present suit; and, (ii) no cause of action has been made out against the said defendants in the plaint.
14. I have already dismissed above similar applications filed on behalf of the defendants no.1 and 2 alleging that this Court does not have the Signature Not Verified Digitally Signed By:AMIT BANSAL CS(COMM) 521/2020 Signing Page 4 of 6 18:21:07 Date:22.11.2022 2022/DHC/005038 territorial jurisdiction to deal with the present case. The only issue to be examined is whether any cause of action has been made out against the defendants no.3 to 6. The only averments in the plaint in respect of the defendants no.3 to 6 are that they are the newly appointed distributors of the defendant no.1 who are encashing on the goodwill/customer base and the market created by the plaintiff for the products of the defendants no.1 and 2. The only relief claimed against the said defendants in the plaint is that they be injuncted from acting as distributors for the products of the defendants no.1 and 2. However, as also noted above, no pleadings in the plaint have been made in respect of the aforesaid relief claimed against the defendants no.3 to 6. Further, no documents have been filed along with the plaint in respect of the defendants no.3 to 6.
15. It is clear from a meaningful reading of the plaint that there is no privity of contract between the plaintiff and the defendants no.3 to 6. Merely because the defendants no.3 to 6 have been appointed as distributors by the defendants no.1 and 2 in place of the plaintiff would not give rise to any cause of action in favour of the plaintiff against the said defendants.
16. In light of the above discussion, I am of the considered view that the defendants no. 3 to 6 are neither necessary nor proper parties to the suit. The aforesaid defendants have been wrongly impleaded as parties in the present suit and their names ought to be struck out.
17. Accordingly, invoking provisions of Order I Rule 10(2) of the CPC, the defendants no.3 to 6 are deleted from the array of parties.
18. I.A. 5672/2022, I.A 5710/2022 and I.A. 5711/2022 are disposed of.
19. In view of the deletion of the defendants no.3 to 6 from the array of parties, amended memo of parties be filed by the plaintiff within one week.
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20. List before the Joint Registrar on 12th January, 2023 for further proceedings.
AMIT BANSAL, J.
NOVEMBER 22,2022 sr Signature Not Verified Digitally Signed By:AMIT BANSAL CS(COMM) 521/2020 Signing Page 6 of 6 18:21:07 Date:22.11.2022