M/S Interarch Building Products ... vs M/S Aurangabad Electrical ...
2012 Latest Caselaw 815 Del

.*             HIGH COURT OF DELHI: NEW DELHI

+           I.A. No.20921/2011 in C.S. (OS) No. 942 of 2009

%                                   Judgment decided on: 07.02.2012

M/s Interarch Building Products Pvt. Ltd.             ..... Plaintiff
                      Through: Mr. Sanjiv Bahl, Adv. and
                                 Mr. Ekant Bahl, Adv.

                        versus

M/s Aurangabad Electrical Pvt. Ltd.                 ..... Defendant
                    Through: Mr R.F. Tofale, Adv. with
                                Mr. Ashutosh Dubey and Ms. D.
                                Anand, Advs.
CORAM:
HON'BLE MR. JUSTICE MANMOHAN SINGH

MANMOHAN SINGH, J. (Oral)

1. This application has been filed by the defendant under Section 20 of CPC for deciding the issue of territorial jurisdiction as a preliminary issue for the trial of the present suit filed by the plaintiff for recovery of Rs.41,64,170/- against the defendant.

2. In nutshell, the case of defendant in the present application is that from the documents filed by the plaintiff like "Exh. P-1" i.e. the Project purchase order dated 16.08.2005 issued by the defendant which is at page 16 alongwith the plaint wherein it is clearly mentioned "Subject to Aurangabad Jurisdiction" and the Commercial Bill for Rs.1,56,48,360/- issued by the plaintiff Company to the defendant from its Branch Office at Worli Mumbai and placed on record by the plaintiff at page No. 19, it becomes clear that the plaintiff is having its

branch Office at Mumbai from where the project for design and fabrication was handled and invoice was raised. Therefore, it is clear that only Aurangabad Court has territorial jurisdiction to decide this case.

3. Further, the plaintiff has admitted all the documents filed by the defendant marked as Exh. "D-1 to D-2" and on the perusal of the said documents it would further become clear that the plaintiff has issued the invoices in the name of their Branch Office and the entire project was handled from Branch Office. It is also stated that the mere fact that the plaintiff has its registered office at Delhi, will not give jurisdiction to this court.

4. It is also stated by the defendant that the written statement and counterclaim was filed in this case during the prescribed period of limitation and on the same date a separate application being I.A. No.1446/2009 was also filed requesting to frame the preliminary issue of territorial jurisdiction of court however, during the hearing of the said application it was noticed that the same had been filed under the incorrect provision of CPC therefore, the defendant sought liberty to file fresh application under the correct provision and the same was granted by this court vide order dated 02.11.2011. It is further stated that while the I.A. No.1446/2009 was pending for hearing, the plaintiff filed the list of witnesses and evidence affidavit and is now trying to take benefit of this fact by saying that the evidence affidavit is already filed and it is for cross-examination and further filed an application that by way of present application the defendant is trying to delay the matter. However, factually it is incorrect, as it is evident from the

record that application for preliminary objection was filed at earliest and while it was pending for consideration, the plaintiff filed its affidavit. But, that will not make the present application infructuos and take away the right of the defendant to request to decide the issue of jurisdiction at a preliminary stage.

5. The defendant is relying on the case of Patel Roadways Ltd., Bombay vs. M/s. Prasad Trading Company, (1991) 4 SCC 270 wherein it was held that where the corporation has a subordinate office in the place where the cause of action arises, it cannot be heard to say that it cannot be sued there because it does not carry on business at that place. It would be a great hardship if, in spite of the corporation having a subordinate office at the place where the cause of action arises (with which in all probability the plaintiff has had dealings), such plaintiff is to be compelled to travel to the place where the corporation has its principal place.

6. The plaintiff in its reply to the present application has stated that this court has territorial jurisdiction to entertain the present suit as there is no exclusive clause of jurisdiction conferred on the court of Aurangabad and the question of jurisdiction, is a mixed question of law and facts which cannot be decided as a preliminary issue. Hence, the present application should be dismissed. It is also stated that the plaintiff is only relying on the purchase order to the extent of showing to the defendant that the entire work was completed as per the terms of the purchase order.

7. According to the plaintiff, this court has jurisdiction because the defendant approached the plaintiff at Delhi, the transaction took

place at Delhi and the plaintiff executed entire purchase order from its registered office at Delhi and only a few invoices were raised by the plaintiff from their branch office at Mumbai. However, as per clause 7 of the terms and conditions of the invoices raised by the plaintiff and accepted by the defendant it was clear between the parties that only Delhi courts will have jurisdiction.

8. The plaintiff has invoked the territorial jurisdiction of this Court in view of the statement made in para 11 of the plaint. The same reads as under:

"11. That the Hon‟ble Court has jurisdiction to try the present suit as the defendants approached the plaintiff at Delhi and negotiations took place at Delhi and the plaintiff handled the entire project from its registered office at Delhi and the cause of action has arisen at Delhi and the payments were to be made at Delhi and infact part-payments have been made at Delhi. Further as per the invoices raised by the plaintiff and duly accepted by the defendant it was expressly agreed between the parties that only the Courts at Delhi alone shall have the jurisdiction. Further the debtor should find the creditor and make the payment at a place where creditor is situated."

9. Issues were framed on 13.12.2010 and there was no specific order at that time to treat the issue No.(b) as a preliminary issue. The plaintiff has already produced the evidence by way of affidavit. Although the defendant‟s application was pending at the time of framing of issues. The plaintiff filed the list of witnesses as well as affidavit in evidence. When the matter was listed for plaintiff‟s witness‟s cross-examination, the defendant insisted for fixing the date

for hearing the defendant‟s application to frame the issue No.(b) as preliminary issue which is as under:

"(b) Whether this Court has the jurisdiction to try and adjudicate the suit? OPD"

10. No doubt, the plaintiff has to prove the territorial jurisdiction of this Court at the appropriate time. However, it appears from issue No.(b) that the burden of proving the said issue lies on the defendant. In view of the specific statement made in para 11 of the plaint, it is stated that the negotiations about the subject matter of the goods took place at Delhi. The payments were also made at Delhi, which was also accepted in Delhi. The plaintiff has also office in Delhi. On these counts, the plaintiff has invoked the jurisdiction of this Court. The learned counsel for the plaintiff has referred to the following judgments in support of his submissions:

1. Srodeep Polymers Ltd. v. SCJ Master Batches: 179 (2011) DLT 595.

2. J.C. Enterprises (Regd.) v. Ranganatha Enterprises: 178 (2011) DLT 689.

3. AVN Tubes Ltd. v. Shishir Mehta: (2008) 3 SCC 272.

11. Relevant para of Srodeep Polymers Ltd. (supra) reads as under:

"10. Under Section 20 of the Code of Civil Procedure, the Court gets jurisdiction if the defendant resides or carries for business or personally works for gain within the local limits or jurisdiction or the cause of action arises, wholly or in part within such local limits. In the present case, the defendant had their registered office as also their sales office at Delhi. As has been held by the Supreme Court in AIR 1989 SC

1239, A.B.C. Laminart Pvt. Ltd. Vs. A.P. Agencies that as regards construction of an ouster clause when words like „alone‟, „only‟, „exclusive‟ and the like have been used there may be no difficulty; even without such words in appropriate cases the maxim „expressio unius est exclusio alterius‟- expression of one is the exclusion of another-may be applied; it would depend upon the facts of each case. In view of the averments made in the plaint as also the admitted fact that the registered office and sales office of the defendant company is in Delhi; part payments of the transaction had also been made by the defendant from his Delhi Bank, it cannot be said that the jurisdiction of the Delhi Courts is excluded."

12. Relevant paras of J.C. Enterprises (Regd.) (supra) read as under:

"11. A.B.C. Laminart Pvt. Ltd. and another Vs. A.P. Agencies, Salem, (1989) 2 SCC 163, the Supreme Court while dealing with the issue of territorial jurisdiction of the Court observed that the jurisdiction of the Court in the matter of a contract will depend on the situs of the contract and the cause of action arising through connecting factors. It was further observed that a cause of action is a bundle of facts, which, taken with the law applicable to them, gives the plaintiff a right to relief against the defendant and comprise every fact necessary for the plaintiff to prove to enable him to obtain a decree, through it has no relation CS(OS)No. 1443/1999 Page 14 of 29 whatever to the defence which may be set up by the defendant. It was also held that the performance of a contract being part of cause of action, a suit in respect of its breach can always be filed at the place where the

contract should have been performed or its performance completed. It was further held that part of cause of action arises where money is expressly or impliedly payable under the contract.

12. In a suit for price of the goods sold and delivered which in effect is also the suit for breach of contract on the part of the defendant by not paying the price of the goods in terms of the agreement between the parties, the cause of action, within the meaning of Section 20(c) of the Code of Civil Procedure arises at the following places:-

(i) The place where the contract was made.

(ii) The place where the contract was to be performed which in such a contract would mean the place where the goods were delivered to the purchaser and

(iii) The place where money in performance of the contract was payable, expressly or impliedly.

The plaintiff, may in his choice, sue the defendant at any of these three places unless the parties by

have restricted the jurisdiction to a particular place, by agreeing that in the event of a dispute arise between them, the Court at a particular place alone would have jurisdiction to resolve the same. As per illustration (a) to Section 20 of the Code of Civil Procedure, if A, a tradesman in Calcutta sells goods to B who is carrying on business in Delhi and on the request of B, A delivers the goods to Railway in Calcutta, A may sue B for price of goods either in Calcutta, where the cause of action has arisen or in Delhi, where B carries on business. This illustration

clearly shows that cause of action does arise at the place where the goods are delivered by the seller to the purchaser.

13. If the goods are handed over to the carrier for delivery directly to the consignee, the property in the goods passes to the consignee, the moment they are delivered to the carrier/courier for the purpose of delivering them to the consignee, since the consignee thereafter has no control in those goods and the carrier/courier is bound to deliver them only to the consignee. Section 23(1) of the Sale of Goods Act, 1930 provides that where there is a contract for the sale of unascertained or future goods by description and CS(OS)No. 1443/1999 Page 16 of 29 goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer or by the buyer with the asset of the seller, the property in the goods thereupon passes to the buyer. Such assent may be express or implied, and may be given either before or after the appropriation is made. Sub-Section 2 of this Section, to the extent it is relevant, provides that where, in pursuance of the contract, the seller delivers the goods to the buyer or to a carrier for the purpose of transmission to the buyer and does not reserve the right of disposal, he is deemed to have unconditionally appropriated the goods to the contract. Since the goods handed over to the courier at Delhi were deliverable to the defendant and not to the order of the plaintiff or his agent, the plaintiff did not reserve any right of disposal of those goods, while handing them over to the courier. Therefore, the property in the lottery tickets handed over by the plaintiff to the courier at

New Delhi passed to the defendant, the moment the goods were handed over to the courier for delivery to him and, therefore, the tickets shall be deemed to have been delivered to the defendant at New Delhi. Section 39(1) of the Sale of Goods CS(OS)No. 1443/1999 Page 17 of 29 Act, to the extent it is relevant, provides that where, in pursuance of a contract of sale, the seller is authorised or required to send the goods to the buyer, delivery of the goods to a carrier, whether named by the buyer or not, for the purpose of transmission to the buyer, or delivery of the goods to a wharfinger for safe custody, is prima facie deemed to be a delivery of the goods to the buyer. Since the lottery tickets for price of which the present suit has been filed were delivered to the defendant at Delhi through R. South Couriers, the part of cause of action arose in the jurisdiction of this Court and, therefore, in view of the provisions contained in Section 20(c) of the Code of Civil Procedure, Delhi Court has jurisdiction to try the suit."

13. Relevant para of AVN Tubes Ltd. (supra) reads as under:

"3. Without going into the merits as to whether the court in which the suit has been instituted has territorial jurisdiction to decide the suit or not, we feel that the ends of justice would be served if the issue regarding territorial jurisdiction is taken up and decided by the trial court along with other issues without being influenced by the observations made either by the trial court or by the High Court in the revision petition. Consequently, the trial court in which the suit has been instituted shall proceed to decide the suit on all issues. In the event the trial court comes to the conclusion that the court in which the suit has been instituted does not have the

territorial jurisdiction to decide the same, the suit can be dismissed on that ground. Otherwise, the trial shall decide the suit on merits. With this direction, the appeal is disposed of. There shall be no order as to costs."

14. As already referred to above, a specific statement has been made by the plaintiff in para 11 of the plaint coupled with the fact that the matter is almost at the final stage and the plaintiff has to prove the jurisdiction as per the averments made in the plaint, therefore, I am not inclined to allow the present application at this stage to treat the issue No.(b) as a preliminary issue. I am of the view that the objection raised by the defendant has to be ultimately decided after the trial. The present application is accordingly dismissed.

15. It is clarified that the objection raised by the defendant about the territorial jurisdiction would be considered on merit and without the influence of the order passed in the present application.

16. The application is disposed of.

C.S. (OS) No. 942/2009

List the matter before Joint Registrar on 25.04.2012 for directions.

MANMOHAN SINGH, J.

FEBRUARY 07, 2012