Delhi High Court
Corporate Voice (P) Ltd. vs Uniroll Leather India Ltd. on 15 September, 1995
Equivalent citations: 60(1995)DLT321, (1996)112PLR8
JUDGMENT Devinder Gupta, J.
(1) This is defendant's application under Order 37, Rule 3(5) read with Section 151 of the Code of Civil Procedure (for short "the Code") seeking leave to defend in a suit filed by the plaintiff for recovery of Rs. 10,13,870.50 under Order xxxvII of the Code.
(2) The defendant after service duly put in appearance. On summons for judgment having been served on 26th April, 1994, the defendant on 6th May, 1995 applied for leave to defend.
(3) The plaintiff's objection that te application for leave to defend is not within limitation cannot be accepted and the same deserves to be repelled holding that the leave to defend has been sought within the period allowed in law. While computing period of 10 days, either the day of service of summons or the day on which application is filed has to be excluded. Both days cannot be counted.
(4) Leave to defend has been sought alleging that dispute between the parties in respect of the suit amount cannot be settled in summary proceedings. Defendant's letter promising to pay the balance amount always impliedly and expressly meant that the balance payment should be the correct amount supported with proof of vouchers. Plaintiff raised inflated demands and the mere fact of remittances of invoices will not amount to defendant having admitted plaintiff's claim. According to the defendant, the suit is not for a liquidated amount and the matter requires accounting for which evidence will have to be led. Other ground seeking leave is that this Court has no territorial jurisdiction to entertain and decide the suit since cause of action arose to the plaintiff in Lucknow and one of the conditions of the contract was that jurisdiction will be of the Courts at Bangalore Metropolitan City, suit ought to have been filed either at Lucknow or at Bangalore. The application is contested by the plaintiff.
(5) Having heard learned Counsel for the parties, I do not find any ground having been made out for allowing the defendant leave to defend.
(6) The letters exchanged between the parties and their Counsel, which are on record have not been disputed. It is also not disputed that plaintiff sent and defendant received the estimates, invoices and the bills. It is also not disputed that letters, purported to have been written by the plaintiff were duly received by the defendant and some of them were duly replied including notice got sent by the plaintiff.
(7) Along with two letters dated 13th April, 1994 and 19th April, 1994 invoices for corporate advertisements. Financial advertisements and of Issue Opening advertisements till date with air fare bills for conferencing and press clippings were sent by the plaintiff to the defendant for the amount of Rs. 8,60,490.00 and Rs. 8,25,456.25 respectively. Letter dated 28th July, 1994 from plaintiff to defendant stated that the demand till then outstanding was for Rs. 11,74,026.25, after adjusting a sum of Rs. 3,00,000.00 received from the defendant by means of a demand draft. Reminders to pay this amount were sent on 8th August, 1994 and 9th August, 1994. On 20th August, 1994, the defendant remitted a sum of Rs. 3,00,000.00 by another demand draft stating that the balance payment would be made shortly. As per the plaintiff's letter dated 24th September, 1994, the balance outstanding was Rs. 8,74,026.25 against a total demand of Rs. 17,24,026.25, after adjusting Rs. 8,25,000.00 received till then from the defendant. On 13th October, 1994, a complete statement of account was sent by the plaintiff to the defendant reiterating the demand for the balance of Rs. 8,74,026.25. It gave details of the amount of bills and of the payments received. On 9th November, 1994, a notice was got sent by the plaintiff through its Lawyer to the defendant purporting to be a notice under Section 434 of the Companies Act stating that Rs. 8,74,026.25 principal with interest of Rs. 1,04,880.00, in all a sum of Rs. 9,78,906.25 were due and payable. from the defendant. In response to this notice, reply dated 6th December, 1994 was sent by Dinesh Chandra Sinha, Advocate of M/s. D.C. Sinha & Co. for and on behalf of the defendant stating that there was no dispute that plaintiff had rendered services to the defendant for publicity of their public issue and that defendants were not denying the factum of outstanding as claimed by the plaintiff. It was also stated that defendants never refused to pay any amount lawfully payable by them. Liability for being wound up due to non-payment of the dues was denied saying that in every business house, there are always transactions resulting into both debit and credit side due to which it cannot be said that the party is unable to pay its debts.
(8) From the various letters exchanged and from the contents of affidavit, no bonafide ground can be said to have been made out for which leave deserves to be granted. In the affidavit, it is not disputed that the bills, invoices and statement of accounts were not received. It is also not denied that the contents of the replies sent by the defendant to the plaintiff in response to the plaintiff's demand are not factually correct. The only defense sought to be raised is that the plaintiff is not entitled to the amount claimed in the suit, for which it is stated that the plaintiff must give adequate proof to the satisfaction of the Court that the amount is legally recoverable by the plaintiff. This by no stretch of imagination can be said to be a defense what to say a bonafide defense in a money suit in which the defendant in various letters admitted the correctness of the amount due from it to the plaintiff.
(9) As regards Court's jurisdiction, it is stated in the affidavit that the offer and production estimates dated 28th March, 1994 were given by the plaintiff to the defendant at Lucknow and the same were accepted by the defendant. Thereafter, contract was concluded at Lucknow. It is also stated that one of the conditions in the contract was that jurisdiction of any civil dispute or liability would be that of the Courts of Bangalore Metropolitan City. As such Bangalore Courts alone will have jurisdiction. In any case it is alleged that since defendant's company has its registered office at Bombay, the Court at Bombay will have the jurisdiction and not the Courts at Delhi where no cause of action has arisen. It is also stated that the defendant never promised to pay the amount at Delhi.
(10) No doubt the invoices, at bottom thereof, have a printed clause "subject to Bangalore jurisdiction", it is not the case of the plaintiff or that of the defendant that any part of cause of action arose within the jurisdiction of Bangalore Courts. It is also not the case of the plaintiff or that of the defendant that any part of the cause of action has arisen at Bombay. Defendant's contention is that in view of the printed condition on invoices Bangalore Courts alone have the jurisdiction, although no cause of action has arisen within Bangalore. It is also the defendant's case that entire cause of action arose at Lucknow where estimates were submitted by the plaintiff to the defendant-Company, where the same were accepted and where contract was conicuded. Payments were also sent by the defendant to the plaintiff from Lucknow office of the defendant.
(11) The plaintiff's claim is that it is an advertising agency and had undertaken publicity work of defendants' company as per letter dated 24th February, 1994, by which defendant-Company appointed the plaintiff as its advertising agency. Press estimates and production estimates were duly signed by Shri G.K. Bangla on behalf of the defendant on 28th March, 1994 for Rs. 17,37,795.00. Sixteen invoices were sent by the plaintiff to the defendant for Rs. 17,24,026.25 for the work done. The defendant agreed to make payment to the plaintiff in its Delhi office and in persuance thereof, the Lucknow office of defendant company sent part payments of Rs. 8,50,000.00 to the plaintiff's Delhi office. Inspite of reminders, letters, telephone calls, the balance Along with interest was not remitted though liability to pay was not denied. Cause of action arose at New Delhi on 28th Match, 1994 when press estimates and production estimates were signed by the defendant, it arose thereafter when work of the defendant, undertaken by the plaintiff was done by the plaintiff from its Delhi ofice, when invoices, bills etc. thereafter were sent to the defendant's Lucknow office and at Delhi to which place part payments were sent by defendant's office at Lucknow.
(12) Since cause of action has not arisen at any place within the jurisdiction of Bangalore Courts, even according to the defendant's affidavit, the condition appearing in invoices "subject to Bangalore jurisdiction" will not amount to ousting this Court's jurisdiction or ousting jurisdiction of any other Court where cause of action for filing the suit has arisen. It is plaintiff's case that cause of action arose against the defendant on 28th March, 1995 at New Delhi where the Managing Director of the defendant-Company signed the estimates and from which place the work undertaken by plaintiff for and on behalf of the defendant was done. Cause of action also arose in Delhi since the defendant-Company from its Lucknow office sent part payment to plaintiff's-Company office in Delhi. The first letter from defendant to the plaintiff addressed to its New Delhi office is dated 24th February, 1994, intimating that the plaintiff has been appointed as an advertising agency for defendant's public issue. It is the defendant's case also that all payments were sent by defendant's Lucknow office to the plaintiff's office in Delhi. Thus the objection as regards territorial jurisdiction raised by the defendant is such which also cannot be said to be a ground for grant of leave to defendant. None of the facts disposed in the affidavit in the light of decision in M/s. Mechalec Engineers & Manufacturers v. Mis. Basic Equipment Corporation, do not make out any ground for grant of leave to defend. It is necessary that the affidavit must disclose a friable issue, namely, a plea which is at least plausible. Facts and circumstances of the case do not warrant grant of leave. The application is accordingly dismissed.
(13) Since leave to defend has been refused and it is a suit for recovery of a liquidated demand in money, on the basis of bills and invoices sent by plaintiff to the defendant, the suit is covered by Order xxxvII of the Code, in view of the ratio of decision in M/s. Punjab Pen House v. Mis. Samrat Bicycle Ltd., . Plaintiff is entitled to judgment in its favor. Accordingly, plaintiff's suit against the defendant is decreed with costs for Rs. 10,13,870.50 Along with interest at the rate of 18% p.a. on Rs. 8,74,026.75 from the date of institution of the suit till realisation. Decree be drawn in accordance with law.