Delhi District Court
Adj-06(Central) Delhi vs M/S. Sapna Electric Corporation on 10 May, 2010
1
IN THE COURT OF SH. RAJENDER KUMAR SHASTRI
ADJ-06(CENTRAL) DELHI.
CS: 250/09
LAKSHMAN EXPORT PVT LTD.
A-58/2, OKHLA INDUSTRIAL AREA,
PHASE-II, NEW DELHI.
PHOENIX CONTACT (INDIA) PVT. LTD.
A-58/2, OKHLA INDUSTRIAL AREA,
PHASE-II, NEW DELHI.
REPRESENTATED THROUGH ITS
MANAGING DIRECTOR ....PLAINTIFFS
VERSUS
M/S. SAPNA ELECTRIC CORPORATION,
265, THAMBU CHATTY STREET,
CHENNAI. .....DEFENDANT
Date of Institution : 23.9.2005
Date of Judgment : 10.5.2010
Present: Sh. Ratesh Kumar, advocate for plaintiff.
Sh. Yogesh Kaushik, advocate for defendant.
JUDGMENT
This is a suit for recovery of Rs. 3,61,470/- with interest @ 18% per annum, litigation expenses etc. As per its case, plaintiff no. 1 is a private limited company incorporated under The Companies Act, 1956. Same is engaged in the business of manufacturing and supplying of goods like Connector and accessories of connectors of different types and sizes having its office at A- 58/2, Okhla Industrial Area, Phase-II, New Delhi. Plaintiff no. 2 is also a private limited company and subsidiary company of phoenix contact GMBH and Co-Germany for developing in India a wide range of products being manufactured by its holding company in Germany.
Both of plaintiffs entered into an agreement on 15.10.93 by which plaintiff no. 1 undertook inter-alia the development and expansion of its 2 manufacturing activities. One more agreement was entered between both of plaintiffs on 30.3.96, where it was agreed that plaintiff no. 1 will continue with manufacturing of various items and products. The plaintiff no. 2 will have exclusive marketing right for the sale of all the products of plaintiff no. 1.
Defendant is an authorised distributor for Indo-Asian MCD/D.B. Copper Bossmann, HRC Fuselink, Telemechanique, controls & Switch Gear & Phoenix contact. Defendant placed orders for the supply of goods, time to time with plaintiff no. 1. The latter in turn used to dispatch goods accordingly. Payments were made by the defendant through cheques in favour of plaintiff no. 1. Defendant was allowed a credit period of 30 days. The payment was made bill to bill basis. This arrangement continued till 3.7.2003. Thereafter the defendant stopped making payments, leaving an outstanding amount of Rs. 3,61,473/-. The plaintiffs requested for payment of dues through various communication i.e. Letters, e-mail etc. When defendant did not turn up, the plaintiffs stopped dispatch of goods to the former.
In background of these facts, the plaintiffs have approached this court seeking recovery of amount as mentioned above.
Apart from disputing the claim of plaintiff, defendant challenged very maintainability of present suit. As per it, this court has no territorial jurisdiction to try and entertain present suit and that present suit has not been filed by a competent person, on behalf of plaintiff.
On the basis of pleadings of parties, following issues were framed on 9.5.2006 :-
1. Whether this court has territorial jurisdiction to entertain the present suit? OPP
2. Whether suit has been filed by a competent person? OPP
3. Whether plaintiff is entitled to recover any amount from the defendant? OPP
4. If issue no. 3 is decided in favour of plaintiff, whether it is entitled to recover any amount on account of interest, if so, at what rate, for what period and to what amount? OPP
5. Relief.3
In order to prove their case, the plaintiffs examined Sh. S.R. S. Sabharwal as PW1. Defendant examined Sh. M. Navrathan Jain as DW1.
I heard Ld. Counsels for parties. However arguments were advanced in part on behalf of plaintiff on 22.3.2010. None appeared on behalf of same, thereafter. As trial had already concluded, I have no option but to dispose of this case. My findings issue wise are as under :-
ISSUE NO. 1.
As per defendant, this court has no territorial jurisdiction to try and entertain the present suit as defendant is residing and working for gain within the territorial jurisdiction of courts in Chennai and not within the jurisdiction of this court.
It is not the plea of plaintiff even that its suit falls within the category of suits as described in Section 16, 17, 18 and 19 CPC.
"Section 20 CPC provides as where other suits to be instituted. It runs as - "Subject to the limitations aforesaid, every suit shall be instituted in a court within the local limits of whose jurisdiction :-
(a). the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or
(b). any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carried on business, or personally works for gain, provided that in such case either the leave of the court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or
(c). the cause of action, wholly or in part arises."
It is averred in the plaint that defendant used to place its purchase orders with plaintiff no. 1, at its registered office i.e. A-58/2, Okhla Industrial Area, Phase-II, New Delhi and all payments were made in favour of plaintiff vide account payee cheques or demand drafts payable at Delhi. As per Ld. Counsel for plaintiff, this court has jurisdiction to try and entertain present 4 suit as the contracts between the parties reached in Delhi. It is admitted by Sh. M. Navrathan Jain (DW1) in his cross examination that they (defendant) used to place orders with plaintiff no. 1 company through letters and the latter used to dispatch material from here i.e. Delhi. In this way, contract between parties appears to have concluded in Delhi, giving rise to cause of action in favour of plaintiff within territorial jurisdiction of Delhi Courts.
This issue is hence decided against the defendant and in favour of plaintiff.
ISSUE NO. 2.
Trite it to say that present suit has been filed by plaintiff through Sh. S.R.S. Sabharwal. The latter is examined as PW1. It is deposed by the same that he was director of plaintiff no. 1 company and was having power of attorney on behalf of plaintiff no. 2. True, the document stated to be power of attorney allegedly executed by Sh. Dinesh Parwanda has been put on file, along with plaint as Annexure P1. No evidence is lead at all to verify that any such power of attorney was ever executed by Sh. Dinesh Parwanda. Nothing is deposed by only witness i.e. PW1 examined by plaintiff in this regard. Even if it is presumed that PW1 through whom present suit has been filed by plaintiffs is director of plaintiff no. 1. There is no resolution of said company or any other document to show that PW1 was authorized to sign, verify or to institute present suit. Every Director of a company cannot file suit on behalf of company, simply being a director unless same is specifically authorized by a resolution or by memorandum of articles of the company. May I refer here a case titled as M/s. Nibro Ltd.
Vs. National Insurance Co. Ltd., AIR 1991 Delhi 25, where following was held by our own High Court :-
"It is well settled that under Sec.291 of the Companies Act except where express provision is made, the powers of a company in respect of a particular matter are to be exercised by the company in general meeting-- in all other cases the Board of Directors are entitled to exercise all its power, individual directors have such powers only as are vested in them by the 5 Memorandum of Articles."
ISSUE NO. 3.
It is stated on oath by Sh. S.R. S. Sabharwal (PW1) in his affidavit that since 2000, the defendant used to place purchase orders with plaintiff no. 1, who in turn used to dispatch goods accordingly. Defendant used to make payments by the cheque drawn in favour of plaintiff no. 2. Payments were made on bill to bill basis. This arrangement continued till July, 2003 when defendant stopped making payment. At that time, an amount of Rs. 3,61,470/- was outstanding against the defendant. PW1 referred various communications having taken place between plaintiff and defendant. Needles to say that defendant denied his liability to pay said amount. No detail is given by the plaintiff as how said amount became outstanding against the defendant. In this way, plaintiff has failed to prove that any such amount was due against the defendant. Simply to say that plaintiff demanded this amount by issuing letter / e-mails is not enough to establish that such an amount was actually due.
Issue no. 3 is thus decided against the plaintiff. ISSUE NO. 4.
When plaintiff has failed to establish that same was entitled to recover any amount from the defendant. No question arises for recovery of intention thereon.
Issue no.4 is also decided against the plaintiff. ISSUE NO. 5. (Relief.) Suit of plaintiff is dismissed. Both of parties to bear their own costs.
A decree sheet be prepared accordingly.
File be consigned to record room.
Announced in open court. (Rajender Kumar Shastri) on 10.05.2010. ADJ-06(Central) / Delhi 6 LAXMAN EXPORTS VS. M/S. SAPNA ELECTRICALS 10.5.2010 Present: Sh. Ratesh Kumar, advocate for plaintiff.
Sh. Yogesh Kaushik, advocate for defendant.
Vide separate judgment, suit of plaintiff is dismissed. File be consigned to record room.
Rajender Kumar Shastri, ADJ-06 (Central) Delhi.