Jharkhand High Court
V-E Commercial Vehicles Ltd. ... vs M/S Chanani Transports on 2 April, 2024
IN THE HIGH COURT OF JHARKHAND AT RANCHI
F.A. No. 13 of 2016
V-E Commercial Vehicles Ltd. represented through Dharmender
Gaunigel, Asst. Manager (Legal), A-3, 3rd Floor,Select City Walk,
District Centre Saket, Police Station-Saket, P.O-Saket New Delhi-110017
...... Appellant/Plaintiff
Versus
M/s Chanani Transports, Shivajee Road, P.O. and P.S. Ramgarh Cantt.
District Ramgarh, Jharkhand-829122
......Respondents/Defendant
Original Suit Valued at -Rs. 42,68,700/-
Appeal Valued at Rs. 42,68,700/-
.....
For the Appellants : Mrs. Gunjan Sinha, Advocate
Mr. Nikhil Kumar Mehta, Advocate
For the Res. No.2 : Ms. Amrita Sinha, Advocate
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PRESENT
HON'BLE MR. JUSTICE PRADEEP KUMAR SRIVASTAVA
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JUDGMENT
C.A.V. On 04.01.2024 Pronounced On: 02 .04.2024
1. The instant appeal is directed against the judgment/order dated 11.09.2015
passed by learned Civil Judge, Senior Division Ist, Hazaribagh (now
Ramgarh) whereby and whereunder Title Suit No. 08 of 2015 instituted by
the appellant has been dismissed under Order VII Rule 11 (d) on the ground
of barred by limitation.
2. The factual background of this case in nutshell is that the title suit was
instituted by the appellant before the court below asking relief for mandatory
injunction for direction to the defendant to submit C-Forms in respect of sale
of 5 trippers from the appellant in the month of November, 2010 worth Rs.
3,16,20,000/- (Three Crores Sixteen Lacs and Twenty Thousand Only). A
petition under Section 14 of the Limitation Act was also filed for
condonation of delay of 214 days in filing the said title suit.
The specific case of the appellant/plaintiff before the court below is as
follows:-
(a) Plaintiff i.e. V-E Commercial Vehicle Limited is a 50-50 joint venture
between Volvo Group and Eicher Motors Limited.
(b) The defendant M/s Chanani Transports is a partnership firm engaged in
the business of transportation, finance, travel, etc and managing its business
from Ramgarh, District, (Erstwhile District, Hazaribagh) Jharkhand.
(c) The respondent/defendant contacted the appellant plaintiff to purchase
the commercial vehicle from the plaintiff in pursuance of which appellant
sent quotation to the respondent vide quotation no. QCL 10 SC 0020 dated
06.08.2010.
(d) After receiving the quotation from the appellant and being satisfied with
the same, the respondent placed order for 10 (Ten) commercial vehicles (10
Volvo) FM 400 8x4 tipper with 18.7 Cu.M. Rock Body with Hub Reduction
fitted 12x24 Crossply Tyres (MRF) vide letter dated 26.10.2010.
(e) The respondent requested to appellant to provide invoice of above
vehicle at a concessional CST Rate of 2% for which the respondent had
assured the appellant that they were registered with the Sales Tax
Authorities in the State of Jharkhand and in connection of which respondent
provided the appellant their TIN No. 20950406485. The said TIN No. was
also mentioned in the invoices raised by the appellant.
(f) The appellant quoted the price of the vehicle as Rs. 63,24,000/- (Rupees
Sixty Three Lacs Twenty Four Thousand) , each which was inclusively of
CST @ 2% against Form C.
(g) As per agreement between the parties that in case, the respondent fails to
submit the Form-C, the defendant shall pay the appellant Value Added Tax
(VAT) @13 % on the duty price.
(h) The respondent had further agreed in unequivocal terms that respondent
will forward the said Form-C to the appellant prior to the invoicing/delivery
of the vehicles.
(i) The respondent vide letter dated 26.10.2010 undertook to deliver the
Form-C to the appellant by 31.12.2010 and if not delivered within stipulated
time period, they shall pay the entire non-concessional CST of 13.5%. This
letter was in accordance with terms and condition of the purchase order.
(j) The appellant has invoiced 5 tippers to the respondent on 03.11.2010
based on Form-C billing. The details of which are as follows:-
Vehicle No. Invoice No. Date of Price
Invoice
FM 400 8x4 2201503 3.11.2010 Rs.
Tipper 63,24,000/-
FM 400 8x4 2201504 3.11.2010 Rs.
Tipper 63,24,000/-
FM 400 8x4 2201505 3.11.2010 Rs.
Tipper 63,24,000/-
FM 400 8x4 2201506 3.11.2010 Rs.
Tipper 63,24,000/-
FM 400 8x4 2201507 3.11.2010 Rs.
Tipper 63,24,000/-
Total cost of 5 tippers invoiced was Rs. 3,16,20,000/- which was issued on
assurance given by the respondent that they will submit Form-C before
31.12.2020 to the appellant.
(k) The respondent did not submit Form-C to the appellant as per contract
for sale made between the parties and the appellant was expecting that the
Form-C would be submitted within the same financial year 2010-11 if the
same has not been done by 31.12.2020. As a result of which the appellant
send reminder to the respondent through several letters dated 18.03.2011
(before the end of financial year 2010-11), 25.05.2011, 03.03.2012,
25.05.2012 and 27.06.2012 to do the needful but the respondent did not
respond to any of the reminder letters sent by the appellant/plaintiff.
(l) The appellant once again vide registered post and email dated 18.09.2012
requested the respondent to submit Form-C or pay the sum of Rs.
42,68,700/- (Rupees Forty Two Lacs Sixty Eight Thousand Seven Hundred)
towards non-concessional tax amount.
(m) The appellant vide demand notice dated 18.02.2013 issued to
respondent, demanded a sum to pay Rs. 42,68,700/- with interest at the rate
of 24 % per annum.
3. Learned counsel for the appellant has submitted that due to non-responding
to the letters issued by appellant and its reminder the appellant preferred the
title suit no. 472 of 2013 before Sub-Judge, I, Ranchi. The said suit was
withdrawn on 16.09.2013 due to jurisdictional issue by filing a petition
under Order 23 Rule I CPC. Thereafter, suit was allowed to be withdrawn
vide order dated 09.06.2014 with liberty to file fresh suit before the Court of
competent jurisdiction. It is further submitted that the appellant filed a title
suit no. 08 of 2015 before the Court of Civil Judge, Senior Division,
Hazaribagh with a petition for condonation of delay under Section 14 of the
Limitation Act. But the learned court below held that the suit is time barred
and rejected the application under Section 14 of the Limitation Act and also
the suit vide impugned order/Judgment dated 11.09.2015.
4. It is further submitted that the learned court below has erroneously
considered that the cause of action arose on 31.12.2010 within which period
Form-C has to be submitted and arrived at absolutely erroneous conclusion
and dismissed the suit on the ground of limitation exercising the power
under Order 7 Rule 11 (d) C.P.C. Accordingly, impugned Judgment /order is
liable to be set aside and the suit of the appellant is fit to be heard on merits.
5. The learned counsel for the appellant has placed reliance upon reported
judgment in ShaktiBhog Industries Ltd. Versus Central Bank of India &
Anr 2020) 17 SCC 260.
6. Per contra, learned counsel for respondent has vehemently controverted the
aforesaid points of argument raised on behalf of appellant and submitted that
the learned trial court has gone through the entire averments contained in the
plaint and at the very stage of admission of the suit found that it was barred
by limitation about seven months. The period consumed in correspondence
with the respondent cannot be taken as ground for extension of period of
limitation for institution of a suit. As such, there is no illegality or infirmity
in the impugned order calling for any interference by way of this appeal
which is devoid of merits and fit to be dismissed. The learned counsel for the
respondent has placed reliance upon Judgment rendered in CP. Kapoor
Versus the Chairman and Ors. reported in 2012 SCC Online Delhi Court
5465.
7. I have gone through the record along with the impugned order. The
concluding portion of the same reads as under:-
"After going through the record filed by the plaintiff, it is evident that
defendants have to submit Form-C till 31.12.2010 and from this period the
limitation runs and there is limitation of three years within which the suit
must be filed and as per plaintiff title suit no. 472/2013 filed on 16.09.2013
which was within limitation period and after withdrawal of the suit on
09.06.2014 this suit is filed before this Court on 12.01.2015 i.e after lapse of
214 days which is about seven months. As per Section 15 of the Limitation
Act, duration of pendency of Civil Suit at Ranchi is not taken into account
even then, it should be filed within three and half months but, it is filed after
lapse of seven months. The reason assigned in the application is not
appealing.
Accordingly, the petition filed on 31.07.2015 is rejected and the
suit is also not admitted and hence, it is dismissed."
8. From perusal of the impugned order, it appears that the learned court below
has exercised the power under Order 7 Rule 11(d) which empowers the court
to reject the plaint where the suit appears from the statement in the plaint to
be barred by any law including the law of limitation and also in view of the
provision of Article 113 of the Limitation Act, 1963 which provides
limitation period of three years from the date when right to sue accrues.
This is a residuary provision for limitation period where no specific article
with regard to time period is prescribed under the Act.
9. In the case of Shakti Bhog Food Industries Limited versus Central Bank of
India and Anr. (Supra) as relied upon by the learned counsel for the
appellant, the Hon'ble Apex Court has held that "Order 7 Rule 11 CPC"
gives ample power to the Court to reject the plaint, if from the averments in
the plaint, it is evident that the suit is barred by any law including the law of
limitation. The relevant facts which needs to be looked into for deciding an
application under Rule 11 are the averments of the plaint only. If on entire
and meaningful reading of the plaint, it is found that the suit is manifestly
vexatious and meritless in the sense of not disclosing any right to sue, the
court should reject the plaint. Order 7 Rule 11 (d) makes it clear that if the
plaint does not contain necessary averments relating to limitation, the same
is liable to be rejected. The averments of the plaint have to be read as a
whole to find out whether the averments disclose a cause of action or
whether the suit is barred by any law. It is the bounden duty of the court to
examine the plaint as a whole and not selected averments therein. The
question as to whether the suit is barred by any law, would always
depend upon the facts and circumstances of each case. The averments in
the written statement as well as the contentions of the defendant are wholly
immaterial while considering the prayer of the defendant for rejection of the
plaint. Even when the allegations made in the plaint are taken to be correct
as a whole on their face value, if they show that the suit is barred by any law,
or do not disclose cause of action, the application for rejection of plaint can
be entertained and the power under Order 7 Rule 11 CPC can be exercised."
10. It is further observed that expression used in Article 113 of Limitation Act is
"when the right to sue accrues" which is markedly distinct from the
expression used in other Articles in First Division of the Schedule dealing
with suits, which unambiguously referred to the happening of a specified
event e.g. "Article 58 (when the right to sue "first" accrues), Article 59
(when the facts entitling the plaintiff to have the instrument or decree
cancelled or set aside or the contract rescinded "first" become known to
him) and Article 104 (when the plaintiff is "first" refused the enjoyment of
the right.) Parliament was conscious of the distinction between the
provisions referred to above and had advisedly used generic expression
"when the right to sue accrues" in Article 113 of the 1963 Act. Inasmuch as,
it would also cover cases falling under Section 22 of the 1963 Act, to wit,
continuing breaches and torts. Article 113 being a residuary clause and
which has been invoked by all the three courts in this case, does not specify
happening of particular event as such, but merely refers to the accrual of
cause of action on the basis of which the right to sue would accrue. "If a suit
is not covered by any specific article, then it would fall within the residuary
article. In other words, the residuary article is applicable to every kind of suit
not otherwise provided for in the Schedule."
11. It was further observed that the cause of action for filing the suit would
consist of bundle of facts.
12. Further factum of the suit being barred by limitation, ordinarily, would be a
mixed question of fact and law. Whether this plea taken by the appellant is
genuine and legitimate, would be a mixed question of fact and law,
depending on the response of the respondents.
13. Keeping in mind the above legal aspects and the meticulous examination of
plaint appears to be necessary. In the instant case the plaint discloses that the
transaction for sell of five trippers were entered into with the defendant on
3.11.2010 with undertaking of the defendant to submit Form-C for the
purposes of tax rebate. On the request of defendants the invoice was
prepared at concession CST rate on 2 % and the defendant also provided his
TIN No. It was specifically mentioned that the defendant has to provide
Form C by 31.12.2010 with further undertaking that if the defendant fail to
submit Form-C then they shall pay the plaintiff VAT at the rate of 13.5% on
duty price. There is clear cut averment in the plaint that the defendant
neither furnished the Form C by 31.12.2010 nor as per their undertaking
paid the VAT at the rate of 13.5% in spite of several demand letters send to
them. Ultimately, on 18.02.2013 the plaintiff/appellant send a demand notice
claiming to pay Rs. 42, 68,700/- (Rs. Forty Two Lacs Sixty Eight Thousand
and Seven Hundred) along with interest at the rate of 24 % per annum. It is
also specifically pleaded that none of the letters were ever replied by the
defendant which shows their dishonest intention to misappropriate the said
amount without any legal justification. The date mentioned i.e. 31.12.2010
for submitting the Form-C by the defendant may be "first" day for accruing
the cause of action in favour of plaintiff but it cannot be deemed to be the
date of cause of action for the purpose of computing the period of limitation.
It is also obvious that earlier the suit was filed by the plaintiff before the
wrong court at Ranchi having no territorial jurisdiction which was allowed
to be withdrawn under Order 23 Rule 1 CPC with permission to institute
fresh suit on the same facts. It also appears that for the purpose of condoning
the delay in institution of the suit due to choosing wrong forum, an
application under Section 14 of the Limitation Act was filed. Section 14 of
the Limitation Act reads as under:-
Section 14. Exclusion of time of proceeding bona fide in court without
jurisdiction. --
(i) In computing the period of limitation for any suit the time during which the
plaintiff has been prosecuting with due diligence another civil proceeding,
whether in a court of first instance or of appeal or revision, against the
defendant shall be excluded, where the proceeding relates to the same matter in
issue and is prosecuted in good faith in a court which, from defect of
jurisdiction or other cause of a like nature, is unable to entertain it.
(ii) In computing the period of limitation for any applicant the time during which
the applicant has been prosecuting with due diligence another civil proceeding,
whether in court of first instance or of appeal or revision, against the same
party for the same relief shall be excluded, where such proceeding is
prosecuted in good faith in a court which, from defect of jurisdiction or other
cause of a like nature, is unable to entertain it.
(iii) Notwithstanding anything contained in rule 2 of Order XXXIII of the Code of
Civil Procedure, 1908 (5 of 1908), the provisions of sub-section (1) shall apply
in relation to a fresh suit instituted on permission granted by the court under
rule 1 of that Order, where such permission is granted on the ground that the
first suit must fail by reason of a defect in the jurisdiction of the court or other
cause of a like nature.
Explanation.--
For the purposes of this section,--
(a) in excluding the time during which a former civil proceeding was pending, the day
on which that proceeding was instituted and the day on which it ended shall both be
counted;
(b) a plaintiff or an applicant resisting an appeal shall be deemed to be prosecuting a
proceeding;
(c) misjoinder of parties or of causes of action shall be deemed to be a cause of a like
nature with defect of jurisdiction.
14.In the present case, the plaintiff under bonafide belief to settle the dispute
with the defendeant has waited from the stipulated time on 31.12.2010 till
the end of financial year by sending a notice vide letter dated 18.03.2011 to
defendant to submit Form-C and ultimately demand notice was send as per
terms and conditions undertaken by the defendant on 18.02.2013. Therefore,
within the meaning of Article 113 of the Limitation Act the right to sue also
accrued and continued till the last date of demand notice i.e. 18.02.2013 and
from that date computation of limitation period of three years shall be started
and the period consumed during the pendency of the suit in a wrong forum
before the Ranchi Court from the date of institution till its withdrawal shall
also be excluded within the meaning of Section 14 of the Limitation Act. If
such course is adopted, the suit is well within time and is not barred by
limitation.
15.The argument of learned counsel for the respondent to the effect that the
letters and correspondence entered into by the plaintiff with the defendant
cannot be taken into account for the purposes of computation of limitation
period, does not stand to reason in the factual background of this case which
pertains to continuing breach of obligation on the part of defendant and the
citation relied upon the learned counsel for the respondent CP. Kapoor
(Supra) is also not applicable in the facts and circumstances of the present
case. It is also settled law that question of limitation is a mixed question of
law and facts which can't be decided in a haste to declare the plaintiff non-
suited on that ground alone rather it should be decided on merits after
hearing both the parties.
16.In view of aforesaid discussion and reasons, I find that the learned court
below has failed to property appreciate the whole intends and purpose of the
suit, nature of breach of obligation as alleged and applying the law of
limitation towards the facts averred in the plaint and arrived at erroneous
conclusion in dismissing the suit of the plaintiff/appellant.
17.Accordingly, the impugned Judgment and order dated 11.09.2015 passed in
Title Suit No. 08 of 2015 is not legally sustainable which is hereby set aside
and this appeal is allowed.
18.Let a copy of this order be sent to Court below to admit the suit of the
plaintiff/appellant and proceed further in accordance with law.
(Pradeep Kumar Srivastava, J.)
Jharkhand High Court, at Ranchi
Date: 02 / 04 /2024
Rajnish/- N.A.F.R.
