Delhi District Court
Kailashpati Polyplast Pvt. Ltd vs Mis. Raghav Industries on 22 January, 2024
IN THE COURT OF SH. ANURAG SAIN,
DISTRICT JUDGE (COMMERCIAL COURT)-01,
PATIALA HOUSE COURTS, NEW DELHI
CS(COMM) No.418/2022
Kailashpati Polyplast Pvt. Ltd.
3007, Saini Market, 3rd floor,
Bahadurgarh Road, Delhi-110006.
......Plaintiff
Vs.
M/s Raghav Industries
Through Mr. Bhushan Sharma
Proprietor
VPO Bansal Near Village Raiseri
Near UNA Chemicals District UNA
Himachal Pradesh-174303
Also at:
MDC, House No.494, Near IT Park
Panchkulla, Sector-6, Chandigarh,
Punjab
......Defendant
Appearance: Sh.Abhay Raj Verma, Ld. Counsel for the
plaintiff.
Sh.Mayank Maini, Ld. Counsel for the
defendant.
ORDER
1. Vide this order, I shall dispose off an application under Order 7 Rule 11 read with Section 151 CPC filed on behalf of the defendant.
2. It has been averred in the application that the present Page 1 of 16 suit has been filed by the plaintiff through Sh. Priyank Garg who has been authorized by the plaintiff company vide a Board Resolution dated 10.04.2019 however, a bare perusal of the same shows that the same is a photocopy and the said document was executed way back in April 2019, whereas the suit was filed in 2022. Moreover, no name of either of the defendant firm or its proprietor is appearing on the said Board Resolution which annihilates the very locus standi of authorize representation leading to the filing of the present suit. Further the copy of the Board Resolution does not clarify for which case Sh. Priyank Garg is appointed as the authorized representative and the said document is also in teeth of Order III Rule 2 of CPC. It has been further averred that not even an iota of cause of action has arisen within the territorial jurisdiction of this court and the bare perusal of the memo of parties shows that the registered office of the defendant is situated at District Una, Himachal Pradesh and further the proprietor of the defendant is a permanent resident of Panchkula, Haryana. Furthermore, the registered address of the plaintiff is at 3007, Saini Market, 3rd Floor, Bahadurgarh Road, Delhi06 which comes under the jurisdiction of P.S. Sadar Bazar. Furthermore, the abovementioned address is also mentioned in the ledger, invoices of the plaintiff which were sent to the defendant firm. There is not even a single averment pertaining to the accrual of cause of action within the territorial jurisdiction of the court. Admittedly the alleged goods as claimed to be supplied to the defendant by the plaintiff have been transported from the Page 2 of 16 plaintiff's godown's address situated at DSIIDC, Narela Industrial Area, Delhi40 which also does not fall within the territorial jurisdiction of this court and thus, this court is bereft of territorial jurisdiction to adjudicate the present suit. The plaintiff has deliberately omitted to file the requisite documents to accentuate the alleged liability on the part of the defendant including the ledger as amended upto date, bank statement etc. The plaintiff has intentionally filed an incomplete ledger pertaining to the defendant which is only upto 02.03.2019 and not amended upto the year 2022 i.e. the date of filing of the present suit. The plaintiff has miserably failed to file the certified copy of the bank statement pertaining to the banking transactions having been taken place between the plaintiff and the defendant firm. The plaintiff has unscrupulously distorted the facts before the court as the defendant had made the entire payment of the legal dues through banking transfers as well as through cash to the authorized officials of the plaintiff. The plaintiff has deliberately concealed the factum of payment of Rs. 30 Lac through RTGS/NEFT in six installments of Rs. 5 Lac each on dates i.e. 26.02.2019, 27.02.2019, 28.02.2019, 01.03.2019, 02.03.2019 and 14.03.2019 respectively. The balance amount was paid to the plaintiff company in cash in numerous occasions at the office address of the defendant firm. The certified copy of the bank statement of Kangra Central Cooperative bank account of the defendant has also been filed. The present suit has been filed by the plaintiff after the expiry of limitation period of three Page 3 of 16 years as envisaged in the Limitation Act, 1963. Even according to the own case of the plaintiff, a bare perusal of the ledger shows that the last entry of transaction between the plaintiff and the defendant is of date 02.03.2019. Thereafter, except initiation of legal proceedings pertaining to Section 138 NI Act against the defendant, the plaintiff has not undertaken any communication or has filed any document pertaining to the intervening period upto March 2022. Admittedly, the present suit has been filed in the month of May, 2022 and hence the present suit is hopelessly barred by limitation. It has been further averred that no proof of the plaintiff's company including the Master Data as well as FORM45 of the plaintiff which is a Private Limited Company showing the name of the Directors of the plaintiff company has been filed along with the plaint. The plaintiff has miserably failed to even file its registration proof which is the most vital document to corelate the business entity and monetary transactions before the court. The plaint is liable to be dismissed under the provisions of Order VI Rule 15A CPC as the plaintiff has not verified the pleadings in accordance with the law. The plaintiff has not filed the address form of the plaint which is mandatory under the provision of CPC. On these premise, the instant application has been filed for rejection of the plaint.
3. Reply to the application has been filed wherein the plaintiff has denied the averments of the defendant in toto. It has been averred that at the time of deciding any application, Page 4 of 16 contents of the plaint only to be considered. The defendant had made part payment through bank transfer and the said bank account is maintained in the jurisdiction of this court and multiple cheques, which were issued by the defendant towards his liability, also bounced back, which were deposited and bounced in the bank over which this court has jurisdiction. On these premise, the plaintiff has prayed for the dismissal of the present application.
4. I have heard the arguments advanced by both the parties and written submissions so filed and carefully perused the record. During the course of arguments, ld. counsel for the plaintiff fairly submitted that this application though filed under Order VII Rule 11 CPC, but it be treated under Order VII Rule 10 CPC.
5. Ld. counsel for the plaintiff has also relied upon following judgments:
i. Ajanta Raj proteins Pvt. Ltd. Vs. Himanshu Foods (2018) 249 DLT 406;
ii. Puneet Kumar Agarwal Vs. M/s Imagination Agri Exports 2013 SCC online Del 701;
iii. Auto Movers Vs. Luminous Power Technologies Pvt. Ltd. 2021 SCC online Del 4387;
iv. Empire Home Appliance Pvt. Ltd. Vs. M/s Suraj Enterprises, 2016 SCC online Del 3954;
v. Maya Jain Vs. Yash Chhabra 2015 SCC Online Del 9078;
vi. Satyapal Vs. Slick Auto Accessories Pvt. Ltd. & Ors. AIR 2014 Del 115;
vii. Yash Chhabra Vs. Maya Jain (2015) 151 DRJ 316 DB viii. Himanshu Saigal Vs. P.K. Astir 2018 SCC online Page 5 of 16 Del. 1285 ix. Shardha Wassan & Ors. Anil Goel and Anr. 2009 SCC Online Del 1285;
x. L.N. Gupta vs. Smt. Tara Mani, AIR 1984 Del 149; xi. Shanti Devi Vs. Union of India (2020) 10 SCC 766 xii. ABC Laminart (P) Ltd. Vs. A.P. Agencies (1989) 2 SCC 163;
xiii Auto Movers Vs. Luminous Power Technologies Pvt. Ltd. 2021 SCC Online Del 4387;
xiv. Subhashini Malik Vs. S.K. Gandhi & Ors. 2016 SCC Online Del 5058;
xv. Management Committee of Montfort Senior Secondary School Vs. Vijay Kumar & Ors. (2005) 7 SCC 472;
xvi. H.S. Deekshit and Anr. Vs. Metropoli overseas Ltd. & Ors. 2022 SCC online 2023 xvii . Sejal Glass Ltd. Vs. Navilan Merchants Pvt. Ltd. (2018) SCC 780;
xviii. Madhav Prasad Aggawral & Anr. Vs. Axis Bank Ltd. & Anr. (2019) 7 SCC 158 and;
xix. Ramdayal Umraomal Vs. Pannalal Jagannathji AIR 1979 MP 153.
6. Ld. counsel for the defendant has relied upon following judgments:
i. Moutain Mist Agro India Vs. S.Subramaniyam (MANU/DE/9018/2007);
ii. Arintis Sales Pvt. Ltd. Vs. Rockwell Plastic Pvt. Ltd. (MANU/DE/9208/2007) and;
iii. Arinits Sales Pvt. Ltd. Vs. Rockwell Plastic Pvt. Ltd. & Ors., ILR (2008) II Delhi 325
7. It is settled law that an objection regarding territorial jurisdiction of a court, raised by way of an application under Order VII Rule 10 of the CPC, is to be decided on a demurrer, that is, by accepting all statements made in the plaint to be true. Thus, the examination for the purpose of an application under Page 6 of 16 Order VII Rule 10 of the CPC is limited to the averments made in the plaint and the documents filed by the plaintiff.
8. In D. Ramachandran v. R.V. Janakiraman: (1999) 3 SCC 267, the Supreme Court observed as under:
"...It is well settled that in all cases of preliminary objection, the test is to see whether any of the reliefs prayed for could be granted to the appellant if the averments made in the petition are proved to be true. For the purpose of considering a preliminary objection, the averments in the petition should be assumed to be true and the court has to find out whether those averments disclose a cause of action or a triable issue as such. The court cannot probe into the facts on the basis of the controversy raised in the counter."
9. In a civil suit, the issue of territorial jurisdiction is governed by Section 20 CPC, which reads as under:-
"Section 20 of Code of Civil Procedure 1908 "Other suits to be instituted where defendants reside or cause of action arises"
Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction-
(a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily Page 7 of 16 resides, or carries on business, or personally works for gain; or
(b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or
(c) the cause of action, wholly or in part, arises."
10. The meaning ascribed to the phrase "cause of action"
has to be necessarily a bundle of facts which are essential facts giving plaintiff the right to sue. Thus, the facts which are to be pleaded for the purposes of occurrence of cause of action either in whole or in part as per Section 20 CPC have to be the essential facts which are inextricably connected with the right to sue of the plaintiff and not all facts which may arise incidentally in the case can be said to be a "cause of action" for the purposes of invocation of the jurisdiction of the Court.
11. Therefore, the said facts for the purposes of cause of action must essentially have nexus directly with the complaint or the grievance as stated in the plaint and not all other facts which are unrelated to the plaint or grievance but are incidentally related to the case, can be said to be the ones by virtue of which Page 8 of 16 the cause of action either in whole or in part can be said to have arisen for the purposes of Section 20 (c) of the Code.
12. The fine distinction between the essential facts which may constitute the cause of action and the incidental facts which could not constitute part of cause of action has been drawn by Bombay High Court in the case of Baroda Oil Cakes Traders v. Parshotam Narayandas Bagulia and Another, reported in AIR 1954 Bom 491 wherein the Bombay High Court observed thus:-
"It is, however, important to bear in mind that the bundle of facts which constitute the cause of action in a civil suit does not and is not intended to comprise every fact which may be proved in evidence. It is only material facts which must be proved by the plaintiff before he can obtain a decree that constitute the cause of action. Facts which the plaintiff may allege incidentally and facts which may be brought in evidence as 'res gestae' would not necessarily constitute a part of the cause of action. The distinction between facts which are relevant an material and those that are incidental and immaterial is sometimes not easy to be drawn; but the said distinction is nevertheless important for the purpose of deciding which facts constitute the cause of action and which are not included in it. The position under S. 20(c) is very clear. If it is shown by the plaintiff that the cause Page 9 of 16 of action has arisen wholly or in part within the local limits of the jurisdiction of the trial Court, the trial Court would be entitled to deal with the suit".
(Emphasis Supplied.)
13. In view of the law discussed above, let us examine the pleadings of the plaintiff to examine the question whether any part of cause of action of the present dispute, has arisen within the jurisdiction of this Court. On examining the facts of the case and the documents placed on record by the plaintiff more particularly the invoices, the address of the plaintiff is mentioned as 3007, Saini Market, Bahadurgarh Road, Sadar Bazar, Delhi-06 and the Godowns addresses are of Narela Industrial Area, Delhi-
40. As per the invoices, it is clear that material was dispatched/transported from the above addresses and was delivered to defendant V.P.O. Basal, Near Village Raiseri, Near Una Chemicals, District Una, Himachal Pradesh-174303 (as also mentioned in the memo of parties). The defendant has approached the plaintiff at his office address mentioned in the memo of parties.
14. The Counsel for the plaintiff argued that besides the plaintiff has a bank account within a jurisdiction of this Court, the invoices relied upon by him shows that all disputes are subject to Delhi Jurisdiction.
15. The plea taken by ld. counsel for the plaintiff that part cause of action arisen in the jurisdiction of New Delhi Courts, Page 10 of 16 since plaintiff has a bank account, which has a branch in New Delhi and the cheques issued by the defendant were deposited at Citibank, DLF Capital Point, Cannaught Place Delhi.
16. In Arinits Sales Pvt. Ltd. Vs. Rockwell Plastic Pvt. Ltd. & Ors., (supra), Hon'ble Division Bench has dealt with the similar situation where in ld. Single Judge has returned the plaint under Order VII Rule 10 CPC and it has been held that "merely because the aforesaid cheques were presented in the Delhi account of the appellant, the same would not vest any jurisdiction on this Court". The said has been challenged before the Hon'ble Division Bench as above, wherein the same has been upheld after referring to the facts of the case as under:
"A suit was filed by the appellant herein as a summary suit seeking for recovery of Rs. 20,53,944/- against the defendants and also for interest @ 18% per annum. The defendants entered appearance and thereafter the plaintiff moved an application for service of summons for judgment upon the defendants. Summons for judgment were duly served upon the defendants and immediately thereafter, they filed an application for leave to defend the present suit. The defendants also moved an application under Order VII Rule 10 of the Code of Civil Procedure taking up the plea that this Court has no territorial jurisdiction to entertain the suit and, therefore, the plaint should be returned. Since an objection with regard to the territorial jurisdiction of Delhi Court was taken, the said plea was taken up for consideration and upon hearing the counsel for the parties at length, the learned Single Judge upheld the aforesaid preliminary objection regarding the maintainability of the suit in view of the facts and circumstances stated in the impugned order. Therefore, the plaint was directed to be returned for presentation in the competent court of jurisdiction.Page 11 of 16
The learned Single Judge had taken notice of the fact that the plaintiff has supplied the goods and raised its invoices/bills from Faridabad. Notice was also taken of the fact that the defendant Company is situated at village Kassar, Tehsil Bahadurgarh, District Jhajjar, Haryana and works for gain at the same address. Cheques were also issued by the defendant Company in favor of the plaintiff drawn on State Bank of Bikaner and Jaipur, Delhi Rohtak Road, Bahadurgarh, District Rohtak in the State of Haryana. Those cheques, on presentation, were dishonoured by the drawee bank either for insufficiency of funds or payments stopped. In view of the said fact, it was also held that cause of action if any on dishonourment of cheques arose at Bahadurgarh. Reference was also made by the learned Single Judge to the fact that plaintiff has categorically averred in the plaint that the defendant Company had issued form ST-15 towards their liability to pay the sales tax for the goods received at Bahadurgarh. After referring to the aforesaid facts, it was held that merely because the aforesaid cheques were presented in the Delhi account of the appellant, the same would not vest any jurisdiction on this Court. Another plea raised by the appellant that the complaint under Section 138 of the Negotiable Instruments Act was filed at Delhi was dealt with by the learned Single Judge, stating that simply because such a complaint has been filed at Delhi would not confer any jurisdiction on the Civil Courts in Delhi.
17. After referring the facts of the case as mentioned above, it has been held as under:
"We are of the considered opinion that in view of the facts and circumstances of the case, the Delhi Court will have no jurisdiction. The reasons and the findings recorded by the learned Single Judge are found to be cogent, just and proper. We find no ground to interfere with the aforesaid order passed by the learned Single Judge".Page 12 of 16
18. As regards the jurisdiction on the basis of invoices, as argued by the counsel for the plaintiff, where it is mentioned that all disputes are subject to Delhi jurisdiction and hence this Court has territorial jurisdiction to try and entertain the present case.
19. The jurisdiction clause is contained in para 14 of the plaint, which reads as follows:-
14. That it is respectfully submitted that the orders were placed by the defendant at Delhi and the part payments were also made at Delhi.
That invoices raised by the plaintiff company also stated that if any dispute arises between the parties, the courts in Delhi will have the exclusive jurisdiction to adjudicate upon the same. That payment received in DLF Capital Point, Citi Bank in Delhi is in the jurisdiction of this court. Hence this Hon'ble Court possesses the competent territorial jurisdiction to try and entertain the present suit and grant the reliefs as prayed herein.
20. According to settled legal position, where only one court has territorial jurisdiction, the suit necessarily be filed in that court. However, where law allows choice of forums, it is open to the parties to agree that the dispute resolution shall take place only in one of them. Such a contract cannot be treated as contravening the provisions of Section 28 of Indian Contract Act 1872. Agreement cannot confer jurisdiction where there is Page 13 of 16 inherent lack of jurisdiction.
21. There is no dispute regarding the fact where, in case of a contract or agreement, the place where the contract has been made or the place where the breach has occurred or for that matter, the place where it should have been performed, can be said to be the facts determinative of the occurrence of part cause of action at a relevant place, however in the present case, the said is not applicable for the reasons that no part of cause of action accrued within the jurisdiction of this court. The invoices were raised by the plaintiff which does not fall within the jurisdiction of this court and the defendant, where the goods were to be delivered also does not fall within the jurisdiction of this Court. The defendant approached the office of the plaintiff which does not fall jurisdiction of this court. Plaintiff admittedly works for gain and only resides within the jurisdiction of this Court. It is not out of place to mention that the position of law is that the Court cannot drive jurisdiction in respect of which otherwise the Court does not has jurisdiction merely because the parties have agreed to vest their jurisdiction in the said Court. Thus, the jurisdiction of New Delhi District is not made out, even if there is a mention on the invoice "subject to Delhi jurisdiction only". The jurisdiction of other districts is made out, since address of Sadar Bazar is not covered within New Delhi jurisdiction. Merely because the plaintiff has a bank account within the jurisdiction of this Court perse does not confer jurisdiction of this Court, there must be material/substantial cause of action, within the jurisdiction of this court, than those which are accidental.
Page 14 of 1622. The Hon'ble Division Bench of Delhi High Court in Arinits Sales Pvt. Ltd. Vs. Rockwell Plastic Pvt. Ltd. & Ors., (Supra), in a similar situation has held as under:
So far as the clause 2 of the terms and conditions of sale is concerned which states that all disputes are subject to Delhi Jurisdiction, it is the settled position of law that Court cannot derive jurisdiction in respect of a matter in respect of which otherwise the said Court does not have jurisdiction merely because the parties have agreed to vest jurisdiction in the said Court See Harshad Chiman Lal Modi v. D.L.F. Universal Ltd. Reported in.
We are of the considered opinion that in view of the facts and circumstances of the case, the Delhi Court will have no jurisdiction. The reasons and the findings recorded by the learned Single Judge are found to be cogent, just and proper. We find no ground to interfere with the aforesaid order passed by the learned Single Judge.
23. Thus, in view of the above, this Court has come to the conclusion, that the jurisdiction of New Delhi Courts is not made out. The plaint is accordingly returned under Order 7 Rule 10 CPC along with original documents to the plaintiff for being filed before the Court of competent jurisdiction.
Page 15 of 1624. The judgments so relied upon by ld. counsel for the plaintiff are not applicable to the facts of the present case.
25. Accordingly, original plaint along with annexures/documents and court fee be returned to the plaintiff or its authorized representative. Copies thereof be retained for the purposes of record.
26. File be consigned to record room.
Pronounced in the (Anurag Sain)
Open Court on this District Judge
22nd Day of January, 2023 (Commercial Court-01)
Patiala House Court: New Delhi.
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