| SooperKanoon Citation | sooperkanoon.com/849020 |
| Subject | Commercial |
| Court | Jharkhand High Court |
| Decided On | Apr-26-2010 |
| Judge | Pradeep Kumar, J. |
| Appellant | Bihar Air Products Limited |
| Respondent | Andhra Oxygen Pvt. Ltd. and Asiatic Oxygen Ltd. |
| Disposition | Appeal dismissed |
Pradeep Kumar, J.
1. The first appeal is directed against the judgment and decree dated 14.10.1999 passed by Shri S.P. Singh, Sub Judge-II, Saraikela in Money Suit No. 2/95/S.R.1/97, by which judgment the learned Sub Judge dismissed the suit on contest with cost.
2. It is submitted by the learned Counsel for the appellant that the learned Sub Judge wrongly dismissed the suit giving a finding that the suit is barred by law of limitation and decided issue No. 3 against the plaintiff-appellant. Learned Counsel has further submitted that the learned Sub Judge also committed an error of law in deciding issue No. 4 that the court at Saraikela had no jurisdiction to try the suit and as such the judgment of dismissal is bad in law and only fit to be set aside and the appellant-plaintiff is entitled to get a decree for refund security amount of Rs. 5.75 lakhs with defendant No. 1-Andhra Oxygen Pvt. Ltd. which was deposited with him as per the agreement entered into between the parties.
3. On the other hand, learned Counsel appearing for the respondents-defendants has submitted that as per the agreement between the parties the machine i.e. Air Compressor Machine was installed in the premises of the plaintiff at Gamharia by the defendant No. 1-Company on the condition that he will return the same in workable condition, but the same is not returned in workable condition. Then, the respondent-defendant will be liable to claim damages for the same and entitled to get the cost of the repair of the machine. Admittedly, the machine was dismantled before arrival of engineer of respondent No. 1-defendant No. 1 and subsequently respondent incurred a heavy expenditure in repair of the Air Compressor Machine. Learned Counsel appearing for the respondents-defendants further submitted that the suit was obviously time barred and it was filed as an afterthought only to harass the defendant No. 2-Asiatic Oxygen Limited due to their personal differences. Learned Counsel for the respondents-defendants further submitted that the plaintiff-Bihar Air Products Ltd. filed several criminal and civil cases against defendant No. 2 only to harass the defendant No. 2 and this was also one such suit.
4. After hearing both the parties and going through the record, I find that the plaintiff's case, in his plaint, is that the plaintiff's Company incorporated under the Companies Act, 1956 having its registered office at Awatar Building Bistupur, Jamshedpur. The plaintiff's Company produces Oxygen, D.A. Gas etc. used for various Industrial purposes and the plaintiff supplied such gases to its customers and the plaintiff's factory is situated in Industrial Area Phase-V, Gamharia, P.S. Gamharia within the jurisdiction of Saraikella Court. I further find that the defendant Nos. 1 and 2 are both companies incorporated under the Companies Act, 1956. The plaintiff's company in a Board of Directors meeting on 16.12.1982, a decision was taken to take one Air Compressor Machine from the defendant No. 1's company and an order was placed with defendant No. 1 for Air Compressor Machine on hire basis. It was agreed that the plaintiff would deposit a sum of Rs. 5.75 lakhs as security deposit with the defendant No. 1, refundable when the said machine would be returned back. It was also agreed that the plaintiff would pay Rs. 20,000/- per month as rent during the period the machine will be used by the appellant-plaintiff. In accordance with the said agreement, the plaintiff deposited Rs. 5.75 lakhs with the respondent No. 1-defendant No. 1 as security deposit and the defendant No. 1 delivered the Compressor Machine to the plaintiff's Company in the month of March, 1983 at the plaintiff's premises at Gamharia. The plaintiff has stated that on 25th August 1989, the said Air Compressor Machine was dismantled by persons deputed by defendant No. 2-Company authorized by defendant No. 1 for packing and despatching the machine from the plaintiff's factory. He further stated that the defendant No. 2 was acting as an agent of defendant No. 1 for dismantling of the machine, but the same was despatched to defendant No. 1. He filed a letter dated 28.8.1989. He has further alleged that both defendant Nos. 1 & 2 are equally liable for the payment of security deposit. The plaintiff further stated that he sent a demand letter dated 30.6.1992 demanding the payment, but the defendants have failed to send back the same, hence he filed the suit. The plaintiff has further stated that the finding of the trial court that the defendants had any right to claim the cost of repair in absence of any agreement between the parties to return the said Compressor Machine in good and running condition, is bad in law and only fit to be set aside.
5. On the other hand, the defendants appeared in the suit and file their written statements stating therein that the plaintiff is a Company incorporated under the Companies Act and its engaged in manufacturing gases. It is further stated that the defendants and their associate Companies entered into a collaboration agreement with the Bihar State Industrial Development Corporation for setting up a plant in Bihar at Jamshedpur for manufacturing industrial gases and accordingly the plaintiff's Company i.e. Bihar Air Products Ltd. came into an existence. It was agreed that the Managing Director of Bihar Air Products shall be nominated by defendant No. 2 and accordingly Shri S.S. Malik was appointed as Managing Director in Bihar Air Products from its inception being the nominee of the defendant No. 2. The said S.S. Malik of Bihar Air Products suffered huge loss and as such the said S.S. Malik tendered his resignation on 23rd April, 1992 and his resignation was accepted by defendant No. 2. It is further alleged that subsequently Sri S.S. Malik in connivance with Bihar State Industrial Development Corporation withdrew his resignation by his letter dated 28th May, 1992 and thereafter Sri S.S. Malik, Ex-Managing Director of Bihar Air Products and one N.C. Mukherjee in collusion with each other filed frivolous cases such as criminal and civil against the defendant Nos. 1 & 2. They also filed cases at Calcutta High Court, but did not succeed. The defendants admitted that an old machine was booked with the defendant No. 1 as per the meeting of the Company dated 16.12.1982 and the said old machine was given on hire by defendant No. 1 on security deposit of Rs. 5.75 lakhs and on a monthly rental of Rs. 20,000/- per month even it was also agreed with the plaintiff's company that he will return the said Air Compressor Machine in a workable condition and without any technical defects. The defendant No. 1 sent its engineer for the inspection of the said machine and found many defects in the said machine, but in spite of several requests made by defendant No. 1 the appellant-plaintiff failed to rectify the defects and finally the machine was dismantled on 25.8.89. With the help of defendant No. 2, it was found that the equipment has become not workable and after spending a huge loss of Rs. 8-10 lakhs for repair of the said machine the said machine was made workable, hence the defendant No. 1 demanded Rs. 2.25 lakhs after adjusting security deposit of Rs. 5.75 lakhs. The defendant No. 1 had suffered a loss of Rs. 2.25 lakhs as per the terms and conditions of the agreement since within the misuse of the plaintiff the machine become unworkable, hence the plaintiff should fulfill the damages.
6. After hearing both the parties and on their pleadings the learned trial court framed the following 9 issues:
1. Is the suit as framed maintainable?
2. Has the plaintiff got any valid cause of action for the suit?
3. Is the suit time barred?
4. Has this Court got jurisdiction to entertain this suit?
5. Is it a fact that defendant No. 2 acted as an agent of defendant No. 1 in removing back the Air Compressor Machine from the premises of plaintiff's factory?
6. Whether the defendant No. 2 is also liable to pay security money jointly and severally with defendant No. 1or not?
7. Whether the plaintiff is entitled to receive back the security deposit from defendant No. 1 amounting to Rs. 5.75 lakhs with interest?
8. Is the plaintiff entitled to a decree as claimed for?
9. To what other relief or reliefs of any; the plaintiff is entitled to get?
7. The learned trial court while deciding the issue No. 5 against the plaintiff holding that the defendant No. 2 did not act as an agent with defendant No. 1 in dismantling the old compressor machine. The learned trial court also decided issue No. 3 against the plaintiff and came to a conclusive finding that the suit was hopelessly time barred and also decided the main issue of jurisdiction that is issue No. 4 holding that the Court at Saraikella had no jurisdiction to try the suit and finally dismissed the suit.
8. After hearing both the parties and going through the evidences of plaintiff's case, I find that as far as issue No. 4 is concerned on the basis of the correspondence with the plaintiff and defendant relying on Exts.1/C, 1/A and Exts. 2 to 2/L and also Exts. 3 and Exts. 5 to 5/B. 3, 5 to 5b, the learned trial court found that all the correspondences were made from the plaintiff's company head office, situated at Awatar Building, Bistupur, Jamshedpur and hence came to a finding that since the company's Headquarter is at Jamshedpur and entire correspondences and agreement took place there, hence only Jamshedpur court has got jurisdiction, but the trial court lost sight of the fact that the part of cause of action arose within the jurisdiction of Saraikella at Gamaharia. The agreement was for installing a compressor machine in the factory of plaintiff's company at Gamaharia within the jurisdiction of Saraikella. The said machine was dismantled by the defendant No. 1's Company at Gamaharia and it was despatched to defendant No. 1's company at Madras from Gamaharia and hence as per Section 20(c) of the Code of Civil Procedure a suit lies where the cause of action wholly or in part arises even the explanation of Section 20 says that 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. Admittedly, there is a factory at Gamaharia and it has got subordinate office also at Gamaharia and as such Saraikella court had jurisdiction to try the suit and the issue No. 4 which has been decided against the plaintiff is set aside and the said issue decided in favour of the appellant-plaintiff.
9. However, as far as issue No. 3, the point of limitation is concerned, which has been submitted by the learned Counsel for the appellant-plaintiff that the suit was filed on 12.1.1995 within 3 years from the last date of demand made by the plaintiff for the refund of the said security deposit of Rs. 5.75 lakhs and hence the suit is within time.
10. It is submitted by the learned Counsel for the plaintiff appellant that since defendant No. 1 never refused the demand and hence the suit is within time from the date of his last demand.
11. On the other hand, the defendants have submitted that vide letter-Ext-A dated 27.11.89 they denied their claim of the plaintiff for any refund and specifically stated that they have incurred the loss for getting the machine in workable condition and demanded Rs. 2.25 lakhs from the plaintiff and as such that is a complete denial of their demand and hence the suit has to be filed by 27.11.92 and since the same was not filed within time it was hopelessly barred.
12. From perusal of Ext.-A dated 27th November,.89 and Ext. A/1 dated 18th November, 1989, it is clear that defendant No. 1 refused to refund the security deposit and as per Article 70 of the Limitation Act the time is three years from the date of refusal after demand, since, admittedly by letter as Exts. A and A/1 finally the defendant No. 1 refused to pay back the security deposit of Rs. 5.75 lakhs and by its letter dated 27.11.89 it demanded the difference or loss caused to them at Rs. 2.25 lakhs which they have incurred on the repair of the equipment, the suit should have been filed within 3 three from 27.11.89.
13. Accordingly, I find that the suit was barred by the law of limitation and the trial court finding on that score, which requires no interference by this Court.
14. As far the plaintiff's claim of refund of Rs. 5.75 lakhs is concerned, it has been submitted by the learned Counsel for the plaintiff that there was no agreement that the machine has to be returned in a workable condition, but from perusal of the evidences as adduced by the plaintiff as also by the defendant, it is clear that the plaintiff's witnesses No. 3, Shyam Sunder Narora admitted his evidence at para 11 that there was no written agreement with the defendant No. 1's Company with regard to taking the air compressor machine on rent and the agreements were made on various meetings and letters. He also admitted in para 12 that it was agreed between the parties that the plaintiff will return the machine in workable condition. It is important to note that the plaintiff or defendnat have not filed any 'Written Agreement' nor proved the same in trial and as such the acceptance made by the plaintiff's witness No. 3 has to be accepted as agreement that the plaintiff was bound to return the same in a workable condition.
15. The plaintiff has also claimed that the machine was dismantled by defendant No. 1 and they had taken the same on 23.8.89 and the machine was in good condition, but it appears from the evidence of plaintiff's witness itself that it is not a correct fact, the plaintiff's witness No. 6, S.K.M. Sinha has stated, in his evidence, that the machine was dismantled on 18.8.89 itself and subsequently when the representative engineer of defendant No. 1 he only received a dismantled machine and hence the claim of the defendant No. 1 that they got the machine fully checked at Madras and found that it is not workable and hence they got the same repair suffering a loss since repair cost comes to Rs. 8-10 lakhs and they demanded Rs. 2.25 lakhs after adjusting Rs. 5.75 lakhs seems to be a demand as per the agreement and the claim of the plaintiff for refund of the security deposit was not maintainable and the trial court rightly decided issue No. 7 also against the plaintiff.
16. Thus, after discussing all the points raised by the plaintiff and considering the same as per the evidence and documents I find no infirmity or impropriety in finding recorded by the trial court on any of the issue.
17. I find no merit in this appeal and the same is accordingly dismissed with cost.