Deutsche Raitco Gmbh Vs. Mohan Murti - Court Judgment

Excerpt:
a) in the instant case, the defendant was residing temporarily and carrying on his business at delhi - it was found that the defendant had given his address of delhi in the affidavit - thereforee, the court at delhi had the jurisdiction to entertain the suitb) the case questioned whether leave to defend could be granted under order 37 rule 3 of the civil procedure code, 1908, on the basis of counter claim - it was held that the said leave to defend could not be granted - thereforee, the leave was refused - - in this connection he drew my attention to para 2 of the plaint wherein it has clearly been stated that the defendant was carrying on business with offices at 47 ring road, lajpat nagar. in para 2 of the plaint it has clearly been alleged that the defendant carries on business with offices at 47 ring road, lajpat nagar. 9128/89and 5962/90 the defendant has clearly stated that he is a resident of 47 ring road, lajpat nagar, new delhi. (11) coming to the merits of the case, it has clearly been averred in the plaint that the plaintiff had supplied to the defendant parts for household air conditioners manufactured by the plaintiff in west germany and for the supply of the said goods the defendant had informed the plaintiff athat he was willing to transfer the full amount of one million us dollars (us dollars 1,000,000.00)in one payment to the plaintiff and on 15th february, 1988 the defendant had nt a tele copy message to the plaintiff from singapore requesting that a representative of the plaintiff should meet him at frankfurt airport on 17th february, 1988 in order to enable the defendant to hand over the cheque for one million us dollars (us dollar 1,000,000.00). pursuant to the said request of the defendant the plaintiffs representative had met the defendant at frankfurt airport on 17th february, 1988 and had received the cheque dated 31st march, 1988 for us dollars 1,000,000.00 drawn on the indian bank singapo the plaintiff failed to comply with the russian demand on time and the contract went to the japanese. the only defense taken by the defendant is that besides this deal, he had organized a sale of one license to the russian government but since the plaintiff failed to comply with the russian demand on time. basic equipment corporation, begin of the skype highlighting 0043/1976 end of the skype highlighting :[1977]1scr1060 .on the other hand the learned counsel for the plaintiff submitted that the amount due has clearly been admitted by the defendant in para 5 of the application for leave to defend. he, thereforee, contended that the defendant had failed to disclose any fact which could entitle him to defend this suit and as such the suit should be decreed with costs. in para 5 of the application for leave to defend, the relevant portion of which has been reproduced hereinabove, the defendant has clearly admitted the suit amount.sat pal, j. (1) this is a suit for recovery of rs. 1,51,50,000.00 (equivalent of us dollars 1,000,000) plus interest of rs.58,75,620.00 filed by the plaintiff against the defendant under the provision of order xxxvii of the code of civil procedure (hereinafter referred to as'the code'). the plaintiff has also claimed interest on the decretal amount at the rate 18 percent per annum from the date of institution of. the suit till the date of realisation and costs.(2) briefly stated, the facts as mentioned in the plaint are that the defendant who carries on business under the name and style of nexim and/or nexim/mohan murti with offices at 47 ring road, lajpat nagar, new delhi and also at 110/111 pragati tower, rajendra place, new delhi, entered into contract with the official russian importer, technointorg, moscow on 27th december, 1985 for the supply of certain parts of household air conditioners manufactured by the plaintiff in west germany and the total value of the contract was rs.2,535,000.00. it is further stated that under the said contract payment for the parts was to be made in indian rupees to the defendant's account at the bank of foreign trade of the ussr, world trade centre branch, moscow, ussr. thereafter, the defendant ordered the parts covered by the said contract from the plaintiff under the written purchase order dated 23rd january, 1986 at the price of deutsche marks 591,500.00 (dm 591,500,00). pursuant to the aforesaid purchase order, the plaintiff is alleged to have supplied the goods and issued invoice dated 4th march, 1986. it is further stated in the plaint that at the request of the defendant, the plaintiff gave to the defendant a credit of dm 84500 and a total sum of dm 507,000 became due to the plaintiff from the defendant.(3) it is then alleged in the plaint that the defendant entered into another contract dated 11th april,1986 with technointorg for the supply of additional parts, total value of which was rs.4,560,000.00 payable in indian rupees to the defendant's account at the bank of foreign trade of the ussr, world trade centre branch, moscow and the defendant then again ordered the parts covered by the said contract from the plaintiff under a written purchase order dated 24th april, 1986 at the price of dm 1.0641000. in pursuance of the said purchase order dated 24th april, 1986, the plaintiff issued invoice dated 13th august, 1986 and supplied the goods mentioned in the invoice. based on the said invoice, a sum of dm 1,064,000 is alleged to be due from the defendant to the plaintiff. it is then alleged that technointorg had paid the defendant full invoiced amount of rs.7,095,000.00 for the two orders dated 27th december, 1985 and 11 the april, 1986 mentioned hereinabove and the aid sum was deposited in the defendant's account in the bank of foreign trade for ussr, world trade centre, mosco, ussr.(4) it is then alleged in the plaint that the defendant had initially agreed to pay the amount due under the said invoice to the plaintiff in deutsche marks but subsequently the defendant undertook to pay the amount in us dollars and specifically he undertook to pay to the plaintiff one million us dollars (us dollars 1,000,000) in respect of the amount of dm 1,571,000. it is then alleged that the defendant has neglected/refused to pay to the plaintiff the amount admittedly due despite the plaintiff having shipped the goods to the customers as per the defendant's instructions. it is further stated in the plaint that vide letter dated 10th december, 1987 the defendant undertook to pay the entire sum of l,000,000 us dollars to the plaintiff in three equal monthly installments, the first installment commencing on january 1988 and then the entire amount admittedly due was to be paid to the plaintiff not later than 15th march. 1988. it is then stated that subsequently the defendant informed the plaintiff that instead of making payment by installments, he was willing to transfer the full amount of 1,000,000 us dollars in one payment and this fact was confirmed vide letter dated 13th january, 1988 written by the plaintiff to the defendant. thereafter on 15th february, 1988 the defendant sent a tele copy message to the plaintiff from singapore requesting that a representative of the plaintiff should meet him at frankfurt airport on 17th february. 1988 in order to enable the defendant to hand over the cheque for one million us dollars (us dollars 1.000.000.00) to the plaintiff. pursuant to the said message the plaintiff's representative is alleged to have met the defendant on 17th february, 1988 at .frankfurt airport and he was given a cheque dated , march, 1988 drawn on the indian bank, singapore branch. the cheque was payable subject to availability of funds. it is also stated that the defendant had assured that adequate funds would be available on that date. it is then alleged that the said cheque when presented for encashment at singapore, was not honoured. thereafter the defendant made no attempt, to make up the deficiency by issuing cheque afresh. hence the plaintiff has filed the present suit under the provisions of order xxxvii of the code as stated hereinafter above.(5) summons in the prescribed form were issued to the defendant at his address: 47 ring road, lajpat nagar, new delhi for i 1th july, 1989. pursuant to the service of summons at the aforesaid address, the learned counsel for the defendant entered appearance on behalf of the defendant on 26th june, 1989. thereafter the summons for judgment were served on the defendant and the defendant filed an application bearing is no.9128/89 under order xxxvii rule 3 sub-rule 5 of the code seeking leave to defend the suit. reply to this application has been filed by the plaintiff. the defendant has filed the rejoinder also but since the rejoinder was not filed within the period allowed by the court, the learned counsel for parties were not allowed to rely on the same.(6) the defendant had also filed an application bearing is no.5962/90 under order xxxvii rule 7 of the code. in this application it was prayed that since no valid summons for judgment had been taken out by the plaintiff as per requirement of order xxxviii rule 3 sub-rule 4 of the code and no service having been effected on the defendant, the plaintiff be directed to take out fresh summons for judgment and serve the same on the defendant in accordance with law. in the alternative it was prayed that the delay of one day in filing of the application (ia no.9128/89) for leave to defend be condoned. this application was disposed of vide order dated 6th september, 1990 and the alternative prayer of the defendant regarding condensation of delay in filing the application for leave to defend was allowed and the delay was condoned.(7) mr. jay sawla, the learned counsel appearing on behalf of the defendant raised a preliminary objection that this court has no jurisdiction to entertain and try this it as no cause of action has arisen in the union territory of delhi. he further submitted that the defendant was non resident indian and he does not carry on business in the union territory of delhi. he further submitted that the case of the plaintiff was based on the dishonouring of the cheque dated 31st march, 1988 for one million us dollars(us dollars 1,000,000,00) which admittedly was drawn on the indian bank, singapore branch and was delivered at frankfurt airport on 17th february, 1988. in this connection he also drew my attention to page 32 of ext.b which shows that the defendant used to reside temporarily in new delhi on certain occasions for the business purpose. he also submitted that even if the suit of the plaintiff is based on the alleged written contract, no cause of action would arise in the union territory of delhi because the cause of action would arise only at a place where the goods were delivered or where the payment was made. in the present case admittedly the goods were not delivered in the union territory of delhi and the cheque regarding payment of the goods was delivered at frankfurt airport. learned counsel, thereforee, contended that the present suit should be dismissed on this ground alone. in support of his contention the learned counsel placed reliance on a judgment of patna high court in gouri shankar bajoria vs . ram banka, : air1963pat398 and a judgment of bombay high court in jivatlal purtapshi and others vs. lalbhai fulchand shah. air 1943 bom 251 and a judgment of calcutta high court in american pipe company vs. state of uttarpradesh. air 1983 cal 186.(8) mr. madan bhatia, learned counsel appearing on behalf of the plaintiff, however, submitted that the defendant was carrying on business for gain in the union territory of delhi and on this ground alone this court has jurisdiction to entertain and try this suit. in this connection he drew my attention to para 2 of the plaint wherein it has clearly been stated that the defendant was carrying on business with offices at 47 ring road, lajpat nagar. new delhi and also at 110/11 pragati tower rajendra place, new delhi. he submitted that there is no specific denial to the averments made in para 2 of the plaint by the defendant in his application for leave to defend or in the affidavit filed in support thereof. learned counsel further submitted that the summons in the prescribed form were issued by this court to the defendant at his aforesaid address of lajpat nagar new delhi and the summons were duly served at the said address. pursuant to the service of the summons at the said address of lajpat nagar new delhi, the defendant had entered appearance through his counsel in this case. he also drew my attention to the affidavits filed by the defendant dated 1st november, 1989 and 1st august, 1990 in support of iano.9128/89 and is no.5962/90 respectively and both these affidavits show that the defendant is a resident of 47 ring road, lajpat nagar, new delhi. learned counsel also drew my attention to the defendant's telefax dated 10th december, 1987 which contains the address of delhi office of the defendant as 47, ring road, lajpat nagar, new delhi. learned counsel, thereforee, contended that this court has jurisdiction to entertain and try the present suit.(9) i have given my thoughtful consideration to the submissions made by the learned counsel for the parties. before examine the contentions urged by the learned counsel for the parties it will be relevant to reproduce section 20 of the code:- '20.4subject 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 commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; (b) any 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, 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; (c) the cause ofction, wholly or in part, arises. explanationn: 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.'(10) by a bare reading of clause(a)of section20.it is clear that a suit can be instituted in a court within the local limits of whose jurisdiction the defendant at the time of commencement of the suit actually and voluntarily resides or carries on business or personally works for gain. in para 2 of the plaint it has clearly been alleged that the defendant carries on business with offices at 47 ring road, lajpat nagar. new delhi and 110/11 pragati tower, rajendra place, new delhi. this submission has not been controverter by the defendant in his application (ia no.9128/89) for leave to defend. as stated hereinabove, the summons in the prescribed proforma were also served at 47 ring road, lajpat nagar, new delhi and pursuant to the service of summons at the aforesaid address, memo of appearance on behalf of the defendant was filed by his counsel on 26th june, 1989. in both the affidavits filed by the defendant in support of is nos.9128/89and 5962/90 the defendant has clearly stated that he is a resident of 47 ring road, lajpat nagar, new delhi. in the telefax dated 10th december, 1987 the business address of the defendant of delhi office has been shown as 47 ring road, lajpat nagar, new delhi. all these facts show that the defendant at the time of commencement of the suit was carrying on business at 47 ring road, lajpat nagar, new delhi. in view of this i hold that this court has jurisdiction to entertain and try this suit.(11) coming to the merits of the case, it has clearly been averred in the plaint that the plaintiff had supplied to the defendant parts for household air conditioners manufactured by the plaintiff in west germany and for the supply of the said goods the defendant had informed the plaintiff that he was willing to transfer the full amount of one million us dollars (us dollars 1,000,000.00)in one payment to the plaintiff and on 15th february, 1988 the defendant had nt a tele copy message to the plaintiff from singapore requesting that a representative of the plaintiff should meet him at frankfurt airport on 17th february, 1988 in order to enable the defendant to hand over the cheque for one million us dollars (us dollar 1,000,000.00). pursuant to the said request of the defendant the plaintiffs representative had met the defendant at frankfurt airport on 17th february, 1988 and had received the cheque dated 31st march, 1988 for us dollars 1,000,000.00 drawn on the indian bank singapore branch and the said cheque when presented for encashment at singapore was dishonoured and returned. copy of the said cheque is ext.j. in para 5 of the application (ia 9128/89) for leave to defend, the defendant has infact admitted the amount of the suit. the relevant portion of this paragraph is reproduced hereinbelow:- 'the reafter the defendant further organized a sale of one license to the russian govt. on which the commission to the defendant from ranco would have approximately been us dollar one million. however, though various meetings and discussions took place, ranco i.e. the plaintiff failed to comply with the russian demand on time and the contract went to the japanese. thus, it was due to the negligence and casual attitude of the plaintiffs that the commissions of the defendant could not be set off against the amount due to the plaintiff. the defendant cannot, in any way be made responsible for the negligence behavior of the plaintiff. for this reason alone, this suit is liable to be dismissed.'(12) from the above discussion it is clear that a sum of us dollars l,000,000.00 were payable by the defendant to the plaintiff. the only defense taken by the defendant is that besides this deal, he had organized a sale of one license to the russian government but since the plaintiff failed to comply with the russian demand on time. the contract went to the japanese and due to the negligence and causal attitude of the pa!intiff, the defendant suffered loss of commission and he was entitled to a counter claim against the plaintiff because of the loss of commission. relying on this counter claim the learned counsel for the defendant submitted that this was sufficient to entitle the defendant to defend and as such the defendant should be granted leave to defend unconditionally. in support of his contention the learned counsel has placed reliance on two judgments of the supreme court in(13) santosh kumar vs . bhai mool singh, : [1958]1scr1211 and m/s.mechalec engineers & manufacturers vs . m/s. basic equipment corporation, 0043/1976 : [1977]1scr1060 . on the other hand the learned counsel for the plaintiff submitted that the amount due has clearly been admitted by the defendant in para 5 of the application for leave to defend. he, thereforee,drew my attention to the various submissions made in the plaint and submitted that pursuant to the written contract between the parties the plaintiff had supplied the goods in terms of the contract and in consideration of the goods supplied to the defendant, the defendant had agreed to pay the entire amount in the form of us dollars 1,000,000.00 which he has admitted in his telefax dated 10th december, 1987 (annexure 'g'). he further submitted that dishonouring of the cheque has not been denied by the defendant in his application for leave to defend. he, thereforee, contended that the defendant had failed to disclose any fact which could entitle him to defend this suit and as such the suit should be decreed with costs. in support of his contention the learned counsel placed reliance on a judgment of this court in lt.col.r.k. jain vs . col. s. k. mehta, : 29(1986)dlt140 .(14) the learned counsel also submitted that at the time of filing of the suit the plaintiff had claimed a sum of rs. 1,51,50,000.00 (equivalent of us dollars 1,000,000.00 as per the rate of exchange prevailing on the date of filing of the suit) plus interest of rs.58,75,620.00. he, however, contended that in prayer clause (b) it has also been prayed that a decree for an additional sum representing the difference between the rate of exchange prevailing on the date of the suit and the rate of exchange prevailing on the date of decree be also granted. he, thereforee, contended that the claim of the plaintiff for the aforesaid additional sum be also decreed. in support of his contention, the learned counsel placed reliance on a judgment of the supreme court in forasol vs . oil & natural gas commission, : [1984]1scr526 .(15) i have considered the submissions made by the learned counsel for the parties. in para 5 of the application for leave to defend, the relevant portion of which has been reproduced hereinabove, the defendant has clearly admitted the suit amount. the only defense taken by the defendant is the alleged counter claim of commission. i am afraid that this defense is not available to the defendant in a sui t filed under the provision of order xxxvii of the code as the said provisions do not contemplate entertaining of any counter claim from the defendant. if the defendant has any such counter claim against the plaintiff, he can bring a separate suit in that respect. the view i have taken is fully supported by a judgment of this court in punjab & sindh bank vs. b.s.k. tulshan, ilr(1991) 1 del 293.(16) here it will also be relevant to refer to another judgment of this court in bramec suri p. ltd. vs. suri smith chem, 1981 rlr 60. in this case a learned single judge of this court held that in any suit filed under the provision of order xxxvii of the code, it is the defense with regard to the course of dealing and cause of action set up in the plaint which can be taken into account while granting leave to defend and extensors controversies and different causes of action cannot justify enlargement of the scope and purpose of the summary action brought under order xxxvii of the code.(17) in view of the above discussion the leave to defend cannot be granted to the defendant on the basis of the alleged counterclaim. even otherwise the submissions with regard to the counter claim set up by the defendant in his application for leave to defend are quite vague and no particulars of the alleged contract for which the defendant has claimed amount of commission as counter claim have been mentioned, nor any document in support thereof has been filed by the defendant. thus, the defense is not bona fide. i, thereforee, find no substance in the counter claim as alleged by the defendant. the application for leave to defendant is, accordingly, dismissed.(18) as stated hereinabove the application for leave to defend filed by the defendant has been dismissed and the facts staled in the plaint are admitted as correct. accordingly, the suit for the recovery of rs. 1,51,50,000.00 (equivalent of us dollars 1,000,000.00) plus interest of rs.58,75,620.00 is decreed with costs in favor of the plaintiff and against the defendant. the plaintiff will also be entitled to pendente lite interest and future interest attherateofl8percentperannum from the date of the suit till realisation. the claim of the plaintiff for the additional sum representing difference between the rate of exchange prevailing on the date of filing of the suit and the rate of exchange prevailing on the date of decree is also decreed in view of the law laid down by the supreme court in the case of forasol (supra). a decree sheet may be drawn accordingly.