Delhi District Court
Rakesh Kumar Nagpal vs . M/S Gammon India Ltd. on 2 September, 2019
Digitally
signed by
Nikhil
Nikhil Chopra
Chopra Date:
2019.09.04
14:47:14
Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
+0530
IN THE COURT OF SH. NIKHIL CHOPRA, ADDL. DISTRICT
JUDGE, SAKET COURTS, SOUTH DISTRICT, NEW DELHI
In the matter of
CS No.208893/2016
Filing No.28687/2016
CNR No. DLST010041612016
Rakesh Kumar Nagpal
Proprietor:
M/s G. S. Lights, 1749/6,
Bhagirath Palace,
Chandni Chowk, Delhi06 ................Plaintiff
Versus
M/s Gammon India Limited
Through, Authorized Representative
IInd Floor, Ahluwalia Chambers,
16/17, LSC, Madangir,
New Delhi62
Also at:
Gammon India,
Veer Savarkar Marg,
P. O. Box No.9129,
Prabha Devi, Mumbai400025 .............Defendant
Date of Institution : 09.01.2014
Date of reserving the judgment: 31.08.2019
Date of pronouncement : 02.09.2019
Decision : Decreed
CS No.208893/2016 Page No. 1 of 37
Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
SUIT FOR RECOVERY OF RS.44,15,660.00 (RUPEES FORTY
FOUR LACS FIFTEEN THOUSANDS SIX HUNDRED SIXTY ONLY)
ALONGWITH PENDENTELITE & FUTURE INTEREST
JUDGMENT
1. Judgment disposes of the suit for recovery filed by the plaintiff claiming unpaid balance against supplies.
2. Plaintiff is stated to be a sole proprietor of M/s G. S. Lights, 1749/6, Bhagirath Palace, Chandni Chowk, Delhi06, and is engaged in the sale and supply of electric fittings. Defendant is a company engaged in construction, having its headquater at Mumbai and an office within the jurisdiction of this Court.
3. Defendant, it is averred has been purchasing electric goods of various types by placing purchase orders for its different projects in India, from time to time and the plaintiff had been supplying the electric goods as per the purchase order, effecting supply at different places like Alwar, Jaisalmer, Jodhpur, Jaipur, as is instructed by the defendant. It is stated that the supplies were made against FormC and that the plaintiff had been maintaining running account, mutual and open pertaining to the transactions between the parties. It CS No.208893/2016 Page No. 2 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
is stated that the last purchase order was telephonically placed and the plaintiff had supply the goods on 19.07.2011 vide invoice No.744 against FormC to the defendant at its Delhi office.
4. The defendant is stated to have defaulted in payments, resulting into outstanding amount of Rs.28,95,516/ recoverable from the defendant as on 18.01.2011. It is averred that plaintiff had made several requests for the payment. Defendant has delayed the same thereby causing financial losses to the plaintiff. It is further stated that compelled by the nonpayment, the plaintiff served a demand notice dated 31.08.2012/ 04.10.2012 through registered AD as well as courier claiming outstanding amount together with interest @ 18% per annum. It is stated that the defendant vide its reply dated 16.10.2012 refused to make any payment, and denying any outstanding. Plaintiff has, thus, claimed a sum of Rs.44,15,660/ including interest for the period 18.01.2011 to 18.12.2013.
5. The cause of action is stated to have accrued on the dates of the purchase orders; the dates of the supplies; on the occasions when the payments were made irregularly; and the date of refusal vide reply dated 16.10.2012 by the defendant. The cause of action is stated to have accrued at Delhi within CS No.208893/2016 Page No. 3 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
the territorial jurisdiction of this Court and it is stated that the defendant operates from within Delhi. The plaintiff has accordingly, sought a decree of Rs.44,15,660/ together with interest.
6. Defendant filed its WS, objecting to the territorial jurisdiction of this Court; lack of cause of action; barring by limitation etc. It has been stated that the defendant has its office at Mumbai and as on the date of filing of the suit there was no branch office in Delhi. It is averred that no cause of action has accrued in Delhi. It is further averred that the defendant does not have any office at Delhi or had no branch office in Delhi as on the date of filing of the suit. It is stated that the address whereupon the plaintiff claims the jurisdiction, is only an office for correspondence and by no stretch of imagination can be treated as a branch office for the purpose of jurisdiction or for the cause of action having been accrued. It is stated that the invoices would show that the same have been raised on the defendant's address in Alwar, Jaisalmar etc. and this court does not have any jurisdiction. Besides, it is stated that all the invoices issued prior to 02.01.2011, and are barred by limitation. The contents of the plaint are denied parawise.
7. Replication was filed by the plaintiff reiterating its CS No.208893/2016 Page No. 4 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
stands in the plaint.
8. It transpires that an application under Order VII Rule 11 of the Code of Civil Procedure, 1908 was filed on the ground of limitation. The same was dismissed by the Learned Predecessor observing that the suit, having been filed on 21.12.2013 is within limitation.
9. Following issues were framed by the Learned Predecessor on 02.04.2018:
1. Whether the plaintiff is entitled to seek a recovery of Rs.44,15,660/ from the defendant on account of commercial transactions between the plaintiff and the defendant? OPP
2. Whether this court has territorial jurisdiction to entertain the present suit? OPP
3. Whether the plaintiff is entitled to seek interest on the principle amount, as claimed in the prayer clause? OPP
4. Relief
10. Plaintiff examined himself as PW1 and deposed on the lines of the pleadings and proved the following CS No.208893/2016 Page No. 5 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
documents:
1. True copy of certificate of registration issued by Sales Tax Authority as Ex.PW1/1 (OSR);
2. True copy of the balance sheets pertaining to the assessment year 20122013 and 20132014 as Ex.PW1/2 (Colly.) (OSR);
3. Purchase order dated 29.01.2009 as Ex.PW1/3 (2 pages);
4. Invoice No.517 dated 31.01.2004 as Ex.PW1/4;
5. Purchase order dated 20.08.2009 with annexureA as Ex.PW1/5 (3 pages);
6. Invoice No.551 dated 06.10.2009 as Ex.PW1/6;
7. Purchase order dated 20.04.2010 as Ex.PW1/7 (3 pages);
8. Invoice No.664 dated 14.05.2010 as Ex.PW1/8;
9. Invoice No.665 as Ex.PW1/9;
10. Invoice No.744 dated 18.01.2011 as Ex.PW1/10;
11. Original Form C pertaining to invoice No.744 CS No.208893/2016 Page No. 6 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
as Ex.PW1/11;
12. Statement of account for the period from 01.04.2009 to 25.05.2013 as Ex.PW1/12 (colly.);
13. Legal notice dated 31.08.2012 as Ex.PW1/13;
14. Postal receipts of speed post and registered AD and courier receipt as Ex.PW1/14 (colly.);
15. Reply dated 16.10.2012 by the defendant as Ex.PW1/15; and
16. Certificate under Section 65B of the Indian Evidence Act 1872 as Ex.PW1/16.
11. In his cross examination, he stated that purchase orders were sent by post and through employees of the defendant and the material used to dispatch from the shop and volunteered that on demands it was collected by the employees of the defendant from the office of the plaintiff at Chandni Chowk. Plaintiff, further, claimed that he had also delivered the materials at Madangir office in Delhi of the defendant. He admitted that he had not placed the bills in respect of the supply of material at Madangir office in Delhi and volunteered that material was urgently delivered at their CS No.208893/2016 Page No. 7 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
request. He further submitted that the payments were made by the defendant through cheques which were presented to his banker at Chandni Chowk and that there was no payment ever made in cash. However, he admitted that the entry at point A of Ex.PW1/12 reflects the payment in cash.
12. Defendant examined Sh. Naresh Kumar Mehta, the then Project Manager, who deposed through affidavit on the lines of the WS. In his cross examination, he stated that he has not filed any resolution in relation with his authorization and admitted that there is no resolution or power of attorney in his favour for adducing the evidence in the present matter. He stated that he was in Delhi as a Project Manager for the period 2013 to 2015 and that Sh. Sunil Dalal was the incharge of the said office and that he is looking after the pending matters of the defendant from Madangir Office in Delhi. He admitted that Ex.PW1/3, Ex.PW1/5 & Ex.PW1/7 are purchase orders issued by the defendant through Sh. Sunil Dayal and Ms. Anjali Sharma whose signatures are at point X1 to X3. He further stated that he could not say the Delhi Branch Office of the IDBI from where the payment was issued to the plaintiff and that defendant was having various IDBI accounts in various cities. With regard to the questions as to the filing of statement of account or ledger account or counter statement of account CS No.208893/2016 Page No. 8 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
or counter ledger account, he submitted that the same are a matter of record.
13. I have heard the Learned counsel for the parties and have also gone through the relevant records.
14. The submissions of the Learned counsel for the plaintiff are as under:
1. That the defendant has placed orders for supply and the plaintiff had supplied all the materials for the period 31.01.2004 to 18.01.2011 against FormC at various locations of the defendants, as per orders;
2. That the plaintiff maintained a open & running accounts of all the transactions held between the parties;
3. That the last purchase order was made telephonically against which the goods were supplied on 18.01.2011 vide invoice No.744 against FormC;
4. That the defendant defaulted in payment of the outstanding amount despite issuance of demand notice and as on the date of filing of the suit, an amount of Rs.44,15,660/ is CS No.208893/2016 Page No. 9 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
due and payable by the defendant;
5. That the defendant, in its WS, nowhere challenged the outstanding amount and even in the cross examination, no question relating to the outstanding amount was put to the witness.
Defendant only raised the objections with regard to the territorial jurisdiction of this Court as well as limitation and that the application of the defendant under Order VII Rule 11 of the Code of Civil Procedure, 1908 was dismissed.
6. That in the cross examination, DW1 had admitted that the Madangir Office of the defendant is still in operation and that the plaintiff supplied the material at Delhi office of the defendant vide invoice No.744 dated 18.01.2011 Ex.PW1/10 which bears the signature of Ms. Anjali Sharma, the Manager (Purchase) at Madangir Office, Delhi at that time. Even, payments were also made from Madangir office, Delhi. All this proves that this Court has territorial jurisdiction to try the present matter.
CS No.208893/2016 Page No. 10 of 37Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
7. That in the judgment TL Verma & Co.
Pvt Ltd. vs. Gammon India Ltd. In CS (OS) No.2219/2011, the Hon'ble High Court held that as per Section 20 of the Code of Civil Procedure, 1908, this court has territorial jurisdiction as the defendant company' is working for gain at Delhi by observing that "Once the Purchase orders have been placed by the defendant from its office at Delhi and the defendant is operating from Delhi, it can safely be held that the defendant is working for gain at Delhi and this Court has jurisdiction to entertain the present suit".
8. That the defendant has no placed on record any document with regard to the outstanding amount as well as payments made to the plaintiff.
9. That the witness produced by the defendant was not authorized by the company to depose before the Court since he had admitted during his cross examination that he did not file any resolution in relation to the authorization in CS No.208893/2016 Page No. 11 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
his favour to give evidence on behalf of the defendant company.
15. Learned counsel for the plaintiff, in support of his submissions, placed relied on the following judgments:
1. TL Verma & Co. Pvt Ltd. vs. Gammon India Ltd. In CS (OS) No.2219/2011;
2. Kaka Ram Sohanlal and Ors vs. Firm Thakar Das Mathra Das & Ors on 17 May, 1961 Equivalent citation: IAR 1962 PH 27;
3. M/s ICICI Bank Limited vs. Sunil Sharma High Court of Delhi RFA 340/2015;
4. Kulamani Mohanty vs. Industrial Development on 10 July, 2001, Equivalent citiation: AIR 2002 Ori 38;
5. Balmukund and Anr. vs. Jagan Nath, AIR 1963 Raj 212;
6. R. V. E. Venkatachala Gounder vs. Arulmigu Viswesaraswami & VP on 8 October, 2003; and
7. Vijay Power Generators Ltd vs. Sumit Seth CRL A. No.1432 of 2013: Delhi High Court.CS No.208893/2016 Page No. 12 of 37
Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
16. The submissions of the Learned counsel for the defendant are as under:
1. That this court does not have the territorial jurisdiction to try the present suit:
(a) Since existence of a branch office of the defendant at Madangir, Delhi does not confer this court with territorial jurisdiction;
(b) No cause of action accrued with the jurisdiction of this Court as the purchase orders were placed and accepted by the plaintiff at its Chandni Chowk office and the payments were made by the defendant either at the plaintiff's office or at the site where the materials were delivered. Further, placing of purchase order does not form any cause of action. Learned counsel for the defendant has submitted that TL Verma & Co. Pvt Ltd. vs. Gammon India Ltd. In CS (OS) No.2219/2011, does not apply in view of case law cited by the defendant.
2. That the entries made in the statement of account maintained by the plaintiff do not fasten any liability upon the defendant since each CS No.208893/2016 Page No. 13 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
entry has to been corroborated with sufficient evidence and the plaintiff has not produced any evidence to prove that the entries in statement of account can be trusted to be honest, while relying on the citation Chandradhar Goswami vs. Gauhati Bank Ltd, AIR 1967 SC 1058.
3. That the amount claimed by the plaintiff is misconceived and the rate of interest is arbitrary. It is the submission of the Learned counsel for the defendant that the imposition of interest @ 18% per annum is unreasonable and that the conditions enumerated in the invoices are unilateral and cannot be taken as binding on both the parties by relying on the judgment dated 17.093.2015 passed by Hon'ble Delhi High Court in Vijay Mittal vs. Bajaj Products, CS (OS) No.754/2006.
17. Learned counsel for the defendant, in support of his submissions, placed reliance on the following judgments:
1. Bhola Nath Aggarwal & Anr. vs. The Empire of India Life Insurance Co. Ltd., AIR 1948 CS No.208893/2016 Page No. 14 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
Lab 56;
2. Nedungadi Bank Ltd vs. Central Bank of India Ltd., AIR 1961 Ker 50;
3. Thompson Press (India) Ltd vs. U. P. State Transport Corporation, 2000 (54) DRJ 705;
4. Patel Roadways Ltd vs. Prasad Trading Co., AIR 1992 SC 1514;
5. Galley & Co. vs. Appalaswami Naidu, AIR 1946 Mad 300;
6. A.B. C. Laminar Pvt Ltd. vs. A. P. Agencies Salem, AIR 1989 SC 1239;
7. Manohar Oil Mills vs. Bhawani Din, AIR 1971 All 326;
8. Bhagwandas vs. Giridharlal & Co., AIR 1966 SC 543;
9. Chandradhar Goswami vs. Gauhati Bank Ltd. AIR 1967 SC 1058; and
10. Vijay Mital vs. Bajaj Products CS (OS) No.754/2006 dated 17.09.2015 passed by Hon'ble High Court of Delhi.CS No.208893/2016 Page No. 15 of 37
Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
18. Time now to deal with the issues.
ISSUE NO.2 Whether this court has territorial jurisdiction to entertain the present suit? OPP
19. Issue No.2 is taken up firs,t as the same is the most contentious issue between the parties. Learned counsel for the defendant, with great erudition, has pressed upon the argument that this Court does not have territorial jurisdiction to try and entertain the present matter in as much as no cause of action has accrued to the plaintiff for filing the present suit and the cause of action if any, is either at the place where the supplies were allegedly effected or at the best, with the Court exercising the territorial jurisdiction over the place i.e. Chandani Chowk, where the business of the plaintiff is situated. He has placed reliance upon Bhola Nath Aggarwal & Anr. vs. The Empire of India Life Insurance Co. Ltd., AIR 1948 Lab 56; Nedungadi Bank Ltd vs. Central Bank of India Ltd., AIR 1961 Ker 50; Thompson Press (India) Ltd vs. U. P. State Transport Corporation, 2000 (54) DRJ 705; Patel Roadways Ltd vs. Prasad Trading Co., AIR 1992 SC 1514; Galley & Co. vs. CS No.208893/2016 Page No. 16 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
Appalaswami Naidu, AIR 1946 Mad 300; A.B. C. Laminar Pvt Ltd. vs. A. P. Agencies Salem, AIR 1989 SC 1239; Manohar Oil Mills vs. Bhawani Din, AIR 1971 All 326; Bhagwandas vs. Giridharlal & Co., AIR 1966 SC 543; Chandradhar Goswami vs. Gauhati Bank Ltd. AIR 1967 SC 1058; and Vijay Mital vs. Bajaj Products CS (OS) No.754/2006 dated 17.09.2015 passed by Hon'ble High Court of Delhi, while contending that the cause of action cannot be assumed to have been accrued within the territorial jurisdiction of this Court simply because the purchase orders were issued from the said office. It is the contention that merely placing an order would not confer jurisdiction and it is the place of acceptance i.e. Chandni Chowk in this case where the contract is concluded and as such, filing of this suit with this Court would be bad/ defective for want of territorial jurisdiction. He has contended that in a suit like this, the jurisdiction can only be at the following places:
1. The place of contract;
2. The place of delivery of goods; and
3. The polace of payment for the goods, While relying upon Thompson Press (India) Ltd vs. U. P. State Transport Corporation, 2000 (54) DRJ 705. He has CS No.208893/2016 Page No. 17 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
further contended that the mere reading of Section 20 together with the judgments so relied upon by him would make it adequately clear that the suit for recovery would only be maintainable at the place where either the contract is concluded, where the contract is performed i.e. the place of delivery of the goods, and where the payments are made/ or to be made. He has contended that so far as this court is concerned, the plaintiff's filing the suit on the ground that the office of the defendant is situated at Madangir, Delhi i.e. within the territorial jurisdiction of this Court, the same is defective and as such the suit deserves to be dismissed on this ground alone.
20. On the other hand, plaintiff has contended that there appears to be some divergence in the case laws being relied upon by the plaintiff and the one being relied upon by the plaintiff and, since the case laws being relied upon by the plaintiff is later judgment, same would prevail upon the judgments so relied upon by the defendant i.e. Thompson Press (India) Ltd vs. U. P. State Transport Corporation, 2000 (54) DRJ 705 in so far the place of conclusion of the contract is concerned. It is further submitted that the only part of the cause of action would confer jurisdiction over the court and so far as the present case is concerned, the plaintiff has CS No.208893/2016 Page No. 18 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
categorically mentioned that not only the orders were placed from here, in fact, certain deliveries were also effected, while relying upon Ex.PW1/10 and contending that the person who has received the deliveries has been admitted to be operating from the Delhi office, and regardless the mention of the place of delivery as Alwar in the bill, it can not be denied that the cause of action has accrued within the territorial jurisdiction of this Court.
21. Before proceeding further reference to the case laws being relied upon by the defendant and the plaintiff needs to be looked into, as under:
In Bhola Nath Aggarwal & Anr. vs. The Empire of India Life Assurance Co. Ltd. 1947 SCC Online Lab 30 : AIR 1948 Lah 56, it has been observed :
"16. It is, therefroe, clear that the corporation can be said to carry on business at the head office or at the place where it has a branch in respect of a cause of action which arises, wholly or in part, at the place where the branch office is situated. If no part of the cause of action arises at the place of the branch office, the corporation cannot be said to transact business at that place. This is the only possible interpretation of Expl.2, and not a single case cited before me has taken the contrary view. Therefore, the Courts at Lahore can only have jurisdiction if it can be shown that the cause of action, wholly or in part, arose within the CS No.208893/2016 Page No. 19 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
jurisdiction of the Lahore Courts, otherwise the suit must be instituted at Bombay where the head office is situated or at some place where the cause of action, wholly or in part, arose.
17. The next point to consider is whether the cause of action arose at Lahore, and whether on this ground the Lahore Courts have jurisdiction to entertain the suit. The plaintiffs are residents of Jullundur City. The agent of the defendant firm met them there and took proposals from them. The policies (proposals) and these reports were then sent to the Lahore office and the Lahore office forwarded them to the head office at Bombay. The acceptance of the policies (proposals) was made at Bombay. The evidence of the agent is that the Lahore could not accept a proposal without the sanction of the Bombay head office. In fact the Lahore office could not do anything independently and even the appointment of agents have to be sanctioned by the Bombay head office. The branch office at Lahore is in the nature of a post office which merely conveys proposals to the head office and acceptance to the assured persons. The refusal to pay the amount claim by the plaintiffs was made by the Bombay office at Bombay. The premiums were received by the Lahore office and were credited to the account of the company.
18. The meaning of the cause of action was considered in (1943) 1 Cal 564. "Cause of action" was defined as "Every Fact which it would CS No.208893/2016 Page No. 20 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
be necessary for the plaintiff to prove, if transversed, in order to support his right to the judgment of the Court. It does not comprise every piece of evidence which is necessary to prove each fact, but it comprises every fact which is necessary to be proved. Cause of action has not relation to the defence set up in the case."
19. In the present case the plaintiffs will have to prove that they made certain proposals, that those proposals were accepted and that the monies were paid by them. None of these facts took place at Lahore and that mere fact that the papers passed through the Lahore branch office does not mean that any part of the cause of action took place at Lahore. The Lahore office did nothing more than transmit the proposals and the acceptance. The plaintiffs in their plaint did not allege that any part of the cause of action had arisen at Lahore. In fact they based their case on the refusal of the defendants to pay the dues. This refusal took placed on 26th July, 1944, and was made by the head office at Bombay. The fact that the refusal was communicated to the plaintiffs through the Lahore office does not make any difference to the case. According to para 14 of the plaint, the plaintiffs' case was that the Lahore Courts had jurisdiction to hear and decide the suit as the defendant carried on business at Lahore. No other ground was alleged by the plaintiffs. It has been found that the defendants do not carry on business at Lahore within the meaning of Section 20 of the CPC."
CS No.208893/2016 Page No. 21 of 37Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
In Nedungadi Bank Ltd vs. Central Bank of India Ltd. 1960 SCC Online Ker 363; AIR 1961 Ker 50, it has been observed that:
"Under Section 20(a) of the CPC, 1908, it is possible to institute a suit where the defendant "carries on business", and under Sec. 20(c) where the "cause of action, wholly or in part, arises".
Explanation II to Sec. 20 provides:
"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."
5. As pointed out by Chitaley:
"The result of this explanation is to restrict the meaning of the expression "carries on business"
in cl.(a) in relation to corporations. But in the presence of cl. (c) the purpose of the second part of the explanation is obscure. However that may be where the suit is instituted at a place where a corporation maintains a subordinate office, the Court cannot dispense with the requirement that the cause of action must arise at such a place". Civil Procedure Code, Vol.I page 558; see also the cases cited in the commentary in support of the proposition.
6. in other words, if no part of the cause of action arises at the place where the branch office is situate, the mere fact of the corporation having a branch office will not give the court of that place jurisdiction to entertain a suit."
CS No.208893/2016 Page No. 22 of 37Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
In Thompson Press (India) Ltd. vs. U. P. State Road Transport Corporation 2000 (54) DRJ, the Hon'ble High Court of Delhi has held that:
"To decide the question of jurisdiction of a Court to entertain a suit based upon a contract regarding purchase of gods, three points arise for consideration:
1. The place of contract;
2. The delivery of the goods; and
3. The payment for the goods.
In deciding the question as to where the contract is made, Section 4 of the Contract Act has to be taken into consideration. A contract is made where an offer of one party is accepted by the other party.
Thus, the place where offer of the petitioner was received and its acceptance posted is the place where the contract is made.
In pursuance of the quotations invited by the respondent, petitioner had submitted their tender/ offer. It is not the case of the petitioner that the tenders were invited by Delhi office, nor that the tender offer was made by the petitioner at Delhi office or the acceptance was made by Delhi office of the respondent.
..............CS No.208893/2016 Page No. 23 of 37
Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
Thus, all the three conditions i.e., the place of contract, the place of delivery of goods, and payment to be made, took place at Lucknow. If there is any default in making payment, breach of contract or any dispute or difference arising out of this contract, only the Lucknow Courts will have territorial jurisdiction to entertain and decide the dispute."
In Bhagwandas Goverdhandas Kedia vs. Girdharilal Parshottamdas & Co. 1966 1 SCR 656; AIR 1966 SC 543, it has been observed:
"4. Making of an offer at a place which has been accepted elsewhere does not form part of the cause of action in a suit for damages for breach of contract. Ordinarily, it is the acceptance of offer and intimation of that acceptance which result in a contract. By intimating an offer, when the parties are not in the presence of each other, the offeor is deemed to be making the offer continuously till the offer reaches the offeree. The offeror thereby merely intimates his intention to enter into a contract on the terms of the offer. The offeror cannot impose upon the offeree an obligation to accept, nor proclaim that silence of the offeree shall be deemed consent. A contract being the acceptance of the offer and intimation of acceptance by some external manifestation which the law regards as sufficient is necessary."
22. In so far as Bhola Nath Aggarwal & Anr. vs. The CS No.208893/2016 Page No. 24 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
Empire of India Life Assurance Co. Ltd. 1947 SCC Online Lab 30 : AIR 1948 Lah 56 is concerned, the question before the Hon'ble High Court was whether the Lahore Court had jurisdiction to try the suit and the Court while holding that the office at Lahore was in the nature of merely a post office, which merely conveyed the proposals to the head office, and to the assured persons, came to conclusion that the Lahore Court did not have territorial jurisdiction to entertain the suit. It was primarily on this observation that the Court held that the branch office is merely a post office and would not attract jurisdiction. The Hon'ble High Court came to a conclusion that the court did not have jurisdiction.
23. In Nedungadi Bank Ltd vs. Central Bank of India Ltd. 1960 SCC Online Ker 363; AIR 1961 Ker 50, it was been observed that the existence of branch office would not ipso facto, confer jurisdiction over the court, if no cause of action had accrued at the place where the branch office was situated.
24. Having regard to the proviso to Section 20 CPC, there is no denial to the said proposition of law, however, what remains to be seen is whether any cause of action accrued at Madangir, Delhi so as to confer territorial jurisdiction on this Court.
25. In Thompson Press (India) Ltd. vs. U. P. State CS No.208893/2016 Page No. 25 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
Road Transport Corporation 2000 (54) DRJ, the Hon'ble High Court hold that following 3 conditions would be considered for the purpose of determination of the question of territorial jurisdiction of a Court to try and entertain the suit based upon the contract:
1. The place of contract;
2. The place of delivery of goods; and
3. The place of payment for the goods.
The court has observed that in so far as the place of contract is concerned, the same would be the place where the offer of one party is accepted by the other. The contention of the defendant side is that since acceptance was effected at Chandni Chowk i.e. the place of business of the plaintiff, this court would not have jurisdiction as the said cause of action at not accrued within the territorial jurisdiction of this Court.
26. The plaintiff side on the other hand, has relied upon TL Verma & Co. Pvt Ltd. vs. Gammon India Ltd. CS (OS) No.2219/2011 while submitting that in the said judgment, same office of the present defendant, in similar suit for recovery, with a similar objection to the jurisdiction, was being considered by the Hon'ble High Court and the Hon'ble High Court of Delhi, in clear terms have returned the finding that it CS No.208893/2016 Page No. 26 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
is the office from where the orders were issued and as such, the Court would have jurisdiction to try the suit for recovery against the defendant. The court observed:
"Once the Purchase orders have been placed by the defendant from its office at Delhi and the defendant is operating from Delhi, it can safely be held that the defendant is working for gain at Delhi and this Court has jurisdiction to entertain the present suit"
27. It is pressed that since the said judgment is subsequent to the judgment of Thompson Press (India) Ltd. (supra), the later view of the Hon'ble High Court would prevail upon the former view and as such, this Court would have territorial jurisdiction to try and maintain the present suit, in as much as, the purchase orders have been placed from the very office situated at Madangir, New Delhi.
28. As regards the Patel Roadways Ltd vs. Prasad Trading Co., AIR 1992 SC 1514 and the other judgments are concerned, the same are at a different factual footing, addressing a different issue. The contention of the Learned counsel for the defendant feeds on the perception that mere placing/ issuance of purchase orders from a particular place would not confer any jurisdiction. The same, however, in light of the observations made by the Hon'ble High Court in TL Verma & Co. Pvt Ltd. (supra), is rendered devoid of any CS No.208893/2016 Page No. 27 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
substance.
29. Learned counsel for the plaintiff has further invited the attention of the Court towards Clause9 of the purchase orders Ex.PW1/5 to Ex.PW1/7 while submitting that the purchase orders were issued in duplicate and the acceptance was to be communicated to the defendant by counter signatures by the plaintiff on the second copy to be returned to the defendant at their Madangir Office in Delhi, which would further show that the said office was not merely an office for the purpose of correspondence, as has been sought to beclaimed by the defendant, and that the same was the place where the contract was actually concluded.
30. There is a considerable force in the said contention of the Learned counsel for the plaintiff. The cumulative effect of the evidence brought on record, the case laws cited and the contentions of the Learned counsel for the plaintiff, clearly indicate that a part of cause of action had accrued at Madangir, Delhi i.e. within the territorial jurisdiction of this Court.
31. Besides, the question of territorial jurisdiction becomes insignificant once the Court is of the opinion that there had been no actual prejudice in so far as the trial of the suit is concerned before this Court, rather then the court, CS No.208893/2016 Page No. 28 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
within whose jurisdiction the business office of the plaintiff is situated. On the contrary, as would appear from the statement of DW1, the defendant is looking after all the legal matters, while operative from the office at Madangir, Delhi itself, which would clearly show that there is no undue hardship or actual prejudice caused to the defendant as far as the trial of the present suit with this Court is concerned. In such circumstances the objections cannot be sustained. One may, profitably, resort to the following judicial pronouncement in this respect.
Savani Transport (Private) Ltd. vs. Gangadhar Ghosh 1986 SCC Online Cal 53 "5. Therefore, as pointed out by the Supreme Court in Pathumma vs. Kuntalan, AIR 1981 SC 1683 at p. 1684, no objection as to the place of suing can be entertained by an appellate or revisional Court unless the following three essential conditions are satisfied, namely, (1) the objection was taken in the Court of the first instance, (2) it was taken at the earliest possible opportunity and in cases where issues are settled, at or before such settlement, and (3) there has been a consequent failure of justice."
"The policy underlying Ss.21 and 99, C.P. code and S. 11 of the Suits Valuation Act is the same, namely, that when a case had been tried by a Court on the merits and judgment, rendered, it should not be liable to be CS No.208893/2016 Page No. 29 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
reversed purely on technical grounds, unless it had resulted in failure of justice and the policy of the Legislature has been to treat objections to jurisdiction, both territorial and pecuniary, as technical and not open to consideration by an appellate Court unless there has been prejudice on merits."
M/s Ajanta Enterprises vs. M/s Hoechst Pharmaceuticals Ltd & Ors. 1986 SCC Online 67 : AIR 1987 Ori 34:
"12. In conclusion, five years after the presentation of the plaint when the suit is ready for trial there being no material as to how the defendants would be prejudiced if the trial is taken up by the Cuttack Court, there is no justification for return of the plaint by the Court. The order is accordingly liable to be set aside."
In Pathumma (Daugther of Koopilan Uneen) and Ors vs. Kuntalan Kutty (Son of Koopilan Uneen) 1981 3 Supreme Court Cases 589, Hon'ble Supreme Court has observed:
"5. In order that an objection to the place of suing may be entertained by an appellate or revisional court, the fulfillment of the following three conditions is essential:
"(1) The objection was taken in the Court of the first instance.
(2) It was taken at the earliest possible opportunity and in cases where issues are settled, at or before such settlement. and (3) There has been a consequent failure of justice."
6. All these three conditions must coexist. Now in the CS No.208893/2016 Page No. 30 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
present case Conditions 1 and 2 are no doubt fully satisfied; but then before the two appellate courts below could allow the objection to be taken, it was further necessary that a case of failure of justice on account of the place of suing having been wrongly selected was made out. Not only was no attention paid to this aspect of the matter but no material exists on the record from which such failure of justice may be inferred. We called upon learned Counsel for the contesting respondents to point out to us even at this stage any reason why we should hold that a failure of justice had occurred by reason by Manjeri having been chosen as the place of suing but he was unable to put forward any. In this view of the matter we must hold that the provisions of the subsection above extracted made it imperative for the District Court and the High Court not to entertain the objection whether or not it was otherwise well founded. We, therefore, refrain from going into the question of the correctness of the finding arrived at by the High Court that the Manjeri Court had no territorial jurisdiction to take cognizance of the application praying for final decree."
In Kiran Singh & Ors vs. Chaman Paswan & Ors 1955 1 SCR 117 : AIR 1954 SC 340, it has been observed by the Hon'ble Supreme Court that:
"The policy underlying Sections 21 and 99 of the Civil Procedure Code and Section 11 of the Suits Valuation Act is the same, namely, that when a case had been tried by a court on the merits and judgment rendered, it should not be liable to be reversed purely on technical grounds, unless it had resulted in failure of justice, and the policy of the legislature has been to treat objections CS No.208893/2016 Page No. 31 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
to jurisdiction both territorial and pecuniary as technical and not open to consideration by an appellate court, unless there has been a prejudice on the merits."
32. Keeping in view the above, the Court comes to the conclusion that this court has territorial jurisdiction to try and entertain the present suit, issue No.2 is decided in favour of the plaintiff and against the defendant.
ISSUE NO.1 & 31. Whether the plaintiff is entitled to seek a recovery of Rs.44,15,660/ from the defendant on account of commercial transactions between the plaintiff and the defendant? OPP
3. Whether the plaintiff is entitled to seek interest on the principle amount, as claimed in the prayer clause? OPP
33. Learned counsel for the plaintiff has contended that the plaintiff has placed on record some of the bills together with the Statement of account which clearly show that a sum of Rs.28,95,516/ has fallen due from the defendant. He has further contended that neither the plaintiff was cross examined as to the correctness of these bills, nor even in CS No.208893/2016 Page No. 32 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
respect of the entries in the statement of account, nor there is any evidence brought by defendant itself so as to controvert the entries reflected in the statement of account, so proved by the plaintiff, and it is only at the stage of final arguments that the defendant has raised the contention that there is no corroboration of the entries in the statement of account. He has further contended that ever since the beginning the plaintiff's case has been that he has been maintaining a running and current account. It is further contended that the payments being made by the defendant were neither billwise, nor regular and as such, an open and running account was being maintained and that it was clearly upon the defendant to show that the bills or the statements of account relied upon by the plaintiff are not correct or genuine. On the contrary, he has further submitted that the bills and the statement of account would not have required any further corroboration, in as much as, the only effective defence of the defendant was the territorial jurisdiction and neither the factum of the placing of orders, nor the factum of the delivery disputed by the defendant. He has further contended that the defendant is precluded from raising such a plea at this belated stage, when the evidence has already been concluded and had the defendant raised such a plea at an earlier stage, the plaintiff CS No.208893/2016 Page No. 33 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
would have brought other corroborating evidence, available with him including other bills and the statement of account, right from the beginning, and once the defendant, due to his own volition, omitted to take any such defence, the said contention would not available with the defendant. In addition, he has also contended that the corroboration is not required as the bills and the statement of account are self explanatory, and the plaintiff has categorically stated that the statement of account is maintained in the regular course of business. The absence of any cross examination, as conspicuously evident from the statement of PW1, would clearly point towards the fact that the defendant had never sought dispute the factum of placing of orders or supplies, or even the correctness of the bills and statement of account placed.
34. Learned counsel for the defendant, on the other hand, has relied upon Chandradhar Goswami & Ors vs. Gauhati Bank Ltd. 1967 1 SCR 898; AIR 1967 SC 1058:
(1967) 37 Comp Cas 108. Learned counsel for the plaintiff, on the other hand, relied on Kaka Ram Sohanlal and Ors vs. Firm Thakar Das Mathra Das & Ors on 17 May, 1961 Equivalent citation: IAR 1962 PH 27; M/s ICICI Bank Limited vs. Sunil Sharma High Court of Delhi RFA 340/2015;CS No.208893/2016 Page No. 34 of 37
Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
Kulamani Mohanty vs. Industrial Development on 10 July, 2001, Equivalent citation: AIR 2002 Ori 38; Balmukund and Anr. vs. Jagan Nath, AIR 1963 Raj 212; R. V. E. Venkatachala Gounder vs. Arulmigu Viswesaraswami & VP on 8 October, 2003; and Vijay Power Generators Ltd vs. Sumit Seth CRL A. No.1432 of 2013: Delhi High Court in support of these contentions.
35. Considering the case laws cited by the parties, the court is of the opinion that the plaintiff has placed the best evidence available with it and having regard to the fact that the defendant had not countered the evidence either in the pleadings or by any effective cross examination nor did they produce any witness or records being maintained by them, the evidence placed by the plaintiff cannot be said to be of no avail.
36. Corroboration, even otherwise, need not come from the plaintiff side alone, and can also be deduced from the omissions, deliberate or otherwise, by the defendant to raise a particular plea, and its omission to cross examine the witness on these material aspects. Once, the defendant has chosen not to assail the veracity of these entries, the defendant would be precluded from raising it at the final stage of arguments. The very fact that the defendant itself could have produced the CS No.208893/2016 Page No. 35 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
statement of account and records but have omitted to do so subtly points towards its acquaintance as to the correctness of the records placed by the plaintiff.
37. Considering the above, and in the totality of the circumstances, the evidence placed on record is not only conceivably the best evidence the plaintiff could have brought, but also it satisfies the degree of proof requisite for the civil proceedings i.e. preponderance of probabilities. Since by the very pleadings and the omissions to bring any counter evidence, these aspects have left unchallenged by the defendant, the presumption as to the correctness of the entries can neither be countered lightly, nor be allowed exhausted or stifled by any unsubstantiated argument at the final stage.
38. The statement of account show that a sum of Rs.28,95,516/ was due on 18.01.2011 and as such, the plaintiff is held entitled to recover a sum of Rs.28,95,516/ due from the defendant as on the said date i.e. 18.01.2011.
39. Coming now to the question of interest. No doubt, the transaction is a commercial one, however, having regard to the fact that the interest is a variable component, and need of moderation and generalization cannot be ruled out, the court, thus, is of the opinion that the interest @ 12% per annum from the date of amount becoming due till the date of its CS No.208893/2016 Page No. 36 of 37 Rakesh Kumar Nagpal vs. M/s Gammon India Ltd.
realization would be best and apt grant of interest in favour of the plaintiff.
RELIEF
40. In view of the above findings, the suit of the plaintiff is decreed and the plaintiff is held entitled to recover a sum of Rs.28,95,516/ from the defendant alongwith interest @ 12% per annum w.e.f. 18.01.2011 till its actual realization with costs.
41. Decree sheet be prepared accordingly. Thereafter, file be consigned to record room after due compliance.
ANNOUNCED IN THE OPEN (NIKHIL CHOPRA)
COURT ON 02.09.2019 ADDL. DISTRICT JUDGE02
SOUTH, SAKET COURTS,
NEW DELHI
CS No.208893/2016 Page No. 37 of 37