Win Cable & Datacom Pvt. Ltd. vs M/S Grass Link Advertising Pvt. ...
2011 Latest Caselaw 1488 Del

         THE HIGH COURT OF DELHI AT NEW DELHI

%                     Judgment Reserved on: March 08, 2011
                    Judgment Pronounced on: March 15, 2011

+           IA No. 7657/2009 in CS(OS) No.655/2008

WIN CABLE & DATACOM PVT. LTD.                   ....Plaintiff

                            - versus -

M/S GRASS LINK ADVERTISING
PVT. LTD. & ANR.                              .....Defendants

Advocates who appeared in this case:
For the Plaintiff: Mr. Rohit Jain, Adv.
For the Defendant: Mr. N. Kumar, Adv. for def. no. 1
                      Mr. Gajinder Kumar with Ms. Kajal
                      Bhati, Advs. for def. no. 2

CORAM:-
HON'BLE MR JUSTICE V.K. JAIN

1.

Whether Reporters of local papers may be allowed to see the judgment? Yes

2. To be referred to the Reporter or not? Yes

3. Whether the judgment should be reported in Digest? Yes

V.K. JAIN, J

1. This is a suit for recovery of Rs. 24,69,079/-. The

plaintiff company is engaged in the business of reception

and distribution of satellite television, broadcast signal and

other electronic signal primarily to various local cable

operators and business affiliates. Defendant No. 1 is

running an advertising agency which procures

advertisements from various companies for advertising

through cable feed of the plaintiff company. Defendant no.2

is a leading multinational company and the case of the

plaintiff is that the defendant no. 1, while placing orders for

running advertisements on the cable network of the plaintiff

company, was acting as an agent of defendant no. 2

company. It is alleged that the plaintiff company, on

request of defendant no. 1 advertised products of defendant

no. 2 through its cable network and raised invoices on the

defendants from time to time. A sum of Rs. 21,09,335/- is

stated to be outstanding against the defendants towards

payment for the advertisements carried by the plaintiff

company on its network. The case of the plaintiff is that the

defendants have failed to pay the outstanding amount

despite repeated requests. It has accordingly sought

recovery of the principal amount of Rs. 21,09,335/- along

with interest amounting to Rs. 3,59,744/-.

2. In its written statement, the defendant no. 2 has

taken a preliminary objection that this is barred by Order 2

Rule 2 CPC, as the suit amount was not claimed by the

plaintiff company in a previously instituted suit which is

pending in the Court of Additional District Judge. It is

claimed by defendant no. 1 that it was maintaining a

running account with the plaintiff company and there was

no system of maintaining separate accounts for each client

of defendant no. 1 company. On merits, it is alleged that

the invoices have been raised by the plaintiff company

immediately on receipt of release order and without running

the advertisements, meaning thereby that they are merely

proforma invoices which get their confirmation only on

successful running of the advertisement as per the release

order, which, in turn, can be established through the

telecast certificate, with the CDs accompanied by a

monitoring report issued by an independent agency, along

with telecast certificate. According to the defendant, no

such monitoring report has been filed by the plaintiff

company.

It is further alleged that on instructions and

specifications from its client, the defendant no. 1 purchased

advertising time/space in various advertising media

including electronic media. It is claimed that defendant no.

2 had assigned the work of carrying out of advertisements to

defendant no. 1, based upon which it had placed release

orders on the plaintiff company.

3. I.A. No. 7657/2009 has been filed by defendant

No.1 under Order VII Rule 11 read with Order 2 Rule 2 of

the Code of Civil Procedure.

4. The case of the applicant/defendant No.1 is that

the plaint is liable to be rejected under Order VII Rule 11(d)

of the Code of Civil Procedure since it is barred by Order 2

Rule 2 thereof. Order VII Rule 11(d) of the Code of Civil

Procedure provides for rejection of the plaint, if the suit

appears, from the statement made in the plaint to be barred

by any law.

5. The legal proposition in the matter is well- settled.

The Court while considering an application for rejection of

the plaint can look into only the averments made in the

plaint and the documents filed by the plaintiff. The defence

taken by the defendant is not to be considered while

examining such an application and validity of the

documents filed by the plaintiff also cannot be examined at

this stage.

6. A Division Bench of this Court in Inspiration

Clothes & U Vs. Colby International Ltd., 88 (2000) DLT

769, held that the power to reject the plaint can be

exercised only if the Court comes to the conclusion that

even if all the allegations are taken to be proved, the plaintiff

would not be entitled to any relief whatsoever. It was also

observed that where the plaint is based on a document, the

Court will be entitled to consider the said document also to

ascertain if a cause of action is disclosed in the plaint or not

though the validity of the document cannot be considered at

this stage. In Avtar Singh Narula & Anr. Vs. Dharambir

Sahni & Anr. 150 (2008) DLT 760 (DB), this Court reiterated

that the power to reject the plaint has to be exercised

sparingly and cautiously though it does have the power to

reject the plaint in a proper case.

In Popat and Kotecha Property v. State Bank of

India Staff Assn. 2005 7 SCC 510, Supreme Court noted

that the real object of Order 7 Rule 11 of the Code of Civil

Procedure is to keep irresponsible law suits out of the

Courts and discard bogus and irresponsible litigation. It was

further held that dispute questions cannot be decided at the

time of considering an application filed under Order 7 Rule

11 of CPC.

7. In the present case, the suit cannot be said, on the

basis of averments made in the plaint and the documents

filed by the plaintiff, that the suit is barred by any law. In

fact there is no reference in the plaint or in the documents

filed by the plaintiff, to the suit stated to be pending before

the learned Additional District Judge. Therefore, Order VII

Rule 11(d) of Code of Civil Procedure doesn't seem to be

attracted.

8. On merits, the application has been opposed by

the plaintiff. It is stated in the reply that the plaintiff

company has been raising individual invoices in respect of

advertisements which were being carried on its cable feed

on the instructions of defendant No.1 and defendant No.1

had been representing three different multinational

companies before the plaintiff company and each invoice

carried the name of the concerned multinational company

as well as of defendant No.1. It is further stated that the

suits of the plaintiff pending in this Court, before the

Additional District Judge, Delhi and before the Civil Judge,

Delhi are based on various release orders and invoices and

are not based solely on the statement of accounts filed with

the suits. According to the plaintiff, the amounts, which

these multinational companies owe to the plaintiff company

cannot be clubbed in one suit, their liability towards the

plaintiff company being distinct and separate from others.

9. During the course of the arguments, the learned

counsel for the applicant/defendant No.1 stated that he was

pressing the application only under Order 2 Rule 2 of the

CPC.

Order II Rule 2 CPC to the extent it is relevant

provides that every suit shall include the whole of the claim

which the plaintiff is entitled to make in respect of the cause

of action and where he omits to sue in respect of, or

intentionally relinquishes, any portion of his claim, he shall

not afterwards sue in respect of the portion so omitted or

relinquished. The explanation below this Rule to the extent

it is relevant provides that successive claims arising under

the same obligation shall be deemed to constitute one cause

of action.

10. The expression 'cause of action', in the context of

Order II Rule 2 of CPC would mean all those facts which the

plaintiff in order to obtain judgment will have to prove, if

disputed by the defendant. In order to succeed, the plaintiff

will have to prove (i) that defendant No.1, while placing

release orders for advertisements to be carried on the cable

feed of the plaintiff, was acting as an agent of defendantNo.2

company; (2) the release orders placed by defendant No.1

with the plaintiff company from time to time; (3) carrying of

advertisements in terms of the release orders on the cable

feed; (4) that the advertisements were carried by it in

conformity with the release orders placed by defendant No.1

and (5) the amount to which the plaintiff is entitled for

carrying the advertisements on its cable feed. When

different orders are placed from time to time and those

orders are executed on different dates, each order for

carrying advertisements of a particular company would

constitute a distinct and separate cause of action. If all the

advertisements are carried on different dates but under a

common/umbrella contract/order for carrying

advertisements, all the advertisements carried pursuant to

such contract/order may constitute a common cause of

action, despite the advertisement being carried on different

dates. But, where the release orders are distinct, it cannot

be said that all of them constitute a common cause of

action. In order to succeed in the suit, the plaintiff will be

required to prove each and every order placed by defendant

no.1 with it as also carrying of advertisements in terms of

those release orders. In a given case, the parties may agree

that despite orders being placed on different dates and also

being executed on different dates, all the executions of such

orders will constitute a common cause of action or will be

deemed to be part of one unified contract for carrying such

advertisements. However, in the present case, this is not

the case of the parties that the advertisements, which the

plaintiff carried on different dates were executed under a

common contract/order placed by defendant No.1 on it nor

do the parties claim that they had agreed to treat all the

release orders placed on different dates as a

common/unified contract thereby converting it into a

common cause of action.

11. In K.E.A.K. Ahmed Sahib & Co. v. M.K. Pakir

Mohamed Rawther, 1924 Rangoon 145, a Division Bench

of the High Court was of the view that each order and

delivery of goods is a separate transaction and a separate

cause of action, unless they are successive claims arising

under the same obligation within the explanation at the end

of rule 2 of Order 2. It was further observed that the

question is really dependent on the contract between the

parties. If all the goods were supplied under a single

contract, it would be within the explanation, unless there

was an express stipulation that each delivery or each

month's deliveries should be deemed to be a separate

contract. It was also observed that it was possible that in a

particular case, there may be either a contract, or a course

of dealing from which an implied contract might be inferred

to the effect that the entire series in a particular month or

for other specific period should be treated as a single cause

of action. However, in the case before this Court, neither

there is any contract between the parties to treat all the

transactions as a single contract giving rise to single cause

of action nor is it the case of the parties that the goods were

supplied by the plaintiff to the defendant on different dates

under a single contract.

12. Moreover, the case of the plaintiff before this Court

is that defendant No.1 was acting as an agent of defendant

No.2 while placing release orders with it for carrying

advertisements of defendant No.2 on its cable feed.

Presumably, same is the case of the plaintiff with respect to

advertisements of the other two multinational companies

carried by it on its cable feed, on the instructions of

defendant No.1. At this stage, the Court cannot go into

merits of the case set up by the plaintiff in this regard and

cannot decide whether defendant No.1 while placing release

orders with the plaintiff company was acting as agent of

defendant No.2 or not. If defendant No.1, while placing

release orders with the plaintiff company was acting as the

agent of various multinational companies represented by it,

it was not open to the plaintiff to implead all the three

multinational companies in the same suit, the cause of

action being different against these separate multinational

companies. Order 1 Rule 3 of the CPC, to the extent it is

relevant, provides that all persons may be joined in one suit

as defendants where (a) any right to relief in respect of, or

arising out of , the same act or transaction or series of acts

or transactions is alleged to exist against such persons,

whether jointly, severally or in the alternative; and (b) if

separate suits were brought against such persons, any

common question of law or fact would arise. The plaintiff

company could not have claimed any relief against

defendant No.2 before this Court in the suit, which it had

filed against defendant No.1 M/s Grass Link Advertisement

Pvt. Ltd. and T.C.L. Electronics Pvt. Ltd. and is stated to be

pending in the Court of the Additional District Judge, Delhi.

Therefore, it is difficult to accept that the suit is hit by Order

2 Rule 2 of the CPC merely because in the suit filed against

defendant No.1 and T.C.L. Electronics Pvt. Ltd., the plaintiff

company did not claim the amount involved in the suit.

13. The learned counsel for defendant no.1 has relied

upon the decision of Gujarat High Court in Gujarat

Electricity Board, Baroda and others v. Saurashtra

Chemicals, Porbandar, AIR 2004 Gujarat 83. A perusal

of the judgment would show that the suit in the case before

Gujarat High Court was based on accounts, the subject

matter of the previously instituted suit as well as the

subsequently instituted suit was the same and so were the

parties to the suit, except that State of Gujarat, which was

joined as party defendant in the earlier suit was not joined

as a defendant in the subsequent suit. The Court felt that a

tricky omission of one of the party defendants in whose

absence effective and executable decree could be passed,

would not help the plaintiff in bringing the second suit on

the same cause of action or grievance. It was in these

circumstances that the subsequently instituted suit was

held to be barred by Order 2 Rule 2 of the CPC. The facts of

the case before this Court, however, are entirely different.

Each advertisement carried by the plaintiff pursuant to the

release order placed with it by defendant No.1 constitutes a

distinct cause of action and the parties to the previously

instituted two suits are not common since defendant No.2

was not a party to the previously instituted suit whereas

T.C.L. Electronics Pvt. Ltd. is not a party to the present suit.

Since the case of the plaintiff company is that defendant

No.1 was acting as an agent of defendant No.2, it cannot be

said that defendant No.2 is an unnecessary party to the

suit. This judgment, therefore, does not help the applicant

in any manner.

14. For the reasons given in the preceding paragraphs,

I find no merit in the application and the same is hereby

dismissed.

CS(OS) No.655/2008

The parties shall appear before the Joint Registrar

on 29th March, 2011 for admission/denial of documents.

The matter be listed before the Court on 1st September,

2011 for framing of issues.

(V.K. JAIN) JUDGE MARCH 15, 2011 vkm