M/S Sujyoti India (P) Ltd vs South Eastern Coalfields Ltd
2021 Latest Caselaw 2236 Chatt

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                                                                       NAFR
             HIGH COURT OF CHHATTISGARH, BILASPUR

                    Order Reserved on : 12.08.2021

                     Order Passed on : 09/09/2021

                        W.P.(227) No. 782 of 2019

M/s Sujyoti India (P) Ltd., a company registered under the Companies
Act, 1956, having its office at 2nd Floor, Nexus Point, Vidhan Bhavan
Square, Civil Lines, Nagpur 440 001 (Maharashtra), through its
authorized representative/Director Shri Atul Doshi, S/o. Shir Dalichand
Doshi, aged about 54 years. (Defendant No. 2)

                                                              ---- Petitioner

                                  Versus

1.    South Eastern Coalfields Ltd., (A Mini Ratna Public Sector
      Undertaking) (A subsidiary of Coal India Ltd. ), Through : its O/o.
      the General Manager (MM), SECL Bhawan, Post Box No. 60,
      Seepat Road, Bilaspur 495006 Chhattisgarh. (Plaintiff).

2.    M/s. SKF India Limited, Mahatma Gandhi Memorial Building,
      Netaji Subhash Road, Mumbai 400 002 (Maharashtra) (Defendant
      No. 1).

                                                          ---- Respondents

AND

W.P.(227) No. 901 of 2019

SKF India Limited, having its registered office at Mahatma Gandhi Memorial Building, Netaji Subhash Road, Mumbai - 400002, Through Rani Varghese, Sr. Legal Counsel, Duly Authorized By S K F India Ltd.

---- Petitioner

Versus

1. South Eastern Coal Fields Ltd., through its Chairman-cum-

Managing Director, S.E.C.L. Head Quarters, Post Office No. 60, Seepat Road, Bilaspur Chhattisgarh.

2. M/s. Sujyoti Bearing India Pvt. Ltd., through : its Director, having its office at 2nd Floor, Nexus Point, Vidhan Bhawan Square, Civil Lines, Nagpur - 440001.

                                                          ---- Respondents




For Petitioner                        : Mr. Shashank Thakur, Advocate
(in W.P.227) No. 782 of 2019)

For Petitioner                        : Mr. Jatin Joshi, Advocate
{In W.P.(227) No. 901 of 2019}

For Respondent No.1                 : Mr. Vivek Chopda, Advocate.

{In W.P.(227) No.782 and W.P.(227) 901 of 2019}

For Respondent No.2 : Mr. Jatin Joshi, Advocate {In W.P.(227) No. 782 of 2019}

For Respondent No.2 : Mr. Shashank Thakur, Advocate {In W.P.(227) No. 901 of 2019}

Hon'ble Shri Justice Rajendra Chandra Singh Samant

C A V Order

1. Both the petitions have been brought being aggrieved by the order

dated 05.07.2019, passed in Civil Suit No.2-B/2018, passed by the

learned Commercial Court at Naya Raipur, District - Raipur (C.G.).

2. Respondent No.1 has instituted a civil suit against the petitioners

in both the cases, which is registered as Civil Suit No.2-B/2018

making a claim of amount of Rs.2,06,75,810.89 and interest

Rs.2,71,76,339.00 along with other reliefs.

3. The petitioners/defendant No.1 and 2 filed a separate applications

under Order 7 Rule 11 of C.P.C. that no cause of action has arisen

and secondly the civil suit filed is barred by limitation. The learned

Commercial Court has passed common order which is impugned

on both the applications and dismissed both the applications filed

by the petitioners.

4. Learned counsel for the petitioner (in W.P.(227) No. 782 of 2019)

would submit that the impugned order is erroneous, arbitrary and

illegal. Rate contract for supply of goods between the parties is

dated 11.12.1995. The agreement was between Western Coal

Fields Limited and the petitioner- S.K.F. Bearings India Limited.

After the supplies were made, on the basis of the report of Central

Vigilance Commission dated 05.05.2016, the civil suit has been

filed in the Court of Commercial Court, which is highly belated.

The supply order was placed on 01.12.1998 to the M/s. S.K.F.

Bearings India Limited, in which the petitioner M/s. Sujyoti India

(P) Ltd. was not a party. Respondent No.1 issued a notice dated

17.12.2018 against the petitioner Sujyoti India (P) Ltd. and

petitioner in other case S.K.F. India seeking refund of differential

amount of Rs.4,78,52,149.89. The petitioner preferred a W.P.(C)

No. 248 of 2019 against this notice, on which the preliminary order

has been passed on 30.01.2019 and the proceeding on the notice

dated 17.12.2018 has been stayed.

5. Referring to Section 230 of Contract Act, 1872, it is submitted that

petitioner Sujyoti India (P) Ltd. was an agent of S.K.F. India (P)

Ltd., therefore, he is not personally bound by the contract, which

was between the respondent No.1 and the S.K.F. Bearing India

Ltd. The petitioner has placed reliance on the judgment of

Supreme Court in case of Board of Control for Cricket India &

Anr. Vs. Netaji Cricket Club & Ors, reported in (2005) 4 SCC

741, in case of Vivek Automobiles Ltd. Vs. Indian INC, reported

in (2009) 17 SCC 657, and in case of Shakti Bhog Food

Industries Ltd. Vs. Central Bank of India & Anr., reported in

2020 SCC OnLine SC 482 and the order of this Court in Review

Petition No.5 of 2021, passed in case of Navkar Trade Links Vs.

Sharda Energy & Minerals Pvt. Ltd. and Anr., decided on

24.02.2021. It is submitted that the impugned order is not

sustainable, therefore, relief be granted to the petitioner -M/s.

Sujyoti India (P) Ltd.

6. Learned counsel for the petitioner appearing in W.P.(227) No. 901

of 2019 submits that the impugned order is against the provisions

of law and thus perverse. It was burden of the respondent No.1 to

issue price fall certificate but the same was never issued to the

petitioner. The rate contract was in force till 30.06.2010, therefore,

after termination of the contract in the year 2010, the suit that has

been filed on 14.02.2018 by the respondent No.1 is much beyond

the limitation. The pleading in the plaint that the cause of action

arose on 05.05.2016 is a baseless statement. Reliance has been

placed on the judgment of Supreme Court in case of State of

Gujrat Vs. Kothari & Associates, reported in (2016) 14 SCC

761, in Fatehji @ Company & Ors. Vs. L.M. Nagpal & Ors.,

reported in (2015) 8 SCC 390, in Bharat Barrel & Drum Mfg.

Company Private Ltd. & Ors. Vs. The Employees' Estate

Insurance Corporation, reported in (1971) 2 SCC 860, in N.V.

Srinivasa Murthy & Ors. Vs. Mariyamma (Dead) by Proposed

Lrs. & Ors., reported in (2005) 5 SCC 548 and in case of T.

Arivandandam Vs. T.V. Satyapal & Ors., reported in (1977) 4

SCC 467.

7. It is submitted that the respondent No.1 has no entitlement for

pursue the suit filed, it being hopelessly barred by limitation.

Hence, the learned Commercial Court should have allowed the

application under order 7 Rule 11 of C.P.C. and rejected the plaint.

The impugned order is unsustainable. Relief be granted to the

petitioner.

8. Counsel for the respondent No.1/S.E.C.L. opposes both the

petitions and the submissions made in these respect. It is

submitted that parties to the rate contract dated 11.12.1995 were

Western Coal Fields Limited and the petitioner S.K.F. Bearing

India Ltd., which was later on adopted by the respondent No.1

after its constitution. The rate contract was extended from time to

time and that has continued up till 30.06.2010. During this period,

the supplies were made by the petitioner. Petitioner in both the

cases were bound by Clause -12 of the rate contract according to

which, the contractor was bound to make supply of the goods on

the rate which should not more than the rates of the supply of the

same goods to other establishments. The Ministry of Coal,

Government of India sent communication dated 04.03.2016

informing that the goods supplied by the petitioners in both the

cases was overpriced. Investigation was conducted and on the

basis of the report, a letter of demand was issued to the petitioner

dated 29.05.2017 for refund of differential price. It is pleaded in the

plaint that cause of action has arisen on 05.05.2016. It is also

submitted that the petitioner Sujyoti India (P) Ltd. is jointly liable for

the default, therefore, he shall not be able to get any relief under

Section 230 of Contract Act, 1872. It is further submitted that it is a

case in which there was fraudulent concealment by the petitioners

in both the cases regarding actual price of the goods supplied,

which came to the knowledge of the respondent No.1 later on.

Therefore, the pleading in the plaint that cause of action has

arisen after knowledge regarding variation for price was received

by the respondent no.1 has to be determined on the basis of the

evidence, which can be led only in the trial. Therefore, the

question of limitation raised in this case is a mixed question of

facts and law. It is pleaded in the plaint that the petitioner S.K.F.

India (P) Ltd./defendant No.1 had by letter dated 14.04.1998

authorized the petitioner Sujyoti India (P) Ltd./defendant No.2 and

has authorized stockist and agent for effecting supply upon the

plaintiff on various orders received. Subsequent to which, the

goods were supplied by the Sujoyoti India (P) Ltd. to the

respondent No.1. Therefore, the petitioner in both the cases are

jointly and severally liable for the acts done by them. The

impugned order does not suffer from any infirmity, therefore, both

the petition be dismissed.

9. I have heard the learned counsel for the parties and perused the

documents placed on record.

10. Order 7 Rule 11 of C.P.C. provides as follows :-

"11.Rejection of plaint.- The plaint shall be rejected in the following cases:--

(a) where it does not disclose a cause of action;

(b) where the relief claimed is undervalued, and the plaintiff, on being required by the court to correct the valuation within a time to be fixed by the Court, fails to do so;

(c) where the relief claimed is properly valued, but the plaint is written upon paper insufficiently stamped,

and the plaintiff, on being required by the Court to supply the requisite stamp paper within a time to be fixed by the Court, fails to do so;

(d) where the suit appears from the statement in the plaint to be barred by any law;

             (e)    where it is not filed in duplicate;

             (f)    where the plaintiff fails comply with the
             provisions of Rule 9.

Provided that the time fixed by the court for the correction of the valuation or supplying of the requisite stamp papers shall not be extended unless the court, for reasons to be recorded, is satisfied that the plaintiff was prevented by any cause of an exceptional nature for correcting the valuation or supplying the requisite stamp paper, as the case may be; within the time fixed by the Court and that refusal to extend such time would cause grave injustice to the plaintiff."

11. The dispute raised by the petitioners is that the cause of action

had accrued to the respondent No.1/plaintiff in the year 2010 and

on that starting point of limitation, a suit could have been filed

within a period of three years from that date in the year 2010. The

pleading in the plaint is this that the respondent No.1/plaintiff came

to knowledge regarding supply of goods at escalated price in the

year 2016 from the communication received from the Central

Vigilance Commission and on that basis it is pleaded that, cause

of action has arisen in the year 2016, therefore, the suit is within

limitation.

12. In case of T. Arivandandam Vs. T.V. Satyapal (Supra), it was

held that if on a meaningful not formal reading of the plaint, it

seems manifestly vexatious, and meritless, in the sense of not

disclosing a clear right to sue, then the Court can exercise its

power under Order 7 Rule 11 of C.P.C.. In the present case, the

respondent No.1 has pleaded regarding the loss occurred due to

the difference in price for supply of the goods, which is the cause

of action. In case of Popat and Kotecha Property Vs. State

Bank of India Staff Association, reported in (2005) 7 SCC 510,

in which it was held that in case of consideration as to whether the

plaint filed is hit by Clause- (d) of Order 7 Rule 11 of C.P.C., which

pertains to limitation, only where the statement made by the

plaintiff in the plaint without any doubt or dispute shows that the

suit is barred by any law in force only then the plaint can be

rejected, if otherwise there are diverse claim made by the parties

in that case, the Order 7 Rule 11 of C.P.C. shall not be applicable.

In case of Church North India Vs. Lavaji Bhai Ratanjibhai &

Ors., reported in AIR 2005 SC 2544, it is very clearly held that

plea of bar to jurisdiction of civil Court must be considered having

regard to the contentions raised in the plaint only.

13. The contention of the respondent No.1/plaintiff that the cause of

action has arisen in the year 2016, is being based under Section

17 of the Limitation Act, that difference in price was concealed by

the defendants which came to knowledge of respondent in the

year 2016, therefore, the dispute raised by the

petitioners/defendants on this point appears to be a mixed

question of facts and law, which can be determined only after the

parties have led their evidence. Apart from that the pleading in the

plaint in this respect that the cause of action has arisen in the year

2016 and thus the civil suit was filed on 14.02.2018 within

limitation. Therefore, any statement beyond the pleading of the

plaint can not be taken into consideration under Order 7 Rule 11 of

C.P.C. Hence, on this basis, I am of this view that the learned

Commercial Court has not committed any error in holding that the

issue of limitation is a mixed question of facts and law, which is

required to be decided on merits.

14. The issue raised by the petitioner - Sujyoti India (P) Ltd. that in

capacity of being an agent of the petitioner S.K.F. India (P) Ltd., he

has made the supply of the goods to the respondent No.1 on

behalf of the petitioner S.K.F. India (P) Ltd., therefore, he is

exempted from being prosecuted under Section 230 of the

Contract Act. This issue also can not be decided under Order 7

Rule 11 of C.P.C., as it is clear pleading of the respondent

No.1/plaintiff that the petitioners in both the cases, who are

defendants in the civil suit are jointly and severally liable. The

power under Order 7 Rule 11 of C.P.C. can be invoked on the

basis of the pleading made in plaint only. Further the issue of

liability of a defendant party is not within the scope of Order 7 Rule

11 of C.P.C. Pleading of non liability has to be made in written

statement and that shall be decided in the trial. Therefore, I am of

this view that the impugned order does not suffer from any

infirmity.

15. Resultantly, both the petitions are devoid of merits, which are

dismissed accordingly.

Sd/-

(Rajendra Chandra Singh Samant) Judge

Balram