Delhi District Court
Euromoney Publications Plc vs Consulta Juris on 31 January, 2011
IN THE COURT OF SH. PITAMBER DUTT; AD&SJ (CENTRAL)17,DELHI
Suit No. 444/09
Unique Case ID No. 02401C1263622005
Euromoney Publications Plc.
now known as
Euromoney Institutional Investor Plc;
Nestor House, Playhouse Yard,
Land on EC4 M5 EX
United Kingdom .....Plaintiff
Versus
1. Consulta Juris,
20F, First Floor,
Maruthi Lane,
Mumbai 400001
2 Mr. M. Prabhakaran,
Partner,
Consulta Juris,
20F, First Floor,
Maruthi Lane,
Mumbai 400001
3 Mrs Usha K Srivastava
Partner,
Consulta Juris
20F, First Floor,
Maruthi Lane,
Mumbai 400001 .......Defendants
Suit no. 444/09/01 Page 1/17
Date of Institution of Suit : 09.04.2001
Date when reserved for orders : 24.01.2011
Date of Decision : 31.01.2011
JUDGMENT
1 Vide this judgment I shall decide the suit filed by the plaintiff for recovery of Rs. 4,00,000/ against the defendants. The brief facts necessitating in filing the present suit are given as under: 2 The plaintiff is duly incorporated company and Mr. Rakesh Kumar Gupta and Mr. Anil Kumar are duly authorised. The plaintiff was earlier known as Euromoney Publications Plc and above name has been changed to Euromoney Institutional Investor Plc vide certificate issued by the Registrar of Companies. The defendant no. 1 through defendant no. 2 executed a Contract in favour of the plaintiff and guaranteed to the plaintiff to supply articles to International Commercial Litigation and the defendants agreed to pay to the plaintiff USD 3600 per 1000 words with an minimum charges of US D 7200 including the terms that defendants will receive 100 copies of the Supplementary for their own distribution. The plaintiff executed and issued invoice No. L103490116 dated 10.03.1998 with a credit period of 30 days as per the terms of the Contract. The defendant did not make the payment to the plaintiff within the credit period. The plaintiff demanded the sum of USD 7200 amount of invoice from the defendant but to no effect. However defendant sent Suit no. 444/09/01 Page 2/17 reply by post to the advocate of the plaintiff at Delhi and they received the same at Delhi thereby denied the liability to pay the amount to the plaintiff stating that the agreements were void and inoperative. As per the plaintiff the defendants are liable to pay interest on USD 7200 @ 1.5% per month commencing from 10.4.1998.
On the basis of above averment, the present suit was filed under Order 37 CPC.
3 The defendant put appearance as per the law and subsequently filed an application for leave to defend before the service of summons for judgment which was not considered by the Predecessor of this Court and decreed the suit vide order dated 18.02.2003. The said order was challenged by the defendant before the Hon'ble High Court in RFA 434/2004 which was disposed off vide order dated 22.09.2005 thereby direction was given to rehear the application. Thereafter application was allowed by the ld. Predecessor of this court vide order dated 13.08.2007. Thereafter the defendant filed written statement. It is stated by the defendant that they do not owe any amount to the plaintiff and the plaintiff has concocted a story and created suit documents in order to make an attempt to make unlawful gain at the cost of the defendant. It is further stated that plaintiff is a foreign company and the persons mentioned in para 2 of the plaint doe not have any knowledge of the facts related to the relevant transaction. It is further stated that Suit no. 444/09/01 Page 3/17 defendant is a partnership firm and defendant no. 2 & 3 are partners. The defendant have no office at New Delhi. The plaintiff has not submitted any document which can show that any part of cause of action has arisen in New Delhi. The plaintiff is relying on an old visiting card of defendant no. 2 alleging that it would amount to evidence of the address of the defendants at New Delhi. It is denied that any contract has been executed by the defendant with the plaintiff. No invoice was received by the defendant. The plaintiff has also not produced the copy of the Articles contributed by the defendant no. 2. It is further stated that there was no question of making any payment for publishing articles of law in the magazine published by the plaintiff. All other averments have also been denied. It is prayed that suit be dismissed with cost. 4 On the basis of the pleadings of the parties vide order dated 04.10.2007 the following issues have been framed for adjudication: Issue no. 1 Whether the plaintiff is entitled to the recovery of suit amount from the defendants? OPP Issue no. 2 Whether the Delhi Courts have no jurisdiction to entertain and try the present suit, if so its effect?
OPD
Issue no. 3 Whether the plaintiff is entitled to any interest, if
so at what rate, for what amount and for what
period? OPP
Issue no. 4 Relief
Suit no. 444/09/01 Page 4/17
5 Thereafter defendant filed application under Order 14 Rule 5
CPC which was allowed vide order dated 05.02.2008 and following additional issues was also framed: Addl. Issue Whether the suit has been signed, verified and instituted by a duly competent person and the suit filed is maintainable or not? OPP 6 In order to prove its case plaintiff has examined Sh. Rakesh Kumar Gupta as PW1 who reiterated the averment made in the plaint in his examination in chief. Defendant has not led any evidence.
I have heard ld. counsel for the defendant and despite various opportunities granted none appeared on behalf of the plaintiff to advance the final arguments. My issuewise findings is as under: 7 Issue no. 1 Whether the plaintiff is entitled to the recovery of suit amount from the defendants? OPP Issue no. 3 Whether the plaintiff is entitled to any interest, if so, at what rate, for what amount and for what period?
OPP Addl. Issue Whether the suit has been signed, verified and instituted by a duly competent person and the suit filed is maintainable or not? OPP 8 Issue no.1, 3 and additional issue are taken together as they are interconnected. The onus to prove issue no. 1, 3 & additional issues is upon the plaintiff.
Suit no. 444/09/01 Page 5/17
9 The plaintiff has set up a case that defendant executed a contract in favour of the plaintiff and guaranteed to supply article to the Arbitration Supplement to International Commercial Litigation. Pursuant to those agreements the defendant agreed to pay to the plaintiff USD 3600 for per 1000 words with an minimum charges of USD 7200 including the terms. They further agreed to make the payment to the plaintiff on publication and payment will made within 30 days from the receipt of invoice and thereafter interest @ 1.5% p.m will be charged. The plaintiff executed the work issued invoice but the defendant did not make the payment despite the expiry of the credit period. The plaintiff demanded the amount from the defendant, however, they failed to comply the same. 10 On the other hand defendant has taken a plea that no such agreement had ever taken place between the plaintiff and the defendant and defendants are under no legal obligation to pay any such amount and the suit filed by the plaintiff is false. 11 In order to prove its case plaintiff examined Sh. Rakesh Gupta as PW1 who reiterated the averment made in the plaint in his examination in chief. PW1 exhibited the power of attorney dated 12.07.2001 as Ex. PW1/1A, however the same has not been placed on record. He also exhibited the Visiting Card of defendant no. 2 as Ex. Suit no. 444/09/01 Page 6/17
PW1/2, the Contract Ex. PW1/3 and invoice dated 10.3.1998 and as Ex. PW1/4.
During the crossexamination PW1, deposed that the name of the company he is representing is something like Euromoney Institutional PLC. He is doing cases for this company. He is doing two cases only. He is attorney holder in these two cases of the plaintiff. He has got valid power of attorney in his favour by the plaintiff company. He does not remember the exact date when the power of attorney was issued in his favour but it was somewhere in June 2001. The same was issued by two directors of the plaintiff company. He further stated that plaintiff is a limited company incorporated in London, U.K. The name of the aforesaid two directors is Mr. Allen Jones and Mr. Kamre. He further stated that the aforesaid two directors were authorised to issue him the power of attorney. He does not know if the said two directors have any Board of Resolution pass in their favour two sign and issue the power of attorney given to him. He does not remember the address of the plaintiff company. He does not know when the plaintiff company was found and who was the founder. He does not know the name of the person with whom he talks generally. The aforesaid two directors through email instructed him to file and institute the present two cases. He does not remember the email ID of the plaintiff company at the time of filing of the suit as well as today. He came in contract with the plaintiff company Suit no. 444/09/01 Page 7/17 through some common known person. He does not know about the law, rules and regulations for filing of any case for and against any English company. He does not know the name of the writer of the articles but he wrote on behalf of the defendant company namely, Consulta Juris. He has not submitted those articles against which the present suit for recovery has been filed.
He further stated that one another Anil Kumar is also holding the power of attorney with regard to the present cases. Plaintiff supplied the books as per the contract between the plaintiff and the defendant. He has not placed any delivery receipt regarding the fact that books were supplied to the defendant. He does not remember where the said books were supplied by the plaintiff. He does not remember if books were supplied at Delhi to the defendant or at Mumbai address. The defendant has not led any evidence.
12 A perusal of the pleadings and the material place on record shows that the plaintiff has filed a suit for recovery of the publication charges against the defendant. Plaintiff is a foreign company incorporated in London, U.K. Plaintiff has not placed on record any incorporation certificate which can show or suggest that the plaintiff is company incorporated or registered in London, U.K. Plaintiff has also not placed on record any certificate of incorporation with the Registrar of Suit no. 444/09/01 Page 8/17 Companies in India which is mandatory for any foreign company as provided under Section 592 of the Companies Act 1956. The consequences for noncompliance of the conditions contemplated under Section 592 of Companies Act has been provided in Section 599 which reads as under: "Company's failure to comply with Part not to affect its liability under contracts, etc Any failure by a foreign company to comply with any of the foregoing provisions of this Part shall not affect the validity of any contract, dealing or transaction entered into by the company or its liability to be sued in respect thereof; but the company shall not be entitled to bring any suit, claim any setoff, make any counterclaim or institute any legal proceedings in respect of any such contract, dealing or transaction, until it has complied with the provisions of this Part."
13 A perusal of the Section 599 makes it clear that if a foreign company fails to comply the condition as contemplated Section 592, then no such company even not initiate any legal proceedings against any person in India. Plaintiff has not placed on record any such material which can show that plaintiff has complied with the condition of Section 592 of the Act which makes it entitled to initiate legal proceedings against any Indian citizen.
Suit no. 444/09/01 Page 9/17
It is also relevant to mention that the present suit has been filed by the plaintiff who is a private limited company. A private limited company can initiate proceedings through its duly authorised person only. Unless and until the due authorisation is placed on record. No such proceedings can be initiated by a private limited company as provided under Order 29 of CPC.
14 In the instant case the plaintiff has neither placed on record any Resolution passed by the Board of Directors of the plaintiff company authorising a person to file the present against the defendant. The plaintiff has also not placed on record any other material by which the person who has filed the present suit was authorised to initiate legal proceedings against the defendant. PW1 who has been examined by the plaintiff as a sole witness, in his examination in chief deposed that GPA dated 12.07.2001 has been executed in his favour, during cross examination he stated that two of the directors of the plaintiff company executed the said GPA in his favour, however, he does not know if those directors were authorised by way of Board Resolution to execute any such GPA in his favour or not. Moreover no such power of attorney stated to have been executed by plaintiff in favour of Sh. Rakesh Gupta has been placed on record which authorised him to initiate legal proceedings and to depose in the present suit on behalf of the plaintiff. The plaintiff has thus Suit no. 444/09/01 Page 10/17 miserably failed to produce any material on record which can show or suggest that Mr. Rakesh Kumar Gupta or Anil Kumar were authorised by the plaintiff to file the present suit. In the absence of any authorisation in favour of the person who filed the present suit or who has deposed on behalf of the plaintiff, the averment made in the plaint remained un substantiated and unproved for the simple reason that a person who signed the plaint and appeared as PW1 was not having any authority whatsoever on behalf of the plaintiff to file any suit or to make any statement in the court.
15 Plaintiff has taken a plea that two agreements were entered into between the plaintiff and the defendant. Plaintiff has placed on record the photocopy of the Contract Ex. PW1/3. The defendant in the written statement has denied the execution of such documents, therefore, it was incumbent for the plaintiff to prove that these agreements were in fact executed between the plaintiff and defendant, however, plaintiff has failed to place any material on record which can show or suggest that any such agreements were entered into between the plaintiff and the defendant. The plaintiff has placed on record the invoice Ex. PW1/4. However it has failed to prove on record that those invoices were delivered to defendants at any point of time. The plaintiff has also not placed any material which can show that it really executed the work Suit no. 444/09/01 Page 11/17 assigned to it. No material has been placed on record which can show that 100 copies of articles were ever delivered to the defendants by the plaintiff.
In view of the above facts and circumstances, I am of the considered view that the plaintiff has failed to prove on record that plaintiff which is a foreign company is incorporated with the Registrar of Companies in India which is the requirement of Section 592 of Companies Act. In the absence of incorporation as provided under Section 592, the plaintiff was not competent to initiate legal proceedings in India as per Section 599 of the Indian Companies Act.
The plaintiff has further failed to prove any agreements which were entered into between the plaintiff and defendant entitling it to recover the publication charges as prayed from the defendant. The plaintiff has further failed to prove that it execute the said work or delivered the invoices to the defendants. Plaintiff has thus failed to prove on record that it is entitled to recover the amount against the defendant. The plaintiff has thus failed to discharge the onus of issue no. 1 & 3 and same are accordingly decided against the plaintiff.
Plaintiff has further failed to prove that it authorised Mr. Rakesh Kumar Gupta or any other person to initiate proceedings against the defendant or that the suit has been filed by a duly competent person. The plaintiff has thus failed to discharge the onus of additional issue, Suit no. 444/09/01 Page 12/17 same is accordingly decided against the plaintiff. 16 Issue no. 2 Whether the Delhi Courts have no jurisdiction to entertain and try the present suit, if so its effect? OPD The onus to prove this issue is upon the defendant. In the written statement defendant has stated that no part of cause of action has arisen within the territorial jurisdiction of this court, therefore, this court has not jurisdiction to entertain and decide the present suit. The defendant has, however, not led any evidence on record.
It is well settled law that initial burden is always upon the plaintiff to prove that the court has territorial jurisdiction to entertain, try and decided the suit.
In order to prove its case, plaintiff has examined PW1. During his crossexamination PW1 deposed that he knows that defendant company is situated at Mumbai and Delhi. He has no knowledge if defendant company has its office at any other place other than Mumbai and Delhi. He has no knowledge of the address of the defendant company at Delhi. In the present case, plaintiff has given the address of defendant as that of Mumbai only. He came to know about the Delhi office of the defendant through their visiting card. He do not want to disclose as to how did he get the visiting card of the defendant company. There is no Delhi address mentioned in the said visiting card but it is mentioned that Suit no. 444/09/01 Page 13/17 defendant have branch at Delhi and other places. He does not know where Ex. PW1/3 had been signed between the plaintiff and defendant.
In para 14 of the plaint it is mentioned that amount in suit is payable by account payee bank draft in favour of the plaintiff at Delhi and defendants are also carrying on business at Delhi. Thus on that basis the present suit has been filed before this court.
17 The stand of the plaintiff is that the Contract Ex.1/3 was executed between the plaintiff and defendant regarding the publication of articles for the recovery of which, the present suit has been filed. Perusal of contract Ex. PW1/3 shows that the plaintiff is a company situated at U.K whereas defendant are admittedly situated at Mumbai. In the contract it is mentioned that payment can be made by way of cheque payable to Euromoney Publications PLC and sent to Nestor House, Playhouse Yard, London EC4V 5EX or alternatively a credit transfer can be made to their Account No. 1043191 at Loyds Bank, P.O. Box 217 72 Lombard Street, London, EC3P 3BT.
Perusal of the said clause clearly shows that payment was to be made at Lombard, U.K. and not at Delhi as averred in the plaint. The agreement between the plaintiff and defendant is silent at which place the agreement was executed. Admittedly plaintiff company is incorporated at UK whereas the defendants are working for gain at Mumbai. The plaintiff has placed on record visiting card Ex. PW1/2 it mentions that Suit no. 444/09/01 Page 14/17 also in New Delhi, Banglore, Madras & Cochin. Admittedly defendant no. 2 is an advocate practicing in various parts of th country. Merely on the basis that defendant no. 2 has got printed at back of visiting card that also at Delhi, cannot confer jurisdiction to Delhi court. A civil suit can be filed before a court as provided under Section 20 of CPC, which reads as under:
20. Other suits to be instituted where defendants reside or cause of action arises Subject to the limitation 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 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 {Explanation} A corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place.
Perusal of Section 20 CPC shows that suit can be instituted any place where the defendant is residing or working for the gain or Suit no. 444/09/01 Page 15/17 where the cause of action as a whole or in part has arisen. 18 In the instant case plaintiff has failed to place any material on record which can shows that any part of the cause of action has arisen in favour of the plaintiff and against the defendant within the territorial jurisdiction of this court.
A perusal of the plaint itself shows that defendants are based in Mumbai whereas plaintiff is based in U.K. The Hon'ble Supreme Court in Subodh Kumar Gupta Vs. Shrikant Gupta and others reported as ( 1993) 4 SCC has held that Mere bald allegations of the plaintiff that he was having a branch office of the firm at Chandigarh would not confer jurisdiction on the Chandigarh Court unless it is shown that a part of cause of action arisen within the territorial jurisdiction of that court.
In view of the well settled legal preposition, in order to confer jurisdiction to this court the plaintiff is required to plead and prove on record that the defendant or where more than one defendant, defendants are residing or carrying on business for gain within the territorial jurisdiction of the court or cause of action or any part of cause of action has arisen within the territorial limit of this court. 19 In the instant case plaintiff has failed to place any material on Suit no. 444/09/01 Page 16/17 record that defendants are residing or carrying business for gain in Delhi even in Ex. PW1/2 the no address of the defendant has been mentioned. The plaintiff has also not placed any material on record to show that any part of the cause of action has arisen within the territorial jurisdiction of this court. Merely that defendant no. 2 who is a practicing advocate got printed on his visiting card that it also deal in New Delhi, would not confer the jurisdiction to this court to decide the present suit.
In view of the above facts and circumstances, I am of the considered view that neither the defendants are residing or working for gain within the territorial jurisdiction of this court nor any part of cause of action has arisen within the territorial jurisdiction of this court thus this court has no territorial jurisdiction to entertain and decide the present suit, issue no. 2 is accordingly decided.
20 Relief In view of the above facts and circumstances, the suit filed by the plaintiff against the defendant is dismissed. Decree Sheet be accordingly prepared. File be consigned to record room.
Announced in the open court ( PITAMBER DUTT)
on 31st January, 2011 Additional District Judge
Delhi
Suit no. 444/09/01 Page 17/17