Delhi District Court
Blue Star Limited vs Sharda Group Of Institutions on 26 July, 2018
IN THE COURT OF MS. ASHA MENON: DISTRICT &
SESSIONS JUDGE (SOUTH DISTRICT) SAKET: NEW DELHI
CISCS DJ3142018
CNRDLST 010021642018
1. Blue Star Limited
Having its Registered Office at:
Kasturi Buildings,
Mohan T.Advani Chowk,
Jamshedji, Tata Road
Mumbai400020 (India)
Also At:
Blue Star Limited
Vatika Atrium, 6th Floor,
Sector53, Golf Course Road,
Gurgaon122002 (Haryana), India .....Plaintiff.
Versus
1. Sharda Group of Institutions
M11, South Extension, PartII
New Delhi110049.
2. Sharda University
Plot No.32,34, Knowledge Park 3
Greater Noida201306
3. Sharda Educational Trust,
M11, South Extension, PartII
New Delhi. .....Defendants.
Date of Institution: 27.03.2018
Order reserved on: 19.07.2018
Order pronounced on: 26.07.2018.
ORDER
This order will dispose off an application moved by the defendant No.3 under Order 7 Rule 10 CPC read with Section 20 CPC CISCS DJ3142018 Page 1 of 9 for rejection of the present suit.
The brief facts of the case as are relevant for the disposal of the present application is that Blue Star Limited has filed this suit for recovery of Rs.70,16,014/ along with interest against three defendants. The defendant No.1 is Sharda Group of Institutions having address at M11, South Extension, PartII, New Delhi110049. The defendant No.2 is Sharda University having address at Plot No.32,34, Knowledge Park III, Greater Noida201306. The defendant No.3 is Sharda Educational Trust also described as having office at M11, South Extension, PartII, New Delhi. The plaintiff company claimed to be in the business of commercial cooling and refrigeration equipments ranging from water coolers to cold storages. The defendant No.1 is an educational organization. The defendant No.2 is also an educational institution having a multidiscipline campus. The defendant No.3 is a Trust established by the defendant No.1.
The plaintiff claimed that it had submitted its techno commercial bid Ref: 1011/DSA/010/001/R3 dated 24.04.2010 for heating, ventilation and air conditioning (HVAC) works in proposed PGDBM Block, Sharda University, Plot No.32 & 34, Knowledge ParkIII, Greater Noida for total value of Rs.3,25,00,000/. The defendant No.1 awarded the HVAC work to the plaintiff vide its letter of award Ref: H.C.P/PGDM/25/2010 dated 24.04.2010 for a total value of Rs.3,25,00,000/ and requested the plaintiff to mobilize the site and commence work. On being approached by the defendants, the plaintiff submitted another technocommercial bid Ref: 1011/D SA/010/001/R1 dated 16.06.2010 for heating, ventilation and air conditioning (HVAC) works in the proposed Engineering BlockIII, CISCS DJ3142018 Page 2 of 9 Sharda University, Plot No.32 & 34, Knowledge ParkIII, Greater Noida for total value of Rs. 1,45,00,000/. The defendant No.1 awarded the HVAC work to the plaintiff vide its letter of award ref:
SET/02/06/10 dated 16.06.2010 for a total value of Rs. 1,45,00,000/ and requested the plaintiff to mobilize the site and commence the work. Both the bids were accepted by the Defendant No.2 vide their letters of award dated 24.04.2010 and 16.06.2010 on payment terms as below: a. 7.5% mobilisation advance against submission of bank guarantee(s) b. 5% against pro rata submission of shop drawing c. 67.5% pro rata on delivery of material d. 10% on commissioning and handing over against submission of bank guarantee(s) e. 10% on commissioning and handing over against submission of bank guarantee(s) The plaintiff claimed that it duly furnished unconditional bank guarantees No. BG No.2103385 dated 23.06.2010 for an amount of Rs.19,73,151/ and BG No.2103384 dated 23.06.2010 for an amount of Rs.7,72,500/. The bank guarantees were further extended by the plaintiff vide extension letters dated 01.12.2010 and 24.06.2011.
The plaintiff company claimed that it had carried out both the works at PGDBM Block and Engineering Block in Sharda University, Plot No. 32 & 34, Knowledge ParkIII, Greater Noida, despite delays at the behest of the defendant No.1, the plaintiff had commissioned the respective systems and handed over the same to the defendant No.l for their beneficial use. The final invoice dated 12.01.2013 ref:P1034520/FINAL was raised for HVAC works at CISCS DJ3142018 Page 3 of 9 Engineering Block, Sharda University and another final invoice dated 19.01.2013 ref:P1034519/FINAL was raised for HVAC works at PGDBM Block, Sharda University. The plaintiff has alleged that the defendants have failed to release the payment to the plaintiff which was on prorata basis and bill to bill basis as per the terms of both the technocommercial bid and letters of award dated 24.04.2010 and 16.06.2010 and had been delaying the payment without explanation.
Till date plaintiff had received only Rs.2,79,41,028/ for the PGDBM Block and Rs.77,60,048/ for the Engineering Block, whereas the total certified value of the work was Rs.4,27,17,090/. The defendants have paid only Rs.3,57,01,076/ leaving an outstanding principal amount of Rs.70,16,014/. It was submitted that a cheque no. 917655 dated 29.04.2011 drawn by defendant No.3 amounting to Rs.22,00,000/ in favour of the plaintiff was dishonoured for the reasons 'insufficient funds' and this fact was communicated to the defendants through email dated 18.05.2011 whereby the plaintiff also requested for further payments to be released. A letter was issued on 04.06.2014 to defendant No.1 demanding the outstanding amount. The defendants vide letter dated 30.03.2015 acknowledged the liability and assured payment.
Further, letters dated 03.06.2015, 09.11.2015 and 11.12.2016 were sent by the plaintiff to the defendants but no payment was made. It was submitted that the defendants never denied or challenged the amount claimed by the plaintiff company but completely failed to settle the amounts due. Hence, legal notice dated 03.02.2016 and 05.02.2016 were sent to the defendants but no payments were made and in the reply to notice dated 25.05.2016 for CISCS DJ3142018 Page 4 of 9 the first time, disputed the amount due by raising unsubstantiated allegations against the plaintiff. The plaintiff alleged that these were a ploy to evade payments.
It is stated that the cause of action has arisen at New Delhi, as the defendants No.1 and 3 who had made the payment to the plaintiff, work for gain in New Delhi. It is claimed that transaction took place in New Delhi.
The defendants filed common written statement. They also filed the instant application under Order 7 Rule 10 CPC read with Section 20 CPC submitting that this Court has no territorial jurisdiction. It is stated that there was no entity by the name of Sharda Group of Institutions, as it was not a legal entity. It is stated that the Sharda University i.e. the defendant No.2 had its registered address at Greater Noida, U.P and the Sharda Educational Trust impleaded as defendant No.3 had its registered address at 10, Jawahar Nagar Colony, Khanderi, Agra, Uttar Pradesh. Hence, it was submitted that this suit was liable to be dismissed by this Court, as it had no territorial jurisdiction, as the cause of action had fully arisen at Greater Noida at the address of the defendant No.2.
In reply, the plaintiff has submitted that this Court had jurisdiction to try this case. It is submitted that if any part of cause of action arose within the jurisdiction of a Court, that Court was vested with the territorial jurisdiction to try the case. Such cause of action included payment of money. It is stated that the cheque issued by the defendant No.3 were drawn and were submitted to plaintiff's bank account in HSBC Bank having its branch at Barakhamba Road, New Delhi. Hence, the payments were made by the defendant No.3 into the CISCS DJ3142018 Page 5 of 9 account of the plaintiff within the jurisdiction of this Court. It is also claimed that several meetings and negotiations had taken place at the office of the defendant No.1, which was within the territorial jurisdiction of this Court and at that time, the office of the plaintiff was also located at E44/12, Okhla Industrial Area, PhaseII, New Delhi.
I have heard the arguments of Ld. Counsel for the plaintiff Shri Yashvardhan, Ld. Counsel for the defendant Nos. 1 & 2 Shri Vinay Sharma and Ld. Counsel Shri Harsh Kumar Sharda for defendant No.3 and have perused the records.
I have also perused the judgments relied upon by the Ld. Counsel for the plaintiff, being the decision of the Hon'ble Mysore High Court in 'D.Munirangappa vs Amidayala Venkatappa and another', 1964 SCC Online Kar 150 and the judgment of the Hon'ble Delhi High Court in 'ICICI Bank Ltd. Vs Rathi Syntex Ltd.', 2015 SCC Online Del 13320, to submit that even if a part of the cause of action has arisen within the jurisdiction of this Court, it would have the jurisdiction to try the case and that the jurisdiction did not depend on how significant that cause of action was. It was submitted that the plaintiff had furnished two bank guarantees from Delhi as per the terms of the contract and, therefore, the cause of action arose within the jurisdiction of this Court. Further since the office of the defendant No.1 and 3 was located within the jurisdiction of this Court hence this Court had the jurisdiction to try the case.
On the other hand, Ld. Counsel for the defendants submitted that no part of the cause of action had arisen within the jurisdiction of this Court. The Ld. Counsel pointed out to the documents in support of this contention. It is pointed out that the CISCS DJ3142018 Page 6 of 9 technocommercial bid was addressed to the defendant no.2 at Noida and bid was accepted and the work awarded by the defendant No.2 from Noida. The work was also executed at the premises of the defendant No.2 at Noida. Ld. Counsel for the defendants also submitted that even the return of the cheque did not confer any jurisdiction on this Court. In these circumstances, this Court had no jurisdiction and the plaint had to be returned.
Section 20 CPC reads as under: "20. 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 defendant where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or
(b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually 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."
In the present case, in the written statement the defendant No.1 has stated that it is not an educational organization but has a marketing office functioning from a rented property at M11, South Extension PartII, New Delhi and it is claimed that the defendant No.3 is a Trust having its office at Uttar Pradesh. It may be claimed that CISCS DJ3142018 Page 7 of 9 under the provisions of Clause 20 (a) since one of the defendants clearly carries on its business in South Extension PartII, New Delhi within the jurisdiction of this Court, this Court has jurisdiction. However, defendant No.2 has objected. It is to be noted that though the plaintiff has referred to the defendant No.1 in reference to the Contract, the documents relied upon by the plaintiff and admitted by the defendants, show that the offer of the plaintiff was addressed to Sharda University, the defendant No.2 at Plot No. 32 & 34, Knowledge ParkIII, Greater Noida and work was also awarded after acceptance from Plot No. 32 & 34, Knowledge ParkIII, Greater Noida. Further, the work was also to be executed at Plot No. 32 & 34, Knowledge ParkIII, Greater Noida. These documents were addressed to defendant No.2 and by defendant No.2 and merely mentioning of defendant No.1 in the plaint prima facie does not suffice to establish that the contract was between the plaintiff on the one hand and the defendants No.1 on the other hand. Therefore, the mere fact that the defendant No.1 has a place of business at South Extension PartII, New Delhi within the jurisdiction of this Court would not suffice to vest this Court with any jurisdiction in the matter.
Ld. Counsel for the plaintiff had argued that the bank guarantees had been furnished at Delhi within the jurisdiction of this Court. However, the bank guarantees had been issued from Barakhamba Road, New Delhi to Sharda University at Plot No. 32 & 34, Knowledge ParkIII, Greater Noida. There is nothing on the record to show that payments were made to the plaintiff within the jurisdiction of this Court, as the cheque return memo is of the Hong Kong and Shanghai Banking Corporation Limited issued from its CISCS DJ3142018 Page 8 of 9 office at Barakhamba Road, New Delhi. The cheque for Rs.22,00,000/ was also issued from Greater Noida drawn on Syndicate Bank, Greater Noida.
Thus, the question is not of the fraction of cause of action which was the subject matter before the Hon'ble High Court of Delhi and Mysore High Court. In the present case neither the contract was executed in Delhi, nor were the payments made within the jurisdiction of this Court nor was the work executed in Delhi, as the entire contract was executed at Plot No. 32 & 34, Knowledge ParkIII, Greater Noida. In these circumstances, this Court clearly has no jurisdiction to try this case.
Under the provisions of Order 7 Rule 10 CPC, the plaint is accordingly to be returned to the plaintiff to be presented before the Court having territorial jurisdiction. However, before returning the plaint, as the defendants have appeared in the Court, option is given to the plaintiff under Order 7 Rule 10A CPC to move an appropriate application within a week with an advance copy to the opposite side.
The application under Order 7 Rule 10 CPC is allowed accordingly.
Be taken up now for further proceedings on 06.08.2018.
Announced in open Court
today i.e. 26.07.2018 (ASHA MENON)
District & Sessions Judge (South)
Saket/New Delhi.
Digitally signed
by ASHA
ASHA MENON
Date:
MENON 2018.07.30
16:23:38
+0530
CISCS DJ3142018 Page 9 of 9