Delhi District Court
M/S. Kamdhenu Ispat Ltd vs M/S. Bma Readymix Concreate Pvt. Ltd on 21 September, 2011
IN THE COURT OF SHRI. ASHISH AGGARWAL, CIVIL JUDGE1,
SOUTH WEST DISTRICT, DWARKA COURTS, DELHI
CS NO. 654/11
M/s. Kamdhenu Ispat Ltd.
(Paint Division)
L311, Street No.7,
Mahipal Pur Extension,
New Delhi110037
(Through constituted attorney
Sh. Suraj Kumar Singh) ... Plaintiff
Versus
1. M/s. BMA Readymix Concreate Pvt. Ltd.
Through its CMD/ Managing Director
RU 8, First Floor,
Pritampura,
Delhi110034
2. Shree Vineet Aggarwal
Director,
M/s. BMA Readymix
Concreate Pvt. Ltd.
RU 8, First Floor,
Pritampura,
Delhi110034 ...Defendants
21.09.2011
Kamdhenu Ispat Ltd. vs. M/s. BMA Readymix Concreate Pvt. Ltd. & Anr. 1 of 13
C.S No.654/11
ORDER
1. The plaintiff company has pleaded in the plaint that it is engaged in the business of manufacture and distribution of paints, construction chemicals and other products. The defendant no. 2 is stated to be the director of defendant no.1 company. It is averred that the defendant no.1 company placed orders for purchase of certain products from the plaintiff. According to the plaintiff, the goods were delivered to defendant no.1 from time to time. It is pleaded that the defendants failed to make payment of entire price of the goods delivered to them. The plaintiff has, through this suit, prayed for recovery of the sum outstanding and payable by the defendants.
2. The suit is at a nascent stage. Summons to the defendants have not been issued so far. Upon receipt of fresh suit in the court, it was taken up for consideration. Arguments advanced by Ld. Counsel for the plaintiff have been heard on the point of territorial jurisdiction of this court to entertain the suit. Statement of Ld. Counsel for plaintiff has also been recorded separately. By this order, this court shall decide whether it has the territorial jurisdiction to try the suit.
3. This is a suit to recover price of articles sold and delivered to the defendants. The territorial jurisdiction of a civil court to entertain such suits is governed by Section 20 of the Code of Civil Procedure, which reads as Kamdhenu Ispat Ltd. vs. M/s. BMA Readymix Concreate Pvt. Ltd. & Anr. 2 of 13 C.S No.654/11 follows:
"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 nd voluntarily resides, or carries 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".
4. It follows from the above provision that in order to make out jurisdiction of the court, the plaintiff needs to demonstrate that either the defendants operate within or the cause of action, wholly or in part, arose within the jurisdiction of the court.
5. At the outset, it may be seen as to how the plaintiff has explained the competence of the court to entertain the suit. Reference may be made to paragraph no.11 of the plaint by which the plaintiff has explicated as to how he has invoked the territorial jurisdiction of this court. The said paragraph is reproduced as under :
"That this Hon'ble Court has the territorial jurisdiction to try and entertain the present suit as the registered office of the plaintiff company as well as the defendant no.1 companies Kamdhenu Ispat Ltd. vs. M/s. BMA Readymix Concreate Pvt. Ltd. & Anr. 3 of 13 C.S No.654/11 are situated at New Delhi. The invoice raised by the Plaintiff and duly received by the Defendant No.1 contains the condition "Subject to Delhi Jurisdiction". Thus, this Hon'ble Court has got the jurisdiction to entertain and try the present suit".
6. It is evident from the aforementioned paragraph that according to the plaintiff, this court has territorial jurisdiction to entertain the suit on the following counts :
a) That the registered office of the plaintiff's company is situated in New Delhi;
b) That the registered office of the defendant no.1 company is situated in New Delhi; and
c) That as per the invoices raised by plaintiff and received by defendant no.1, dispute between the parties shall be "subject to Delhi jurisdiction".
All the above counts are separately assessed hereinafter to examine whether they confer territorial jurisdiction on this court. A) That the registered office of the plaintiff's company is situated in New Delhi.
7. According to the plaintiff, this court has territorial jurisdiction to try the suit since the registered office of the plaintiff company is situated in New Delhi. As demonstrated above, it is only the court within whose jurisdiction Kamdhenu Ispat Ltd. vs. M/s. BMA Readymix Concreate Pvt. Ltd. & Anr. 4 of 13 C.S No.654/11 either the defendant operates or the cause of action has arisen that is competent to try the suit. The place of residence or office of the plaintiff is wholly irrelevant to the territorial jurisdiction of the court entertaining a suit for recovery of sale price of goods. This is unambiguously borne out from Section 20 of the Code of Civil Procedure which defines the territorial jurisdiction of courts for entertaining such suits. Reference may also be made to the cases of M/s. Dhodha House v. S.K. Maingi, AIR 2006 SC 730 and Alchemist Limited v. State Bank of Sikkim AIR 2007 SC 1812. Hence, there is no manner of doubt that merely because the registered office of the plaintiff is within the territorial jurisdiction of this court, the court cannot exercise jurisdiction over the present suit. The aforesaid ground set out by the plaintiff is accordingly rejected.
B) That the registered office of the defendant no.1 company is situated in New Delhi.
8. It is urged by the plaintiff that this court has territorial jurisdiction to entertain the suit since the registered office of defendant no.1 company is at New Delhi and therefore within the territorial jurisdiction of this court.
9. The territorial jurisdiction of this court does not extend over the whole of Delhi. The National Capital Territory of Delhi has been divided into nine civil districts by Govt. of NCT of Delhi's notification No. F.6/10/2000 Judl/694704 dated 28.06.2000 read with notification No. F6/15/08 Kamdhenu Ispat Ltd. vs. M/s. BMA Readymix Concreate Pvt. Ltd. & Anr. 5 of 13 C.S No.654/11 Judl/Suptlaw/19801982 dated 21.10.2008. By notification No. 540/DHC/Gaz/VI E 2(a)2008 dated 22.10.2008 and notification No. nd 3089/DHC/Gaz./VI.E.2(a)2008 dated 22 October, 2008, the territorial jurisdiction of this court has been restricted only to SouthWest District of Delhi. Hence, for the purpose of territorial jurisdiction, the existence of address of defendant at any place in Delhi is not sufficient. The defendant must necessarily be within the SouthWest District of Delhi. In the present case, the office of the defendants is stated to be at Pritampura which is outside the SouthWest District of Delhi.
10. Moreover, the address of Pritampura, Delhi is stated to be that of the registered office of defendant no.1. This is not the office from where, according to the plaint, orders were placed, delivery of goods was accepted or payment was required to be made. The mere existence of registered office has also been held to be inadequate to assume territorial jurisdiction. It is the office which was involved in the execution of contract or its performance that is relevant for the purpose of territorial jurisdiction.
In the case of Union of India v. Adani Exports Ltd. A.I.R. 2002 SC 126, the Hon'ble Supreme Court has held that the place where the registered office of the defendant is situated is not sufficient to vest territorial jurisdiction with the court. It is observed as under :
"We are unable to accept this finding of the High Court. The view of the High Court that this Court in the case of Oswal Woollen (supra) had held that the existence of the registered Kamdhenu Ispat Ltd. vs. M/s. BMA Readymix Concreate Pvt. Ltd. & Anr. 6 of 13 C.S No.654/11 office of a Company would ipso facto give a cause of action to the High Court within whose jurisdiction the registered office of such Company is situated, is not correct."
In the case of Gujrat Insecticides Ltd. v. M/s. Jainsons Minerals 2008(1) A.D.(Delhi) 268 which squarely applies to the facts of the present case, the Hon'ble High Court of Delhi, relying upon the decision of Hon'ble Supreme Court in the case of Patel Roadways Ltd. v. Prasad Trading Company (1991) 4 SCC 270, held as under :
"The reasons given for conferring the jurisdiction in Delhi are (a) defendants reside and work for gain at Delhi (b) the cheques towards the part payment were handed over by the defendants to the plaintiff at Delhi. It is, however, not disputed that the goods were supplied by the plaintiff from its Parwanoo depot to the defendants at its Fatehabad (Haryana) Office. The contract is thus performed outside Delhi. Merely because the defendants have its principal office at Delhi would not confer the jurisdiction if the defendants also have its subordinate office at other place and cause of action has also arisen at that place and in that case suit will be filed only in the Court within whose jurisdiction the company/corporation has its subordinate office and not in the Court within whose jurisdiction it has principal office."
11. Hence, on account of the place of office of the defendants, this court cannot be inferred to have territorial jurisdiction to entertain the suit. The said ground canvassed by the plaintiff is rejected.
C) That as per the invoice raised by plaintiff and received by defendant no.1, dispute between the parties shall be "subject to Kamdhenu Ispat Ltd. vs. M/s. BMA Readymix Concreate Pvt. Ltd. & Anr. 7 of 13 C.S No.654/11 Delhi jurisdiction".
12. It is urged on behalf of the plaintiff that this court has jurisdiction to entertain the suit in view of a clause in the invoices issued by the plaintiff wherein it has been stipulated that disputes between the parties would be adjudicated by courts at Delhi.
13. The original invoices issued by the plaintiff have not been filed by the plaintiff. The plaintiff has filed only photocopies of the front side of the invoices. The said documents do not contain any clause relating to territorial jurisdiction of the court.
14. However, even if it is assumed that such a clause exists, and even if it is assumed that parties have agreed to have their disputes adjudicated by this court, that by itself would not confer jurisdiction upon this court, unless on the basis of the facts of the case, this court would otherwise have territorial jurisdiction to entertain the suit. When no part of cause of action arises within the jurisdiction of a court, the jurisdiction cannot be conferred on that Court by agreement between the parties. Jurisdiction cannot be bestowed on a court which has none. In holding so, I draw support from the decision of Hon'ble Supreme Court in New Moga Transport Company Vs United India Insurance Company Ltd & Ors (2004) 4 SCC 677, wherein it has been expressly laid down that parties cannot, by agreement, confer jurisdiction on a court which otherwise does not have jurisdiction to deal Kamdhenu Ispat Ltd. vs. M/s. BMA Readymix Concreate Pvt. Ltd. & Anr. 8 of 13 C.S No.654/11 with the matter. The same view has been echoed by the Hon'ble Supreme Court in the case of Hanil Era Textiles Ltd. Vs Puromatic Filters (P) Ltd. (2004) 4 SCC 671. The stipulation in the agreement that the dispute would be subject to the decision of Delhi Courts is by itself of no effect. Through such agreement, only the concurrent jurisdiction of some amongst several courts can be ousted. Hence, by the said clause, it cannot be concluded that this court has jurisdiction to entertain the suit.
Cause of action
15. Under Section 20 of Code of Civil Procedure, the court competent to entertain the suit is one within whose jurisdiction either the defendant is situated or any part of the cause of action arises. It has already been demonstrated above that none of the defendants carry on business or work for gain within the territorial jurisdiction of this court. The defendant no.1 is a company. The place of residence of defendant No. 2 has not been disclosed. Further, it has also not been pleaded anywhere in the plaint that he resides within the jurisdiction of this court. Such plea has also not been orally urged before the court. Hence, the provisions of Section 20(a) and (b) are not attracted. It remains to be examined as to whether any part of cause of action has arisen within the jurisdiction of this court in terms of Section 20(c) of Code of Civil Procedure.
16. The expression "cause of action" refers to "every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his Kamdhenu Ispat Ltd. vs. M/s. BMA Readymix Concreate Pvt. Ltd. & Anr. 9 of 13 C.S No.654/11 right to the judgment of the Court". This definition has been consistently accepted by Hon'ble Supreme Court in the cases of Alchemist Limited Vs State Bank of Sikkim AIR 2007 SC 1812, A.B.C Laminart Pvt. Ltd. And Anr. Vs A.P Agencies, Salem (1989) 2 SCC 163, Oil and Natural Gas Commission Vs Utpal Kumar Basu & Ors. (1994) 4 SSC 711, Kusum Ingots and Alloys Ltd. Vs Union of India & Anr. (2004) 6 SCC 254, and National Textile Corporation Ltd. & Ors. Vs Haribox Swalram & Ors. (2004) 9 SCC
786. In the case of Union of India v. Adani Exports Ltd. A.I.R. 2002 SC 126 it has been held that every fact which is pleaded in the plaint does not give rise to a cause of action unless it has a nexus or relevance with the lis that is involved in the case. Facts which have no bearing with the lis or the dispute involved in the case, do not give rise to a cause of action so as to confer territorial jurisdiction on the court concerned.
17. In the present case, the plaintiff has sued to recover price of goods sold and delivered to the defendants. In order to succeed, the plaintiff is required to prove that the defendant had entered into an agreement with the plaintiff for purchase of the goods. This would constitute the contract entered into between the parties. Besides this, the plaintiff is required to establish that he has performed his part of the contract by delivering the goods. The plaintiff is further required to prove that the defendant has failed to perform its part of the contract and has failed to make payment of the purchase price. In case the plaintiff company succeeds in proving the Kamdhenu Ispat Ltd. vs. M/s. BMA Readymix Concreate Pvt. Ltd. & Anr. 10 of 13 C.S No.654/11 above, it would be entitled to recovery of the sum prayed for. Therefore, cause of action comprises of the execution of the contract, its performance by the plaintiff and the failure of the defendant to perform his obligation. The place where the cause of action arose therefore is the place where the contract was executed, the place from where the goods were supplied, the place where goods were delivered and the place where payment was supposed to be made by the defendant.
18. In the present case, the plaint is silent about the place where the agreement was entered into between the plaintiff and the defendant for supply of the goods. The plaint also does not disclose the place from where purchase order was placed, the source of the goods supplied and the destination of the said goods. The plaint also does not disclose the place where part payment was made by the defendant or the place where the remaining payment was required to be made. Hence, on bare perusal of the plaint, this court cannot be stated to have jurisdiction to entertain the suit.
19. Since the plaint does not throw any light on the place of cause of action, the documents filed by the plaintiff are taken into consideration. The board resolution by which authority to institute the suit was delegated has evidently been issued from Gurgaon, Haryana. The ledger prepared by the plaintiff company, which shows the sum payable by the defendants, was evidently prepared from Alwar, Rajasthan. The invoices detailing the products delivered to the defendants have also evidently been issued from Kamdhenu Ispat Ltd. vs. M/s. BMA Readymix Concreate Pvt. Ltd. & Anr. 11 of 13 C.S No.654/11 Alwar, Rajasthan. The correspondence shows that the representative of the defendant no.1 had been communicating from either Pritampura or Sonepat. All of these places are beyond the territorial jurisdiction of this court.
20. Since the plaint did not expressly state the place from where the goods were dispatched, the place where the goods were delivered and the place from where the invoices were issued, counsel for plaintiff was directed to disclose the same. The statement of counsel for plaintiff was recorded on 16.08.2011. He stated that the goods were supplied from Alwar, Rajasthan and were destined for Sonepat, Haryana. Invoices were also issued from Alwar, Rajasthan. On the basis of this too, the territorial jurisdiction of this court to entertain the suit is not made out.
21. No part of cause of action has arisen within the jurisdiction of this court. Apart from the facts disclosed in the plaint, no new facts can be orally pleaded by the plaintiff with a view to make out territorial jurisdiction of this case. This proposition of law has been laid down by Hon'ble High Court of Delhi in the case of Gujrat Insecticides Ltd. v. M/s. Jainsons Minerals 2008(1) A.D.(Delhi) 268 wherein it has been observed:
"Though learned counsel for the plaintiff made oral submission to the effect that the order was placed in Delhi and part of the goods were also supplied from this depot at New Delhi. However, there is no such averment made in the plaint and as far as jurisdiction is concerned the only grounds taken are that office of the defendants is situated in Delhi Kamdhenu Ispat Ltd. vs. M/s. BMA Readymix Concreate Pvt. Ltd. & Anr. 12 of 13 C.S No.654/11 where they reside and work for gain and cheques towards the part payment were handed over by the defendant to the plaintiff at Delhi. Thus this oral submission is not supported by any pleadings. I am, therefore, of the view that this Court has no territorial jurisdiction."
For this reason, no useful purpose will be served by subjecting the case to trial for enabling the plaintiff to further elaborate on or to introduce new facts so as to make out the territorial jurisdiction of this court. Since the averments made in the plaint do not disclose any part of cause of action arising within the territorial jurisdiction of this court, there is no reason to prolong the disposal of the case.
22. For the aforesaid reasons, it is concluded that this Court does not have territorial jurisdiction to entertain the suit. The plaint is liable to be returned under Order 7 Rule 10 of Code of Civil Procedure. The plaint shall be returned after due endorsement to be presented to the appropriate court, on filing of certified copy thereof by the plaintiff. File be consigned to Record Room.
(Ashish Aggarwal) Civil JudgeI/Dwarka Courts Delhi/21.09.2011 Kamdhenu Ispat Ltd. vs. M/s. BMA Readymix Concreate Pvt. Ltd. & Anr. 13 of 13 C.S No.654/11