Delhi District Court
M/S Interads Advertising Private ... vs M/S Triveni Structurals Limited on 31 August, 2010
IN THE COURT OF SH. RAKESH KUMAR : ADJ03 (C): DELHI
Suit No.415/08/93
Unique ID No.02401C6063422004
M/s Interads Advertising Private Limited.,
4/24A, Asaf Ali Road, New Delhi-110002. .....Plaintiff.
V E R S U S
1. M/s Triveni Structurals Limited.,
(A Government of India Undertaking)
having its Registered Office at
Naini Allahabad (U.P.).
2. M/s Bharat Yantra Nigam Limited.,
Naini Allahabad (U.P.)
3. Union of India,
Ministry of Industry,
Udyog Bhavan, New Delhi
(Service to be effected
through its Secretary).
4. Sh. Raj K. Agarwal,
28, Chatham Lines,
Allahabad - 211002 (U.P.) .....Defendants.
Date of filing of suit : 11.01.1993
Arguments concluded on : 17.08.2010
Date of judgment : 31.08.2010
SUIT FOR THE RECOVERY OF Rs.7,18,194.45ps.
WITH PENDENTALITE AND FUTURE INTEREST.
M/s Interads Advertising Private Ltd. Vs. M/s Triveni Structurals Ltd. (Suit No.415/08) Page no. 1 of pages 25
J U D G M E N T
1. The present suit for recovery of money has been filed by the aforesaid plaintiff against the aforementioned defendants interalia making a prayer for passing a decree for a sum of Rs.7,18,194.45ps. (Rs. Seven Lakh Eighteen Thousand One Hundred Ninety Four and Paise Forty Five Only) alongwith pendentelite and future interest @ 24% per annum from the date of institution of the suit till the realization of the decreetal amount in favour of plaintiff and against the defendants jointly and severally. Cost of the suit is also demanded.
2. As per plaint, plaintiff a Private Limited Company incorporated under the Companies Act, 1956 through Sh. Vijay Chopra its authorized representative being one of the Directors and Principal Officer of the plaintiff company has filed the present suit for recovery against the aforementioned defendants. The defendant no.1 is also a company incorporated under the Companies Act, 1956 and is a subsidiary of defendant no.2. The defendants no.1 & 2 are the Government of India Undertakings and therefore defendant no.3 is also liable alongwith the defendants no.1 & 2. The defendant no.4 was working exclusively with the plaintiff company as its Commission Agent on profit basis, who had to collect the payments as well as business of the plaintiff company and account for the same to the plaintiff company. Thus, all the defendants are jointly and severally bound and liable to pay the claim of the plaintiff in the present case. The plaintiff is engaged in the business of advertising, media publicity and public relations and carries out for various M/s Interads Advertising Private Ltd. Vs. M/s Triveni Structurals Ltd. (Suit No.415/08) Page no. 2 of pages 25 clients responsible goodwork of publicity through newspapers, All India Radio, Doordarshan, Hoardings, Kiosks and other medias of publicity and has established reputation in the field of publicity and public relations. The defendant no.4 approached the plaintiff company at its Delhi Office and expressed his desire to work for the plaintiff company on commission basis and after negotiations the plaintiff company appointed defendant no.4 as its commission agent with the clear understanding that defendant no.4 shall work exclusively for the plaintiff company on 50:50 profit sharing basis on the business procured by him for the plaintiff company. The share of commission of defendant no.4 wgas payable only after the receipt of payment from the advertisers from whom the defendant no.4 was to collect business for the plaintiff company. In the present case, the defendant no.4 was to collect the payments from other defendants and to account for the same to the plaintiff as per the terms and conditions arrived at between the plaintiff and defendant no.4. Since despite admissions on his part, the defendant no.4 failed and neglected to recover and account for the payments, hence the defendant no.4 is also jointly and severally bound and liable to pay outstanding amount to the plaintiff. The defendants used to place orders on the plaintiff from time to time and the plaintiff used to carry out the work in media publicity in various newspapers, periodicals and other various medias for the defendants as per their instructions and bills used to be raised from time to time against the defendants by the plaintiff. The defendants from time to time used to make running payment to the plaintiff of its various bills and the plaintiff used to maintain a running account for the M/s Interads Advertising Private Ltd. Vs. M/s Triveni Structurals Ltd. (Suit No.415/08) Page no. 3 of pages 25 defendant no.1 wherein various outstanding that became payable by the defendants to the plaintiff on the basis of the bills that used to be raised against the defendants by the plaintiff, used to entered and various payments received from the defendants used to be given credit in favour of the defendants. During the period from 23.10.1979 to 15.03.1991, the plaintiff raised various bills for the work done by it for the defendants and the defendants used to make on account running payment to the plaintiff. As per statement of account, a sum of Rs.4,14,756.41ps. was due and payable by the defendants to the plaintiff as on 15.02.1992. Despite of repeated requests and various letters, the defendants did not make the said payment to the plaintiff and ultimately plaintiff issued a legal notice dated 30.03.1991, thereby calling the defendants to pay a sum of Rs.4,70,075.41ps. plus interest @ 22% per annum and notice charges, but despite service of notice defendants failed to make the payment thereof. Thereafter, in response to the plaintiff's letter dated 17.05.1991 the defendants vide their letter dated 14.06.1991 addressed to the Director of the plaintiff company informed that they are examining the contents of the claims and assured that all efforts would be made to release the payment at the earliest and requested the plaintiff to bear with them for some more time. On 12.02.1992, plaintiff again wrote a letter to the managing Director of defendant no.1 and once again requested the defendant to settle the outstanding dues of the plaintiff. In the said letter, the plaintiff also mentioned that the late payments carry interest @ 24% p.a., which they continue to pay to the bankers on behalf of those clients, who do not pay on time. After the said letter, plaintiff received a M/s Interads Advertising Private Ltd. Vs. M/s Triveni Structurals Ltd. (Suit No.415/08) Page no. 4 of pages 25 letter dated 24.02.1992 from the defendants that too in response to their letter dated 04.02.1992, in which it was stated that due to financial crunch and liquidity problems, there was some delay in settlement of outstanding payment but the outstanding payment would be liquidated. Various letters were also written to the defendant no.4, asking him to constantly follow up the matter with the other defendants and to get the outstanding payment from them as per terms and conditions agreed in between the plaintiff and defendant no.4, who kept on assuring the plaintiff that the entire outstanding payment shall be paid to the plaintiff. The defendant no.4 also collected the cheque for Rs.48,537/ from the other defendants and sent the same to the plaintiff as part payment in account towards the running account maintained by the plaintiff in the ordinary course of business. The plaintiff again served a legal notice dated 06.03.1992 upon the defendants no.1, 2 & 3 thereby calling them to pay a sum of Rs.4,59,293.41ps. with interest @ 24% p.a and notice charges but despite service of said notice, the said amount still remained outstanding. On 29.06.1992, plaintiff again sent a letter which was duly received by the defendants on 03.07.1992, wherein the plaintiff once again pointed out that a sum of Rs.4,14,756.41ps. is due and outstanding and that no payment is forthcoming despite the defendants promise to clear the same. Thereafter, the plaintiff was constrained to serve another legal notice on 23.07.1992 upon the defendants thereby calling upon them to clear the outstanding amount but they failed to pay the same. The plaintiff also requested the defendant no.4 to personally visit Delhi and settle the matter, but the defendant no.4 kept on avoiding the same on one pretext or M/s Interads Advertising Private Ltd. Vs. M/s Triveni Structurals Ltd. (Suit No.415/08) Page no. 5 of pages 25 the other and also kept on assuring the plaintiff that their entire payment shall be made. The plaintiff was also constrained to serve upon the defendant no.4 a separate notice to settle the account but without any fruitful result. Thus all the defendants are jointly and severally bound and liable to pay the following outstanding payment to the plaintiff: Principal Amount. : Rs.4,14,357.41ps.
Interest @ 24% p.a. on the said
amount of Rs.4,14,357.41ps. : Rs.2,98,337.04ps.
Notice Charges. : Rs. 5,500.00ps.
T O T A L Rs.7,18,194.45ps.
The cause of action for filing the present suit arose in favour of plaintiff and against the defendants from time to time when the bills used to be submitted by the plaintiff to the defendants and when the defendants used to make the payment in their running account from time to time. It further arose on various dates when the plaintiff demanded the money from the defendants and also when the registered letters and the legal notices were sent by the plaintiff to the defendants which were duly served. It also arose on 12.05.1991 when on one hand, the defendants admitted their liability but gave some vague reply. The cause of action further arose on 14.06.1991 and again on 24.02.1992 when the defendants again admitted their liability and made part payment in their running account with the plaintiff. The cause of action also arose on 06.03.1992, 23.07.1992 and 21.12.1992 when the legal notices were duly served upon the defendants. It also arose on various dates when the defendant no.4 although kept on assuring the plaintiff that M/s Interads Advertising Private Ltd. Vs. M/s Triveni Structurals Ltd. (Suit No.415/08) Page no. 6 of pages 25 the payment will be made but failed and neglected to account for and pay the same. The cause of action still subsisting as defendant has failed and neglected to pay his due liability. It is claimed that the court has pecuniary and territorial jurisdiction to try and entertain the suit as the defendant has business and market in Delhi and the transactions took place in Delhi. The suit has been properly valued for the purpose of court fee and jurisdiction.
3. The defendants no.1 & 2 contested the suit by filing their joint written statement, whereas, despite of giving numerous opportunities defendant no.3 Union of India did not prefer to file its Written Statement and as such vide order dated 01.02.2000, it was proceeded against exparte. On the other hand defendant no.4 could not be served by way of ordinary mode of service and as such vide order dated 11.03.1997 he was directed to be served by way of publication in the newspaper "Amar Ujaja" and accordingly defendant no.4 was served by way of publication in the aforesaid newspaper dated 29.03.1997. Since no representation was made on his behalf, so he was also proceeded against exparte vide order dated 01.02.2000.
4. The defendants no.1 & 2 in their joint written statement have raised certain preliminary objections like that (i). plaintiff has wrongly impleaded Union of India as defendant no.3 in the suit as defendants no.1 & 2 have their independent legal entity and therefore, defendant no.3 will not be liable to be sued under the present suit. Even the defendant no.2 has only a supervisory control over the defendant no.1. (ii). The present suit is not maintainable in view of the fact that most of the bills in question are time M/s Interads Advertising Private Ltd. Vs. M/s Triveni Structurals Ltd. (Suit No.415/08) Page no. 7 of pages 25 barred under the Limitation Act and the plaintiff has merely tried to over reach the said bar by asserting that the plaintiff had been making running payments in account, which fact is not correct and the present suit is liable to be dismissed on this ground alone. (iii). This court has no territorial jurisdiction to try the present suit as no cause of action ever arose in favour of plaintiff within the territorial domain of the Court. All orders were placed through the defendant no.4 at Allahabad, where the defendants no.1 & 2 are situated, all payments were made at Allahabad and therefore, the territorial jurisdiction also lies with the Courts at Allahabad. The plaint is devoid of any cause of action against the defendants no.1 & 2 and therefore, liable to be dismissed. (iv). The suit is not maintainable and cannot be tried by this Court in view of the provisions of Sec.22 (1) of the Sick Industrial Companies (Special Provisions) Act, 1985 read with its amendments and also that the defendant no.1 company has been declared a Sick Industry by the Board of Industrial and Financial Reconstruction vide order dated 14.09.1992 and reference under Sections 16 & 17 of the said Act is still pending. (v). The suit has not been properly valued for the purpose of court fee.
On merits, it is categorically denied that the defendants no.1 & 2 are in any way liable, as alleged. The defendant no.4 represented himself as a representative of the plaintiff and the defendant no.1 used to place orders and make payment against the same through the defendant no.4. The defendant no.1 had placed various orders for advertisement on the plaintiff. It is, however, denied that the defendant no.1 used to make running M/s Interads Advertising Private Ltd. Vs. M/s Triveni Structurals Ltd. (Suit No.415/08) Page no. 8 of pages 25 payment to the plaintiff, as alleged. It is submitted that the defendant no.1 used to make payment against respective bills of their individual amount and not in the manner as suggested in the plaint. It is denied that the defendant no.1 used to make in account payments in their running account, as alleged. It is submitted that the Statement of Account referred to is not correct as it contains incorrect figures and amounts alleged to be due against the defendant no.1. Various amounts so far paid to the plaintiff has not been reflected in the said Statement of Account and it also contains baseless and inflated figures as outstanding against the defendant no.1. It is categorically denied that a sum of Rs.4,14,756/ was due and payable by the defendant no.1 on 15.02.1992, as alleged. It appears from the facts of the plaint that certain payments received by the defendant no.4 were in turn not given to the plaintiff, and accordingly, the said Statement of Account is neither correct nor can the same be relied upon. Even as per their own showing, the alleged outstanding amount of Rs.4,14,756/ in terms of the Statement of Account includes Rs.98,390/ towards alleged interest which, apart from being incorrect and arbitrary was also never agreed upon between the parties. In fact, the plaintiff used to raise various frivolous bills against the plaintiff for work which either was never asked for or the same was never executed. The plaintiff, on the other hand, used to calculate arbitrary interest charges against the defendant which is not payable by the defendant. The plaintiff was time and against requested as has admitted in the plaint to clarify the bills and settle the accounts for the work actually done for the defendant no.1 but to no avail. Instead, the plaintiff continued M/s Interads Advertising Private Ltd. Vs. M/s Triveni Structurals Ltd. (Suit No.415/08) Page no. 9 of pages 25 with its earlier practice of sending inflated and unwarranted bills and went on raising illegal and arbitrary claims against the defendant no.1. As the defendant no.1 did not agree to pay the incorrect and arbitrary claims of the plaintiff, the plaintiff served various notices on the defendant no.1 and has filed the present suit, which is liable to be dismissed for want of correct particulars. It is further submitted that the defendant no.1 was facing serious financial crunch and liquidity problems to the extent that the defendant no.1 was declared a Sick Industry by the Board of Industrial and Financial Reconstruction vide order dated 14.09.1992. The defendant no.1 had been releasing the legal dues to the plaintiff despite the financial hardship being faced by the defendant no.1 during that period but the plaintiff never came forward to clarify/justify the incorrect bills as stated hereinabove. It is categorically denied that by paying the sum of Rs.48,537/ the defendant no.1 has admitted the wrong and baseless claims of the plaintiff or that the said amount was paid in account, as alleged. It is specially denied that the defendants no.1 & 2 were colluding or conspiring with defendant no.4, as alleged. It is vehemently denied that the amount of Rs.48,537/ was paid in account, as alleged. The said payment was made against specific bills and not otherwise. The defendant no.3 has been wrongly impleaded as a party in the present suit and has been done so with the sole intention to file the suit before the Court.
5. The plaintiff filed the replication to the Written Statement of defendant whereby objections and stand taken by the defendant has been vehemently denied and the contents of the plaint were reaffirmed and reasserted. It is M/s Interads Advertising Private Ltd. Vs. M/s Triveni Structurals Ltd. (Suit No.415/08) Page no. 10 of pages 25 specifically stated that all the three defendants are jointly and severally liable for the claim in suit. It is denied that the defendant no.2 has only a supervisory control over the defendant no.1. It is also denied that the plaintiff has tried to over reach the question of limitation by saying that the plaintiff had been making running payments in account. It is stated that the Statement of Account used to be maintained for the debit and credit entries in favour and against the defendants and the suit of the plaintiff, based on a running account in between the parties, are well within time. It is further stated that the orders used to be placed and executed on the plaintiff at Delhi and also the same used to be executed at Delhi and various payments were released from Delhi. As per the bills raised, there is specific condition that the goods at Delhi alone have the jurisdiction to try this suit. The defendant no.1 is a Government of India Undertaking and the head office of defendant no.3 is at New Delhi. Orders were placed by the defendants no.1 & 2 at New Delhi and the same were executed at New Delhi. Part payments were made by the defendants to the plaintiff at New Delhi. It is also stated that the answering defendant has no knowledge of the alleged proceedings or that the defendant no.1 has been declared as a sick unit. It is stated that the statement of account annexed with the plaint of the suit is true and correct statement of account and there is no arbitrary calculation.
6. From the pleadings of the parties following issues were farmed vide order dated 11.12.2000:
(i).Whether the suit is bad for misjoinder of the parties? OPD.
(ii).Whether this court has no territorial jurisdiction to try this suit? OPD M/s Interads Advertising Private Ltd. Vs. M/s Triveni Structurals Ltd. (Suit No.415/08) Page no. 11 of pages 25
(iii).Whether the statement of account annexed with the plaint does not depict the correct amount inasmuch as that the claim against some of the bills is time barred? OPD.
(iv).Whether the plaintiff is entitled to the suit amount? OPP.
(v).Whether the plaintiff is entitled to interest? If so at what rate? OPP.
(vi).Relief.
7. In support of its case plaintiff company examined Sh. Naresh Kumar Sharma as PW1 and then the plaintiff's evidence was closed, whereas in its defence, defendant examined Sh. Ashok Kumar Dwivedi as DW1 and thereafter the defendant's evidence was also closed.
8. PW1 Sh. Naresh Kumar Sharma in his examination in chief tendered by way of affidvait Ex.PW1/A has reiterated the contents of plaint and has exhibited the following documents relied upon by him:
(i).Certified copy of Certificate of Incorporation of plaintiff. : Ex.PW1/1
(ii).True copy of resolution dated 06.01.1993. : Ex.PW1/2
(iii).Statement of Account. : Ex.PW1/3
(iv).Copy of letter dated 18.03.1991. : Ex.PW1/4
(v).Copy of legal notice dated 30.03.1991. : Ex.PW1/5
(vi).Original Postal Receipts. : Ex.PW1/6 to 8 (vii).AD Card. : Ex.PW1/9
(viii).Copy of reply dated 12.05.1991. : Ex.PW1/10
(ix).Copy of letter dated 14.06.1991. : Ex.PW1/11
(x).Copy of letter dated 12.02.1992. : Ex.PW1/12 M/s Interads Advertising Private Ltd. Vs. M/s Triveni Structurals Ltd. (Suit No.415/08) Page no. 12 of pages 25
(xi).Copy of letter dated 24.02.1992. : Ex.PW1/13
(xii).Copy of legal notice dated 06.03.1992. : Ex.PW1/14
(xiii).Postal Receipts. : Ex.PW1/15 to 17
(xiv).Copy of letter dated 29.06.1992. : Ex.PW1/20
(xv).Copy of legal notice dated 23.07.1992. : Ex.PW1/21 (xvi).Original Postal Receipts. : Ex.PW1/22 to 24 (xvii).Copy of Legal Notice. : Ex.PW1/28 (xviii).Postal Receipt. : Ex.PW1/29 During cross examination, he stated that resolution dated 06.01.1993 Ex.PW1/2 was passed by the Chairman Dr. Vishwanath Sharma and the same was passed for this case only and the defendant no.4 is the resident of Allahabad and he has been working on behalf of their company in Allahabad and entire UP. All the advertisements of defendant no.1 were booked and brought to their company by defendant no.4 and then the advertisements were displayed accordingly. He conceded that he never visited to the defendant no.1 company to book their advertisement at Naini, Allahabad, rather, the defendant no.4 used to book the advertisement of defendant no.1 from Naini, Allahabad and their company used to display the same accordingly from Delhi in all leading newspapers. He also testified that the defendant no.4, who was their commission agent used to collect the payment from defendant no.1 from Naini, Allahabad and then used to tender the same to their company at Delhi. The statement of account filed in the case reflects the details of all the bills. The amount claimed by them is on running account. He conceded that they have claimed the payment of bill M/s Interads Advertising Private Ltd. Vs. M/s Triveni Structurals Ltd. (Suit No.415/08) Page no. 13 of pages 25 dated 23.10.1979. He denied that the suit was filed after the period of three years. The last payment was made by the defendant no.1 on 09.08.1991. The amount of Rs.48,000/ was paid in account by cheque by the defendant no.1. He further testified that the payment mentioned in the plaint to be received on account by them were collected through their representative of Delhi, who went to Allahabad to collect the same. He denied that they did not receive any payment from defendant no.1 directly but the same were received through the defendant no.4 Sh. Raj Kumar Aggarwal. He conceded that the payment used to be receive directly from defendant no.1 but this payment might have been received through defendant no.4. He also conceded that the statement of account filed by them does not bear the signatures of defendant no.1 or its representatives. He denied that no statement of account was sent to the defendant no.1 or that no legal notice was served upon the defendant no.1 or that no claimed amount are due from the defendant no.1 to them.
9. DW1Sh. Ashok Kumar Dwivedi in his examination in chief tendered by way of affidavit Ex.DW1/A has testified that he has been authorized to depose on behalf of the defendant no.1/company vide authority letter dated 04.04.2005 Ex.DW1/1, which was given to him by the Managing Director of the defendant no.1/company for the same and he is well conversant with the facts of the case and competent to give the evidence, verify, sign and depose every thing on behalf of the defendant no.1/Company. He further testified that the defendants no.1 & 2 have their independent legal entity and the defendant no.1 is a subsidiary of the defendant no.2 and the defendant M/s Interads Advertising Private Ltd. Vs. M/s Triveni Structurals Ltd. (Suit No.415/08) Page no. 14 of pages 25 no.3 is not required to be used in the present case being not necessary party to the present suit. The defendant no.2 has only a supervisory control over the defendant no.1/company and thus the present suit of the plaintiff against the defendant no.2 & 3 are not liable either jointly or severally to the alleged claim. It is further testified that the defendant no.1/company used to place the orders for advertisement to the defendant no.4 at Allahabad (U.P.) and also used to make the payment to him at Allahabad only. The defendant/company never placed the orders to the plaintiff in Delhi or directly nor they made any payment in Delhi and the plaintiff never dealt at any moment and in any manner with the defendant/company in Delhi and the defendant/company used all the times to deal with the plaintiff only through the defendant no.4 at their office at Allahabad only. As such this court has not jurisdiction to try and entertain the present suit of the plaintiff and only the court at Allahabad has the jurisdiction for the same. The defendant no.1/company has placed various orders for advertisement to the plaintiff through the defendant no.4 at Allahabad and the defendant no.1/company used to make the payment against the respective bills of their individual amount and never made the payment on account in their running account to the plaintiff. Further the claim of the plaintiff in the present suit against the defendant no.1/company is time barred and the same has been filed after lapse of three years. No amount is due from the defendant no.1/company to the plaintiff and the claim of the plaintiff against the defendant no.1/company is false and also the same is barred by time as per the provisions of the Limitation Act. Further the Hon'ble BIFR (Board of M/s Interads Advertising Private Ltd. Vs. M/s Triveni Structurals Ltd. (Suit No.415/08) Page no. 15 of pages 25 Industrial and Financial Reconstruction) has already recommended for winding up of the defendant no.1/company vide order dated 04.06.2003 and sent for the same to the Hon'ble High Court of Allahabad where a case of the same has already been registered as Misc. Company Petition No.08/2003 and the Hon'ble High Court of Allahabad has already proceeded in the matter under the Companies Act, 1956 and is still pending for final disposal and the same now has been clubbed with Civil Misc. Writ No.77778/2005 filed by the Triveni Structural Karamchari Sangh against Appellate Authority of Industrial and Financial Reconstruction and Ors., before the Hon'ble High Court at Allahabad. As per the provisions provided under Section 446 of the Companies Act, where the winding up order is passed and forwarded to the Hon'ble High Court or Official Liquidator is appointed as Provisional Liquidator, no suit or other legal proceeding shall be commenced or proceeded with against the company like the defendant no.1/company except by the leave of the Court. He also proved on record certified copy of orders dated 09.04.2007 and 30.07.2007 as Ex.DW1/2 and Ex.DW1/3 respectively.
During cross examination he stated that he has been working in the legal department of defendant no.1 company since 1988 but never dealt with this case nor he met with any official of the plaintiff in connection with this case. However, he met with defendant no.4 only once, who came to their office in connection with this case himself and he stated that he must have visited Delhi in connection with this case at least 78 times but he could not specify the date/month thereof. He, however, added that it was M/s Interads Advertising Private Ltd. Vs. M/s Triveni Structurals Ltd. (Suit No.415/08) Page no. 16 of pages 25 during the year 2005 onwards. He further stated that he has neither seen the bills/invoices raised by the plaintiff against defendant no.1 in this case nor he has seen the accounts of the defendant no.1 pertaining to the transactions with the plaintiff. As far as he knew, the transactions between the plaintiff and the defendant no.1 remained till 1981 and he said so on the basis of documents supplied to him by the legal department of defendant No.1 company and the same were filed in the court records, however, after seeing the court records, he conceded that no such documents have been filed in the court record and also he had not seen the statement of accounts filed by the plaintiff in the present proceedings. He confirmed that a sum of Rs.48,537/ was paid by defendant No.1 to the plaintiff and it was the last payment which was made by defendant No.1 to the plaintiff. He confirmed that whatever payments were made by defendant No.1 the same were made in the name of plaintiff company and the defendant No.4 used to come to their finance department to collect payment and get orders from the sale department for the plaintiff. He conceded that the plaintiff used to raise bills in the name of defendant no.1 and defendant No.1 used to make the payment to plaintiff through defendant No.4, however he denied the suggestion that the defendant used to make the running payment to the plaintiff on its various bills from time to time and the plaintiff was maintaining running accounts in respect of the payments received from defendant No.1 and bills raised against them. He, however,expressed his unawareness about the claim of the plaintiff that the transactions between plaintiff and defendant No.1 took place during the period from 23.10.79 to 15.03.91 and M/s Interads Advertising Private Ltd. Vs. M/s Triveni Structurals Ltd. (Suit No.415/08) Page no. 17 of pages 25 as per the statement of account of the plaintiff, the defendant No.1 was liable to pay a sum of Rs.4,14,756.41ps. as on 15.02.1992. He conceded that notice ExPW1/5 was served upon defendant to which a reply Ex PW1/10 was preferred. He could not confirm whether any payment was made by defendant No.1 to the plaintiff after the letter dated 24.02.92 Ex PW1/13.
10. I have carefully heard the rival submissions made before me. I have also perused the entire material placed before me.
11. My issue wise findings are as under:
12. ISSUE No.1: Whether the suit is bad for misjoinder of the parties? OPD.
The onus to prove this issue has been placed upon the defendants. In their joint written statement defendants no.1 & 2 have taken a preliminary objection that the plaintiff has wrongly impleaded Union of India as defendant No.3 in the plaint, as the defendants No.1 & 2 have their independent legal entity and therefore, defendant No.3 will not be liable to be sued under the instant suit. Even the defendant No.2 has only a supervisory control over defendant No.1 and as such the prayer of the plaintiff for a decree of the suit amount against all the defendants jointly or severally cannot be granted and therefore the present suit merits dismissal.
In the corresponding para of the replication the plaintiff has denied the claim of the defendants and reiterated that all the three defendants i.e defendant No. 1, 2 & 3 are jointly and severally liable for the claim in the suit.
M/s Interads Advertising Private Ltd. Vs. M/s Triveni Structurals Ltd. (Suit No.415/08) Page no. 18 of pages 25 In his submissions Ld. counsel for the plaintiff claimed that since defendant No.1 is the subsidiary of defendant No.2 and defendant No.1 & 2 are the Government of India Undertakings so defendants No.2 & 3 are jointly and severally liable towards the claim of the plaintiff raised in the suit.
Per contra, according to Ld. counsel for the defendants the suit of the plaintiff is bad for misjoinder of defendants no.2 & 3 for the reasons that all the transactions took place between the plaintiff and defendant No.1 only, who is having independent legal entity. The defendant No.2 & 3, with whom no transactions took place by the plaintiff, cannot be held liable.
I find substance in the claim of Ld. counsel for defendant No.1 & 2. From the perusal of the record it can very well be seen that as per the claim of the plaintiffs itself all the bills/invoices were raised by the plaintiff against defendant No.1 only and the plaintiff was maintaining the running account in respect of the bills/invoices raised upon defendant No.1 and the payments received from defendant No.1 and no where the plaintiff has shown that any transaction took place between plaintiff and defendant no.2 & 3, so they are not the necessary party. Suit of the plaintiff is, therefore, bad for misjoinder of the parties. Issues stands decided accordingly.
13. ISSUE No.2: Whether this court has no territorial jurisdiction to try this suit? OPD.
The onus to prove this issue has been placed upon the defendants. In their joint Written Statement defendant No.1 & 2 has taken a preliminary objection that the present court at Delhi has no territorial jurisdiction to try and entertain the suit as no cause of action ever arose in M/s Interads Advertising Private Ltd. Vs. M/s Triveni Structurals Ltd. (Suit No.415/08) Page no. 19 of pages 25 favour of the plaintiff within the territorial domain of this court. All orders were placed through the defendant No.4 at Allahabad where the defendant No. 1 and 2 are situated, all payments were made at Allahabad and therefore, the territorial jurisdiction also lies with the Civil Courts at Allahabad.
In the corresponding para of the replication, the plaintiff has claimed otherwise i.e. since the orders used to be placed and executed on the plaintiff at Delhi and also various payments were released from Delhi and the defendant was liable to make the payment of the plaintiff at Delhi, so this Court has perfect territorial jurisdiction. Further as per the bills raised, there is specific condition that the Courts at Delhi alone have the jurisdiction to try this suit and the defendant no.1 is a Government of India Undertaking and the head office of defendant no.3 is at New Delhi, as such there is no force in the claim of the defendants.
Section 20 of the Code of Civil Procedure incorporates the provisions regarding the territorial jurisdiction of the Court, which reads as under: S. 20. Other suits to be instituted where defendants reside or cause of action arises. - Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction -
(a). The defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or
(b). any of the defendants, where there are more than M/s Interads Advertising Private Ltd. Vs. M/s Triveni Structurals Ltd. (Suit No.415/08) Page no. 20 of pages 25 one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution: or
(c). the cause of action, wholly or in part, arises.
[Explanation.] - A corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place.
Section 20 of the Code of Civil Procedure is a general section covering all personal actions (i.e. relating to person or movable property) and such personal actions shall be instituted in a Court within whose local jurisdiction-
(a). the defendant actually resides or carries on business and, or
(b). any of the defendants (where there are more than one) actually resides, and either the leave of the Court has been taken or other defendants acquiesce, or
(c). the cause of action or a part of it arises.
As per contentions of Ld. counsel for plaintiff, since the defendants no.1 & 2 are the Government of India undertakings and the head office of the defendant no.3 i.e. Union of India is situated at Delhi, so this court at Delhi has territorial jurisdiction to entertain the suit. Moreover, as per the bills raised by the plaintiff, there is specific condition that the Courts at Delhi alone have the jurisdiction to try the suit. Further orders used to be placed and executed on the plaintiff at Delhi and the defendant was liable to make M/s Interads Advertising Private Ltd. Vs. M/s Triveni Structurals Ltd. (Suit No.415/08) Page no. 21 of pages 25 the payment of the plaintiff at Delhi, so this Court has perfect territorial jurisdiction. As such, issue is liable to be decided against the defendants.
Per contra according to Ld. counsel for the defendants as defendants no.1 & 2 are the independent identities, so simply on the fact that the head office of the Union of India i.e. defendant no.3, is located in Delhi in the circumstances where no transactions took place between plaintiff and defendant no.3 nor any agreement was made between plaintiff and defendant no.3, no territorial jurisdiction can be conferred on this Court. Further, since the plaintiff has placed no documentary material i.e. bills/invoices in support of its claim that the jurisdiction of the courts other than of the Court at Delhi have been ousted, so there is no force in the claim of the plaintiff.
Having heard the aforesaid rival submissions, I find substance in the claim of the defendants. Simply the fact that the head office of the defendant no.3 i.e. Union of India is located at Delhi (which is not a necessary party in the suit) and the defendant no.1 & 2 are having their separate legal entities and both of them are having their base in Allahabad, can not create the territorial jurisdiction of this Court at Delhi. Further, it is well settled proposition of law as propounded in the judgment reported as AIR 1968 AP 330 titled as Satya Narayanan Vs. Kanumarlapudi that "where parties by contract restrict their right to institute suit except in particular court it must be strictly proved that the clause restricting the jurisdiction is a part of the contract".
In the case in hand, the plaintiff has produced no bills or invoices on M/s Interads Advertising Private Ltd. Vs. M/s Triveni Structurals Ltd. (Suit No.415/08) Page no. 22 of pages 25 record to establish that there was specific condition that the Court at Delhi alone have the territorial jurisdiction to entertain the suit and this clause was the part of their contract, thus the contentions made by plaintiff contains no force.
Further, in his testimony DW1 has confirmed that the defendants no.1 & 2 are having their independent legal entity and defendant no.1 is a subsidiary of defendant no.2 and defendant no.2 is having only a Supervisory control over the defendant no.1. Further the defendant no.1 used to place the orders for advertisement to the defendant no.4 at Allahabad (U.P) and also used to make the payment to him at Allahabad only. Further the plaintiff never dealt at any moment and in any manner with the defendant/company in Delhi and the defendant/company used all the times to deal with the plaintiff only through the defendant no.4 at their office at Allahabad only.
Moreover, in his cross examination the sole witness examined on behalf of the plaintiff i.e. PW1 Sh. Naresh Kumar Sharma himself has conceded that the payment mentioned in the plaint were collected by their representative at Allahabad i.e. through defendant no.4 Sh. Raj Kumar Aggarwal. All the advertisements of defendant no.1 were booked at Allahabad through defendant no.4 and also the defendant no.4, who was their commission agent used to collect the payment from defendant no.1 from Naini, Allahabad and then used to tender the same to their company at Delhi.
Thus in this case where it is not in dispute that the defendant no.1 & 2 M/s Interads Advertising Private Ltd. Vs. M/s Triveni Structurals Ltd. (Suit No.415/08) Page no. 23 of pages 25 are having their base in Allahabad and they do not have their any branch office at Delhi and defendant no.3 has no connection with transaction in question and they are not necessary party and above all the plaintiff has failed to show that the cause of action or any part thereof ever accrued at Delhi, so in this situation issue is liable to be decided in favour of the defendants and against the plaintiff. Same stands decided accordingly.
14. Since while giving my findings on issue no.2, I have come to the conclusion that this court has no territorial jurisdiction to entertain the present suit, so there is no need to give findings on issues no.3, 4 & 5.
15. RELIEF: In view of my findings that this court at Delhi has no territorial jurisdiction to entertain the suit, so suit of the plaintiff is hereby dismissed. No order as to cost.
16. Decree Sheet be prepared.
17. File be consigned to Record Room after completion of necessary formalities.
(Announced in the open (RAKESH KUMAR)
court today on 31.08.2010) ADDL. DISTRICT JUDGE03 (C)
DELHI
M/s Interads Advertising Private Ltd. Vs. M/s Triveni Structurals Ltd. (Suit No.415/08) Page no. 24 of pages 25
Suit No.415/08
M/s Interads Advertising Private Ltd. Vs. M/s Triveni Structurals Ltd.
17.08.2010
Present : As before.
Further oral arguments heard.
Put up on 31.08.2010 for orders.
(RAKESH KUMAR)
ADJ03 (C)/17.08.2010
31.08.2010
Present : As before.
Vide a separate judgment, suit of the plaintiff is dismissed. Decree Sheet be prepared.
File be consigned to Record Room after completion of necessary formalities.
(RAKESH KUMAR) ADJ03 (C)/31.08.2010 M/s Interads Advertising Private Ltd. Vs. M/s Triveni Structurals Ltd. (Suit No.415/08) Page no. 25 of pages 25