Calcutta High Court

Reliable Roadwings Pvt Ltd vs Bevcon Wayors Pvt Ltd & Ors on 23 February, 2021

OD-57 & 58
                                    ORDER SHEET

                       IN THE HIGH COURT AT CALCUTTA
                        Ordinary Original Civil Jurisdiction
                                 ORIGINAL SIDE

                     IA NO.GA/2/2018 (Old No.GA/3106/2018)
                                       In
                                  CS/40/2018

                         RELIABLE ROADWINGS PVT LTD
                                    Versus
                        BEVCON WAYORS PVT LTD & ORS

                                          AND

                     IA NO.GA/1/2018 (Old No.GA/2282/2018)
                                       In
                                  CS/40/2018

                         RELIABLE ROADWINGS PVT LTD
                                    Versus
                        BEVCON WAYORS PVT LTD & ORS


  BEFORE:
  The Hon'ble JUSTICE DEBANGSU BASAK

Date : 23rd February, 2021.

(Via Video Conference) Appearance:

Mr. K.C. Garg, Adv.

Ms. Sunita Agarwal, Adv.

Mr. Sarosij Dasgupta, Adv.

Mr. Avijit Dey, Adv.

The Court: Two applications are taken up for analogous hearing as

they are in the same suit.

The first in point of time is IA NO.GA/1/2018 (Old

No.GA/2282/2018), which is at the behest of the plaintiff. In such

application, the plaintiff seeks final judgment for a sum of Rs.56,20,000/-

under Chapter XIIIA of the Original Side Rules of this Court.

The second in point of time is IA NO.GA/2/2018 (Old

No.GA/3106/2018) which is at the behest of the defendants. By such

application, the defendants seek revocation of leave granted under Clause

12 of the Letters Patent, 1865 and dismissal of the suit.

Since the application of the defendants relates to the jurisdiction of

the Court, it is taken up for consideration first.

The plaintiff filed the instant suit for recovery of money from the

defendants after obtaining leave under Clause 12 of the Letters Patent,

1865. The cause title of the plaint will demonstrate that the plaintiff is

situated within the territorial jurisdiction of this Hon'ble Court. The first

defendant is outside the jurisdiction of this Hon'ble Court. The defendant

nos. 2 to 5 are also outside the jurisdiction of this Hon'ble Court.

In the plaint, the plaintiff claims that the defendant no.1 engaged the

plaintiff for transportation of goods and materials. The defendant nos.2 to 5

are Directors who stood as guarantors for making payment of the

transportation charges. According to the plaintiff, the defendants

approached the plaintiff at the office of the plaintiff within the territorial

jurisdiction of this Hon'ble Court for carriage of the goods. The plaintiff

executed the contract of carriage by delivering goods from the point of origin

to the point of destination at the instance of the defendants. These were

outside the jurisdiction of this Hon'ble Court. The defendants agreed to pay

the transportation charges to the plaintiff at the office of the plaintiff within

the jurisdiction of this Hon'ble Court. The plaintiff raised diverse bills on the

defendants which remains unpaid. According to the plaintiff, the defendants

paid a sum of Rs.4 lakh to the plaintiff on June 30, 2017 at the office of the

plaintiff within the territorial jurisdiction of this Hon'ble Court. The plaintiff

claims a sum of Rs.56,30,000/- from the defendant inclusive of interest.

According to the defendants, no part of the cause of action of the suit

arose within the jurisdiction of the Hon'ble Court. The plaint does not

disclose any cause of action against the defendants. The plaintiff has no

cause of action against the defendant nos. 2 to 5. According to the

defendants, the suit is barred by law. The plaintiff filed the instant suit with

ulterior motive and collateral purposes. The names of the defendant nos. 2

to 5 should be struck off from the plaint. The defendant nos. 2 to 5 do not

have any personal liability in respect of the transactions between the

defendant no.1 and the plaintiff.

In an application under Order 7 Rule 11 of the Code of Civil

Procedure, 1908, the Court is to proceed on the basis of a meaningful

reading of the plaint. As noted above, the claim of the plaintiff is on account

of bills raised for transportation charges. The plaintiff is situated within the

territorial jurisdiction of this Hon'ble Court. The plaintiff claims that the

contract was entered into within the jurisdiction of this Hon'ble Court. The

defendant made part payments to the plaintiff at the office of the plaintiff

within the territorial jurisdiction of this Hon'ble Court. The defendants did

not deny the factum of payment. According to the plaintiff, a part of cause of

action of the instant suit arose within the jurisdiction of this Hon'ble Court.

In fact, it cannot be said that no part of the cause of action of the plaintiff

within the territorial jurisdiction of this Hon'ble Court. Therefore leave under

Clause 12 of the Letters Patent, 1865 granted cannot be revoked as prayed

for by the defendants.

The defendants have not cited any law, under which the claim of the

plaintiff stands barred.

So far as the claim for guarantee of the defendant nos. 2 to 5 is

concerned, the same is an issue of fact. At this stage, the Court need not

decide such issue finally without affording the parties an opportunity to lead

evidence.

The defendants in support of the contention that the Hon'ble Court

has no jurisdiction to try, entertain and determine the suit, relies upon

purchase orders which the defendants placed on the plaintiff, containing a

forum selection clause.

The purchase orders which the defendants rely upon are not signed

by the plaintiff although there is a portion in the purchase order which

allows the plaintiff to sign. The defendants rely upon the order dated August

31, 2016. The order is of two pages. The order contains the terms and

conditions at the first page. At the second page, the service order claims

itself to include two annexures. Annexure 1 to the service order are of two

pages. None of the two pages are signed by the plaintiff. The order contains

a clause that the Courts of Hyderabad in India shall have jurisdiction to deal

with and decide the matter arising out of a proposed contract/work order.

The forum selection clause which the defendant relies upon speaks of

a proposed contract/work order. It pre-supposes that the plaintiff would

accept the terms and conditions for a contract to come into being. Therefore,

there is a space for the signature of the plaintiff. The plaintiff did not

subscribe its signature at that space in Annexure 1 to the service order. In

such circumstances, I am not in a position to accept the contention of the

defendant that there exist a valid forum selection clause between the

parties.

In such circumstances, I find no merit in this application being IA

NO.GA/2/2018 (Old No.GA/3106/2018).

So far as the application being IA No. G.A. No. 1 of 2018 (Old

No.GA/2282/2018) is concerned the plaintiff acted on the basis of the

orders of the defendants for transportation. It transported materials on

behalf of the defendants. The plaintiff raised bills on the defendants

aggregating to a sum of Rs.51,70,555.25/-. The defendants made a part

payment of Rs.4,00,000/- after adjusting such part payment a sum of

Rs.47,70,555.25/- became due and payable by the defendants to the

plaintiff.

The defence in the affidavit-in-opposition to the application under

Chapter 13A of the Original Side Rules is that, the defendants suffered huge

losses and damages on account of short supply of the materials by the

plaintiff. In the affidavit-in-opposition, the defendants raise a claim of

Rs.91,85,000,/- against the plaintiff. Significantly, the defendants adjusted

the claim of the plaintiff of Rs.47,70,555.25/- against the claim on account

of damages by the defendants.

Adjustment is possible only when the amount due to the plaintiff by

the defendants is admitted.

In support of the claim that the defendants suffered losses and

damages, four electronic mails are relied upon. The electronic mails are from

March 3, 2016 till February 12, 2017. There is no follow up action by the

defendants on such electronic mails. Electronic mails complain of short

delivery of certain items. The value of the short delivery are not specified in

the electronic mails. The defendants did not take any steps

contemporaneously to realize the value of the short delivered items. The

defendants unconditionally paid a sum of Rs.4,00,000/- to the plaintiff

towards part payment of the billing amount on June 13, 2017 much after

the complaints of short delivery. Moreover, as the claim of the defendants on

account of damages suggests, it is in excess of Rs.90,00,000/-. As on date,

such claim is barred by limitation. The defendants did not take any steps for

realizing such claim on account of damages from the plaintiff. In such

circumstances, the defence sought to be raised by the defendants are found

to be moonshine and of no substance.

The defendant nos. 2 to 5 are the Directors of the defendant no. 1. The

plaintiff claims that the defendant nos. 2 to 5 are the guarantors of the

payment of the defendant No. 1. The defendant nos. 2 to 5 claims that they

did not guarantee payment to the plaintiff and moreover, they acted as

Directors and cannot be held liable as guarantors. There is no written

document of guarantee on record. The defence of the defendant nos. 2 to 5

is plausible and can succeed at the trial.

The defendants rely upon (2017) 1 SCC 568 (IDBI Trusteeship

Services Ltd. v. Hubtown Ltd.) and submits that, the defendants come

within clauses (a) and (b) of paragraph 18 of such judgment and, therefore,

entitled to unconditional leave to defend. IDBI Trusteeship Services Ltd. v.

Hubtown Ltd. (supra) considers various authorities on the provisions of

Order XXXVII Rule 3 of the Code of Civil Procedure, 1908 and is of the

following view:-

"18. Accordingly, the principles stated in paragraph 8 of Mechelec's case will now stand superseded, given the amendment of Order XXXVII Rule 3, and the binding decision of four judges in Milkhiram's case, as follows:

a. If the Defendant satisfies the Court that he has a substantial defence, that is, a defence that is likely to succeed, the Plaintiff is not entitled to leave to sign judgment, and the Defendant is entitled to unconditional leave to defend the suit;

b. if the Defendant raises triable issues indicating that he has a fair or reasonable defence, although not a positively good defence, the Plaintiff is not entitled to sign judgment, and the Defendant is ordinarily entitled to unconditional leave to defend; c. even if the Defendant raises triable issues, if a doubt is left with the trial judge about the Defendant's good faith, or the genuineness of the triable issues, the trial judge may impose conditions both as to time or mode of trial, as well as payment into court or furnishing security. Care must be taken to see that the object of the provisions to assist expeditious disposal of commercial causes is not defeated. Care must also be taken to see that such triable issues are not shut out by unduly severe orders as to deposit or security; d. if the Defendant raises a defence which is plausible but improbable, the trial Judge may impose conditions as to time or mode of trial, as well as payment into court, or furnishing security. As such a defence does not raise triable issues, conditions as to deposit or security or both can extend to the to the entire principal sum together with such interest as the court feels the justice of the case requires. e. if the Defendant has no substantial defence and/or raises no genuine triable issues, and the court finds such defence to be frivolous or vexatious, then leave to defend the suit shall be refused, and the Plaintiff is entitled to judgment forthwith; f. if any part of the amount claimed by the Plaintiff is admitted by the Defendant to be due from him, leave to defend the suit, (even if triable issues or a substantial defence is raised), shall not be granted unless the amount so admitted to be due is deposited by the Defendant in court."

In the facts of the present case, in my view, the plaintiff is entitled to a

decree against the defendant No. 1 for a sum of Rs.47,70,555.25/- being the

principal amount of the claim after adjusting a sum of Rs.4,00,000/- paid

by the defendants. So far as interest is concerned, since the transactions

between the parties are commercial in nature, the plaintiff will be entitled to

interest at the rate of 12% from the date of institution of the suit on the sum

of Rs.47,70,555.25/-. The claim on account of interest for the period prior to

this date is relegated to the trial of the suit. So far as the claims as against

the defendant nos. 2 to 5 are concerned, the same are relegated to suit.

The defendants are at liberty to file written statement within one week

from date.

IA No.: G.A. No. 1 of 2018 (Old No.GA/2282/2018) is disposed of