Delhi High Court
Boston Scientific International B.V. vs Metro Hospital on 3 January, 2007
Equivalent citations: AIR 2007 (NOC) 1843 (DEL.)
Author: Badar Durrez Ahmed
Bench: Badar Durrez Ahmed
JUDGMENT Badar Durrez Ahmed, J.
Page 0333
1. This is an application filed on behalf of the defendant under Order 7 Rule 10 CPC for return of the plaint on the ground that this Court does not have territorial jurisdiction to entertain the same.
2. Before the question of territorial jurisdiction is examined, it would be necessary to set out the nature of the suit and the averments made in the plaint. The suit has been filed by the plaintiff for recovery of a sum of Rs. 32,38,479.40 along with interest @ 18% per annum from the defendant. The plaintiff is a foreign company incorporated in the Netherlands and has a branch office at 100A, The Capital Court, Olof Palme Marg, Munirka, New Delhi-110067. As stated in the plaint, the plaintiff is engaged in the business Page 0334 of manufacture and supply of medical care equipments to various institutions and hospitals worldwide. The defendant, on the other hand, is a company which runs a private hospital engaged in providing medical care. The plaintiff has been supplying medical equipments to the defendant for this purpose. It is stated in the plaint that the parties have been doing business with each other since October, 1998 and the modus operandi of the business is that the defendant used to place orders on the plaintiff for various medical equipments and that the plaintiff, on receipt of such orders, used to issue invoices upon the defendant and deliver ordered equipments against a receipt. The price of the equipment as quoted in the invoice was to be paid by the defendant to the plaintiff. For this purpose, the parties maintained a running account between themselves and the defendant used to make on account payments which were accepted by the plaintiff from time to time. As per the plaint, the total value of the material supplied by the plaintiff to the defendant throughout the course of their business transactions came to about Rs. 3,54,799.32 in respect of the materials supplies through the Meadox Division and Rs. 69,65,380.75 through the Scimed Division of the plaintiff. The total receipts against such supplies amounted to Rs. 1,48,279.66 and Rs. 43,92,064.01 in respect of the supplies from the said Meadox and Scimed Divisions respectively. According to the plaintiff, this left a debit balance of Rs. 2,06,519.66 and Rs. 25,73,316.74 in respect of the Meadox and Scimed Division supplies respectively. Thus, according to the plaintiff, the total debit balance in the book of accounts of the plaintiff vis-a-vis the defendant was Rs. 27,79,839.40 which was outstanding against the defendant and which the defendant was liable to pay along with interest @ 18% per annum as per the market trade and usage. Paragraph 11 of the plaint reveals that a legal notice dated 02.06.2001 was issued by the plaintiff to the defendant whereby the defendant was called upon to pay a sum of Rs. 34,88,695.00 as was due on that date along with interest @ 18% per annum from the date of notice till realisation. The said amount was obviously not paid by the defendant and, therefore, the present suit under Order 37 of the Code of Civil Procedure, 1908 (hereinafter referred to as 'CPC') has been instituted by the plaintiff. Paragraph 17 of the plaint reads as under:
17. That the cause of action arose in Delhi. The medical care equipment was supplied by the plaintiff to the defendant from Delhi. The payment was received by the plaintiff at Delhi. Hence, this Hon'ble Court has the jurisdiction to entertain the present suit.
In view of these averments contained in the plaint, it is submitted on behalf of the learned Counsel for the plaintiff that this Court would have territorial jurisdiction to entertain this suit.
3. On the other hand, the learned Counsel for the defendant submitted that the contents of paragraph 17 of the plaint are vague. The learned Counsel for the defendant with reference to the contents of the present application (IA NO 193/2005) as also the written statement filed by it, submitted that the entire cause of action arose at NOIDA which falls within Uttar Pradesh and, therefore, this Court would not have territorial jurisdiction to entertain the present suit. As regards the averments made in paragraph 17 of the plaint, it is stated in the written statement that the averments are wrong and denied. Page 0335 It is further stated that the defendant has its hospital as well as its subordinate office at NOIDA. All the equipments were received at NOIDA. The equipments were utilised at NOIDA and all the payments were made by the defendant to the plaintiff at NOIDA. The defendant's bankers were at NOIDA. All the payments were received by the plaintiff and its representatives from the defendant at NOIDA. It was also noted that the mere existence of the registered office of the defendant at Delhi also did not give the Delhi courts any jurisdiction in this matter. It is further contended that the plaintiff had made a wrong averment regarding payments received by the plaintiff in Delhi and that this was a sham and incorrect averment just to make out a case for the maintainability of the suit qua the territorial jurisdiction objection. Accordingly, it was stated that all the payments were received by the plaintiff from the defendant at NOIDA in the hospital of the defendant at NOIDA and, therefore, only the courts at NOIDA, District-Gautambuddh Nagar had territorial jurisdiction to entertain the present suit. It was, therefore, contended that the plaint be returned under the provisions of Order 7 Rule 10 of the CPC.
4. An important aspect of this case is that earlier the defendant had filed an application [IA. No. 9292/2002] under Order 37 Rule 3(5) read with Sections 151 of the CPC for unconditional leave to defend the suit. That application was allowed by an order dated 24.5.2004. In the said application the defendant had inter alia taken the plea that this Court did not have territorial jurisdiction to try the suit. In the order dated 24.5.2004 it was observed that the pleas of the defendant, which included the plea of territorial jurisdiction, raised friable issues. Specifically, the court found:
The plea of the defendant in regard to the territorial jurisdiction of this Court has to be looked into as the documents on record suggest that the equipment was being supplied by the plaintiff to the defendant at NOIDA and the payments even were being collected by the representative of the plaintiff from defendant at NOIDA.
5. Having obtained unconditional leave to defend the suit, the defendant has filed the present application under Order 7 Rule 10 for return of the plaint on the ground of lack of territorial jurisdiction. Now, on the one hand we have an order of this Court granting unconditional leave to defend on the ground that a "triable issue" arises qua the plea of territorial jurisdiction and, on the other, we have the present application wherein the defendant seeks return of plaint without the issue being tried. This, to me, seems a somewhat incongruous situation. A 'triable issue' means that the same requires to be decided after leading of evidence. Whereas, the parameters of disposing of an application under Order 7 Rule 10 CPC, at the initial stage without going into evidence, requires the court to only look at the averments contained in the plaint.
6. In the case of Condor Power Products Pvt. Ltd. v. Sandeep Rohtagi , a learned single Judge of this Court observed that "it is well-established that at the stage of deciding an application under Order VII Rule 10 Page 0336 or Order VII Rule 11, the averments in the plaint should alone be looked at". The learned single Judge further oibserved that "this principle may be somewhat enlarged by making it permissible to also look at the documents filed by the plaintiff. This is for the reason that the plaintiff cannot deny the genuineness of documents filed by him. But this presumption would not extend to the extremity that every statement made in the document also stands admitted by the plaintiff". The learned single Judge then observed in para 7 of the decision in Condor Power Products (supra) that "since the object pertaining to territorial jurisdiction had been taken at the threshold, only the plaint should be looked at". The Court further observed as under:
...In my opinion a distinction must be drawn between the places possessing jurisdiction because of any part of the cause of action having arisen therein, and other places where a suit may be filed because of the residence of the defendant. If no part of cause of action arises in the place where the defendant resides, on the application of Section, the plaintiff is nevertheless entitled to file the Suit where the defendant resides. The cause of action should not be confused with the residence of the defendant....
7. It is, therefore, clear that for the purposes of this application only the plaint and the documents in support of the plaint need be looked into. The pleas of the defendant can only be examined at the stage of trial and for which purpose it would be necessary to lead evidence. It must be reiterated that in deciding this application I am not required to decide the question of territorial jurisdiction as if it were a friable issue and I was to give my decision on the basis of evidence led by the parties. I am only required to examine the plaint and, perhaps, the documents accompanying it to arrive at a decision as whether this Court has or does not have territorial jurisdiction to entertain the suit.
8. Of course, arguments were advanced on the question of place of "residence" of the defendant and various decisions including Patel Roadways Limited, Bombay v. Prasad Trading Company , New Moga Transport Co v. United India Insurance Co Ltd and Ors. and Pramod Kumar Gupta v. Skylink Chemicals were cited in this context. But, in my view it is not necessary to examine the issue of place of residence as the plea taken in the plaint is also that the cause of action, or at least a part of it, arose in Delhi. Two averments were made with regard to this in paragraph 17 of the plaint. The first being that the equipment was supplied by the plaintiff to the defendant from Delhi. Even if this averment is taken at face value, it, in my view may not confer jurisdiction on this Court. However, the second statement that the payments were received in Delhi by the plaintiff stands on a different footing. Receipt of payments does constitute Page 0337 a part of cause of action. As per the plaint, the plaintiff, in the course of dealings with the defendant, used to receive payments at Delhi. This is controverter by the defendant in the written statement by stating that the payments were also made at NOIDA and not in Delhi. But, the written statement and defense of the defendant is not to be looked into. That would also be a matter of evidence. So, going by the plaint alone it is clear that the business dealings between the plaintiff and the defendant were conducted, not on the basis of any written contract, but on the basis of orders placed over the telephone. Hence, even if it assumed that Delhi was not the expressly contracted place of payment, Delhi would still be the presumed place of payment because of the general rule that, in the absence of a contract to the contrary, a debtor is bound to find the creditor for making the payment. In other words, the place of payment is the place where the creditor resides. In this context, the learned Counsel for the plaintiff's reliance on Bangali Mal v. (Firm) Ganga Ram Ashrafi Lal AIR 1923 All 465 (1), Soniram Jeetmull v. R.D. Tata and Company Ltd. and H.S. Shobasingh and Sons v. Saurashtra Iron Foundary and Steel Works (Pvt) Ltd. is quite appropriate. The learned Counsel for the defendant raised a plea that Soniram Jeetmull (supra) was not applicable in the present case as in that case the debts were not disputed whereas in the present case they are. But, this is not a distinguishing feature at this stage because the plaint alone is to be seen and not the defense of the defendant. Similar is the fate of the his submission that the said privy council decision would apply in a case where no place of payment is specified but, here the payments were dispatched at NOIDA. This again is the averment of the defendant.
9. The learned Counsel for the defendant then submitted, placing reliance on Meghraj v. M.R. and O. Mills (at para 6) and Prem Nath v. Kaudoomal Rikhiram , that place of payment does not necessarily mean the place where the money was payable. He submitted that in paragraph 17 of the plaint it is merely alleged that payments were received at Delhi. It did not specify that payments were also receivable at Delhi. It is the place where money is payable which gives jurisdiction and not the place where it is, in fact, paid. While this may be true as an abstract proposition, it must not be forgotten that the general rule cited in Soniram Jeetmull (supra) would apply and the plaintiff being the creditor and residing at Delhi would clearly make the money payable at Delhi. So, on the basis of averments contained in the plaint, if taken at face value, Delhi was both the place where the money was payable and, in fact, paid.
10. Lastly, it was sought to be contended by the learned Counsel for the defendant that mere bald assertions in the plaint with regard to jurisdiction would not confer jurisdiction. For this proposition he placed reliance on Haryana Milk Foods Ltd v. Chambel Dairy Products and Gupta Brothers Conduit Pipe Manufacturing Co Pvt Ltd v. Anil Gupta and Anr. 2001 VII AD (Delhi) 838. These decisions were Trade Marks cases and were different in Page 0338 nature to the case at hand which is a suit for recovery of money. It any event, it is sufficient to aver in the plaint that payments were received in Delhi and that the plaintiff "resided" in Delhi. Such an averment would be in compliance with the provisions of Order 6 Rule 2 and Order 7 Rule 1(f). Of course, the onus would still be on the plaintiff to establish, by leading evidence, that Delhi was, indeed, the place where the payments were to be made and were, in fact, made. The defendant could, at the trial, very well establish that payments were not to be made at Delhi but at NOIDA and, therefore, this Court did not have territorial jurisdiction. But, at this stage, it would not be possible to return the plaint on the ground of want of territorial jurisdiction.
11. Accordingly, this application is dismissed. The parties are left to bear their own costs.