Bangalore District Court
Prakash Parcel Services Limited R/By ... vs Beml Limited on 30 January, 2025
1
Com.O.S.NO. 25714/2017
KABC170094412020
IN THE COURT OF LXXXII ADDL.CITY CIVIL &
SESSIONS JUDGE, AT BENGALURU (CCH.83)
THIS THE 30th DAY OF JANUARY 2025
PRESENT:
SUMANGALA S BASAVANNOUR., B.COM, LL.M.,
LXXXII ADDL.CITY CIVIL & SESSIONS JUDGE,
BENGALURU.
Com.O.S.No.25714/2017
BETWEEN:
M/s Prakash Parcel
Services Ltd., having its
registered office at
st
No.18/3, 1 Main,
Mission Road, Bengaluru
- 560 027. Rep. By its
Director Mr. Prakash
Pandey.
: PLAINTIFF
(Represented by
A.S.Gupta - Advocate)
AND
2
Com.O.S.NO. 25714/2017
BEML LIMITED (Registered
Corporate Body) Corporate
Materials, BEML Soudha,
23/1, 4th Main, S.R. Nagar,
Bengaluru - 560 027.
Rep. By its Managing
Director or Authorized
Officer.
: DEFENDANT
(Represented by M/s
Chouta Associates -
Advocate)
Date of Institution of the suit 24.06.2017
Nature of the suit (suit on
pronote, suit for declaration & Money suit
Possession, Suit for injunction
etc.)
Date on which judgment was 30.01.2025
pronounced
Total Duration Year/s Month/s Day/s
07 07 06
(SUMANGALA S BASAVANNOUR),
LXXXII Addl. City Civil & Sessions Judge,
Bengaluru.
3
Com.O.S.NO. 25714/2017
JUDGMENT
The plaintiff prays that directing the defendant to pay sum of Rs.1,18,70,115/- along with interest @ 21% per annum from the date of the filing of the suit till the date of realization and along with cost.
2. The Brief facts of the Plaint are as follows:-
The plaintiff have business transactions between in the year 2012 the plaintiff filed an application before the High Court of Karnataka under Arbitration and Conciliation Act 1996 and the Hon'ble High Court passed its order dated 14- 12-2012 in CMP No.132/2012 and referred the subject arbitration dispute to the executive director BEML Limited, the defendant herein. The petition claim was for Rs.60,83,990/- along with interest @21% per annum payable by the defendant - The claim was under certain agreements in writing-The Hon'ble arbitrator by its order dated 07-11-2016, passed the following order:-
Perused the ruling passed in the citation relied by the Claimant. I am satisfied that the ruling passed in the above 4 Com.O.S.NO. 25714/2017 citation applies to the facts and circumstances of the case.
Further the claimant had made sincere efforts to amicably settle the matter for which the respondent failed. Therefore, take cognizance of the ruling passed by the Supreme Court holding that this Tribunal has no jurisdiction to adjudicate the instant dispute. The claimant is permitted to withdraw the claim and liberty is afforded to the claimant to initiate appropriate legal remedies for recovery of the amount. Further the period consumed covering the instant. Arbitration proceedings is excluded from the period of limitation in order to enable the claimant to initiate an appropriate legal remedy, in the interests of justice and equity.
The plaintiff further submitted that due to technical difficulties and unavoidable circumstances, such as the entire file was at the hands of the advocate on record in the arbitration proceedings, the same was still at the hands of advocate on record in the arbitration proceedings. The file is expected to be received within few days from Mr. Sundra Murthy advocate, therefore the plaintiff is not in a position to produce a comprehensive plaint- the plaintiff with abundant precaution produces this plaint to claim limitation.5
Com.O.S.NO. 25714/2017 The plaintiff reserve his right to file an amended comprehensive plaint in due course and relative documents to be produced in support of suit claim.
The limitation is calculated as follows:
a) The last payment received from the defendant was dated 30th June 2012 and the Hon'ble high court of Karnataka vide its Order dated 14-12-2012 passed in CMP No.132/2012 filed by the Claimant herein referred the subject Arbitration Dispute to the Executive Director, BEML Limited Accordingly the Arbitrator entered reference and Claimant filed its claim petition claiming an Rs.60,83,990/- along with interest @21% per annum from the Respondent, in respect of a dispute raised by the Claimant under contract bearing No. CPC/ROAD TRANSPORT/2008-09 for the period 01-06-2008 to 31-05-2011, subsequently extended to 31-07-2011 from the respondent's works situated at KGF, Bangalore/Mysore to various destination both incoming & outgoing.
b) The claimant is permitted to withdraw the claim and liberty is afforded to the claimant to initiate appropriate legal remedies for recovery of the amount. Further, the period consumed covering the instant Arbitration proceedings is excluded from the period of limitation in order to enable the claimant to initiate an appropriate legal remedy in the interests of justice and equity.6
Com.O.S.NO. 25714/2017
c) The Arbitration proceedings commenced from dated 14-12-2012 and continued till dated 07- 11-2016. Limitation starts from dated 30-06-2012 and was originally available upto 30-06-2015 the Arbitration proceedings were commenced on 14-12- 2012 and continued upto 07-11-2016 and this period of limitation is excluded from the limitation Act -
d) The total period delay as per the original limitation is now accounted from dated 30-06-2012 to dated 24-06-2017 is 1819 days less period consumed in arbitrator proceedings from dated 14- 12-2012 to 07-11-2016 - works out to 1432 days :-
The total period from the dated of 30-06-2012 - 24-06- 2017 is 1819 days less statutory period 1095 days from 1819 less 1095 days 724 days the period consumed in arbitrator proceedings duly exempted from limitations is 1432 days. Hence the plaint is in time.
The claim of Rs.60,83,990/- is capital amount which carries interest @21% per annum The interest will be calculated and added in the capital amount of Rs.60,83,990/-. The suit claimed includes to transport materials of the KGF and MYSORE the materials are detail in agreement bearing no.CPC/ROAD TRANSPORT/2008-09 for the period covering which was subsequently extended upto 31-07-2011. Transportation charges.7
Com.O.S.NO. 25714/2017 The plaintiff further submitted that, the defendant is liable to pay a sum of Rs.52,17,110/- being the freight charges along with Bank Guarantee amount of 10,00,000/- and illegally forfeited EMD amount of Rs.2,10,000/- aggregating to a sum of Rs.64,27,110/-, which is inclusive of the admitted liability of Rs.29,61,000/- and on these sum, the defendant made a claim of Rs.3,63,120/- the same was deducted from the total claim after deducting the excess freight charges Rs.3,63,120/- the plaintiff claims the sum of Rs.60,63,990/- along with sum of Rs.20,000/- being the cost towards the legal notice issued in the Arbitration proceedings. The interest is calculated on the capital amount of Rs.60,63,990/- at the rate 21% per annum, is calculated with effect from 14-12-2012 to 24-06-2017- works out to Rs.57,86,125/-. The total suit claim is Rs.1,18,70,115/- Capital amount Rs.60,83,990/- and interest thereon @ 21% with effect from with effect from 14-12-2012 to 24-06-2017/- works out to Rs.57,86,125/- is Rs.1,18,70,115/-which carries subsequent interest @21% per annum till the decree amount is realized. Hence, this suit.8
Com.O.S.NO. 25714/2017
3. The defendant filed written statement stating that, the suit is not maintainable either in law or on facts and is liable to be dismissed in limine. The suit is belated and is barred by the Law of Limitation. The above suit is also not maintainable as an alternative remedy is provided under the terms and conditions of the contract entered into between the Plaintiff and the Defendant and the claimant had proceeded in accordance with the Arbitration. Hence the suit is liable to be dismissed in limine.
The plaintiff has by resorting to clever drafting tried to create an illusion of a cause of action where there exist none and hence the plaint is liable to be rejected at the earliest stage. The suit is liable to be dismissed with exemplary costs, on the ground of it being false and vexatious to the knowledge of the Plaintiff. The suit has been filed solely with an intention to make illegal and unjust enrichment at cost of the Defendant. The above suit lacks bonafide and has not been filed to attain the ends of justice. The Plaintiff has not approached this Hon'ble Court with clean hands and has suppressed several material facts. Hence the Plaintiff is not entitled to any relief.
9Com.O.S.NO. 25714/2017 A perusal of the averments in the plaint would disclose that the suit is barred by the law of limitation, the date on which cause of action for the suit is said to have arisen when the plaintiff delivered material as per in terms of the said agreement. The above suit was filed on 24.06.2017. Further, Article-18 of the Limitation Act, 1963, prescribes the period of limitation of 3 years from the date of work done for filing a suit for recovery arising out of contracts. The Agreement was for a period of 3 years from 01.06.2008. Even assuming, without admitting, that the cause of action arose on 30.06.2012 i.e., the last date of payment, the suit is beyond the period of Limitation. The cause of action shown in the Plaint is not real, but only illusory and deserves no consideration. Therefore, the above suit is hopelessly barred by the Law of limitation and the plaint is liable to be rejected.
The defendant contended that, M/s BEML Limited (formerly Bharat Earth Movers Limited), the Defendant herein is a Central Public Sector Undertaking within the meaning of Section 617 of the Companies Act, 1956, under the administrative control of the Ministry of Defence, Department of Defence Production, Government of India. The Defendant is a Heavy Engineering Multi Technology 10 Com.O.S.NO. 25714/2017 Company engaged in the manufacture of Earth Moving Equipment, Rail Coaches, Metro Coaches, Equipment used for Defence, Mining and Construction, Aerospace and other products. The Defendant Company has four manufacturing divisions one each at Bengaluru, Mysore, Kolar Gold Fields and Palakkad and has Regional/Marketing offices throughout India and abroad The Respondent Company has been facing rigid competition from 'private players' who are in the same business sector as that of the Defendant Company. As such the Respondent Company is under immense pressure to provide its products and services at competitive price, without compromising on the quality and on time to its clients. The Defendant company in order to ensure effective management of manpower and delivery of its services/products to its client has outsourced certain portion of its services to the Claimant.
The Defendant further stated that, the defendant company issued a Tender No. CPC/ROAD Transport/07-08 for transportation of materials including spare parts and equipment for the period of three years extendable by mutual consent. As per the Tender condition the successful contractor had to transport material, spares and equipment 11 Com.O.S.NO. 25714/2017 by road from BEML's works at KGF/Bangalore/Mysore to the destinations and vice-versa. The Plaintiff emerged as L-1 and the contract was awarded to the Plaintiff. Accordingly, an Agreement Ref. Contract No. CPC/ROAD TRANSPORT/08- 09 dated 25.06.2017 entered into between the plaintiff and the defendant. As per the said Agreement, plaintiff has to provide transportation of spares and steel plates from Chennai Port to the Defendant's works at Bengaluru, Mysore and KGF for a period of three years from 01 06.2008.
It is apposite to adapt some of the relevant clauses in the Agreement for fair understanding of the dispute, as under "(1) Forfeiture of Security Deposit in the following circumstances:
(i)......... (ii).............. (!!!)...........
(iv) In case the carrier fails to perform in accordance with the instructions of the Asst. General Manager (Stores) of respective BEML divisions. (v)..............
II. Validity of Rates
i) The rates indicated in Annexure are firm and same for transport of goods either way i.e inbound/outbound 12 Com.O.S.NO. 25714/2017 consignments during the contract period.
ii) No request for revision of rates except on account of increase in Diesel price will be entertained on any account during pendency of the contract.
(!!!) Deployment of Vehicles:
(i)..........
(ii) The carrier is solely responsible to provide vehicles either to BEML or their suppliers and deploy it in time frame not to exceed 24 hours from receipt of intimation from BEML supplier.
(iii).............. (iv)............
(v) In the event the carrier fails to deploy vehicles within a stipulated time, BEML or BEML Supplier will have right to transport goods through alternate carrier at the sole risk and cost of the contracted carrier. The excess freight charge incurred (if any) in making alternate arrangement shall be debited to the carrier's account or will be recovered from their pending/subsequent bills.
IV. Right of Alternate Vehicle Arrangement - The Respondent reserved the right to use own transport or the transport of other road transport contractor of its choice and 13 Com.O.S.NO. 25714/2017 discretion during the tenure of this contract whenever required, particularly when the carrier is unable to quickly clear the load or when the carrier fails to place the vehicles in time and the extra freight charge incurred in this regard would be recovered from the Carrier.
V Termination of Contract:
(i) In the event of breach of any contract terms and failure to comply the same through corrective measures the Company reserve the right to terminate the contract after giving opportunity to the carrier to comply with the Agreement terms through TWO WRITTEN NOTICES, followed by termination Notice. The EMD - Cum Security Deposit will be forfeited and Bank Guarantee will be encashed at the absolute discretion of the Asst. General Manager (Stores)
(ii) Notwithstanding anything stated in this contract, the Asst. General Manager (Stores), BEML, Bangalore/KGF/Mysore Complex will have the right to terminate the contract without notice and without assigning any reason, if he is of the opinion that the carrier is negligent in rendering services in terms of this Contract or the services rendered not satisfactory".
The plaintiff during the pendency of the contract, had breached several terms of the contract, several times, including but not limited to placing Trailers for lifting the steel plates at the designated time from Chennai Port and the Claimant was put on notice vide letters/e-
14Com.O.S.NO. 25714/2017 mails, with opportunities to make good the breach committed. Further, despite of various communications, the Plaintiff did not place Trailers on many occasions for lifting the steel plates at the designated time or thereafter from Chennai Port as promised by them. Whenever the defendant would follow-up, the Plaintiff promised to the claimant that it would be placing trailers, such as registration numbers, registration numbers, the payload capacity, driver details etc and based on the promises made by the Plaintiff the Defendant had deployed the gangmen along with cranes and had made other necessary arrangement required for lifting and loading the steel plates on to the Trailers through the Agency M/s Sanco, Chennai by incurring huge expenses and also hired another Transporter viz., M/s All India Carriers (P) Ltd., at their terms and lifted/transported the steel plates from the Chennai Port.
The defendant had recovered the difference in the freight charges from the Claimant of a sum of Rs 3,38,221/- from pending bills of the Defendant in accordance with the Terms and conditions of the Agreement.
The defendant further submitted that due to the Plaintiffs non-placement of Trailers on many occasions for lifting the steel plates at the designated time from Chennai 15 Com.O.S.NO. 25714/2017 Port, the Respondent was imposed with demurrage charges of an amount of Rs.26.23 lakhs by the Chennai Port Authorities, besides suffering huge damages, including but not limited to additional freight charges. The Defendant, left with no alternative, recovered a sum of Rs.29,61,000/- from the Defendant towards damages suffered at actual caused to the Defendant due to breach of the terms of the Agreement as under:
(i) Rs. 10,00,000/- by encashing the Bank Guarantee;
(ii) Rs.5,00,000/- from Earnest Money Deposit; and
(iii) Rs. 14,61,000/- from the pending bills at KGF.
The Plaintiff by not lifting the steel plates/consignments since September 2010 on time, impeded the Respondents' commitment to their clients' to provide the finished goods/products within time.
The defendant further submitted that though the action of the Defendant is legally in order and in accordance with the Terms and conditions of the Contract, the Plaintiff invoked a dispute on the same and also, ignoring the Arbitration clause in the Agreement filed CMP No.32/2012 before the Hon'ble High Court of Karnataka for appointment 16 Com.O.S.NO. 25714/2017 of independent Arbitrator instead of the named Arbitrator i.e. Executive Director (BEML), to resolve the alleged dispute due to the imposing of penalty and recovery of expenses by the Defendant, which is the subject matter of the present suit. Further, the Hon'ble High Court of Karnataka, observing that the Respondent having agreed upon the named Arbitrator cannot ask for a neutral Arbitrator, referred the matter to the named Arbitrator i.e. Executive Director of the Defendant Company. The Arbitrator, in terms of the Hon'ble High Court order, commenced Arbitration proceedings and both the Plaintiff and the Defendant actively participated. The Plaintiff had filed its Claim Statement claiming an amount of Rs 52,17,110/- without any the documentary proof for substantiating its claim and further submitted that subsequently, as requested by the Plaintiff the defendant had agreed for reconciliation of accounts and started reconciliation of the accounts. However, the claimant unilaterally for the reasons best known to them, backed out from such reconciliation. During the reconciliation the claimant had agreed to absorb the additional freight charges, demurrages and container charges and the proceedings of the reconciliation meeting is reduced into writing.
17Com.O.S.NO. 25714/2017 Subsequently, the Defendant had filed its Objection Statement and also relevant documents to substantiate its contentions. The Plaintiff had also led evidence and when the Defendant's evidence was partly completed, the then Executive Director resigned from the Services of the Defendant Company and Shri. Umesh Chandra, Executive Director of the Defendant Company assumed charge as sole Arbitrator in the matter during 2014. The Hon'ble Arbitrator held meetings on 12.06.2014, 25.06.2014, 22.07.2014, 17.06.2016 and 25.07.2016. After the sitting held on 22.07.2014, considering the request of the Plaintiff for an amicable settlement of issues in the dispute and the submission on behalf of Defendant that the proposal needs to be examined and put up, the Hon'ble arbitrator directed the Plaintiff to submit a written proposal bringing out all the details of the settlement and depending on the outcome of the settlement the next date of hearing would be fixed.
The defendant further submitted that vide letter dated 26.07.2014 the Plaintiff informed that they are willing to amicably settle the dispute for an amount of Rs 60,83,990/- + interest Rs.22 Lakhs. Further, they are also willing to waive the interest and to reduce the principle by 10-15%.
18Com.O.S.NO. 25714/2017 Subsequently, a meeting was held between the Plaintiff and the Defendant and Defendant had requested for break-up details of their claim Plaintiff vide letter dated 22.08 2014, submitted the break up details of the outstanding amount to the Defendant. On perusal of the said breakup details Defendant found that the Plaintiff made baseless claims and accordingly replied vide letter dated 14. 10 2014 that the proposal could not be accepted. Thereafter, a discussion was held between the Plaintiff and Defendant on 10.11.2014 and the Defendant handed over the statement containing the Plaintiff's claim and Defendant's remarks on the same with a request to have reconciliation of the accounts.
The defendant further submitted that vide email dated 05.04.2016 the Hon'ble Arbitrator forwarded the email letter received from Mr. Azad Singh, Advocate, issued on behalf of the Plaintiff wherein it is informed that the Hon'ble Arbitrator has advised the parties to explore the possibility of out of court settlement and since no progress has been made for last 20 months and also requested to settle the issue within a week otherwise they would be forced to move to the court. In this regard, the Defendant vide mail dated 05.04.2016, replied that no progress in the matter of 19 Com.O.S.NO. 25714/2017 settlement for almost 20 months, it can be presumed that here is no settlement possible and Arbitrator can proceed with Arbitration for which Arbitrator.
The defendant further submitted that since the attempt of the Claimant was not sincere or bonafide, the Respondent did not agree for the settlement as proposed by the Claimant The said incidents are nothing to do with the change of management of either the Claimant or the Respondent. Accordingly the Arbitrator had the next sitting on 17.06.2016 and on that date, since the Defendant submitted its inability to discuss on the proposal, the Arbitrator directed the Defendant to file Evidence by way of Affidavit of its witness by 18.07.2016 and posted the matter to 25.07.2016 for cross examination.
The defendant further submitted that on 25.07.2016, the Plaintiff filed an Application under Sec. 16 of the Arbitration and Conciliation Act, 1996, praying to take cognizance and hold that the Arbitral Tribunal had no jurisdiction to adjudicate the dispute as the Arbitration Clause is in conflict with the dictum laid by the Hon'ble Supreme Court in P. Dasaratharama Reddy Complex Vs. 20 Com.O.S.NO. 25714/2017 Government of Karnataka (MANU/SC/1103/2013), as per which employee of the party to a dispute cannot be an Arbitrator. The Defendant had filed its detailed objection as the dictum in the said judgment of the Hon'ble Apex Court was not at all applicable to the instant case and the said Application was in violation of Sec.4 of the Arbitration and Conciliation Act, which inter-alia provides that such Applications challenging the jurisdiction of the Arbitrator ought to have filed before filing of Objection Statement to the Claim However, the Arbitrator without application of mind, allowed the said Application holding that Therefore, take cognizance of the ruling passed by the Supreme court holding that this tribunal has o jurisdiction to adjudicate the instant dispute. The claimant is permitted to withdraw the claim and liberty is afforded to the claimant to initiate appropriate legal remedies for recovery of the amount.
The defendant further submitted that the plaintiff has not yet filed any application for withdrawal of the said claim before the Hon'ble Arbitrator and the Arbitration proceedings is not yet disposed of/closed and is pending. In accordance with said order of the Arbitral Tribunal, the remedy available to the Plaintiff is to seek for substitution of the Arbitrator 21 Com.O.S.NO. 25714/2017 either from the Defendant or from the Hon'ble High Court. However, state that this could be possible only after withdrawal of the Claim in accordance with the order dated 07.11.2016 and annulment of the Arbitral proceedings.
The defendant further submitted that, by virtue of the Agreement itself there is no debt and the Plaintiff cannot demand for the debt or money on the strength of the same As such prima-facie there is no cause of action arose on account of the said Agreement. The defendant further submitted that, the Arbitrator does not have the power to exclude the limitation period. The order passed by the Arbitrator is not sustainable and without jurisdiction. The Arbitrator has no right or jurisdiction to elongate the period of Limitation prescribed under Law. Therefore, the above suit is hopelessly barred by the Law of limitation and the plaint is liable to be rejected.
The defendant further submitted that, the statement produced by the Plaintiff has no authenticity and it is a self made statement without any supporting documents and no heed can be given to the same and to be discarded at the threshold. Since the suit is barred by limitation and also the suit is not maintainable as there is Arbitration clause in the 22 Com.O.S.NO. 25714/2017 Agreement, based on which the suit has been filed, the above Plaint is liable to be dismissed with cost. Hence, he prayed to dismiss the suit.
4. Based on the above contentions of both parties, following Issues arise for my consideration:-
1. Whether the plaintiff proves that the defendant is liable to pay sum of Rs.1,18,70,115/- ?
2. Whether the plaintiff proves that the defendant is liable to pay interest at the rate of 21% per annum from the date of the suit till realization ?
3. Whether the plaintiff is entitled relief as prayed for ?
4. What Decree or Order?
5. In support of the plaintiff's case plaintiff is examined as PW.1 and got marked Ex.P.1 to Ex.P.17 and closed his side evidence. On the other hand defendant is examined as DW.1 and got marked the documents at Ex.D.1 to Ex.D.8 and closed his side evidence.
6. I have heard the arguments on both the advocates.23
Com.O.S.NO. 25714/2017 6(a). The plaintiff relied upon following decision:-
1. Pulavarti Sitaramamurthy and another V/s Bangaru Sobhandari and another. High Court of Madras LAWS(MAD)-
1950-2-505.
The obvious thing, therefore, for him was to dismiss the suit without costs, as the plaintiffs were bound to prove their contention that the defendants had broken the contract before they could get a pic as damages, Breach of contract has, of course, to be proved before any enquiry can be conducted into the quantum of damages, just as marriage must be proved before maintenance can be given to a woman claiming it as a wife.
2. AIR 1965 SC 1981 Karsansas H. Thacker V/s M/s Saran Engineering Co. Ltd.,.
3. AIR 1985 KERALA 49 State of Kerala V/s K. Bhaskaran.
(A)Contract Act (9 of 1872), S.73 - contract - Works contract by Breach of Govt. - Nature of work indicating Govt.'s obligation to supply cement reasons Refusal to do so without proper Cancellation of contract for not commencing work - Govt. is guilty of breach/ of contract.
4. AIR 1983 ALLAHABAD234 Mirza Javed Murtaza V/s U.P. Financial Corporation Kanpur and another.
(A) Contract (A)Contract Act (9 of 1872), S.73 - Breach of contract - Does not co instanti incur any pecuniary obligation.
When there is a breach of contract, the party who 24 Com.O.S.NO. 25714/2017 commits the breach does not co instant i.e. at that instant incur any pecuniary obligation, nor does the party complaining of the breach become entitled to a debt due from the other party. The only right which the party aggrieved by the breach of the contract has is the right to sue for damages. No pecuniary liability thus arises till the court has determined that the party complaining of the breach is entitled to damages. The Court in the first place must decide that the defendant is liable and then it should proceed to assess what that liability is. But, till that determination, there is no liability at all upon the. defendant AIR 1974 SC 1245, Rel. on.
5. AIR 1984 HIMACHAL PRADESH 18 Himachal Fruit Growers Co-operative Marketing and Processing Society Ltd., Simla V/s Upper India Food Preserves and Processors Pvt., Ltd., Parwanu and another.
(A)Contract Act (9 of 1872), S.51, S.73 Contract for storing and preserving fruits Plaintiff fruit growing and preserving co-operative society entrusting fruits to defendants for preservation Clause in contract that plaintiff before removing goods must pay rental charges
- Defendants refusing delivery as plaintiff was unable to make payments - Held, that breach of contract was on the part of plaintiff and not on part of defendant - Plaintiff was not entitled to any damages or interest as claimed.
6. AIR 19747 SC 1265 Union of India V/s Raman Iron Foundry.
Index Note:- (B)Contract Act (9 of 1872), S.10, S.73, S.74 Standard Form of Contract No. D.G.S. and D. 68 Constitution of Cl. 18 - Principles - Claim for damages for breach of contract when becomes a sum due and payable.
25Com.O.S.NO. 25714/2017 Brief Note:- (B) Held that the words 'any claim for the payment of a sum of money' occurring in the opening part of Cl. 18 of the contract must be read not in isolation but in the context of the whole clause, for the intention of the parties is to be gathered not from one part of the clause or the other but from the clause taken as a whole.
7. AIR 1981 SC 1680 Masum Hussain V/s State of M.P and others.
8. AIR 1975 DELHI 248 M/s Mohan Meak in Breweries Ltd., V/s Union of India and others.
Held on facts that the Union of India had no right under Clause 18 of the Terms and conditions of the Contract to adjust or recover the amount claimed by it for breach of contract from out of the security amount of the other pending or future bills of the petitioner company, and the Union of India is to be restrained from in any manner adjusting or recovering the amount from out of the security amount and the pending or future any. bills of the petitioner company.
9. (2017) 8 SCC 237 Kanchan Udyog Ltd., V/s United Spirits Ltd.,.
Held on facts, appellant failed to establish that breach e was substantial cause for loss of anticipated profit - Hence, appellant not entitled to compensation for any expectation loss towards anticipated profit - Remoteness of damages Contract Act, 1872, S. 73.
Expectation loss and reliance loss Concepts explained - They are mutually exclusive and thus both cannot be claimed simultaneously - Moreover, award of damages for reliance loss should not amount to a windfall on party who breached contract.
26Com.O.S.NO. 25714/2017
10. AIR 1973 SC 1098 Union of India V/s Rampur Distillery & Chemical Co. Ltd.,
4. It is important that the breach of contract caused no loss to the appellants. The stipulated quantity of rum was subsequently supplied to the appellants by the respondents themselves at the same rate. The appellants, in fact, made no attempt to establish that they had suffered any loss or damage on account of the breach committed by the respondents.
11. AIR 1983 KERALA 1 K. Abdulkhadar V/s The Plantation Corporation of Kerala Ltd., Kottayam.
(A) Contract Act (9 of 1872), S.55 Time, when not of essence of contract Agreement between plaintiff corporation and defendant contractor for construction of road - Agreement requiring construction to be completed before certain date Special conditions providing for damages for delayed completion of work and also for extension of time in certain circumstances - Held, time was not of the essence of the contract.
12. AIR 1977 SC 734 Timblo Irmaos Ltd., Margao V/s Jorge Anibal Matos Sequeira and another.
(B)Contract Act (9 of 1872), S.73 - Claim for demurrage or damages - Basis upon which agreement to pay demurrage rested was that appellant would afford proper facilities for loading - Appellant itself committed breach of its obligations in that respect - Held that respondent could not be made liable for delay in loading.
13. 2021 (3) KCCR 2664 (DB) J. Somashekar V/s Lt. Col. Appuramanand Sharma (Retd.) B. CONTRACT ACT, 1872-Section 13-Consent-Held, when two or more persons said to consent when they agree upon same thing in same sense.
27Com.O.S.NO. 25714/2017 C. CONTRACT ACT, 1872-Section 14-Free consent-Is one not given under coercion, undue influence, fraud or misrepresentation.
D. CONTRACT ACT, 1872-Section 17-Fraud-Constituents of Held: Section 17 of the Contract Act provides that where one person or his agent or with his connivance with an intent to deceive other party or his agent or to induce him to enter into the contract, the suggestion, as a fact, of that which is not true by one who does not believe it to be true; active concealment of a fact by one having knowledge or belief of the fact; a promise made without any intention of performing it and any other act fitted to deceive.
E. CONTRACT ACT, 1872-Section 17-Fraud-Undue influence- Is a subtle species of fraud whereby mastery is obtained over mind of victim by insidious approaches and seductive artifices.
G. SPECIFIC RELIEF ACT, 1963-Sections 16 and 22- Refund of earnest money-Agreement of sale entered into by plaintiff buyer by playing fraud on seller-Failing to prove his readiness and willingness to perform his part of contract-Trial Court declining to grant refund of earnest money-Proper.
14. 2021 (3) KCCR 2689 (SC) Nagendra Sah V/s Sate of Bihar.
15. 2008 (1) KCCR SN 50 Smt. Vasanti V/s Smt. Jayashree V. Shetty.
CONTRACT ACT, 1872-Section 17-CODE OF CIVIL PROCEDURE, 1908-Section 11-Fraud-What amounts to- Held, when a person acts deliberately with the design of securing something by taking unfair advantage of another, commits fraud.
28Com.O.S.NO. 25714/2017 Held, fraud avoids all judicial acts. Fraud is anathema to all equitable principles and any affair tainted with fraud cannot be perpetuated or saved by the application of any equitable doctrine including resjudicata. Fraud and-collusion vitiate even the most solemn proceedings in any civilized system of jurisprudence. No Court will allow a person to keep an advantage which he has obtained by fraud. No judgment of a Court, no order can be allowed to stand, if it has been obtained by fraud and fraud unravels everything. If the facts establish that fraud is committed, the Court will not hesitate to set at naught all such acts, which are result of fraud.) the misrepresentation or a fraud.
16. AIR 1987 SC 1257 K.P. Subbarama Sastri and others V/s K.S.Raghavan and others.
The question whether a particular stipulation in contractual agreement is in the nature of a penalty has to be determined by the Court against the background of various relevant factors, such as the character of the transaction and its special nature, if any, the relative situation of the parties, the rights and obligations accruing from such a transaction under the general law and the intention of the parties in incorporating in the contract the particular stipulation which is contended to be penal in nature. If on such a comprehensive consideration, the Court finds that the real purpose for which the stipulation was incorporated in the contract was that by reason of its burdensome or oppressive character it may operate in.
17. AIR 1987 SC 1359 State of Karnataka V/s Shree Rameshwara Rice Mills. Thirthahalli.
A)Constitution of India, Art.299, Art.226 Govt. Contract - Term that for any breach of condition of contract, contractor shall be liable to pay to Govt. such damages as assessed by Govt. - Term does not empower Govt. to adjudicate upon disputed question of 29 Com.O.S.NO. 25714/2017 breach - Power to assess damages is confined only to cases where breach is admitted.
18. (2004) 1 SCC 252 United Bank of India V/s Ramdas Mahadeo Prashad and others.
A. Contract Achere was no on terronsensus ad idem _Absence of - Where there was no consensus on the terms and conditions stipulated in MOU and the same also had not been acted upon, held, there was no concluded contract - Civil Procedure Code, 1908, Or. 23 R. 3.
B. Contract Act, 1872 S. 62 Memorandum of Understanding Held, MOU does not (MOU) whether amounts to novation of contract - amount to novation as envisaged by S. 62 - Further held on facts, the respondents having committed breach can hardly seek to enforce the contract.
19. 2007 (2) KCCR 845 Huchappa and another V/s Union of India and others.
LIFE INSURANCE CORPORATION ACT, 1956-Condition imposed by the Insurance Company while assuring the life of the policy holders to forfeit the amount if the amount/premium is not paid for full three years, held, will be detrimental to the interest of the common man and it will be in clear violation of Articles 21, 38 and 39 of the Constitution. Such practice being adopted by the Corporation will be amassing the wealth of the public and thereby resulting in concentration of wealth, which does not legitimately entitle them to retain the amount/premium paid by the policy holders whose policies have lapsed when due to the financial hardship they could not get their policy revived The same has been directed to be returned with interest.
30Com.O.S.NO. 25714/2017
7. My findings on the above points are as follows:-
Issue No.1:- In the Negative.
Issue No.2:- In the Negative.
Issue No.3:- In the Negative.
Issue No.4:- As per the final Order for the following reasons.
REASONS
8. ISSUE NO.1 TO 3:- As these points are interlinked with each other, they are taken together for discussion, to avoid repetition.
9. The defendant has raised objection regarding the maintainability of suit, on the point of authorization and limitation. These points are goes to the route of subject matter. So, I would like to consider these points before the fact in issue.
10. The plaintiff company to substantiate its case examined its executive Director as PW.1. PW.1 in his evidence reiterated the averments of the plaint and got marked Ex.P.1 to 4. It is pertinent to note that, during the case management hearing Ex.P.1 and 2 are got marked. The 31 Com.O.S.NO. 25714/2017 facts elicited during cross-examination is to be considered herein after at appropriate stage.
11. On the other hand, defendant company examined its Senior Manager/authorized representative as DW.1. DW.1 in his evidence and got marked Ex.D.2 to D.30. The facts elicited during cross-examination is to be considered herein after at appropriate stage.
12. The Learned counsel for the defendant argued that, Prakash Pandey who has filed this suit and given evidence in this case, has no authority to file the suit and to give evidence. The present suit is barred under Order 29 Rule 1 of CPC. It is not in dispute that the plaint is verified by Sri. Prakash Pandey. The cause title of the plaint shows that the plaintiff company is represented by its director Sri. Prakash Pandey. The Plaintiff has not produced any authorization letter or board resolution issued by the plaintiff company authorized Sri. Prakash Pandey to institute the suit for money recovery against the defendants on behalf of the plaintiff company. Moreover, Sri. Prakash Pandey admitted that he is not a director of the plaintiff company.
32Com.O.S.NO. 25714/2017
13. In this regard, the defendant relied upon order 3 Rule 1 of CPC which reads as under:-
"Any appearance, application or act in or to any court, required or authorized by law to be made or done by a party in such court, may except where otherwise expressly provided by any law for the time being in force, be made or done by the party in person, or by his recognized agent or by a pleader appearing, applying or acting, as the case may be, on his behalf provided that any such appearance shall, if the court so directs be made by the party in person".
Order 29 Rule 1 of CPC which reads as under:-
"in suits by or against a corporation, any pleading may be signed and verified on behalf of the corporation by the Secretary or be any director or other principal officer of the corporation who is able to depose to the facts of the case".
14. It is an admitted fact that, the plaintiff has not produced any documents to shows that Sri. Prakash Pandey is director or executive director of the plaintiff company who has authorized to file the present suit and further PW.1 during cross-examination has stated that, at the time of filing the suit may be he was Senior General Manager or General Manager. At the time of the filing of the suit he was not a director of the plaintiff company.
33Com.O.S.NO. 25714/2017
15. Learned counsel for the defendant in written argument stated that, Sri. Prakash Pandey has adduced evidence as PW.1 and when the matter was posted for further examination of PW.1, one Subedar Major A.B. Singh filed interim application before this Court for production of documents and other reliefs. In the affidavit field by the Subedar Major A.B. Singh (retired) it has been stated that he was the power of Attorney holder of the plaintiff company.
16. In this regard, defendant counsel relied upon following decisions:-
1. State Bank of Travancore V/s Kingston Computers (I) (P) Ltd., (2011) 11 SCC 524.
Corporate Laws Companies Act, 1956 - S. 291 and 632 Suif by company - Maintainability of - Institution of, by unauthorised person Absence of resolution by Board of Directors of company defegating authority to file suit on its behalf Effect Held, suit filed by person not duly authorised by company is not maintainable - A filed suit on behalf of respondent Company as its authorised signatory against appellant Trial court upheld preliminary objection as to maintainability and dismissed suit holding that A was not authorised to file suit on behalf of the Company High Court reversed said finding based on authority letter issued by R in his capacity as Chief Executive Officer (CEO) of the Conipany and resolutions authorising R to operate bank account - Tenability Held, respondent had neither produced any evidence to prove that A was appointed as Director of the Company nor 34 Com.O.S.NO. 25714/2017 that there was any resolution by Board of Directors of respondent Company authorising A to file suit against appellant Further, letter of authority issued by R was nothing but a scrap of paper as no resolution was passed by Board of Directors delegating its powers to R to authorise another person to file suit on behalf of the Company Hence, held, suit rightly dismissed by trial court - Civil Procedure Code, 1908 and Or. 3 Rr. 1 & 2, Or. 6 R. 14 and Or. 29 R. 1 Company Law Affairs, Management Running of company Nibro Ltd. v. National Insurance Ca Lid.,
2. Schmenger GMBH and Company Leder V/s Saddler Shoe Pvt. Ltd., 2010 SCC Online Mad 6539.
18. It is to be noted that in the said Order 29, CPC, the Corporation includes any Company registered under the Companies Act, 1956. In the suit for recovery of money filed by the plaintiff-Company, it should be filed by the person authorised by the Board of Directors of the plaintiff- Company, who shall verify and institute the suit. The suit should have been filed by the competent person. To institute a suit on behalf of the plaintiff-Company, it can only be filed by the Directors, specifically empowered by the Board of Directors to file the suit, and in this case, only the Liaison Officer has filed the suit. Even the Director is not competent to file the suit on behalf of the Company, unless the specific power is conferred on him.
20. In the decision reported in AIR 2000 HP 11 (cited supra), it is held by the High Court of Himachal Pradesh that even though the suit was filed by the Managing Crector of the plaintiff-Company, it is the duty of the plaintiff to prove that he is the Competent person and he has the authority to file the suit on behalf of the plaintiff- Company therein. But admittedly, in the case on hand, none of the documents had been filed before Court to show that the Liaison Officer was duly authorised to institute the suit As per Ex.P-1 (xerox copy) and its original Ex.P-10, the Liaison Officer Mr. Balagopal is authorised to take any decision independently as far as the present C.S. No. 689 of 1999 is concerned.
35Com.O.S.NO. 25714/2017
21. As per the decision reported in AIR 1991 Del 25 (cited supra), the individual Directors have such powers only as are vested in them by the Memorandum and Articles of Association. To prove the same, in the present case, neither the Articles nor the Memorandum of Association, had been filed before Court. Even as per the Division Bench decision of this Court reported in 1997 SCC OnLine Mad 766: (1999) 98 Comp Cas 151 (Mad): (1998) 1 Mad724 (cited supra), the suit having been filed without there being any Resolution and as the Corporation/Company can only file a suit if there is a Resolution for the same, the suit was not filed by an authorised person under Order 29 Rule 1 of CPC, and hence, the Division Bench held that the suit as such was not maintainable.
3. Rajghria Paper Mills Ltd., V/s General Manager, Indian Security Press, 2000 SCC Online Del 90.
It was in the said background that S.L.P. was allowed holding that K. Rohatgi must have been authorised to sign the plaint and in any case the bank ad ratified the action of L.K. Rohtagi in signing the plaint and thereafter he had con- nued with the suit. In my view, in the facts and circumstances of this case, the plain- If cannot derive any advantage from the above decision in the matter of said K.. ajgaria being authorised to file the present suit on behalf o the plaintiff company. In e decision in M/s. Nibro Limited vs. National Insurance Co. Lid AIR 1991 Delhi 25 er taking note of a series of decisions on the subject the view taken by this court was at unless a power to institute suit is specifically conferred on a particular director he no authority to institute suit on behalf of the company. It must, therefore, follow although the plaint was signed and verified properly but the suit was not instituted duly authorised person on behalf of the plaintiff. Issue is answered accordingly.
36Com.O.S.NO. 25714/2017
4. Nibro Ltd., V/s National Insurance Co. Ltd., 1990 SCC Online Del 65.
26. The plaintiff has not placed on record any resolution passed by the company authorising Shri G. Jhajharia to institute Dthe suit. Shri G. Jhajharia did not come forward to make a statement that he was in a position to depose to the facts of the case. In the plaint signed by him, he claims to be a prin- cipal officer and director, but there is no evidence on record to indicate that he had the authority to institute the suit The Memorandum and Articles of Association of the plaintiff com- pany are also not placed on record. Even after the suit was instituted by Shri G. Jhajharia, no resolution, was passed by the company ratifying this action. No such decision of the Board of Directors is placed on record in the present case. The plaintiff has examined Shri Ashok Kumar Jhajharia. He has F placed on record, Ext. PW2'1 which is the resolution of the Board of Directors Cappointing Shri G. Jhajharia as the Director but this resoluton does not empower Shri G. Jhajharia as a Directer to institute the present suit. Shri Ashok Kumar Jhajharia has stated that he was handling day-to-day management of the plaintiffs.company including the insurance part of it. He however, does not state that Mr. G. Jhajharia was handling day-to-day management or was incharge of the insurance claim.
5. Sant Singh V/s Senior Executive Additional S.E. & others, MANU/HP/1465/2023.
44. It is apparent from the Rule that in a suit by or against a Corporation, the plead have to be signed or verified on behalf of the Corporation by any Secretary, Director other Principal Officer of the Corporation, who is able to depose to the facts of the case. It was laid down by the Hon'ble Delhi High Court in Nibro Limited v. National Insurance Co. Ltd., MANU/DE/0138/1991: AIR 1991 Delhi 25 that Order 29 Rule 1 of CPC does not authorize the persons to 37 Com.O.S.NO. 25714/2017 institute the suit but to sign and verify the pleadings. was observed that:
45. It was further held that in the case of a Company, authorization has to be given to the Board of Directors of the Company to institute the suit and when such an authorization is not placed on record, the suit is not maintainable.
47. It is apparent from the aforesaid judgment that the Hon'ble Supreme Court has concluded that the person was empowered to sign on behalf of the plaintiff and his action was ratified by the Bank. In the present case, D.K. Sharma (PW-1) did not state that Central Government or BBMB had authorized him to file the present suit or agreed to ratify his acts. There is no other evidence that Central Government or BMMB authorized Senior Executive Engineer, Additional Superintending Engineer or Superintending Engineer, BBMB to file the suit or ratify the acts done by them, therefore, this judgment will not apply to the present case.
17. On perusal of the records, it reveals that the plaintiff has filed advancement application dated 07.12.2021 and along with application under Section 101 of Evidence Act R/ w 151 of CPC and the plaintiff also filed precise statement of claim for the purpose of investigation, I.A. NO.12 under Order 14 Rule 5 of CPC, application under Section 16 of Commercial Court Act R/w 151 of CPC dated 22.06.2022. All these are applications enclosed with affidavit of Subedar Major A.B. Singh (retired) and he is also field verifying affidavit stating that he is the Power of Attorney of the 38 Com.O.S.NO. 25714/2017 plaintiff company. But, the plaintiff has not produced board resolution or power of Attorney executed by the plaintiff in favour of the Subedar Major A.B. Singh.
18. During the course of argument the plaintiff advocate filed a list of citations and certified copy of board resolution.
The plaintiff has produced certified true copy of resolution passed at the meeting of the board of directors of the Sri. Prakash Parcel Services Ltd., held on 11.11.2024 at 11.30 am at Mumbay Regional Office. The directors present are Ashok Rajendraprasad Gupta, Abhishek Ashok Gupta, Savitha Ashok Gupta and Ranjitha Ashok Gupta. It also reveals that, after discussion it is resolved that " Mr. Prakash Chand Pandey the executive director has all the power of the authority to defend and prosecute all the cases civil and criminal courts on behalf of the company and same is accepted and approved. It also reveals that, it signed by Ashok R Gupta and it does not contain seal of the company and this Board resolution does not whisper about the present case.
19. In view of this it is not forthcoming from the record that, under what capacity Sri. Prakash Pandey has signed and verified the plaint. Therefore, it is clear that Sri. Prakash 39 Com.O.S.NO. 25714/2017 Pandey has no authority or locus to file the above suit and also to lead evidence on behalf of the company.
20. Let us consider the point of limitation.
The Defendant contention that, the suit is barred by law of limitation, the date on which cause of action for the suit is said to have arisen when the plaintiff delivered material as per in terms of the said agreement. The above suit was filed on 24.06.2017. Further, Article-18 of the limitation Act, 1963, prescribes the period of limitation of three years from the date of work done for filing a suit for recovery arising out of contracts. The agreement was for a period of 3 years from 01.06.2008 and even assuming without admitting, that the cause of action arose on 30.06.2012 i.e., the lase date of payment the suit is beyond the period of limitation. The cause of action shown in the plaint is not real, but only illusory and deserves no consideration. Therefore, the above suit is hopelessly barred by the law of limitation.
21. The advocate for the defendant has relied upon a following decisions:
40Com.O.S.NO. 25714/2017 Purshottamdas Hassaram V/s Impex (India) Ltd., 1953 SCC Online Bom 119 Indian Limitation Act (IX of 1908), s. 14-Arbitration Act (X of 1940), s. 37-Computation of period of limitation for suit Time taken by plaintiff in prosecuting, infructuous arbitration proceedings against defendant-Whether such time can be excluded under s. 14-"Court," whether includes domestic forum.
The Courts referred to in's. 14 of the Indian Limitation Act, 1908, are judicial Courts, that is, Courts established by the law of the land, and not Courts in the wider sense of domestic forums or tribunals. There- fore, in computing the period of limitation prescribed for any suit, the time taken up by the plaintiff in prosecuting against the defendants infructuous arbitration proceedings before an arbitrator, cannot be excluded under s. 14 even if the other ingredients of the section are satisfied.
7. M.N. Saji V/s K.R. Krishnakumar, 2023 SCC Online Ker 8531.
17. In this connection, a decision of the Apex Court reported in [(1987) 2 SCC 555], Ram Sarup Gupta (dead) by LRs v. Bishun Narain Inter College is relevant, wherein it has been held that all necessary and material facts should be pleaded by the party in support of the case set up by it.
In the absence of pleadings, evidence, if any, produced by the parties cannot be considered. No party should be permitted to travel beyond its pleading. The object and purpose of pleading is to enable the adversary party to know the case it has to meet. In order to have a fair trial it is imperative that the party should state the essential material facts so that other party may not be taken by surprise.
20. In this connection, I am inclined to refer a latest decision of the Apex Court reported in [2023 KHC 6511 2023 (4) KHC SN6: 2023 KLT OnLine 1463], Damodhar 41 Com.O.S.NO. 25714/2017 Narayan Sawale (D) through Lrs. v. Tejrao Bajirao Mhaske. In the said decision, the Apex Court held that one could be permitted to let in evidence only in tune with the pleadings. The observation of the Apex Court in paragraph 28 is as under:
21. Thus it has to be held that the plaintiff/s or defendant/s in a suit would not succeed a case by adducing evidence without support of pleadings, as it is the well settled law that one could be permitted to let in evidence only in tune with the pleadings. The basic rule governing pleadings is founded on the principle of secundum allegata et probate, that a party is not allowed to succeed where he has not set up the case which he wants to establish.
22. Thus, the object and purpose of pleading are to enable the adversary party to know the case it has to meet. In order to have a fair trial, it is imperative that the party should state the essential material facts so that the other party may not be taken by surprise. Pleadings help the court in determining the burden of proof. The burden of proof is fixed on the basis of the contentions of the aggrieved party. If some evidence has been produced which is not in conformation with the written statement or plaint, it may disturb the position of the whole case.
22. The plaintiff contention that, the Limitation starts from dated 30-06-2012 and was originally available upto 30-06-
2015 the Arbitration proceedings were commenced on 14- 12-2012 and continued upto 07-11-2016 and this period of limitation is excluded from the limitation Act -
42Com.O.S.NO. 25714/2017
23. The total period delay as per the original limitation is now accounted from dated 30-06-2012 to dated 24-06-2017 is 1819 days less period consumed in arbitrator proceedings from dated 14-12-2012 to 07-11-2016 - works out to 1432 days :-
24. The total period from the dated of 30-06-2012 - 24-06- 2017 is 1819 days and less period consumed in arbitration proceedings i.e., 14.12.2012 to 07.11.2016 work out to 1432 days, it comes 387. The said 1432 days is a period consumed in arbitration proceedings was duly exempted from the limitations.
25. Perused the order of arbitrator dated 07.11.2016 it reads as under: Therefore, I take cognizance of the ruling passed by the Hon'ble Supreme court holding that this tribunal has no jurisdiction to adjudicate the instant dispute. The claimant is permitted to withdraw the claim and liberty is afforded to the claimant to initiate appropriate legal remedies for recovery of the amount further the period consumed covering the instant arbitration proceedings is excluded from the period of limitation in order to enable the claimant to initiate an appropriate legal remedy, in the interest of justice and equity.
43Com.O.S.NO. 25714/2017
26. The learned counsel for the Defendant stated that, the fact that the arbitrator has no power to exclude the period of limitation and condone the delay, Section 14 of Limitation Act is not applicable in the matter. The plaintiff can avail the benefit of Section 14 of Limitation Act if the earlier proceedings relate to the same matter in issue and is prosecuted in good faith before the court. However, in the instant matter the plaintiff had knowing the arbitration clause and got the arbitrator appointed by the Hon;ble High court. More over, the present suit is not substantially the same matter which was the subject matter of arbitration. The claim before the arbitrator was for Rs. 44,19,490/- towards principal, whereas in the instant suit the plaint amount is for Rs. 1,18,70,115/- (Rs. 60,83,660/- towards principal and Rs. 57,86,125/- towards interest) Rs. 60,83,660/-. Therefore, the instant matter is not the same matter as that of the arbitration proceedings. Further stated that, the cause of action before the arbitrator and the present suit are not the same and are completely different by perusing the claims. As per the instant plaint last of he cause of action arose on 31.07.2011. However, as per the claim statement the cause of action was on 04.10.2011.
44Com.O.S.NO. 25714/2017
27. Ofcourse the claim amount before the arbitral tribunal and in the present suit or not same. But, the subject matter of the present suit and arbitration are one and same. Under these circumstances, as per the order of learned arbitrator the period of consumed covering the arbitration proceedings is excluded from the period of limitation. Under such being the case, the suit is filed with in the limitation.
28. Let us consider whether the plaintiff is entitle for recovery of Rs.1,18,70,115/- along with interest @ 21% per annum from the defendant as prayed in this suit.
29. The para No.4 of the plaint averment discloses that, due to technical difficulties and unavoidable circumstances, such as the entire file was at the hands of the advocate on record in the arbitration proceedings, and the same was still at the hands of advocate on record in the arbitration proceedings. The file is expected to be received within few days from Mr. Sundra Murthy Advocate, therefore the plaintiff is not in a position to produce a comprehensive plaint, the plaintiff with abundant precaution produces this plaint to claim limitation. The plaintiff reserve his right to file 45 Com.O.S.NO. 25714/2017 an amended comprehensive plaint in due course and relative documents to be produced in support of suit claim.
30. Further, the plaint averments discloses regarding the petition filed before the arbitration tribunal and also reflect the arbitration proceedings. Further the plaint averment discloses that, the defendant is liable to pay 60,83,990/- with interest at 21% per annum. The suit claime includes transport materials of the KGF and Mysore the materials are detail in agreement bearing No. CPC/ROAD/TRANSPORT/2008-09 for the period covering which was subsequently extended upto 31.07.2011.
31. On perusal of the plaint averment it appears that, the plaint lacks the essential and material particular which would give effective cause of action to the plaintiff.
32. What is the effect of not pleading the fact which is an essential ingredient of the cause of action.
Order 6 Rule 2 of CPC reads as under:
Every pleadings shall contain and contain only a statement in a concise form of the material facts on which the party pleadings relies for his claim or defence, as the case may be, but not the evidence by which they are to be proved.46
Com.O.S.NO. 25714/2017
33. In this case of Coke vs. Gill, it was held that cause of action means every fact which would be necessary for the plaintiff to prove if traversed to support his right to the judgment of the court in his favor.
34. The cause of action (existence and violation of a legal right) is the main substance of the suit as the entire suit revolves around it. Disclosure of the cause of action is vital for a comprehensive and just decision by the court as it enables the courts to frame the issues efficiently and fulfill the requirement of natural justice to appraise the defendant about the actual cause of action in the suit so that he can prepare his defense effectively. The court has to settle the issues based on pleading only. Therefore, the more concise and precise the pleadings, the more accurate the issues. On the first hearing, the court shall examine if the cause of action has been properly disclosed in the plaint or not by examining the pleadings and even orally examining the witnesses if the need arises. If the cause of action has not been explicitly disclosed then the court may ask the plaintiff to amend its pleading and disclose the cause of action properly. The court normally takes a liberal approach and 47 Com.O.S.NO. 25714/2017 will not reject the plaint for non-disclosure of a cause of action per se but if the court is of the view that the plaintiff is acting malafide then certainly the court will reject the plaint on the face of it.
35. The plaint lacks essential and material particulars which would give an effective cause of action to the plaintiff. Where on the face of it, the plaint does not disclose any cause of action, the plaint may be liable to be rejected, but where the parties are to produce oral and documentary evidence to substantiate and support their cause of action and relief claimed for in the plaint, the Court has to consider the entire material placed on record. The Court is to look into only the allegations in the plaint and as such allegations should be assumed at that stage to be correct and only thereupon the Court is to see if the assertions did disclose a cause of action or not. The facts necessary to be proved for claiming the reliefs ought to be stated in the plaint although the evidence may not be pleaded. The plaint is to stand or fall on its own merits or demerits without any reference to the defendant's case.
48Com.O.S.NO. 25714/2017
36. On perusing the plaint averments it reveals only regarding the arbitration proceedings and order of the arbitration proceedings. But, the averments of the plaint does not discloses that what are the real transaction between the plaintiff and Defendant and it also not explained what is the contract or agreement between the plaintiff and Defendant. Further, the plaint averments does not discloses that the details about the tender and agreement executed between the plaintiff and defendant and nature of dispute between the plaintiff and defendant and cause action and no details of alleged breach of contract by the defendant. Ofcourse the plaintiff has produced Ex.P.1 agreement/contract No. CPC/ROAD TRANSPORT/2008-09. But the plaint averments does not indicate regarding Ex.P.1 agreement.
37. In affidavit evidence the PW.1 has stated regarding agreement dated 25.06.2008 and also detail about the tender and agreement executed between the plaintiff and defendant and also explained regarding the nature of dispute between the plaintiff and defendant. As above discussed, the settled principal of law that in the absence of the pleadings any amount of evidence will not helpful to the 49 Com.O.S.NO. 25714/2017 parties. The plaint averments does not indicate a single word regarding the agreement dated 25.06.2008. Under these circumstances, in the absence of the pleadings, the claim of the plaintiff for recovery money of Rs. 1,18,70,115/- from the defendant cannot be granted and plaintiff is not entitle for any relief claimed in this suit.
38. In view of the above discussion, I hold that the plaintiff is failed to prove that the defendant is liable to pay the suit claim amount of Rs. 1,18,70,115/- and interest. Hence, I answer Issue No. 1 to 3 are Negative.
39. Point No. 4:- For the discussion made on above point, following order is passed:
ORDER The suit of the plaintiff is dismissed with cost.
The Office is directed to send copy of this judgment to both parties to their email ID as required under Order XX Rule 1 of the Civil Procedure Code as 50 Com.O.S.NO. 25714/2017 amended under Section 16 of the Commercial Courts Act.
(Dictated to the Stenographer, typed by him directly on computer, verified and then pronounced by me in open Court on this the 30th day of January, 2025).
(SUMANGALA S. BASAVANNOR), LXXXII Addl. City Civil & Sessions Judge, Bengaluru.
ANNEXURE LIST OF WITNESSES EXAMINED ON BEHALF OF THE PLAINTIFF P.W.1 Sri. Prakash Pandey LIST OF DOCUMENTS EXHIBITED ON BEHALF OF THE PLAINTIFF Ex.P.1 Xerox copy of agreement dated 25.06.2008 Ex.P.2 Xerox copy of the order dated 07.11.2016 Ex.P.3 Computer generated copy of outstanding due statement Ex.P.4 Document of showing fright charge 51 Com.O.S.NO. 25714/2017 LIST OF WITNESSES EXAMINED ON BEHALF OF THE DEFENDANT D.W.1 Sri. Nilesh Prabhakarro LIST OF DOCUMENTS EXHIBITED ON BEHALF OF THE DEFENDANT Ex.D.1 Letter dated 16.11.2015 Ex.D.2 Letter of authorization Ex.D.3 E-mail communication dtd.03.09.2010 Ex.D.4 O/C of Letter dtd.08.09.2010 Ex.D.5 E-mail communications (pg no.4 & 5) Ex.D.6 E-mail communications.
Ex.D.7 and O/C of Two letters dated 05.10.2010 8 Ex.D.9 O/c of letter dated 13.10.2020 Ex.D.10 O/c of letter dated 20.10.2010 Ex.D.11 O/c of letter dated 21.10.2010 Ex.D.12 O/c of letter dated 30.10.2010 Ex.D.13 E-mail dated 12.11.2010.
Ex.D.14 O/c of letter dated 19.11.2010. Ex.D.15 E-mail dated 03.12.2010.
Ex.D.16 O/c of letter dated 07.12.2010 Ex.D.17 O/c of letter dated 08.12.2010 Ex.D.18 O/c of letter dated 27.12.2010 Ex.D.19 O/c of letter dated 28.02.2011 Ex.D.20 O/c of letter dated 09.04.2011 Ex.D.21 O/c of letter dated 12.01.2011 Ex.D.22 O/c of letter dated 28.01.2011 Ex.D.23 O/c of letter dated 31.01.2011. Ex.D.24 Letter through Fax dated 04.11.2010. Ex.D.25 Letter through Fax dated 04.12.2010 Ex.D.26 Letter through Fax dated 17.12.2010 Ex.D.27 O/c of letter dated 14.02.2011. Ex.D.28 Copy of receipts of payment issued by Chennai 52 Com.O.S.NO. 25714/2017 Port Trust.
Ex.D.29 O/c of letter dated 04.10.2011 Ex.D.30 O/c of letter dated 14.10.2014.
(SUMANGALA S BASAVANNOUR), LXXXII Addl.City Civil & Sessions Judge, Bengaluru.