Bangalore District Court
Mysore Mercantile Company vs S.R.S Electricals on 15 June, 2016
IN THE COURT OF THE IV ADDL.CITY CIVIL & SESSIONS
JUDGE AT MAYO HALL UNIT, BENGALURU. (CCH-21)
Dated: This, the 15th day of June 2016.
Present: Sri.Bannikatti Hanumanthappa.R.
B.A.,LL.B(Spl)
IV Addl.CC & SJ, Mayohall Unit,
Bengaluru.
O.S. No.25592/2011
Plaintiff: Mysore Mercantile Company
Limited, A company
incorporated under the
Provisions of the Companies
Act, 1956 and having its
registered Office at No.201 &
202, 2nd Floor, Shresta Bhoomi,
No.87, K.R.Road, Basavanagudi,
Bengaluru-560004.
Rep. by its Director (Admin)
Sri.Rakesh Shetty.
(By Sri.M.A.Subramani, Advocate)
V/S
Defendants: 1. S.R.S Electricals,
A proprietorship concern,
having its office at shop at
No.3, Al-usuf Complex,
Bhuvaneshwari Road,
Sakleshpur-573134.
Hassan - District,
2 O.S. No.25592/2011
Rep. by its Proprietor
Sri.B.S.Premanath.
2. Sri.B.S.Premanath,
S/o.Sri.Sidde Gowda,
aged about 30 yrs,
R/o.Soondekere Post,
Sakleshpur-Taluk,
Hassan-District.
(By Sri.Ashok.S.Mensinkai, Advocate)
Date of institution of the suit 23.03.2011
Nature of the suit (Suit for Pro-note, Suit for Recovery of
Suit for Declaration and Possession, Money.
Suit for Injunction, etc.)
Date of commencement of recording 09.07.2013
of the evidence
Date on which the Judgment was 15.06.2016
pronounced
Total duration Year/s Month/s Day/s
05 02 22
JUDGMENT
Present suit has been filed under Order VII, Rules 1 & 2 of CPC by the plaintiff against the defendants for recovery of a sum of Rs.12,14,707/- being the principal amount paid by the plaintiff in excess to the defendant and also Rs.7,97,840/- being the amount as penalty for non-completion of the work and Rs.5,63,512/- towards interest on Rs.12,14,707/- & Rs.7,97,840/- at the rate of 3 O.S. No.25592/2011 24% p.a. from the date of termination of the contract dated 25.01.2010 till the date of filing of the suit together with future interest at the rate of Rs.24% p.a. on Rs.20,12,547/- (in respect of Rs.12,14,707/- and Rs.7,97,840/-) from the date of suit till payment and for costs.
2. Case of the plaintiff, in brief, is as below:-
The plaintiff is a company, registered with the Registrar of Companies under the provisions of the Companies Act, 1956, as a limited company by shares with a share capital. The main objects of the plaintiff company is to carry out the business of importing and exporting of all kinds of commodities including liquid edible oils, agricultural products, packed food items, soft drinks, tinned foods etc., to manufacture and deal in all kinds of eatables, to carry on the business of production, generation, distribution, sales, development and maintenance of renewable energy and renewable energy products etc. The 1st defendant is a proprietorship concern. 2nd Defendant is the proprietor of the 1st defendant. The defendants represented the plaintiff that the 1st defendant is a class-I Electrical and K.P.W.D., (electrical) contractor and also dealers all kinds of 4 O.S. No.25592/2011 electrical goods. Pursuant to the invitation of the tenders bearing No.MMCL/DEC/770/08-09 dated 12.12.2008 by the plaintiff for carrying out the '66 KV Single Circuit Transmission Line Works between 3 M.W Yettinahole Mini Hydel Scheme and Tapping Point of Kempuhole IPCL - Sakleshpura, 66 KV D/C Line' for the project located at Doddathappale Village, the 1st defendant represented by 2nd defendant submitted the bid in the office of the plaintiff company at Bengaluru by virtue of a letter dated 01.01.2009 along with annexure for carrying out the said work.
The work put to tender was classified into three parties namely Part 'A' to Part 'C' as follows:-
Part A: Supply of Materials;
Part B: Cost of Labour and Civil Works; and; Part C: Liaison with Electricity Board in obtaining the requisite approvals/permissions/licenses to carry out the said work.
The plaintiff accepted the bid submitted by the defendants and in furtherance to such acceptance of the bid amount, an agreement dated 06.02.2009 was entered into between the plaintiff and the defendants. All the terms and conditions for carrying out the said 5 O.S. No.25592/2011 work were incorporated in the said agreement. The plaintiff in terms of the said contract paid a sum of Rs.10,00,000/- to the defendant towards mobilization advance by way of a cheque bearing No.903373 dated 06.02.2009 and a sum of Rs.15,00,000/- towards procurement of materials by way of a cheque bearing No.903374 dated 06.02.2009. The said cheques were sent to the defendant along with a letter dated 06.02.2009, and were encashed by the defendant. Thereafter, by virtue of a letter dated 09.02.2009, work order to start the work was also issued to the defendants. Thereafter, the plaintiff learnt that the defendant has failed and neglected to obtain the requisite approvals from the KPTCL and also has not informed the KPTCL before the work commencement and also carrying out the work without the supervision of the KPTCL officials. The plaintiff wrote a letter dated 18.09.2009 to the defendant intimating the various breaches and violations of the terms of the contract committed by the defendant and further also informed that, to avoid any untoward situation, Part C of the work; i.e., liaison and obtaining approvals from the KPTCL was taken over by the plaintiff itself, even though 6 O.S. No.25592/2011 the obligation under the contract was on the defendants to obtain the same. The defendant did not issue any reply to the same. To the utter shock and dismay of the plaintiff, all of a sudden without any reason the defendant has abruptly stopped and abandoned the work for more than 90 days. In spite of a show cause notice dated 09.01.2010 issued by the plaintiff the defendant did not choose to reply the same. In the meanwhile the plaintiff also learnt that, though the defendant had collected amount from the plaintiff, the defendant has not paid the same to its vendors/suppliers. In spite of letter dated 13.01.2010 about the said fact by the plaintiff, the defendant failed to respond to the same. In view of 'non-
performance' and 'non-cooperation' from the defendant in executing the work as per the terms of the contract, as stated above the plaintiff has incurred huge losses both in terms of money and reputation. The plaintiff issued a notice of termination dated 25.01.2010, terminating the contract dated 06.02.2009 entered into between the plaintiff and the defendant and called upon the defendant to come for a meeting for finalization of accounts; but however the defendant neither replied to the same nor attended the 7 O.S. No.25592/2011 meeting for settlement of accounts. During the currency of the said agreement dated 06.02.2009, the plaintiff on various dates and as and when demanded by the defendant, in all paid a sum of Rs.63,00,797/-. The plaintiff took the final measurement of the work done by the defendant and certified the same and forwarded the said final certified bill to the defendant along with a letter dated 17.03.2010. In all in the said communication, in all the defendant was called upon to pay a total sum of Rs.20,14,704.99 to the plaintiff; but the defendant neither replied nor complied the same. Thereafter, the plaintiff has taken up the work for execution by informing the same to the KPTCL and has successfully completed the same on 08.11.2010. As per the final certified bill the total cost of the work executed by the defendant was amounting to Rs.50,86,089.91, which is much less than the amount paid by the plaintiff. In all the defendant is liable to pay a sum of Rs.20,12,547/- to the plaintiff towards refund of the excess amount paid to the defendant. The plaintiff got issued a notice dated 15.12.2010 to the defendant calling upon them to pay the said sum of Rs.20,12,547/- and also damages of Rs.10,00,000/- to the 8 O.S. No.25592/2011 plaintiff. After receipt of the said notice the defendant has issued a reply dated 18.01.2011 taking all untenable contentions. Hence, this suit arose.
3. The case of the defendants, in brief, is as below:-
The defendants contended in their WS that suit of the plaintiff is not maintainable either on law or on facts and it is fundamentally defective. Further it is contended that the suit of the plaintiff is not within the territorial jurisdiction of this court; since the place of work, transactions took place and defendant's firm situated at Sakaleshpura Taluk, Hassan District and also the plaintiff has not paid proper court fee on the plaint. It is also contended that the 2nd defendant is the class one contractor in the electrical field and upon the tender invite, the defendant became successful bidder in the tender conducted by the plaintiff company with respect to 66 KV Single Circuit Transmission Line work. Accordingly the plaintiff company issued work order on 09.02.2009 to commence the work and the defendants immediately started tender work on 12.02.2009 itself and done his part of job.
Further it is contended that the amount released by the plaintiff has 9 O.S. No.25592/2011 not been sufficient and always the defendants used to spend his own money to complete the work. It is denied that the work was carried out without the supervision of the KPTCL officials, for the defendants have paid the huge amount towards supervisory charges to the KPTCL. It is also contended that no one from the plaintiff company represented to support the defendant even in such a critical situation and alone faced all the oppositions and obstruction from the farmers and localities. It is also contended that many workers belonging to Rakshana Vedike were tried to destroy the materials dumped on spot and obstructed to the work continuously. The steps for errection of powers in the land has been acquired. During that process the land owners colluding with the local persons and the persons of Rakshna Vedike started a violation, nuisance and objected for carrying out the work. They have conducted a number of bandh and protests, dharani, by demanding to remove the erected towers and warned not to put up further towers even after receiving the compensation amount. In the above said manner the said persons objected the work carrying by the defendants and not allowed to complete the work. In this regard, 10 O.S. No.25592/2011 the defendants have made a complaints and representations to the Revenue Minister, concerned Deputy Commissioner, Assistant Commissioner and also Tahasildar by opposing the tender work and demanded to stop it. Even the said matter was reported to the Delhi Newspapers and Electronic Media, since the date of commencement work to completion of the same. Land owners have filed a WP No.38643/09 (GM-KEB) before the Hon'ble High Court of Karnataka by opposing the tender process; but the Hon'ble High Court of Karnataka directed the respondents to dispose the matter in accordance with law and respondent shall not draw the lines over the lands of the owners. It is also contended that relating to the said issue the plaintiff never bothered about the inconvenient caused to the defendant and from which the defendants lost his money, even not given a moral support also. Despite the 1st defendant alone faced all the critical situation, which were started by the land owners, Rakshana Vedika peoples etc. It is also alleged that the plaintiff has shown its unfair trade practice even after intimation and communications made by the defendants regarding the above said inconvenient made to the 11 O.S. No.25592/2011 plaintiff company and not co-operated with the defendants. Instead of that the defendants strictly responded for all the communications made by the plaintiff failed to respond for the same and to fulfill the agreed terms and conditions of the agreement entered between the parties. It is also contended that the tender works were carried out by the defendants with the trust. But, the plaintiff failed to perform his part of contract while the defendants facing the critical conditions at the time of carrying out the tender work. Even though defendants requested many time to the plaintiff to renew the agreement; but the plaintiff postponed by saying today or tomorrow. In fact the defendants carried out the entrusted work honestly by trusting the words of the plaintiff's officials. Thus, being the fact all of sudden the plaintiff has issued a termination notice on 25.01.2010 for that. The 2nd defendant immediately met the M.D. of the plaintiff company many times to discuss about the issue and get solve the same. The M.D. agreed to resolve the issue and also accepted to come and talk with the farmers and other obstructers, who have lost their land while erecting the towers. But, as assured no one responded for the same. It is also contended 12 O.S. No.25592/2011 that defendants are at liberty to prosecute the plaintiff company for forging the signature of defendant No.2 while submitting work completion work to KPTCL. Over all from the date of tender plaintiff company cheated to the defendants. Thus, the criminal activities of the plaintiff company amounts a unfair trade practice from which defendant suffered huge financial loss and mental agony. It is also contended that plaintiff company has no locus standee to claim anything by blaming the satisfactory work completed by the defendants. Accordingly plaintiff cannot say the words like non-performance and no co-operation. It is also contended that even pending bills are still due withholding the amount of the bills, which is a illegal and accrues interest without any reasons. Thus, the plaintiff company failed to clear the bills in time. Instead of that filed a this false case against the defendants for obtaining wrongful gain. It is also contended that no such breach of contract or trust in the part of the defendants, the act of the plaintiff itself shows that the plaintiff company has breached the contract terms and conditions and also cheated. For the same the criminal offences which punishable under the IPC. It is also 13 O.S. No.25592/2011 contended that the plaintiff is not for good cause to file a suit only just to harass the defendants, this suit is filed without having a clean hands by suppressing the material facts. On the said grounds defendants pray to dismiss the suit of the plaintiff with having exemplary costs.
4. On the basis of the pleading of the both side parties, my Predecessor has framed the following issues:-
1. Whether plaintiff proves that defendants are liable to pay a sum of Rs.45,76,059/-?
2. Whether this court got a territorial jurisdiction to try the suit?
3. Whether plaintiff is entitled for interest at the rate of Rs.24% p.a.?
4. Whether the plaintiff is entitled for the relief sought for?
5. What order or decree?
5. In the issue No.1 a typographical error is taken place regarding the suit claim amount as Rs.45,76,059/- at the time of framing the issues by me Predecessor instead of Rs.25,76,059/- 14 O.S. No.25592/2011 was to be typed. With regard to this, later on the parties to the suit have rightly brought to the notice of this court that it was to be typed Rs.25,76,059/-. Perused the same and satisfied with the submissions of the respective counsel. Therefore, I would like to amend the same as provided under Order XIV Rule 5 of CPC as below mentioned:-
Issue No.1: Whether plaintiff proves that defendants are liable to pay a sum of Rs.25,76,059/-?
6. On behalf of the plaintiff, affidavit of Director (Admn) of the plaintiff company by name Sri.Rakesh Shetty has been filed and he has been examined as PW-1 and Exs.P-1 to P-21 documents have been marked. Per contra, no evidence has been adduced on behalf of the defendants.
7. Ex.P.1 is the board resolution, Ex.P.2 is the agreement dated 06.02.2009, Exs.P.3 to P.6 are the copy of letter dated 06.02.2009, 09.02.2009, 18.09.2009, 09.01.2010, Ex.P.7 is the postal acknowledgement, Ex.P.8 is the copy of letter dated 13.01.2010, Ex.P.9 is the termination notice of the contract, Ex.P.10 is the postal acknowledgement, Ex.P.11 is the letter dated 15 O.S. No.25592/2011 03.02.2010, Ex.P.12 is the postal acknowledgement, Ex.P.13 is the statement of final certified bill, Ex.P.14 is the letter dated 17.03.2010, Ex.P.15 is the letter to postal dept., Ex.P.16 is the letter dated 28.01.2010, Ex.P.17 is the certificate dated 26.11.2010, Ex.P.18 is the notice, Ex.P.19 is the postal acknowledgement, Ex.P.20 is the reply notice, and Ex.P.21 is the extracts of board resolution.
8. Heard the arguments and also written arguments filed on behalf of the defendants.
9. After considering the evidence on record, findings on the above issues are:
Issue No.1: In the Affirmative, Issue No.2: In the Affirmative, Issue No.3: Partly in the Affirmative, Issue No.4: Partly in the Affirmative, Issue No.5: As per final order, for the following:-16 O.S. No.25592/2011
REASONS.
10. ISSUE No.1: In order to prove the said issue the plaintiff company has got examined to the one Rakesh Shetty, a Director of the plaintiff company as a P.W.1. It is stated in his chief-examination that their company has passed a resolution and authorized to him to appear in this case and give evidence on its behalf. Further P.W.1 stated that their company is a limited company registered under the Companies Act, 1956 as a limited company by sharers with a share of capital. It was incorporated in the year 2000 having its registered office at Bengaluru, in the address shown in the cause title of this suit. The main objects of their company is to carry out the business of importing and exporting all kinds of commodities including liquid edible oils, agricultural products, packed food items, soft drinks, etc., and also to manufacture and to deal in all kinds of eatables, to carry on business of production, generation, distribution, sales, development and maintenance of renewable energy and products since the date of incorporation of the plaintiff company. It is also P.W.1 stated that 1st defendant is a proprietorship concern, 2nd defendant is a 17 O.S. No.25592/2011 proprietor of the 1st defendant. Both the defendants approached to the plaintiff and represented that 1st defendant is a class-I Electrical PWD Contractor and also dealer of all kinds electrical goods. During the course of company business the plaintiff invited a tenders bearing No.MMCL/DEC/770/08-09 dated 12.12.2008 for carrying out the 66 KV Single Circuit Transmission Lines Work between 3 M.W Yettinahole Mini Hydel Scheme and Tapping Point of Kempuhole IPCL-Sakleshpura, 66 KV D/C Line for the project located at Doddathappale Village, Sakleshpura Taluk, Hassan District, to be submitted by the prospective bidders in the registered office of the plaintiff company situated at Bengaluru. Pursuant to the said notice, 1st defendant represented by 2nd defendant and submitted a bid in the office of plaintiff company at Bengaluru by virtue of letter dated 01.01.2009 along with annexure for carrying the said work, which was classified into 3 parts namely Part-A to Part-C. Part-A: Supply of materials.
Part-B: Cost of labour and civil works, and Part-C: Liaison with Electricity Board in obtaining the requisite approvals/permissions/licenses to carry out the said work. 18 O.S. No.25592/2011 P.W.1 it is also stated that after the bid acceptance, awarded the contract for the above mentioned work. In furtherance to such acceptance of the bid amount and award of the contract of the defendants an agreement was taken place in between the plaintiff company and defendants on 6.2.2009 on the trust that the defendants would abide all the terms and conditions of the contract and to execute the work as stipulated in the said contract within the stipulated period of agreement. It is further P.W.1 stated that pursuant to the award of the said contract in the terms of said agreement the plaintiff on the date of agreement itself paid a sum of Rs.25,00,000/- by way of two separate cheques drawn in favour of the 1st defendant; out of the said Rs.25,00,000/-, Rs.10,00,000/- was given to the defendants towards mobilization advance by way of cheque bearing No.903373 dated 6.2.09 and the remaining sum of Rs.15,00,000/- was given towards procurement of materials by way of cheque bearing No.903374 dated 6.2.09. The above said cheques were sent to the defendants along with the letter. Both the said cheques were accepted and encashed by the defendants. Thereafter, by virtue of the letter dated 9.2.09 work order was 19 O.S. No.25592/2011 issued to the defendants to start the work. P.W.1 it is also stated that though the 1st defendant has obtained the requisite approvals and licence etc., from KPTCL, which work has to be executed in the supervision of the KPTCL; but later on learnt that the defendant has failed and neglected to obtain the requisite approvals and license from the KPTCL and has not informed about it before the commencement of work and it was carrying out without supervision of the KPTCL officials. In view of the serious violations and breach committed by the defendants during the course of execution of said work, the plaintiff wrote a letter on 18.9.09 to the defendant by intimating the various breaches and violations committed by the defendant and also informed that to avoid any untoward situation, Part-C of work and the said communication was duly acknowledged by the defendants; but did not reply for the same. P.W.1 it is further stated that to the utter shock of the plaintiff, all of a sudden without any reason, the 1st defendant has abruptly stopped and abandoned the work for more than 90 days. In view of this, the plaintiff issued a show cause notice dated 09.01.2010 to the defendant; but did not reply for the 20 O.S. No.25592/2011 same. In the meanwhile the plaintiff also learnt that, though the defendant had collected amount from the plaintiff, the defendant has not paid the same to its suppliers of various materials; in this regard the plaintiff addressed a letter dated 13.01.2010 to the defendants; but did not respond to it. It is also stated in his chief- examination that due to the inaction, omissions and lapses on the part of the defendant in not completing the work entrusted under the contract, the plaintiff has incurred huge losses besides suffering mental agony. The above conduct of the defendant in abandoning the work clearly suggest that from the beginning the 1st defendant had no interest in executing the work and the defendants are liable to make good the said loss suffered by the plaintiff. The trust imposed on the defendant by the plaintiff has been completely breached by the defendants. It is also stated that the plaintiff issued a notice of termination dated 25.01.2010, terminating the contract dated 06.02.2009 and called upon the defendant to come for a meeting for finalization of accounts; but neither replied to the same nor attended the meeting for settlement of accounts. Since the defendant did not attend the meeting scheduled on 01.02.2010, the 21 O.S. No.25592/2011 plaintiff issued one more letter dated 03.02.2010, calling upon the defendant to attend the meeting scheduled on 11.02.2010; however the defendants have again failed to respond to this communication also. P.W.1 it is further stated that during the currency of the said agreement dated 06.02.2009, the plaintiff on various dates and as and when demanded by the defendant, in all paid a total sum of Rs.63,00,797/- in the following manner:
(a) Rs.10,00,000/- by way of Cheque bearing No.903373 dated 06.02.2009 drawn in favour of the defendant;
(b) Rs.15,00,000/- by way of cheque bearing No.903374 dated 06.02.2009 drawn in favour of the defendant;
(c) Rs.21,96,694/- paid to Sujatha Telecom on behalf of the defendant vide Cheque No.264234 dated 07.04.2009;
(d) Rs.15,00,000/- paid through RTGS (online transfer) from the Bank account of the plaintiff to the bank account of the defendant on 28.04.2009;
(e) TDS of Rs.1,03,103/- paid by the plaintiff to the Income Tax Authorities on behalf of the defendant; and;
(f) Other charges of Rs.1,000/- paid on behalf of the defendant. 22 O.S. No.25592/2011 It is also stated that the plaintiff took the final measurement of the work done by the 1st defendant and certified the same and forwarded the final certified bill to the defendant along with a letter dated 17.03.2010. In this communication the defendant was called upon to pay a sum of Rs.12,14,707.09 which was paid in excess by the plaintiff to the defendant and also Rs.7,97,840/- being 10% of the contract value as penalty and in all Rs.20,14,704.99 to the plaintiff; but the defendant has not paid the above said sum to the plaintiff. P.W.1 it is further stated that after the termination of the contract with the defendant, the plaintiff addressed a letter dated 28.01.2010 to the KPTCL informing the same and thereafter the plaintiff has taken up the work for execution on its own and has successfully completed the same on 08.11.2010. It is also stated that as per the final certified bill the total cost of the work executed by the defendant was amounting to Rs.50,86,089.91, which is much less than the amount paid by the plaintiff. As per the terms of the contract, the defendant is also liable to pay a sum equivalent to 10% of the tender amount for non-completion of the work. In all the defendant is liable to pay a sum of Rs.20,12,547/- to the 23 O.S. No.25592/2011 plaintiff towards refund of the excess amount paid to the defendant. It is also stated in the chief-examination of the P.W.1 that the defendant did not pay the said amount of Rs.20,12,547/- even after receipt of the various communications and though the plaintiff counsel got issued a legal notice on 15.12.2010 calling upon the defendants to pay the above said amount of Rs.20,12,547/- and damages of Rs.10,00,000/- to the plaintiff. The notice was duly served upon them; then also defendants given a reply notice taking all untenable contentions. The defendants have not replied to serious communications brought to his notice. It is also stated that the cause of action for filing the suit arose on 6.2.2009 when the plaintiff and defendant entered into agreement about the contract for execution of the certain works during the month of November/December-2009. Immediate cause of action arose when the defendant abruptly stopped and abandoned the work on 25.1.2010 and when the contract was terminated on 28.1.2010, when the plaintiff took up the execution of the work on its own on 17.3.2010, when the final certified bill was prepared and communicated to the defendant on 15.12.2010 and when the 24 O.S. No.25592/2011 plaintiff issued a legal notice to the defendant and which was duly served and then defendant replied for the said notice. It is pertinent to note that the defendants have denied the case of plaintiffs in total in their WS; but neither chosen to lead the evidence on their behalf to prove the case of defendants nor cross-examined to the P.W.1 for rebutting the case of plaintiff by stating that the claim of the plaintiff against the defendants is a false and baseless and the plaintiff company is not recovered the suit claim amount from the defendants etc. Only the defence of the defendants is that under the provision of law Section 16 CPC the suit of the plaintiff is not maintainable. But, as per the terms and conditions No.30.1 of the contractual agreement no such point of pecuniary jurisdiction cannot be raised by the defendant. In total I would like to say that the above said matters discussed in issue No.1 are remained unchallenged by making any cross-examination to P.W.1 or placing any rebuttal evidence by the defendants against the case of plaintiff. Under such circumstances, the unchallenged version of the plaintiff evidence cannot be discarded. Therefore, I would not hesitate to accept the unchallenged version of the plaintiff suit 25 O.S. No.25592/2011 claim against the defendants as prayed for. Accordingly, I would like to say that the plaintiff company has successfully proved the issue No.1; hence I would like to answer this issue in favour of the plaintiff company as a Affirmative.
11. ISSUE No.2: In order to prove the issue No.2 the P.W.1 it is stated that plaintiff company is situated at Bengaluru and invited for tender in respect of the said work from its registered office at Bengaluru. Thereafter the plaintiff and defendant have entered into agreement of contract on 6.2.09 also at Bengaluru. Therefore, this court is having a territorial and pecuniary jurisdiction to try the above said suit. On the other hand, the learned advocate for the defendant has submitted a written argument particularly about the point of jurisdiction in para No.2 of their argument that the defendants have filed their written statement questioning the territorial jurisdiction of this court on the point of that the place of work as per the agreement was situated in Sakleshpur Taluk and the subject matter of the suit is also situated within the jurisdiction of Sakleshpur. As per Section 16 of the CPC the suit was to be filed subject to pecuniary jurisdiction at the 26 O.S. No.25592/2011 place where the subject matter is situated and the defendants have resided. Therefore, the present suit filed in this court which is not having a jurisdiction to try the matters. It is further stated in the written argument that the property in respect of agreement held between the defendants and plaintiff is situated in Sakleshpur Taluk and the defendants also are residing in the town of Sakleshpur, the suit was to be filed within the local limits of Sakleshpur Taluk. Further relied on a Section 16 of the CPC, which is reproduced as below:-
Provided that a suit to obtain relief respecting, or compensation for wrong to, immovable property held by or on behalf of the defendant may, where the relief sought can be entirely obtained through his personal obedience, be instituted either in the court within the local limits of whose jurisdiction the property is situate, or in the court within the local limits of whose jurisdiction the defendant actually and voluntarily resides, or carries on business, or personally works for gain.
12. The counsel for the defendant particularly though relied upon the above said provision of Section 16 of the CPC, Section 16 27 O.S. No.25592/2011
(a) to (e) are relating to the immovable property where which will be subject matter; but, Section 16 (f) and its proviso speaks and applies for the recovery of movable property actually under distraint or attachment shall be instituted in the court within the court wherein the local limits of whose jurisdiction the property is situated. On the said provision of Section 16 (f) and its proviso the defendant advocate is opposing the jurisdiction of this court by stating that the subject matter of the suit property is situated within the limits of Sakleshpur Taluk and defendants also are residing in the Sakleshpur Taluk. Therefore, the suit ought to have been filed within the jurisdiction of the Sakleshpur Taluk Courts not in this court. The counsel for the plaintiff by replying to the above said provision of law he drawn attention of this court towards the agreement held between the owner and contractor dated 6th February 2009 and taken the attention of this court towards the terms and conditions of the said agreement and in the condition No.30 of the agreement wherein agreed by the both parties about the jurisdiction in which the court has to file a suit in case of any breach and violation of contract taken place between them. 28 O.S. No.25592/2011 Condition 30 Forum -
30.1 Shown that no suit or action shall be commenced hereunder by the claimant other than in the Courts at Bengaluru and only after all contractual and administrative procedures have been fulfilled by submitting.
13. In supporting to the case of plaintiff, the counsel for the plaintiff relied on the citation AIR 1989 SC 1239 in the case of Civil Appeal No.2682/1982 dated 13.3.1989 in between A.B.C. Laminart Pvt. Ltd., and another-Appelants v/s A.P.Agencies, Salem-Respondent, wherein held that; Where there may be two or more competent Courts which can entertain a suit consequent upon a part of the cause of action having arisen therewithin, if the parties to the contract agreed to vest jurisdiction in one such court to try the dispute which might arise as between themselves the agreement would be valid. If such a contract is clear, unambiguous and explicit and not vague it is not hit by Sec. 23 and 28 of the Contract Act. This cannot be understood as parties contracting against the Statute. Mercantile Law and practice permit such agreements. 29 O.S. No.25592/2011 Another citation (2015) 12 SCC Page No.225 in the case of B.E.Simoese Von Staraburg ......., v/s Chattisgarh Investment Ltd., wherein held that; When the intention of the parties in a particular clause in the agreement is clear and unambiguous that the courts at a particular place shall have jurisdiction which means that the courts at that place alone shall have jurisdiction by virtue of the construction of jurisdiction clause, the maxim expression unius est exclusion alterius comes into play. This legal maxim means that expression of one is the exclusion of another. Where the contract specifies the jurisdiction of the courts at a particular place and such courts have jurisdiction to deal with the matter, an inference may be drawn that parties intended to exclude all other courts. (Para-
10). Upon perusal of the above said citations, and combined reading the column No.30.1 of the agreement held between the plaintiff company and defendants, it is clearly appearing in this case that the sum and substance of the both the citations are aptly applicable to the present suit in hand and further upon careful perusal of the said agreement the both the parties plaintiff and 30 O.S. No.25592/2011 defendants of the above said agreement of contract agreed that the suit shall be filed only within the courts of Bengaluru jurisdiction no elsewhere, if any breaches or violation of terms and conditions of the contract taken place by any parties to the contract. Therefore, in my view the objections as aforesaid risen by the defendant does not hold any water. Hence, I would like to say that the suit of the plaintiff is having a territorial jurisdiction to file the suit before this court and proceed against the defendant for recovery of the suit claim amount. Hence, I would like to answer issue No.2 in favour of the plaintiff as a Affirmative.
14. ISSUE No.3: That the burden of proving this issue lies upon the plaintiff. It is undisputed that there is nothing mentioned in the agreement taken place in between plaintiff and defendants regarding payment of interest upon the suit claim amount. Under such circumstances, the plaintiff cannot claim a such exorbitant future interest against the defendants; the 1st defendant is a proprietorship concern and 2nd defendant is a one of the proprietor under the 1st defendant, which is standing for rendering the service to carry out the business of importing and exporting of all kinds of 31 O.S. No.25592/2011 commodities including liquid edible oils, agricultural products, packed food items, soft drinks, etc., and also to carry on the business of production, generation, distributions and sales, development and also maintenance of renewable energy and renewable energy products etc. It amounts that it is being a company and doing above said business entered into above said agreement, which is taken place in between the plaintiff's company and defendants under the Contract Act, which is falling under the commercial one. Therefore, the interest under Section 34 Proviso of the CPC where there is a claiming future interest in the recovery of money suits on the commercial business it shall not be less than 6% p.a. and it shall be extended as per the contract held in between the parties or the presently nationalized banks are imposing the interest for advancing the loan like commercial purpose etc. Now presently the nationalized banks are imposing the rate of interest on the commercial loan, which is not less than 14% p.a. and the same is extending upto 18% p.a. However, I would like to discuss that the plaintiff company is entitled for 24% interest per annum on the suit claim amount from the date of termination of contract till filing 32 O.S. No.25592/2011 the suit and thereafter, the plaintiff company is entitled for future interest at the rate of 14% per annum on the suit claim amount of Rs.25,76,059/-. Therefore, the plaintiff company cannot claim the above said exorbitant interest at the rate of 24% per annum as a future interest on the suit claim amount against the defendants. In my above said observations, I think that if the rate of interest on the suit claim amount is fixed at the rate of 14% p.a. it will meets the ends of justice to the both parties. Hence, I would like to answer issue No.3 in favour of the plaintiff as a Partly Affirmative.
15. ISSUE No.4: This issue does not requires a detail discussion; because the findings of the issue Nos.1 to 3 will be answered to the issue No.4. In this case, since issue No.1 & 2 are answered in favour of the plaintiffs as a Affirmative and issue No.3 is answered Partly Affirmative in favour of plaintiff. It is also I would like to say that the both the defendants have entered into agreement with the plaintiff company in the capacity of Proprietorship and Proprietor; therefore, the joint and several liabilities will be upon the defendants to repay the suit claim amount. Hence, both the defendants jointly and severally liable for 33 O.S. No.25592/2011 payment of suit claim amount to the plaintiff company with the awarded reasonable interest on the suit claim amount. Therefore, for the said reasons, the plaintiff automatically is entitled for the above said relief of recovery of the above said suit claim amount with 14% interest per annum and not entitled for suit claim interest at the rate of 24% per annum; it discloses that the plaintiff is entitled for the above said suit reliefs as above discussed. Accordingly, I answer to issue No.4 Partly Affirmative.
16. ISSUE No.5: For the above said reasons, I proceed to pass the following:-
ORDER Suit of the plaintiff is partly decreed with costs.
It is ordered that the plaintiff is entitled for recover in total the suit claim amount of Rs.25,76,059/-, (which the suit amounts are claimed in prayer (a) to (c) of the suit relief column) at the rate of 14% future interest from the date of suit till the date of payment.34 O.S. No.25592/2011
Both the defendants are jointly and severally liable for payment of the above said suit decretal amount to the plaintiff company.
Both the defendants are hereby directed to pay the above said decretal amount jointly and severally to the plaintiff company within the 6 months from the date of this order. In case, defendants failed to pay the decretal suit claim amount to the plaintiff company, it is entitled for recover the suit decretal amount with the above said interest by approaching to the court of law.
Advocate fee is fixed at Rs.1,000/-.
Draw the decree accordingly.
(Dictated to the Stenographer on online computer, thereof corrected and then pronounced by me in the open court on this the 15th day of June, 2016).
(Bannikatti Hanumanthappa.R.) IV Addl.City Civil & Sessions Judge, Mayohall Unit, Bengaluru.
ANNEXURES List of witness examined for the plaintiff:
P.W.1 - Sri.Rakesh Shetty 35 O.S. No.25592/2011 List of documents exhibited for the plaintiff:
Ex.P.1 - Board resolution
Ex.P.2 - Agreement dated 06.02.2009
Ex.P.3 to 6 - Copy of letter dated 06.02.2009,
09.02.2009, 18.09.2009, 09.01.2010
Ex.P.7 - Postal acknowledgement
Ex.P.8 - Copy of letter dated 13.01.2010
Ex.P.9 - Termination notice of the contract
Ex.P.10 - Postal acknowledgement
Ex.P.11 - Letter dated 03.02.2010
Ex.P.12 - Postal acknowledgement
Ex.P.13 - Statement of final certified bill
Ex.P.14 - Letter dated 17.03.2010
Ex.P.15 - Letter to postal dept.
Ex.P.16 - Letter dated 28.01.2010
Ex.P.17 - Certificate dated 26.11.2010
Ex.P.18 - Notice
Ex.P.19 - Postal acknowledgement
Ex.P.20 - Reply notice
Ex.P.21 - Extracts of board resolution
List of witness examined for the defendants:
-NIL-
List of document exhibited for the defendants:
-NIL-
(Bannikatti Hanumanthappa.R.) IV Addl.City Civil & Sessions Judge, Mayohall Unit, Bengaluru. 36 O.S. No.25592/2011