Delhi District Court
Arvind Goel vs Food Corporation Of India on 26 April, 2018
IN THE COURT OF GAURAV RAO, ADJ02 & Waqf Tribunal / NEW DELHI DISTRICT, PATIALA HOUSE COURTS, NEW DELHI. CS No. 58564/16 ( Old No. 664/04) CNR No. DLND010089002016 1.
Arvind Goel s/o Sh. Ram Nath, R/o 102, Dwarkapuri, Muzaffarnagar251 001 Uttar Pradesh.
2. Ram Nath Sanjay Kumar, a business undertaking being a sole proprietorship undertaking of plaintiff no. 1 which had been carrying on the relevant business in the year 2000 at 54B, Ganj Bazar, Nadiad ( Gujarat) and the business having been closed, its permanent postal address was and is 110B, Naveen Mandi Sthal, Muzaffarnagar251001, Uttar Pradesh.
........Plaintiffs Vs. Food Corporation of India, a body corporate under the Food Corporation Act, 1964 through its Managing Director/Chairman having its Head Office at 1620, Bara Khamba Lane, New Delhi110 001.
..........Defendant
CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 1/49
Date of institution : 31.05.2004
Date on which reserved for judgment : 26.04.2018
Date of decision : 26.04.2018
Decision : Dismissed
J U D G M E N T
1. The present suit for recovery of Rs. 37,55,000/ has been filed by the plaintiff against the defendant.
1.1 The suit was filed before Hon'ble High Court of Delhi on 31.05.2004 and in view of the notification No. 27187/DHC/Orgl. dated 24.11.2015, the same was transferred to Ld. District & Sessions Judge, New Delhi District, Patiala House Courts vide orders dated 02.03.2016 and thereupon assigned to this Court vide orders dated 12.07.2016.
Plaint
2. It is the case of the plaintiff that he is the sole proprietor of Ram Nath Sanjay Kumar and it is in the name of said proprietorship i.e. plaintiff no. 2 that the agreement was entered with the defendant.
CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 2/49 2.1 It is further his case that defendant is a body corporate established under the provisions of the Food Corporation of India Act, 1964 for the purposes of undertaking purchase, storage, movement, transport, distribution, sale of food grains and has its Head office at New Delhi.
2.2 It is further his case that in the year 2000 defendant invited tenders from the public for the disposal of rice lying in its various godowns in different States in India.
2.3 It is further his case that the terms and conditions of the sale were incorporated in the Apendix I of the model tender form, which are one sided, favouring the defendant are unconscionable, arbitrary & unreasonable.
2.4 It is further his case that on 21.06.2000 he submitted his tenders in respect of four states namely Delhi, Gujarat, UP and Maharashtra. It is further his case that he submitted tender for purchase of 12533 metric tonnes of URS Rice Crop Year 199798, as offered for sale by the defendant in the State of Maharashtra, for total price of Rs.9,16,32,244.80, out of the quantity advertised for sale by the defendant and deposited an earnest money of Rs.9,55,000/.
2.5 It is further his case that aforesaid rice was to be of standard CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 3/49 quality, edible and conforming to the provisions of Prevention of Food Adulteration Act, 1954 standard. It is his case that the aforesaid quality, of the rice to be supplied, was a condition precedent and essential to the main purpose of the contract and the plaintiff relied upon the skill judgment of the defendant regarding the said quality and description at the time of submitting the tender, without inspecting the goods at different places throughout India, which was otherwise not feasible and practicable.
2.6 It is further his case that the headquarter/head office of the defendant at New Delhi accepted the various tenders relating to the purchase of URS rice ( 199798 crop) submitted by different tenderers in different States vide communication dated 21/24th July, 2000 No. 1/10/TE June/2000/S IV directing the Zonal Manager and Senior Regional Managers concerned to take action accordingly.
2.7 It is further his case that the offer was opened for acceptance upto 21.07.2000 but the same was extended for a further period of 15 days from 22.07.2000 and in consequence thereof the Regional Office of the defendant at Bombay intimated such an acceptance to the plaintiff in respect of part of the rice offered to be purchased by him vide its telegram dated 27/28th July, 2000. It is his case that in pursuance of the said acceptance, relating to 5103 metric tonnes of rice for Rs.3,73,30,503.90, the plaintiff was CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 4/49 required to deposit the security.
2.8 It is further his case that in contemplation of final approval from the defendant, he got the drafts prepared for an amount of Rs.28/ lacs and deposited the same with the defendant in its Mumbai office on 02.08.2000 as he had already deposited Rs.9,55,000/ as EMD. It is further his case that he was handed over a final confirmation of acceptance on behalf of the Regional Manager of the defendant, Mumbai dated 03.08.2000, which also required the District Manager of the defendant at Nagpur to permit the lifting of the material concerned intimating the deposit of the entire security of Rs.37,55,000/.
2.9 It is further his case that on 06.08.2000 he went to the godown, of the defendant at Nagpur, where the rice was stored and upon inspection he found that the same was not conforming to PFA standards and he noticed some insects as well, which fact he also informed to the District Manager, Nagpur.
2.10 It is further his case that District Manager asked him to have look at the other godowns in Wardha and accordingly he went to Wardha godowns of the defendant but found that rice therein also was not of requisite standards. It is further his case that he returned to Nagpur and CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 5/49 informed the District Manager of the defendant and asked him to look into the matter and as such he did not deposit the drafts with the District Manager, Nagpur.
2.11 It is further his case that after 10.08.2000 he was constantly enquiring from the defendant's District Manager at Nagpur as to what steps had been taken by him to supply PFA Act Standards rice and the District Manager tried to pacify him in respect of the quality of the rice and assured him that he should come and inspect the goods in the presence of the representative of the defendant and that time for delivery shall be extended accordingly after 03.09.2000.
2.12 It is further his case that on 08.09.2000, in view of the assurances of District Manager, he got prepared drafts of Rs.16,00,000/ in the name of the defendant, from Allahabad Bank, Muzaffarnagar and went to Nagpur to start lifting the material if the same conformed to the PFA standard and accordingly he contacted the District Manager of the defendant at Nagpur on about 11th or 12th of September, 2000, who accompanied him to the defendant's godowns at Nagpur as well as Wardha for satisfying him about the quality of the rice, but he found that the same was not appearing to be so conforming with the PFA standards, which fact he told to the officer of defendant.
CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 6/49 2.13 It is further his case that the defendant's officer allowed him to take representative samples of rice from the stacks from both the godowns at Nagpur as well as Wardha earmarked for the plaintiff and a such samples were duly sealed so that the same could be analyzed in a reputed laboratory. It is further his case that he submitted the said samples to Food Research and Analysis Centre, Federation House, Tansen Marg, New Delhi which examined the samples and gave its report dated 06.10.2000, as per which the sample was found deficient on three counts as per PFA specifications i.e. had damaged grains at 7.47% against permissible limit of 5%, foreign matter at 8.02% as against permissible limit of 6% and there were 10 live insects though as per standard it should not have any insect or infestation.
2.14 It is further his case that he sent the photocopies of the said report to the defendant's Regional office at Mumbai vide communication dated 10.10.2000 wherein he also requested to get the samples tested through an independent laboratory but instead the defendant sent a letter to the plaintiff dated 12/13.10.2000 asking the plaintiff to give his willingness for lifting additional URS detailed therein which was duly replied by the plaintiff on 16.10.2000 and he also intimated the defendant's Regional Office at Mumbai vide communication dated 18.10.2000 about his unwillingness to lift any additional rice. It is further his case that vide communication dated CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 7/49 25.10.2000 sent to defendant's Regional Office Mumbai he demanded refund of Rs.37,55,000/ by draft/cheque immediately, otherwise 18% interest shall be charged alongwith other consequences because the defendant was not in a position to deliver the proper goods.
2.15 It is further his case that he sent further reminder and again reiterated the entire matter vide communication dated 04.11.2000 and 16.11.2000 to defendant's office at Mumbai with a copy to the District Manager at Nagpur.
2.16 It is further his case that as per clause H of the agreement appendixI, maximum period of 90 days had been provided for lifting which ended before 03.11.2000 and he had declined to lift the stack concerned much earlier since the same did not conform to the PFA standards and the defendant did not respond to get the analysis done through an independent laboratory.
2.17 It is further his case that as per clause O maximum period for selling the goods, not lifted, is 3 months from the date of expiry given in the release order i.e. 03.09.2000 or at best 03.11.2000. It is his case that after 90 days of 03.08.2000 the agreement annexure1 exhausted itself on account of the breach committed by the defendant and the security amount of Rs.
CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 8/49 37,55,000/ remained with the defendant as a trustee on behalf of the plaintiff.
2.18 It is further his case that he received communication dated 02.12.2000 from the defendant's office at Mumbai on 20.12.2000, requiring the plaintiff's presence for drawing the samples to be analyzed by the defendant's own laboratory under supervision of the defendant's authorities which is in no way contemplated or provided in the agreement and is contrary to and inconsistent with the rule of the natural justice, so the same was declined by him vide communication dated 27.12.2000 and the reminder was sent on 30.01.2001. It is further his case that he received another communication from the defendant on 02.02.2001 requesting him to send representative for drawing the sample, which plaintiff declined vide communication dated 03.02.2001. It is his case that he received communication dated 07.03.2001 from the defendant's Mumbai Office intimating him that, since the stocks have not been lifted within 90 days of 03.08.2000, the same will be disposed off at his risk and the security amount will be withheld. It is further his case that being dissatisfied with the attitude of the defendant, he served a notice on the defendant dated 27.04.2001 which was replied by the defendant vide communication dated 29.05.2001.
2.19 It is further his case that there were disputes regarding the tenders CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 9/49 submitted by the plaintiff in respect of States of Delhi and Gujarat which were amicably settled after negotiations.
2.20 It is further his case that despite several communications dated 09.02.2002, 04.04.2002, 05.04.2002 and personal meetings dated 26.04.2002 and 15.05.2002 the defendant's Mumbai Office intimated the plaintiffs vide communication dated 16.05.2002 that the stocks in question are intended to be sold at the risk of the plaintiff's while the question of selling any stocks at the risk of the plaintiff at this stage did not arise either under the law or the agreement. It is further his case that plaintiff's again contacted the authorities on 30.05.2002, 04.06.2002 and 11.06.2002 and had a meeting with the authorities of FCI on 26.08.2002 and 30.08.2002. However the Mumbai office of the defendant wrote a letter to the plaintiff on 01.05.2004, dispatched on 05.05.2004 and received by him on 11.05.2004, intimating him that the stocks have been disposed of at the plaintiff's costs and FCI has suffered a loss of Rs.3,57,22,456/ and the plaintiffs were required to deposit the same. It is further his case that the amount of security is being illegally withheld by the defendant and the plaintiff is entitled to the same alongwith the interest.
2.21 Hence the present suit.
CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 10/49 Written Statement
3. Defendant took a preliminary objection that this court has no territorial jurisdiction to try the present suit as the same arises out of a transaction of sale of goods by tender offer and the agreed jurisdiction, to settle the dispute as per the tender documents, is of Maharashtra State.
3.1 It was further pleaded that the suit is barred by the law of limitation and ought to be dismissed under section 3 of the Limitation Act as the last letter of FCI Mumbai regarding sale of stocks at the risk & Cost of the plaintiff is of 07.03.2001.
3.2 It was further pleaded that the suit is bad for misjoinder of parties as the present dispute arises out of a transaction/contract between two contracting parties i.e. the tenderer/purchaser i.e. the plaintiff and the seller, i.e. Senior Regional Manager, Maharashtra, Mumbai. It was pleaded that therefore the only proper and necessary party to the present suit is the Senior Regional Manager, Maharashtra and the failure on the part of the plaintiff to make the Senior Regional Manager as party in the present suit calls for rejection of plaint.
3.3 It was further pleaded that admittedly the plaintiff declined to CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 11/49 remove the stocks within the stipulated period and therefore he must suffer the consequences as prescribed in the tender documents. It was pleaded that he is liable for failure on his part including the withholding of the security deposit and also liable for the loss caused to the Food Corporation, Regional Office, Maharashtra and the consequences of the resale of the tendered stocks at the risk and cost of the plaintiff and any other claim that the Regional Office may be entitled to under the agreement/contract/tender etc. 3.4 It was further pleaded that plaintiff had unequivocally and unconditionally made the offer of purchase of the stocks by submitting the tender accompanied with the earnest money deposit, the tender of the plaintiff having been accepted, the earnest money was converted to security deposit and the plaintiff thereupon made the deposit of the security money to the tune of Rs. 37 lakhs. In such circumstances, the plaintiff did not have any recourse except to perform his part of the contract and on his failure to perform his part of contract, he must face the consequences in accordance with the terms of the agreement and the law in force.
3.5 It was further pleaded that the present suit is not borne out of the sovereign function of the defendant corporation and the dispute has arisen out of a contractual obligation in a commercial deal set to roll by any advertisement calling for tenders for the sale of particular stocks of goods, CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 12/49 rice URS 19971998, crop in the present case. It was further pleaded that the plaintiff cannot therefore, be allowed to maintain the proceedings against the defendant against whom there is no cause of action or relief claimed.
3.6 It was further pleaded that tenders were invited by the Senior Regional Manager at Mumbai and not by the Food Corporation of India at its Head Office at New Delhi.
3.7 It was further pleaded that plaintiff had tendered the offer, accompanied by the earnest money, after carefully going through the terms and conditions contained in the document and had affixed his signatures thereto including the inspection of the stock for which the offers were made 3.8 It was further pleaded that plaintiff with his eyes wide open after making proper inspections and verification about the standards and specifications of the goods put to offer, made the offer by tender for the stated quantity at the tendered rates and amount but later failed to perform the contract, declined to remove the goods and thus breached the terms and conditions of the tender agreement thereby causing loss to the Regional Office of the FCI.
3.9 It was further pleaded that plaintiff visited Nagpur office which CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 13/49 is under the control of SRM Mumbai but it was denied that stacks did not conform to PFA standards or there were any insects or that any official made such general innocuous statement. It was pleaded that the food grain was of the stated quality.
3.10 It was pleaded that plaintiff was given an offer on behalf of the SRM/Mumbai and a reminder thereof calling upon him to associate himself in joint sampling and analysis of the stocks/stack, though same was beyond the agreed terms of the contract, to relieve him of the doubts about the standard and specification of stack of tendered/allotted rice however plaintiff miserably failed to associate himself for the said purpose.
3.11 It was further pleaded that plaintiff himself admits that he was obliged to take delivery of the stocks within 90 days from the date of acceptance of the tender and make necessary payments etc. however he failed to do so and thus breached the terms & conditions of the contract. It was further pleaded that SRM, Mumbai was ever ready to hand over the stock to the plaintiff but miserably he failed to carry out his contractual obligation and therefore no question arises of refund of any security amount/ earnest money. It was pleaded that the stocks were disposed of after proper intimation/notice to the plaintiff and at his risk & cost. It was thus prayed tht the suit be dismissed.
CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 14/49 Replication
4. In the replication, the plaintiff denied the averments of the written statement while simultaneously reiterating and reaffirming the contents of the plaint.
Admission/denial
5. Admission/denial of the documents took place vide proceedings dated 06.02.2007. The admitted documents of the plaintiff are Ex. P1 to P13 and that of the defendant are Ex. D1 to D11.
Issues
6. On the basis of pleadings of the parties, following issues were framed vide proceedings dated 21.04.2008:
1. Whether the plaintiff is entitled to a decree of Rs.37,55,000/ against the defendant and if so, whether the plaintiff is entitled to pendente lite and future interest @ 12% per annum?OPP
2. Whether this Court lacks the territorial jurisdiction to try and entertain the present suit? OPD
3. Whether the suit is barred by limitation? OPD CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 15/49
4. Whether the suit is bad for nonjoinder/misjoinder of parties? OPD
5. Whether the suit is without cause of action against the defendant?
OPD
6. Relief.
Plaintiff's evidence
7. To prove its case, plaintiff examined himself as PW1 who tendered his evidence by way of affidavit Ex. PW1/A and relied upon the following documents: A. Communication dated 21/24.07.2000 as Mark A. B. Letter dated 22.03.2001 as Mark B. C. Certificate dated 22.03.2001 as mark C. D. Report dated 06.10.2000 as mark D. E. Communication dated 12/13.10.2000 as mark E. F. Notice dated 27.04.2001 as mark F. G. The visitor's pass dated 26.04.2002 as mark G. H. Visitor's pass dated 30.05.2002 and 04.06.2002, 11.06.2002, 26.08.2002, 30.10.2002 and 30.10.2002 as Mark H to M. I. Slip written and signed by Sri Gauri as Mark N. J. The letter dated 29.07.2000 sent by defendant as EX. PW1/15. K. The communication dated 18.10.2000 as EX. PW1/20.
CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 16/49 L. Letter dated 25.10.2000, 04.11.2000 and 16.11.2000 alongwith receipt are exhibited as EX. PW1/21 to EX. PW1/23 respectively.
M. Letter dated 27.12.2000 as EX. PW1/24.
N. Letter dated 30.01.2001as EX. PW1/25.
O. Letter dated 03.02.2001 as EX. PW1/26.
P. Representation letter dated 04.04.2002 and visitor's pass dated
04.04.2002 as EX. PW1/28.
Q. Letter dated 05.04.2002 as EX. PW1/29.
R. Letter dated 15.05.2002 and visitor's pass as EX. PW1/31.
7.1 This witness also relied upon the documents Ex. P1 to P13 which
were admitted by the defendant during admission/denial of the documents.
Defendant's evidence
8. Defendant examined Sh. Navin Kumar as DW1 who tendered his evidence by way of affidavit Ex. DW1/A and relied upon the following documents: A. The original tender form bearing No. S&S/2/URSR/tender/2000/RO dated 08.06.2000 and original receipt dated 19.06.2000 for purchase of Tender Form as Ex. D2 and D1 respectively.
B. Telegram dated 27.07.2000 as Ex. D3.
CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 17/49
C. Letter dated 02.08.2000 sent by plaintiff as Ex. D4.
D. The inter office note dated 02.08.2000 as Ex. D5.
E. Allotment letter dated 03.08.2000 as Ex. D6.
F. Office order dated 05.12.2000 as Ex. D1/A1.
G. Fax dated 12.12.2000 as Ex. D1/A2.
H. Letter dated 12.12.2001 as Ex. D1/A3.
I. Telegram dated 29.01.2001 as Ex. D1/A4.
J. Fax dated 14.02.2001 as Ex. D1/A5.
K. Fax dated 08.02.2001 as Ex. D1/A6.
L. Letter dated 07.03.2001 as Ex. D8.
M. Notice dated 16.05.2002 as Ex. D9.
N. Reply dated 29.05.2001 as Ex. D10.
O. Notice dated 01.05.2004 as Ex. D1/A7.
P. Notice dated 19.09.2005 as Ex. D1/A8.
Q. Letter dated 19.09.2005 as Ex. D11.
R. The reply dated 29.05.2001 as Ex. D10.
Findings
9. I have heard the Ld. counsels for the parties, given due consideration to the rival contentions raised at bar and have carefully gone through the record. My issue wise finding is as under:
CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 18/49 Issue no. 1: Whether the plaintiff is entitled to a decree of Rs.37,55,000/ against the defendant and if so, whether the plaintiff is entitled to pendente lite and future interest @ 12% per annum? OPP Issue no. 5: Whether the suit is without cause of action against the defendant? OPD 9.1 The tender bearing no. S&S/2/URSR/TENDER/2000/RO dated 08.06.2000 for disposal of URS rice, of crop year 199798 lying in the Maharashtra region was floated by Food Corporation of India, Regional Office Mumbai. The same is on record as Ex.P1 (also Ex. D2). The tender form was purchased by the plaintiff (plaintiff shall imply plaintiff' no. 1 as plaintiff no. 2 being a proprietorship of plaintiff no. 1 is not a juristic person, separate legal entity in the eyes of law) on 19.06.2000 vide Ex. D1. Vide Ex. P2, dated 20.07.2000, the acceptance of the tender was extended for a period of 15 days from 22.07.2000.
9.2 The plaintiff submitted his tender which was accepted on 27.07.2000 i.e. Ex. P3 (also Ex. D3) for 5103 metric tones of rice. Vide Ex. PW1/15 dated 29.07.2000 plaintiff wrote to Senior Regional Manager, FCI Mumbai to provide details so that the security amount can be deposited CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 19/49 in terms of the tender. Vide Ex. P4 (also Ex. D4) dated 02.08.2000 plaintiff deposited a sum of Rs. 28 lacs by way of demand draft with a request to adjust the advance of Rs. 9,55,000/ i.e. Earnest money deposit towards the security. This request was allowed vide Ex. D5 dated 02.08.2000. Upon deposit of the said amount, the quantity i.e. 5103 metric tones as was allotted to the plaintiff, was intimated to him vide Ex. D6 dated 03.08.2000.
9.3 As per terms and conditions of Ex. P1 i.e. clause 5 the full cost of the stocks allotted was to be deposited within 30 working days from the date of issuance of acceptance letter. Clause 5 in this regard read as under:
"5. PAYMENT OF THE COST AND TAKING DELIVERY:
The successful tenderer after acceptance of his tender will be required to deposit the full cost of the stocks within 30 (thirty) working days from the date of issue of the acceptance letter in as many installments as he likes and to remove the stocks within a specified date mentioned in release order or such period as may be decided by the Sr. Regional Manager, FCI, Mumbai20. Delivery will be given ex godown on "as is where is" basis by FCI on all working days."
9.4 However plaintiff did not deposit the full cost, amount in terms of clause 5 nor did he lift the URS rice/ stock/grain allotted to him as per the schedule. The terms and condition of the payment, delivery schedule are contained in clause H, AppendixI of Ex. P1. Same is reproduced hereunder: CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 20/49 H) PAYMENT/DELIVERY SCHEDULE :
i) Price of the foodgrains will be payable on the net weight and will include the cost of gunny. All taxes and other charges of any nature whatsoever leviable by any authority shall be payable by a buyer in addition to the price offered.
ii) The payment of the consignment will be made within 30 days from the date of the acceptance of tender in as many instalments.
iii) The buyer will complete the lifting within 30 days of the date of communication of acceptance of tender.
iv) After 30 days the party will be allowed a maximum period of another 30 days for lifting the stocks from FCI godowns on payment of usual interest on which FCI is borrowing.
v) After 60 days, further extension will be admissible only for a further period of 30 days on payment of 2% penal interest over and above the bank rate.
vi) After 90 days, no further extension will be admissible on any account and the stocks will be sold at the risk and cost of the firm."
9.5 Hence as per clause H the entire payment was to be made and stocks were to be lifted within 30 days from the acceptance of the tender. Stocks could be lifted after the period of 30 days maximum upto 90 days upon certain terms and conditions as enumerated above, but after 90 days there was no further extension for lifting of the stocks and FCI had the right to sell the stocks at the risk and cost of the firm (plaintiff herein).
9.6 Plaintiff has claimed that on 06.08.2000, after getting two more drafts prepared for Rs.25 lacs on 05.08.2000, he went to the godown of the defendant at Nagpur where the rice, stocks were stored and on inspection he found that the rice was not conforming to the PFA standards and some insects were also noticed. It is also his contention that he brought the said CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 21/49 fact to the notice of District Manager, FCI and upon his advise went to the other godowns at Wardha but found that the rice/stocks there too did not conformed to the PFA standards and hence he did not deposit the drafts of Rs. 25 lacs and got them cancelled vide Mark B. This according to the plaintiff was the sole reason why he did not lift the stocks/rice.
9.7 Plaintiff has also claimed that from 10.08.2000 till 07.09.2000 he was constantly in touch with District Manager of the defendant at Nagpur and enquiring from him regarding the steps taken by him in terms of the plaintiff's concern. He has also claimed that upon the assurance of District manager Nagpur he got prepared another draft for Rs. 16 lacs on 08.09.2000 and went to Nagpur, however when he along with District Manager visited the godowns at Nagpur and Wardha on 11/12.09.2000 he found that the rice still did not conform to the PFA standards. He has claimed that he was permitted by the District Manager to lift the sample of rice from the different stacks, earmarked for the plaintiff, from the godowns at Nagpur and Wardha and accordingly he drew the samples and took them with him for being examined by a reputed laboratory. He has claimed that he submitted the said sample with the laboratory who gave its report dated 06.10.2000 i.e. Mark D as per which the sample was deficient on three counts as per the PFA specifications. On the other hand the defendant has categorically denied lifting of the sample as well as report Mark D. CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 22/49 9.8 Plaintiff has vehemently relied upon the said report i.e. Mark D purportedly issued by Food Research and Analysis Centre, NABL Accredited Laboratory, Sponsored by FICCI and CIFITI, Federation House, Tansen Marg, New Delhi110001 to buttress his case that the stock alloted to him was not as per the PFA standards, as was represented at the time when the tender was floated. This report however could not be proved on record as per the rules of evidence. Its genuineness/authenticity remained doubtful. Plaintiff did not examine any official from the said laboratory which had allegedly prepared the report. Neither the person who had allegedly prepared the report was examined nor was any person in whose the presence the report might have been prepared. The relevant portion of the cross examination of PW1 in this regard read as under:
"The experts who gave sample testing report did not sign the report in my presence. I cannot tell the name and designation of these experts."
9.9 Though plaintiff had tried to prove the said report by examining a witness from FICCI Research and Analysis Centre however the said witness, as is evident from proceedings dated 16.11.2015, categorically stated that the summoned record has been weeded out and only record of one year is maintained/preserved. Even if the report could not be proved still plaintiff should/could have made efforts to prove that indeed the sample was deposited with the said laboratory or that some report was prepared by CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 23/49 proving the necessary record pertaining to deposit of sample or atleast record by which the records/report were weeded out/destroyed.
9.10 Otherwise also this report cannot be relied upon or made basis to believe the plaintiff's allegations. Merely on the strength of this report it cannot be held that the sample, so allegedly analysis, was of the stock which was alloted to the plaintiff i.e. the stock in dispute. It cannot be even remotely inferred from the report that the sample was/ corelated, belonged to the stock as was allotted to the plaintiff. This is more so when it is mentioned in the report as "Sample not drawn by us". Furthermore there was no attachments with the report to corelate, link the report or the sample to the stock in question. It is also not reflected that the sample was received by them/laboratory in sealed condition. This itself renders the report absolutely unreliable. It was incumbent upon the plaintiff to prove that not only the sample so analyzed belonged to the stock in question but also that the sample so analyzed was lifted from the stock and was delivered at the laboratory in the same condition in which it was lifted that is to say that there was no manipulation or tampering with the sample. There is nothing on record to suggest that immediately upon, at the time when the sample was lifted, it was sealed and that the sample remained in that sealed, intact state till the time it was delivered at the laboratory and further that it remained in that state till the time of its analysis. In the absence of the same no reliance CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 24/49 can be placed upon the report as it cannot be ruled out that sample might have been manipulated, adulterated or interfered with after the alleged sampling before its analysis.
9.11 There is one more important aspect. The sample was allegedly received in the laboratory on 30.09.2000 as is reflected from the said report. As per the plaintiff's case the sample was lifted by him somewhere on 11/12.09.2000. No explanation has come forward from the plaintiff as to why the sample which was allegedly lifted on 11/12.09.2000, if indeed it was lifted, was not immediately deposited in the laboratory and why it was deposited after a gap of 18/19 days. Similarly no explanation has come forward as to where, in whose custody and in what condition the sample remained from 11/12.09.2000 till 30.09.2000. As discussed above it has not been claimed by the plaintiff and otherwise also it has not been proved on record that the sample was sealed at the time of or immediately after it was lifted and that it remained in that condition till the time it was deposited in the laboratory. Therefore when the sample remained in the possession of the plaintiff for around 18/19 days, tampering with the sample cannot be ruled out. It also cannot be ruled out that the sample would, might have deteriorated during this period and before its alleged deposit in the laboratory for analysis.
CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 25/49 9.12 Even otherwise I have serious doubts upon the claim of the plaintiff regarding lifting of the sample on 11/12.09.2000. As per the plaintiff's claim the sample was lifted as per the permission and in the presence of the District manager, Nagpur. It is not the plaintiff's case that some other official or any of his employee was also present at the time of sampling. In these circumstances, and when defendant has categorically denied the lifting of any sample, much least in their presence, then to prove the factum of lifting of sample it became incumbent upon the plaintiff to examine District Manager Nagpur but he failed to make any efforts in this regard. This itself creates upon the claim of the lifting of the sample.
9.13 Plaintiff has also relied upon Ex. PW1/20 dated 18.10.2000 which finds reference to letter dated 10.10.2000 i.e. Ex. P6 whereby it is claimed that the Senior Regional FCI Mumbai was informed that the sample does not conform to the PFA standards. In the said letter plaintiff had also conveyed to him that he was no more inclined to lift rice nor did he want any extension of the time line of the tender. It was claimed that the tender was exhausted after its acceptance. I have also considered letter dated 10.10.2000 i.e. Ex. P6 which makes it amply clear that the samples were drawn by the plaintiff himself/themselves. It is nowhere claimed in the said letter that the sample were lifted in the presence of the District Manager, Nagpur. The averment regarding lifting of sample read as "We drew some samples CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 26/49 ourselves and got them tested through Food Research & Analysis Centre, Tansen Marg, New Delhi." Once the samples were not lifted in the presence of District Manager Nagpur or any other official of FCI Mumbai I find no reasons to believe or presume that the sample allegedly sent for testing was the same as was lifted from the stacks, stock alloted to the plaintiff. In fact doubts are created upon the alleged claim of lifting of sample itself. It will be worthwhile to mention that the plaintiff has not claimed that he himself had lifted the sample and he has failed to give the name of his employee who had lifted the sample on his instructions and in his presence as the words used int the letter are "We, ourselves". Furthermore it cannot be even remotely inferred from the above letter that the sample was so lifted and sealed at the time of/after its alleged lifting so as to rule out any tampering or manipulation with the same.
9.14 In the above letter the plaintiff had also requested for lifting of samples from the bags pointed out by him, from the sanctioned stacks in his/their presence. At the outset there is nothing to suggest as to which bags and to whom such bags were pointed out by the plaintiff. There is nothing to suggest that the plaintiff had put any identity mark on the bags from which he had allegedly lifted the sample and from which he wanted resampling to be done.
CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 27/49 9.15 Furthermore plaintiff had claimed that he had inspected the rice, stock at Nagpur on 06.08.2000 and found that the same does not conform to the PFA standards. The sample is allegedly lifted only on 11/12.09.2000 i.e. after a gap of more than one month. If indeed the rice, stock did not conform to the PFA standards at the time of its inspection by plaintiff on 06.08.2000, then the plaintiff has failed to explain why he did not lift, insist for lifting of the sample for analysis on 06.08.2000 itself and why he waited for more than one month.
9.16 Last but not the least reliance on Mark D can also not be placed for the simple reason that it is mentioned in the report "This report, in full or in part, shall not be used for advertising or legal action". Once the report carries such a rider that itself creates doubt upon the genuineness/ authenticity of the report and the purpose for which it is issued.
9.17 Now, vide Ex. D7 dated 27.11.2000 plaintiff wrote to the Senior Regional Manager, FCI referring to letter dated 10.10.2000 i.e. Ex. P6 and telegram dated 20.12.2000 demanding refund of Rs. 37,55,000/ along with interest as he was not agreeable to the suggestion of the Senior Regional Manager, FCI. In the said said letter he had also claimed that the last date of delivery i.e. 29.10.2000 has passed long back and that part of the goods have already been disposed off by Senior Regional Manager, FCI.
CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 28/49 9.18 Vide Ex. P7, dated 02.12.2000, Senior Regional Manager FCI Mumbai had written to the District Manager, FCI Nagpur to arrange for joint sampling in the presence of plaintiff's representative. Accordingly vide Ex. D1/A1, dated 05.12.2000 District Manager, FCI Nagpur had instructed Shri R.K. Gotmare, Asstt. Manager (QC) and R.K. Phulzele, Asstt. Manager (QC) to draw truly representative, stack wise sample of URS rice, at Wardha and Nagpur, as was allotted to the plaintiff in the presence of plaintiff's representative and send them in a sealed condition to a District Lab at Nagpur for analysis. This was followed by communication dated 12.12.2000 i.e. Ex. D1/A2 wherein it is reflected that the plaintiff's representative did not come forward for drawal of the sample for its analysis. This was followed by Ex. D1/A3 dated 12.12.2000 wherein it was reported that the plaintiff's representative did not turn up for joint sampling. Vide Ex. D1/A4, dated 29.01.2001, the telegram was sent to the plaintiff to send the representative for joint sampling. Vide Ex. P8 dated 02.12.2000 it was informed to the plaintiff that his representative has not turned up for drawal of the sample for its analysis. It is reflected in Ex. D1/A5, dated 14.02.2001, that the plaintiff's representative failed to turn up for joint sampling. It is also reflected that the plaintiff's allegations regarding release of certain stocks/lots were baseless as the stock/lots were issued/released before the opening of the tender and not after allocation to the plaintiff. This was in CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 29/49 response to Ex. D1/A6, dated 08.02.2001, wherein information was sought as to whether plaintiff, his representative have turned up for joint sampling and regarding his allegations about disposal of the part of the stock. All these communications prove that the plaintiff, his representative failed to join the sample proceedings despite repeated requests and reminders. Accordingly no sample, out of the alloted stock, could be sent for analysis. The relevant portion of the deposition of plaintiff/PW1 in this regard read as under:
"It is correct that after I had raised the dispute, the defendant granted me an opportunity for joint inspection and for joint sampling and getting the sample tested from laboratory. Volunteered: this opportunity was given to me after the time for my lifting the rice had already expired and the testing had already been done by the independent laboratory."
9.19 I completely fail to understand as to why plaintiff shied away from joining the joint sample proceedings. If indeed the sample was not as per the PFA standards, report Mark D was correct and it pertained to the sample from the stock alloted to the plaintiff then the plaintiff should have been more than willing to join the joint sample proceedings to substantiate his stand and settle the dispute once for all. Not doing so itself is malafide and dishonest. This is more so when as per the agreement, tender document, its terms and condition there was no right of joint sampling that is to say that the plaintiff was granted an opportunity of joint sampling which was beyond the terms agreed by him. By granting him an opportunity the Regional Office of FCI had shown its bonafide.
CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 30/49 9.20 Furthermore as discussed above plaintiff failed to participate in the joint sampling despite repeated requests of District Manager, Nagpur and Senior Regional Manager, FCI Mumbai as stands proved in view of Ex. D1/A1 to Ex. D1/A5. Instead in between plaintiff had written to the Senior Regional Manager, FCI Mumbai on 25.10.2000 vide Ex. PW1/21 demanding refund of Rs. 37,55,000/ deposited by him. This letter was followed up by Ex. PW1/22 dated 04.11.2000 and Ex. PW1/23 dated 16.11.2000.
9.21 Vide Ex. PW1/24 dated 27.12.2000 while referring to his letter dated 10.10.2000 i.e. Ex. P6 and the telegram of Senior Regional Manager, FCI Mumbai dated 20.12.2000, the plaintiff while emphasizing that the last date of delivery was 29.10.2000, which passed long back, conveyed that he was not agreeable to the suggestion of Senior Regional Manager, FCI Mumbai. This was followed up by letter dated 03.02.2001 i.e. Ex. PW1/26 whereby the plaintiff refused to take part in sampling.
9.22 Accordingly, vide Ex. P9 (also Ex. D8) dated 07.03.2001 plaintiff was informed by Senior Regional Manager FCI Mumbai, that as reported by District Manager Nagpur he had failed to lift the allotted stocks within the validity period, his security deposit was withheld and the stock in CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 31/49 question would be disposed of at his risk and cost. This was followed up by letter dated 29.05.2001 i.e. Ex P10 (also Ex D10) which was in response to the notice issued by the plaintiff's advocate wherein it is categorically averred that plaintiff did not turn up for drawing samples and final notice dated 29.01.2001 was issued to him.
9.23 Vide Ex. P12 (also Ex. D9) dated 16.05.2002 plaintiff was informed that he had failed to abide by the terms and conditions of the tender, as were agreed by him, as he has failed to lift the allotted stocks within 90 days and accordingly on account of failure to arrange the payment and lift the stocks, the stocks in questions have been put to tender floated on 06.05.2002 at his risk and cost. He was further informed that loss if any on account of the risk and cost sale will be payable by him.
9.24 Vide Ex. D1/A7 (also Ex. P13) dated 01.05.2004, plaintiff was informed that, as he failed to make the payment & lift the stock within the validity period and despite numerous reminders, the stock in question were disposed of at his risk and cost. He was also informed that as the FCI had suffered loss of Rs. 2,57,22,456/, he was called upon to deposit the said amount towards loss, interest, storage charges and difference in the cost received in risk and cost sale. This was followed up by Ex. D1/A8, dated 19.09.2005.
CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 32/49 9.25 Plaintiff also wrote a letter to the Minister, Consumer Affairs Food & Public Distribution on 04.12.2002 vide Ex. PW1/28 followed up by letter dated 15.05.2002 Ex. PW1/31 regarding his grievances however the said letter is factually incorrect as in the said letter the plaintiff had claimed that FCI was never willing to get the stacks, stock, rice tested from an independent laboratory whereas it has been discussed above that it was the plaintiff who had failed and refused to participate in the joint sampling despite repeated requests.
9.26 It is also to be seen that as per Ex. P1 the plaintiff and for that matter the tenderers were given liberty to inspect the stocks prior to applying for the tender. The relevant portion of Ex. P1 read as under:
2. SAMPLE OF CONSIGNMENTS :
The consignment may be inspected by the intending tenderers on the authority of this tender form at the godown(s) on any working day where from the delivery of the stocks shall be made.
9.27 Clause B of appendixI also gave a right to the tenderer to inspect the goods, stocks, foodgrains. Same read as under:
B) The foodgrains stocks can be inspected by the prospective tenderer(s) at the godown from where delivery of the consignment will be given.
9.28 There is nothing on record to suggest that the plaintiff exercised CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 33/49 that right. In fact in his plaint he admitted that he had not exercised the said right claiming that same was not feasible. Same is not justified. However the plaintiff falsely deposed during his crossexamination that he was not granted an opportunity to inspect the goods before lifting. As per his own case he had inspected and rather lifted the sample before lifting the goods/stock. The false statement made by the plaintiff/PW1 during the crossexamination creates grave doubts upon the demeanor of the witness, his credentials. The relevant portion read as under:
"It is incorrect to suggest that before I submitted the tender, the defendant gave me opportunity to inspect the quality and quantity of the rice to be lifted."
9.29 In fact plaintiff does not have a right to agitate that the food grain, stack does not, did not conform to the PFA Act standards in view of clause 10 of AppendixII signed by the plaintiff. Clause 10 read as under:
"(10) I/We hereby declare that we will abide by the terms and conditions governing the sale of this foodgrains. I/we also declare that the foodgrain purchased and lifted by us do conform ot PFA Act Standards."
9.30 Clause I and J of AppendixI further provided as under:
(I) the foodgrains are sold in the same condition as they lie on "as is where is basis".
(J) Stocks be removed by the buyer within the period specified in the delivery order, with all the defects if any and notwithstanding any error or mis statements of description, measurement, quantity, weight, enumeration or otherwise and without any objection on the part of the buyer and no claim shall lie against Food Corporation of India, for compensation now shall any allowance be made on account of such faults, misstatements or errors CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 34/49 although the same may be of considerable nature. The Food Corporation of India reserve the right to withdraw from the sale any Lot/Lots included in the tender prior to the acceptance of any offer for such lot/lots without assigning any reason.
9.31 Furthermore during his crossexamination the plaintiff stated " I cannot admit or deny the suggestion that the rice given to me had been tested and was passed by the laboratory of the defendant". Once he makes such a statement, fails to prove his alleged report regarding adulteration, he has no right to agitate that the sample, the stock was not as per the PFA standards.
9.32 Furthermore there was a delay in lifting of foodgrain/stock by the plaintiff since the day of acceptance. As per the plaintiff's version he had gone to Nagpur lift the goods/stacks only on 06.08.2000 whereas his tender was accepted on 27.07.2000. After 27.07.2000 the goods as per clause N which is reproduced hereunder remained in the custody of FCI Mumbai at the risk of the plaintiff: N. the stocks sold to a buyer shall be from the date of acceptance of the ender will be at his risk and Food Corporation of India shall not be responsible for the safe custody or preservation thereof.
9.33 Hence I find no merits in the claim of the plaintiff and no justification whatsoever in his explanation for not lifting the stock. He has CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 35/49 no reason to agitate and no grounds to feel aggrieved.
9.34 As far as withholding of the earnest money, security deposit is concerned the relevant clauses, in the agreement, which empowered the defendant to do so are reproduced as under:
(F) EARNEST MONEY
(i) The tenderer shall pay to the FCI earnest money at the flat rate of one percent of the value of stocks intended to be purchased estimated at the rate being quoted by the buyer.
(ii) No exemption shall be allowed to any party from deposit of earnest money.
(iii) The earnest money deposit would be adjusted towards security deposit after the acceptance of the tender in respect of successful tenderer on receipt of request from the successful tenderer.
(iv) Tender should be accompanied by earnest money in the form of accounts payee Bank Demand Draft, Pay Order or Banker's Cheque etc. issued by a scheduled bank in favour of Sr. Regional Manager, Food Corporation of India payable at Mumbai. Tenders not accompanied by the earnest money shall be summarily rejected.
(v) The earnest money paid will be liable to forfeiture, if the tenderer after submitting his tender does not keep his offer open or modifies the terms and conditions thereof in a manner not acceptable to Food Corporation of India or withdraws his offer before final acceptance it being understood that the tender documents have been issued to him and he is being permitted to tender in consideration of his agreement to this stipulation. The earnest money shall also be liable to be forfeited in the event of tenderers failure.
(G) SECURITY DEPOSIT
(i) The security deposit shall be @ 10% of the accepted value to be deposited within seven days from the receipt of date of acceptance. The earnest money of successful tenderers will be adjusted towards the security deposit. The security deposit would be adjusted against all losses incurred by the Corporation, I case the tenderer(s) either resiles/resile from his/her/their offer or violates/violate the terms of the contract. The balance of Security deposit if CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 36/49 any after adjusting the Earnest Money Deposit towards security deposit shall be deposited in the form of demand draft/pay order/bakers cheque etc. on any schedule Bank in favour of S.R.M., FCI, Mumbai.
(ii) The security deposit will be adjusted on the due completion of eh contract against the last instalment of the payment. The corporation shall not be liable to pay any interest thereon.
(iii) If the tenderer fails or neglects/to observe or perform any of his obligations under the contract, it shall be lawful for the Corporation to adjusts either in whole or any part thereof in its absolute discretion the Security Deposit furnished by the tenderer towards the satisfaction of any sum due to the claim from the tenderer for any damage, losses, charges, expenses or costs that may be sufferd or incurred by the Corporation. The decision of the Corporation, in this respect shall be final and binding on the tenderer. In the event of earnest money deposit/security deposit being insufficient or if such security deposit has been wholly adjusted, the balance or the total sum recoverable as the case may be/shall be deduced from the sum then due or which at any time thereafter may become due to the tenderer under this or any other contract with Corporation. Should that sum also, be not sufficient to cover the full amount recoverable, the tenderer shall pay to the Corporation on demand the balance due.
(O) The goods sold will be removed by the buyer from the site of accumulation within the period specified in the Release Order. If the stocks sold are not removed within the time specified or delivery is not taken at the time and date given in the Release Order, Food Corporation of India may resale the stocks at the buyer's risk and cost. If the Food Corporation of India is unable to resale the goods within 3 months from the date of expiry given in the Release Order, the decision of the Food Corporation of India in this regard will be final. The buyer shall also be laible to pay storage charges at the rate of Ten paise per bag or part of a bag per day subject to minimum of Forty paise per bag or that part thereof. These chargtes will be recovered in respect of the entire quantities of the unlifted stocks at the end of free period before the delivery of such stocks is actually effected or till the dtae of release (inclusive). Delivery would be given only during the working hours on all Food Corporation of India working days on presentation by the buyer tot he stocks holder of the copy of Release/delivery order issued by the SR?District Manager, Food Corporation of India or any officer authorised by him. Without prejudice of the right to resale, the FCI may at their option permit the buyer to CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 37/49 remove on payment in advance of aforesaid charges on account of storage space from the date of following the last date of the free period of delivery given in the Release Order, the said consignment or any part thereof remaining uncleared within the extended period.
9.35 Plaintiff admits receiving letters dated 07.03.2001 and 01.05.2004. He was duly informed that the stock/ goods/ rice would be sold at his cost and risk. It is the categoric claim of the defendant that it had suffered a loss of Rs. 2,57,22,456/ towards interest, storage charges and difference in cost received in risk and cost sale. Not even a single suggestion was given to the defendant's witness i.e. DW1 that FCI, Regional Office Mumbai, Maharashtra did not suffer any loss or that false claim regarding loss having been suffered was being made by them/him. Rather certain suggestions were given to the witness regarding loss which read as under:
The rice in question was subsequently sold by the FCI. After invoking risk purchase clause, the rice were sold at the cost of plaintiff after floating tender. FCI sold the grains at a lesser price then what was agreed to be sold to the plaintiff.
Ques. How much loss the FCI suffered because of the sale? Ans. I do not know.
(Vol. Approximately FCI suffered a loss of Rs 99 lacs towards sale in addition to other losses. Total loss is about 2.16 crore)............ .......Plaintiff had breached the contract due to said reasons his security deposit of Rs. 37.55 lacs had been forfeited."
9.36 I accordingly find no reasons to doubt the defendant's, FCI Regional office's claim of having suffered the loss. Merely because suit no.
CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 38/49 263/2005 titled as M/s Food Corporation of India Vs M/s Ram Nath Sanjay Kumar as filed before the Hon'ble Bombay High Court, as filed by FCI for recovery of Rs. 2.16 cr., was dismissed would not create any doubt upon the claim of loss for the simple reason that the said suit was admittedly dismissed on technical grounds. The suit was not dismissed on merits after trial.
9.37 Hence in view of the above discussion plaintiff is not entitled to refund of Rs. 37,55,000/ nor there is any cause of action in favour of the plaintiff or against the defendant. Issue no. 1 and 5 are accordingly decided against the plaintiff.
Issue no. 2: Whether this Court lacks the territorial jurisdiction to try and entertain the present suit? OPD 9.38 The onus to prove the present issue was upon the defendant. It was the case of the defendant that this court has no territorial jurisdiction to try and entertain the present suit. It was argued that the tender form was purchased by the plaintiff from the office of FCI Mumbai and was submitted with FCI's Regional Office, Mumbai only. It was argued that even the offer was accepted at the Regional Office at Mumbai and no cause of action whatsoever had taken place in Delhi. It was also argued that as per Ex. P1 CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 39/49 Clause Q the jurisdiction is limited to the courts at Maharashtra.
9.39 Per contra it was argued by the Ld. counsel for the plaintiff that as the Head Office of the defendant is situated at Delhi this court has the territorial jurisdiction to entertain the present suit.
9.40 However on considering the entire material on record I have no hesitation in concluding that this court has no jurisdiction to try and entertain the present suit. Clause Q of the tender form i.e. Ex. P1 provides as under:
"(Q) LEGAL JURISDICTION The disputes arising in connection with this transaction will be subject to the jurisdiction of Court falls under the State where FCI Region is functioning."
9.41 FCI region is admittedly functioning in Mumbai, Maharashtra. The tender was floated by the said regional office of FCI. Plaintiff had purchased the tender form i.e. Ex. D1 from the said regional office on 19.06.2000 and his offer was accepted by the said regional office only. The goods/stocks were to be lifted from the godowns of said regional office at Maharashtra. No part of cause of action ever arose in Delhi. Plaintiff who is resident of Muzzafarnagar, UP chose Delhi as forum convenience to himself and nothing more despite fully knowing that Delhi courts have no jurisdiction to try and entertain the dispute arising out of the tender in question. The relevant portion of the crossexamination of the plaintiff in CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 40/49 this regard is reproduced hereunder:
"It is correct that the tender pertaining to the present suit was prepared in Maharshtra, submitted in Maharashtra and even the stock to be lifted was to be so lifted from Maharashtra. It is correct that inspection of the stock was to be done in Maharashtra only."
9.42 Ex. P1, the tender agreement between the parties unambiguously proves that the parties, in case of any dispute, agreed to the jurisdiction of Maharashtra courts to the exclusion of other courts. In Swastik Gases Pvt. Ltd. Vs. Indian Oil Corporation Ltd. (2013) 9 SCC 32 it was held as under:
"For answer to the above question, we have to see the effect of the jurisdiction clause in the agreement which provides that the agreement shall be subject to jurisdiction of the courts at Kolkata. It is a fact that whilst providing for jurisdiction clause in the agreement the words like 'alone', 'only', 'exclusive' or 'exclusive jurisdiction' have not been used but this, in our view, is not decisive and does not make any material difference. The intention of the parties by having clause 18 in the agreement - is clear and unambiguous that the courts at Kolkata shall have jurisdiction which means that the courts at Kolkata alone shall have jurisdiction. It is so because for construction of jurisdiction clause, like clause 18 in the agreement, the maxim expressio unius est exclusio alterius comes into play as there is nothing to indicate to the contrary. This legal maxim means that expression of one is the exclusion of another. By making a provision that the agreement is subject to the jurisdiction of the courts at Kolkata, the parties have impliedly excluded the jurisdiction of other courts. Where the contract specifies the jurisdiction of the courts at a particular place and such courts have jurisdiction to deal with the matter, we think that an inference may be drawn that parties intended to exclude all other courts. A clause like this is not hit by Section 23 of the Contract Act at all. Such clause is neither forbidden by law nor it is against the public policy. It does not offend Section 28 of the Contract Act in any manner.
The above view finds support from the decisions of this Court in Hakam CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 41/49 Singh3, A.B.C. Laminart1, R.S.D.V. Finance 5, Angile Insulations6, Shriram City7, Hanil Era Textiles8 and Balaji Coke 12.
57. For the reasons mentioned above, I agree with my learned Brother that in the jurisdiction clause of an agreement, the absence of words like "alone", "only", "exclusive" or "exclusive jurisdiction" is neither decisive nor does it make any material difference in deciding the jurisdiction of a court. The very existence of a jurisdiction clause in an agreement makes the intention of the parties to an agreement quite clear and it is not advisable to read such a clause in the agreement like a statute. In the present case, only the Courts in Kolkata had jurisdiction to entertain the disputes between the parties.
9.43 The jurisdiction clause in the plaint is contained in para 78 which read as under:
".......and since the cause of action has also arisen at New Delhi where the offices of the defendant are situated, the suit is being filed in this Hon'ble Court which has jurisdiction to hear and try the suit."
9.44 No cause of action has arisen in the jurisdiction of this court. Merely because FCI has its Head Office at Delhi will not confer the jurisdiction upon this court to try and entertain the present suit. Reliance may be placed upon the law laid down in Patel Roadways Limited Bombay Vs. Prasad Trading Company (1991) 4 SCC 270 wherein it was held as under:
"Clauses(a) and (b) of Section 20 inter alia refer to a court within the local limits of whose jurisdiction the defendant inter alia "carries on business".
Clause (c) on the other hand refers to a court within the local limits of whose jurisdiction the cause of action wholly or in part arises. It has not been urged before us on behalf of the appellant that the cause of action wholly or in part arose in Bombay. Consequently clause (c) is not attracted to the facts of these cases. What has been urged with the aid of the Explanation to Section 20 of the Code is that since the appellant has its principal office in Bombay it shall be deemed to carry on business at Bombay and consequently the courts at CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 42/49 Bombay will also have jurisdiction. On a plain reading of the Explanation to Section 20 of the Code we find an apparent fallacy in the aforesaid argument. The Explanation is in two parts, one before the word "or" occurring between the words "office in India" and the words "in respect of" and the other thereafter. The Explanation applies to a defendant which is a corporation which term, as seen above, would include even a company such as the appellant in the instant case. The first part of the Explanation applies only to such a corporation which has its sole or principal office at a particular place. In that event the courts within whose jurisdiction the sole or principal office of the defendant is situate will also have jurisdiction inasmuch as even if the defendant may not be actually carrying on business at that place, it will "be deemed to carry on business" at that place because of the fiction created by the Explanation. The latter part of the Explanation takes care of a case where the defendant does not have a sole office but has a principal office at one place and has also a subordinate office at another place. The words "at such place"
occurring at the end of the Explanation and the word "or" referred to above which is disjunctive clearly suggest that if the ease falls within the latter part of the Explanation it is not the Court within whose jurisdiction the principal office of the defendant is situate but the court within whose jurisdiction it has a subordinate office which alone shall have jurisdiction "in respect of any cause of action arising at any place where it has also a subordinate office".
..............The linking together of the place where the cause of action arises with the place where a subordinate office is located clearly shows that the intention of the legislature was that, in the case of a corporation, for the purposes of clause (a), the location of the subordinate office, within the local limits of which a cause of action arises, is to be the relevant place for the filing of a suit and not the principal place of business. If the intention was that the location of the sole or principal office as well as the location of the subordinate office (within the limits of which a cause of action arises) are to be deemed to be places where the corporation is deemed to be carrying on business, the disjunctive "or" will not be there. Instead, the second part of the explanation would have read "and in respect of any cause of action arising at any place where it has a subordinate office, also at such place".
9.45 Therefore this issue is decided in favour of the defendant and against the plaintiff and it is held that this court lacks, does not have the CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 43/49 territorial jurisdiction to try and entertain the present suit.
Issue no. 3 : Whether the suit is barred by limitation? OPD 9.46 As far as the issue of limitation is concerned, the onus to prove that the suit is barred by limitation was upon the defendant. It was the contention of the defendant that plaintiff had demanded refund of the amount of Rs. 37,55,000/ vide his letter dated 27.12.2000 i.e. D7 and hence it was upon this date that the cause of action if any arose in favour of the plaintiff but the suit was filed only on 27.05.2004 i.e. the beyond the period of three years prescribed by the Limitation Act. It was also argued that vide letter dated 18.10.2000 i.e. Ex. PW1/20 the plaintiff had requested for refund of the amount by refusing to lift the stocks and therefore this suit even from that date is hopelessly barred by limitation. It was further contended that vide letter dated 07.03.2001 i.e. D8 plaintiff was duly intimated about withholding of his security deposit and that the goods will be sold as per his risk and cost. It was argued that even from the said date suit is hopelessly barred by law of limitation.
9.47 Per contra it was the case of the plaintiff that the correspondences between the parties, in respect of the dispute, continued upto 2004. Furthermore in suit no. 263/2005 filed by the defendant before the Hon. CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 44/49 High Court of Bombay it was claimed by the defendant that the stock/rice was stored by them till 01.02.2003 and hence the suit is well within the period of limitation.
9.48 The present suit is for recovery of Rs. 37,55,000/. The said amount was deposited by the plaintiff as a security at the time of tender and after acceptance. It is recovery of this amount which has been sought by the plaintiff. Vide his letter dated 18.10.2000 i.e. Ex. PW1/20 plaintiff had refused to lift the goods or to deposit any further security amount. Vide Ex. PW1/21, dated 25.10.2000 he had demanded refund of the above amount along with interest. In my considered opinion the cause of action arose in favour of the plaintiff and against the defendant on 25.10.2000. This communication was followed by Ex. PW1/22 dated 04.11.2000, Ex. PW1/23 dated 16.11.2000 and Ex. PW1/24 dated 27.12.2000. Undoubtedly District Manager, Nagpur was corresponding with the plaintiff vide Ex. D1/A1 to A6 which is dated 08.02.2001 however none of these documents can be termed as acknowledgement of any outstanding amount or its refund as was deposited by the plaintiff as a security.
9.49 As far as Ex. D1/A7 dated 01.05.2004 is concerned it was merely an intimation to the plaintiff that the goods/stocks have been disposed off at his risk and cost and that FCI has suffered a loss of Rs. 2,57,22,456/ which CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 45/49 the plaintiff was required to deposit with them. Even this letter/ communication is not an acknowledgement of any liability or liability in respect of any outstanding amount much least the security amount. It will also be worthwhile to point out that plaintiff during admission denial had denied all these documents Ex. D1/A1 to Ex. D1/A7. Plaintiff cannot be permitted to blow hot and cold at the same time that is to say to deny having received those documents, but places reliance upon them to bring the suit within limitation. Ex D1/A7 refers to letter Ex D8 dated 07.03.2001 which the plaintiff had admittedly received. It was vide this letter that the plaintiff was informed about withholding of his security deposit as well as disposal of the stock at his risk and cost. Even from the said date the present suit for recovery of Rs. 37,55,000/ i.e. the security deposit is hopelessly barred by law of limitation as the suit is well beyond the period of three years from 18.10.2000 as well as 07.03.2001. The cause of action to file the present suit arose when the plaintiff demanded refund of his security/amount and the present suit admittedly has been filed well beyond the period of three years from the said date of demand. This issue is accordingly decided in favour of the defendant and against the plaintiff.
Issue no. 4 : Whether the suit is bad for nonjoinder/misjoinder of parties? OPD CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 46/49 9.50 The onus to prove the present issue was upon the defendant. It was the contention of the defendant that in terms of the tender floated by the FCI's Regional Office at Mumbai, the Senior Regional Manager, Maharashtra is/was the only proper and necessary party to the present suit and failure on the part of the plaintiff to implead the Senior Regional manager calls for rejection of the plaint.
9.51 Per contra it was contended by the plaintiff that the defendant corporation has its Head Office at New Delhi and it is not the defendant's case that the Regional offices of the defendant are independent and not answerable to the Head office. It was argued that the defendant is properly represented through its Head Office.
9.52 It has been discussed above that the tender was floated and accepted by FCI's Regional Office at Mumbai, Maharashtra. The goods were to be lifted from the godowns in Maharashtra. It is the Senior Regional Manager who is/was the signatory to the agreement, tender documents at the time when the tender was floated, proposal accepted and agreement entered between the parties. The communication of the acceptance, of the bid/tender, to the plaintiff and all further correspondences till the time of filing the present suit were signed either by the Senior Regional Manager himself or on his behalf by Deputy Manager Commercial. Senior Regional Manager CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 47/49 was thus the concerned official who was aware about the entire factual matrix, genesis of the dispute. Even as per the case of the plaintiff the samples were lifted in the presence of District Manager (which otherwise could not be proved) who was corresponding on behalf of the Senior Regional Manager. Therefore Senior Regional Manager in my considered opinion was indeed a proper party but not a necessary party as no relief has been claimed against FCI's Regional Office at Maharashtra. Necessary Parties' are those parties from whom relief is claimed. 'Nonnecessary Parties' are those parties who may be party to the suit, but from whom no relief has been claimed. The presence of necessary parties is obviously required for the court to adjudicate and pass an effective and complete decree granting relief to the plaintiff. Necessary Parties are those parties in the absence of whom no effective decree can be passed by the court. However, the same does not hold good for nonnecessary parties. In the absence of necessary parties, the court may dismiss the suit, as it shall not be able to pass an effective decree. But a suit can never be dismissed due to absence of nonnecessary parties.
9.53 Hence Senior Regional Manager Mumbai Maharashtra though a proper party is not a necessary party and hence the suit is not bad for non joinder/mis joinder of parties. This issue is accordingly decided against the defendant.
CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 48/49 9.54 In view of the above discussion as issue no. 1, 2, 3 and 5 have been decided against the plaintiff and in favour of the defendant, plaintiff is not entitled to any relief. Suit is liable to be dismissed. I order accordingly.
10. Decree sheet be prepared accordingly.
11. File be consigned to record room.
Announced in the open court (Gaurav Rao)
on 26th April 2018 ADJ02 & Waqf Tribunal /
New Delhi District,
Patiala House Courts, Delhi.
CS No. 58564/16 Arvind Goel Vs. Food Corporation of India 49/49