Telangana High Court
M/S. Rajeshwari Constructions vs Government Of Andhra Pradesh And 3 ... on 27 January, 2025
Author: N. Tukaramji
Bench: P.Sam Koshy, N.Tukaramji
THE HON'BLE SRI JUSTICE P. SAM KOSHY
AND
THE HON'BLE SRI JUSTICE N. TUKARAMJI
CIVIL MISCELLANEOUS APPEAL NO.465 OF 2008
JUDGMENT:
(Per Hon'ble Sri Justice N. Tukaramji)
Challenging the propriety of the decree and judgment dated
15.11.2007 in O.S.No.161 of 2003 passed by the XII Additional
Chief Judge, City Civil Court, Hyderabad, the plaintiff preferred
this appeal.
2. We have heard Sri M.V. Durga Prasad, learned Senior
Counsel for the appellant and the learned Additional Government
Pleader for Irrigation representing the respondents.
3. The relevant facts in brief are that the appellant as plaintiff
filed the suit seeking direction to the defendants to render the
accounts and settle the bills by paying an amount estimated at
Rs.94,98,907/- with future interest at 24% per annum with costs.
The Court below having considered the issues, on the ground of
territorial jurisdiction returned the plaint for its presentation before
the appropriate Court. Aggrieved thereby, the plaintiff preferred
this appeal.
2 PSKJ&NTRJ,
cma_465_2008
4. Learned counsel for the appellant would submit that though
the agreement was entered and the works to be executed i.e.
modernization of K.C.Canal are within Kurnool District, within the
territory of State of Andhra Pradesh as the then Government and
the Principal Office of the Chief Engineer are stationed in
Hyderabad and G.O.Ms.No.36 dated 06.03.1997, Government
Memo dated 07.05.1995 were issued from Hyderabad, part of
cause of action which is within the territorial jurisdiction of the
Court below. He further pleads that as per Section 20(c) of the
Code of Civil Procedure, 1908 (CPC) the Court within which
cause of action arises wholly or partly would have jurisdiction to
try the matter. Additionally pleaded that, while deliberating the
other issues the Court below had favourably accepted the
appellants' entitlement to the suit claim. That apart, the fact of
appellant receiving communication of termination of contract, in
the address within the jurisdiction of the Court below also forms
part of cause of action. Therefore, returning the suit for want of
territorial jurisdiction is ex facie improper and unsustainable, as
such prayed for interference.
5. On this aspect, the learned counsel for the appellant placed
reliance on the following authorities:
3 PSKJ&NTRJ,
cma_465_2008
(i) A.B.C. Laminart Pvt. Ltd. and another v.
A.P.Agencies, Salem - (1989) 2 SCC 163,
(ii) (ii) State of Andhra Pradesh v. T.V.Krishna Reddy
(died) by L.Rs. - 2009 (1) ALD 660 (DB),
(iii) Government of Andhra Pradesh represented by its
Secretary, Irrigation (Project Wing) Department,
Hyderabad and others v. B.Koteshwara Rao and
antoher - 1993(2) ALT 553;
(iv) Kusum Ingots & Alloys Ltd. v. Union of India and
another - (2004) 6 SCC 254,
and asserted that the place of receipt of communication of
termination of contract constitutes part of cause of action, as such
the suit before the trial Court is maintainable.
6. Per contra, learned counsel for the respondents has
pleaded in support of the impugned judgment. He submits that
admittedly the contract, execution of work and the administrative
agency overseeing the work are within the district of Kurnool,
Andhra Pradesh. The respondents/defendants have raised
objection as to territorial jurisdiction in their written statement.
Further at relevant time the then Government over the territory of
Andhra Pradesh was in Hyderabad. As such issuance of
instructions, memos and the Government orders were from
4 PSKJ&NTRJ,
cma_465_2008
Hyderabad but the department was at Kurnool. Thus, merely
pointing to the government order or communication, the
appellant/plaintiff cannot claim cause of action. Even otherwise,
the Court below had granted liberty to present the plaint before
appropriate forum for proper determination of the matter. The
appellant without availing proper remedy, pursuing this appeal.
7. Further by citing the judgment in New Moga Transport Co.,
through its Proprietor Krishanlal Jhanwar v. United India
Insurance Co.Ltd. and others - (2004) 4 SCC 677 pleaded that
the Hon'ble Supreme Court has held that the parties cannot
confer jurisdiction on a Court even by agreement when such
Court otherwise does not have jurisdiction to deal with the matter.
8. We have carefully considered the submissions of the
learned counsel and perused the materials on record.
9. By the rival claims, the essential issue for consideration is
whether the Court below has territorial jurisdiction to entertain the
suit filed by the appellant.
10. It is pertinent to note that to determine the suit claim the
trial Court had framed the following issues:
5 PSKJ&NTRJ,
cma_465_2008
1. Whether the determination of contract is contrary to
G.O.Ms.No.36 dated 06.03.1997?
2. Whether the defendants have committed any breach of
contract because of which the plaintiff could not perform the
remaining part of contract?
3. Whether the plaintiff is entitled to the suit amount?
4. Whether the plaintiff is entitled to the interest, if so, at
what rate?
5. Whether the suit is not maintainable under law and while
deliberating on this aspect, the Court has framed additional
issue i.e. whether this Court has got territorial jurisdiction to
try the suit?
6. To what relief?
11. Having considered the oral and documentary evidence
placed by the parties, the Court below had concluded the issue
Nos.1 to 4 by holding that the appellant is entitled for
Rs.32,13,000/- and Rs.11,16,410/- together with interest at 12%
per annum from the date of termination of contract i.e. 06.03.1997
and 08.07.1999 respectively till realization. However, on issue
No.5 by observing that the Court has no territorial jurisdiction to
decide the matter, declined to pass decree and directed the
appellant to present the suit before the appropriate Court having
jurisdiction.
6 PSKJ&NTRJ,
cma_465_2008
12. In order to appreciate this issue the relevant facts relating
to cause of action needs attention. Admittedly the
respondents/defendants (Superintending Engineer and Chief
Engineer) issued, processed, finalized tender and entered into
agreement with the appellant as per the Government orders,
instructions/directions of the then Government of Andhra Pradesh
from its administrative headquarter at Hyderabad. This factor is
categorically establishing that the Government of Andhra Pradesh
had appointed the respondents of its department to conduct the
proceedings on its behalf. Indisputably, the parties to the contract
can be made liable in case of any breach or for its enforcement.
13. It is pertinent to note that the interface between the State
Government and its department function in a theoretical
framework of principal and agency, though no formal written
understanding, as the function of the respondents are within the
ordinary course of business of the State Government, from the
acts of the situation or out of necessity of the process adopted in
the functioning, the inter connection between the principal i.e.
State and its agency i.e. department is making out an implied
agency. In this position, the implementation of contract by the
third party with the agency would become distinct as the rights
7 PSKJ&NTRJ,
cma_465_2008
and obligations of the principal and the agent would be subject to
the provisions of the contract. Section 226 of the Indian Contract
Act, 1872 (for short, 'the Contract Act') prescribes that when act is
done by an agent within the scope of authority its acts are binding
on the principal. In the case on hand, as the respondent had
acted on behalf of the principal, the principal is also equally liable
as the agent was authorized by the principal to enter into contract.
14. In this view, the jurisdiction of the Courts prescribed under
the Code of Civil Procedure, 1908 (the CPC) if considered, the
jurisdictions of pecuniary territorial and subject matter are the
factors in determining the competency of the Courts to entertain a
cause. Section 9 of the CPC specifies that all the Courts in India
shall have jurisdiction to try all suits of civil nature except for the
suits to which cognizance is expressly or impliedly barred. The
stipulations as to the jurisdiction finds place under Sections 16 to
20 CPC. In regard to territorial jurisdiction Section 20 of CPC
assumes importance as it provides that the suits relating to the
contracts may be instituted either the place where the defendant
ordinarily resides or carries on business or where any part of
cause of action arises. Accordingly by the places enumerated,
different Courts may have jurisdiction to entertain the suit. It is
8 PSKJ&NTRJ,
cma_465_2008
also settled position that the plaintiff as dominus litis has right to
chose forum (See Nahar Industrial Enterprises Ltd vs. Hongkong
& Shanghai Banking Corp - 2009 (9) SCC 646).
15. Pertinently Section 20(3) of CPC provides that a suit shall
be instituted where the cause of action wholly or in part arises.
The Contract Act does not specify the factors which gives rise to
cause of action in whole or in part. Therefore determination of
these aspects shall be considered by co-relating the relevant
facts with the provisions of the Contract Act and the CPC.
16. As opined earlier, respondents' location, place of contract,
execution of work and payments are within the district of Kurnool
of Andhra Pradesh and the employer i.e. principal/the
Government who conducted the proceedings on its behalf,
through the respondents, was at Hyderabad. Therefore, either at
the place of contract or its execution, as well as, at the place of
principal employer/State the respondents can be legally held
liable. For this reason, this Court is of the considered opinion that
institution of suit by the appellant at Hyderabad is acceptable as it
is within the prescription of Section 20 of CPC.
9 PSKJ&NTRJ,
cma_465_2008
17. That apart, it is clear from the findings of the trial Court that
the communication in regard to removal from contract was
intimated to the appellant at Hyderabad. The Hon'ble Supreme
Court in ABC Laminart (supra) has held that the place where the
cessation of contract is received would create part of cause of
action. In these peculiar facts and circumstances, we hold that the
trial Court had jurisdiction to try the suit, as such, finding in the
impugned judgment regarding territorial jurisdiction is liable to be
and is accordingly set aside.
18. At this juncture it shall be noted that, as the other material
issues were determined by the trial Court upon relevant evidence
placed by the appellant and respondents and on due deliberation.
Neither of the parties raised any dispute as to propriety or
otherwise on other issues. In the circumstances, considering the
fact that the findings recorded in the impugned judgment on the
issues 1 to 4 are just and reasonable, the conclusions are hereby
confirmed.
19. In the result, the appeal is allowed by setting aside the
finding recorded by the trial Court in respect of its territorial
10 PSKJ&NTRJ,
cma_465_2008
jurisdiction to try the suit and by confirming the rest of the
judgment. No costs.
As a sequel, pending miscellaneous petitions if any, stands
closed.
______________
P.SAM KOSHY,J
_______________
N. TUKARAMJI, J
Date :27.01.2025
CCM
