Delhi High Court
Premier Exports vs Hindustan Cold Storage And Ors. on 19 December, 2000
Author: K.S. Gupta
Bench: K.S. Gupta
JUDGMENT K.S. Gupta, J.
1. Suit wherein this IA seeking leave to defend suit came to be filed, was instituted under Order xxxvII CPC by the plaintiff alleging that defendant No. 1 is a partnership firm whereof defendants 2 to 8 are the partners. Pursuant to the orders placed by defendant No. 1, the plaintiff-firm had supplied goods to it and in the books of accounts of plaintiff maintained in due course of business, a sum of Rs. 51,56,058.09 was due from the defendants. The plaintiff issued a legal notice to defendant No. 1 through its counsel on 11th April, 1992 to which a reply was sent by it through its advocates. It is stated that thereafter matter was settled and a Memorandum of understanding dated 8th April, 1994 was executed between the parties pursuant to which defendant No. 1 agreed to pay a total sum of Rs. 41 lacs to the plaintiff. According to this MOU, Rs. 10 lacs were to be paid on 8th April, 1994, Rs. 5 lacs on 8th July, 1994, Rs. 5 lacs on 8th August, 1994, Rs. 5 lacs on 8th September, 1994, Rs. 5 lacs on 8th Ocotber, 1994, RS. 5 lacs on 8th November, 1994 and Rs. 6 lacs on 8th December, 1994. Defendants paid Rs. 10 lacs through cheque No. 048682 dated 8th July, 1994, Rs. 5 lacs through cheque No. 048683 dated 8th July, 1994, Rs. 5 lacs through cheque No. 048687 dated 23rd September, 1994, Rs. 5 lacs through cheque No. 048691 dated 14th November, 1994 and Rs. 5 lacs through cheque No. 190520 dated 31st March, 1995 leaving a balance of Rs. 11 lacs. It is further pleaded that plaintiff is entitled to interest @ 21% per annum as per usual market usage and which is also the normal banking rate as per the directives of RBI. Rs. 13,125/-, Rs. 17,500/- and Rs. 52,500/- have been claimed towards interest for the delayed payments made on 23rd September, 1994 14th November, 1994 and 31st March, 1995 respectively. Further sum of Rs. 1,60,000/- has been claimed on balance amount of Rs. 11 lacs at the said rate upto 30th September, 1995. It is alleged that defendants have failed to pay principal balance amount of Rs. 11 lacs, Rs. 2,43,125/- being the aggregate amount of interest and Rs. 5,500/- towards notice, charges, totalling Rs. 13,48,625/- despite service of legal notice. It is this amount for which decree is sought to be passed by the plaintiff against the defendants.
2. In the application (IA No. 6872/99) which is on the affidavit of Aziz A. Madni, it is averred that defendant No. 1 placed orders with the plaintiff from time to time from Mumbai and gods were supplied by the plaintiff to defendant No. 1 at its cold storage in village Kaveser in Distt. Thane, Maharashtra. During negotiations before arriving at the memorandum of understanding dated 8th April, 1994 and thereafter also the defendant No. 1 had requested the plaintiff to return to defendant No. 1 one imported Meat mincing machine (Laska brand-made in Australia) which was sent to plaintiff on 14th June, 1991 in addition to packing materials of defendant No. 1 lying with the plaintiff. The then market value of said machine was Rs. 6 lacs. The value of pacing materials lying with plaintiff was Rs. 6,84,862.40. The plaintiff had agreed to return said Meat mincing machine to defendant No. 1 in good condition and relying upon plaintiff's words, the defendant No. 1 executed said Memorandum of understanding bona fide believing that plaintiff would return the machine and packing materials to defendant No. 1. Despite repeated requests, the plaintiff has failed to return the machine and packing materials. It is for this reason that balance amount of Rs. 11 lacs was not paid by the defendant to the plaintiff. It is further stated that suit as framed is not maintainable under Order xxxvII CPC. It is also alleged that payments were made by defendant No. 1 to the plaintiff at Mumbai, defendant No. 1 carries business at Mumbai and remaining defendants also reside in Mumbai. Memorandum of Understanding was subject to Bombay jurisdiction. This Court thus has no territorial jurisdiction to try this suit. It is claimed that there was no agreement between the parties to pay interest on any of the instalments including arrears and the plaintiff is not entitled to claim interest much less @ 21% per annum.
3. In the reply which is on the affidavit of Mohd. Mushrafeen Qureshi, one of the partners of plaintiff-firm, it is asserted that suit is maintainable under the provisions of Order xxxvII CPC and this Court has territorial jurisdiction to try the suit as goods were supplied from Delhi and payments made by defendant No. 1 through its partners at Delhi. It is alleged that plaintiff is entitled to interest @ 21% per annum as claimed. It is emphatically denied that during negotiations before reaching the terms of settlement incorporated in MOU dated 8th April, 1994 and thereafter, the defendant No. 1 had asked the plaintiff to return imported Meat mincing machine which was allegedly sent on 14th June, 1991 and also packing materials, as alleged. It is further denied that the value of said machine was Rs. 6 lacs and the of packing materials Rs. 6,84,862.40, as alleged. defense taken by the defendants to the said effect is false, frivolous and vexatious and they are not entitled to life leave prayed for.
4. It was contended by Sh. Pramod B. Agarwala appearing for defendants that this suit being not based on Memorandum of understanding dated 8th April, 1994, is not maintainable under Order xxxvII CPC nor this Court has the territorial jurisdiction to try it. In support of former limb of argument, he invited my attention particularly to paras No. 18 and 6 of the plaint while in regard to latter limb to the facts that said Memorandum of understanding was executed at Bombay; defendant No. 1 carries business while defendants 2 to 8 reside at Bombay and the cheques through which payments were made to plaintiff, were drawn on the bank situated at Bombay. He further drew my attention to Clause(5) of Memorandum of understanding to which I will be referring hereinafter. At the cost of repetition, it may be stated that the case as pleaded in the plaint is that defendant No. 1 placed orders for supply of goods on the plaintiff at Delhi and pursuant to those orders the goods were supplied from Delhi at Bombay and as per books of accounts maintained in regular course of business by the plaintiff-firm, a. sum of Rs. 51,56,058.09 was due from the defendants. Said Memorandum of understanding also notices that plaintiff had sent to the defendant from time to time processed meat etc. to Bombay; amount claim to be due and payable by the plaintiff was not paid on account of defeat in quality and difference in quantity which fact was communicated to plaintiff by the defendants and during negotiations the amount due and payable by the defendants to the plaintiff was mutually settled at Rs. 41 lacs. Para No. 18 of the plaint dealing with cause of action by and large refers to above sequence of events which had culminated into agreeing by the plaintiff to receive amount of Rs. 41 lacs and the defendants agreeing to pay that amount to the plaintiff towards full and final settlement of its claim. Para No. 6 refers to the figure of Rs. 51,56,058.09 which was allegedly due form the defendants in the books of accounts maintained by plaintiff-firm. If one reads the averments made in the plaint as a whole, the only conclusion to which he may arrive at, will be that the suit is based on Memorandum of understanding dated 8th April, 1994. Therefore, said contention advanced on behalf of defendants about the suit being not maintainable under the provisions of Order xxxvII CPC being not based on said Memorandum of understanding deserves to be repelled being without any substance.
5. Adverting to the latter limb of argument, Clause (5) of that MOU to which my attention was drawn, reads thus :-
"This understanding is subject to Bombay jurisdiction and is irrevocable."
6. In the decision is A.B.C. Laminart Pvt. Ltd. and Anr. v. A.P. Agencies Salem, , point which arise for determination before ether Supreme Court was whether an agreement would be valid and binding if the parties to the contract agreed to vest jurisdiction in one such Court to try the dispute which might arise between them in future. While dealing with that issue in para No. 21 on page 1246 of the report, it was held :-
"From the foregoing decisions it can be reasonably deduced that where such an ouster clause occurs, it is pertinent to see whether there is ouster of jurisdiction of other Court. When the clause is clear, unambiguous and specific accepted actions of contract would bind the parties and unless the absence of ad idem can be shown, the other Courts should avoid exercising jurisdiction. As regards construction of the ouster clause when words like 'alone', 'only', 'exclusive' and the like have been used there may be no difficulty. Even without such words in appropriate cases the maxim 'expression' unius est exclusio alterius -expression of one is the exclusion of another may be applied. What is an appropriate case shall depend on the facts of the case. In such a case mention of one thing may imply exclusion of another. When certain jurisdiction is specified in a contract an intention to exclude all others from its operation may in such cases by inferred. It has therefore to be properly construed."
7. Plain dictionary meaning of the word 'irrevocable' is which cannot be recalled or revoked or altered. In my opinion, word 'irrevocable' as used in aforesaid Clause (5) reefs to the terms of understanding as noted in said Memorandum of understanding. It may be noticed that-subject to Bombay jurisdiction - occurring in said Clause (5) is neither prefixed nor suffixed by words - 'like', 'alone', 'only' and 'exclusive'. In para No. 4 of the application under disposal, it is admitted that defendant No. 1 placed orders from time to time on the plaintiff and pursuant to those orders, goods were supplied from Delhi at defendant No. 1's cold storage in village Kaveser in Distt. Thane, Maharashtra which is also the case pleaded by plaintiff in the plaint. A part of cause of action within the meaning of Section 20(c) CPC had thus arisen at Delhi on account of receipt of orders by the plaintiff form defendant No. 1 at Delhi and supplies of goods made pursuant thereto from Delhi at the cold storage of defendant No. 1 in said village Kavesar. Taking aforesaid clause of the MOU as it stands, I am unable to agree with the submission advanced on behalf of defendants that parties had agreed to exclude the jurisdiction of Courts at Delhi to try the suit. The place of residence of defendants 2 to 8 at Bombay and payments to the plaintiff through cheques drawn on bank located at Bombay, would not oust the jurisdiction of Court at Delhi within whose jurisdiction a part of cause of action had accused, as noticed above. Therefore, the objection regarding territorial jurisdiction does not raise real tribal issue.
8. It was next urged on behalf of defendants that the plaintiff has failed to return to defendant No. 1 one imported Meat mincing machine which was sent to it on 14th June, 1991 of the then market value of Rs. 6 lacs and also packing materials worth Rs. 6,84,862.40. In the reply it is denied by the plaintiff that any imported Meat mincing machine was sent to it or that any packing materials belonging to defendant No. 1 is lying with it. MOU dated 8th April, 1994 is conspicuously silent in regard to return of alleged machine and packing materials by the plaintiff to defendant No. 1. It is not in dispute that after execution of said MOU, no further supplies were made by the plaintiff to defendant No. 1. Obviously, amount of Rs. 12,84,862.40 being the value of machine and packing materials, is in the nature of counter-claim. Which claim would not be available by way of defense in a summary suit under Order xxxvII CPC. If the defendants have any such counter-claim, they can bring a separate suit for recovery thereof against the plaintiff. In this view of mine, I am supported by a decision of this Court in Deutsche Ranco GMBH v. Mohan Murti, .
9. It was also contended by Sh. Pramod B.Agarwala that plaintiff has claimed Rs. 2,43,125/- by way of interest @ 21% per annum but to stipulation regarding payment of interest much less @ 21% per annum is made in aforesaid MOU. As is manifest from para No. 15 of the plaint, claim for interest has been made as per market usage and said rate being normal banking rate on which money is lent as per directives of RBI. Needless to repeat that pursuant to Clause (4) of said MOU after allowing adjustment for Rs. 10 lacs which was to be paid through a cheque on its signing, amounts of Rs. 5 lacs was to be paid on 8th July, 1994, Rs. 5 lacs on 8th August, 1994, Rs. 5 lacs on 8th September, 1994, Rs. 5 lacs on 8th October, 1994, Rs. 5 lacs on 8th November, 1994 and Rs. 6 lacs on 8th December, 1994. Amounts of last two instalments total being Rs. 11 lacs, admittedly, have not been paid by the defendants. There was also delay in making payments of instalments of Rs. 5 lacs each were payable on 8th August, 1994, 8th September, 1994 and 8th October, 1994. Second proviso appended to Sub-rule (5) of Rule 3 of Order xxxvII GPC provides that were a part of amount claimed by the plaintiff is admitted by the defendant to be duet from him, leave to defend suit shall not be granted unless the amount so admitted to be due is deposited by the defendant in Court. It is admitted case of parties that the amount mutually settled to by paid be defendant was Rs. 41 lacs. Assuming that interest was not payable on the amount due by the defendants under aforesaid MOU, taking note of said second proviso, the defendants cannot be permitted leave to defend the suit unless principal balance amount of Rs. 11 lacs is deposited by them. Decision in Sunil enterprises and Anr. v. SBI Commercial & International Bank Ltd., on which heavy reliance was placed on behalf of defendants is of no assistance in the matter of deposit of said amount.
10. For the foregoing discussion, the defendants, are allowed to defend the suit on their depositing with the Registry demand draft for Rs. 11 lacs in the name of Registrar of this Court within four weeks from today. Application stands disposed of accordingly.