G.P.i. Textiles Limited Vs. Sekhsaria Impex Ltd. and anr. - Court Judgment

Excerpt:
civil - return of plaint - jurisdiction - order 43 rule 1(a) and order 7 rule 10 of code of civil procedure, 1908 (cpc) and high court of himachal pradesh (appellate side) rules, 1997 - present appeal filed by appellant under order 43 rule 1(a) of cpc and rules against judgment vide which plaint was returned to appellant/company in terms of order 7 rule 10 of c.p.c by holding that no cause of action had arisen at nalagarh or at any place within state of himachal pradesh.- held, orders were sent to appellant from nalagarh - payment was also made by him from nalagarh - further, there was no written agreement in between the parties excluding jurisdiction of court at nalagarh - therefore, part of cause of action has arisen at nalagarh within state of himachal pradesh and once jurisdiction of himachal pradesh court was not specifically barred by means of any contract entered into between parties, courts within state of himachal pradesh had jurisdiction to try suit - thus, impugned findings of court below are liable to be set aside - appeal is accepted and findings of single judge are set aside - code of civil procedure, 1908.[c.a. no. 5/1908]. order 14, rule 2 [as amended by amending act of 1976]: [v.k. gupta, cj, deepak gupta & surjit singh, jj] preliminary issue of law and fact court framing all issues both of law and facts together and also tried all the issues together, including the issue relating to jurisdiction of court held, except in situations perceived or warranted under sub-rule (2) of rule 2 of order 14 where a court in fact frames only issues of law in the first instance and postpones settlement of other issues, clearly and explicitly in situations where the court has framed all issues together, both of law as well as facts and has also tried all these issues together, it is not open to the court to adopt the principle of severability and proceed to decide issues of law first, without taking up simultaneously other issues for decision. this course of action is not available to a court because sub-rule (1) does not permit the court to adopt any such principle of severability and to dispose of a suit only on preliminary issues, or what can be termed as issues of law. sub-rule (1) clearly mandates that in a situation contemplated under it, where all the issues have been together and have also been taken up for adjudication during the course of the trial, these must be decided together and the judgment in the suit as a whole must be pronounced by the court covering all the issues framed in the suit.v.k. ahuja, j.1. this is an appeal filed by the appellant under order 43 rule 1(a), code of civil procedure read with high court of himachal pradesh (appellate side) rules, 1997, against the judgment passed by the learned single judge of this court on 28.10.2005, vide which the plaint was returned to the appellant/company in terms of order 7 rule 10 c.p.c.2. briefly stated, the facts of the case are that the appellant as plaintiff filed a suit for recovery of rs.1,04,77,010/- alongwith interest against the defendants. it was alleged by the plaintiff/company whether reporters of local papers may be allowed to see the judgment? yes. that they have a textile division at nalagarh and they were dealing with the defendants for the purchase of cotton for its textile division at nalagarh. on 19.12.1998, the defendant's company communicated the terms for the purchase of cotton on behalf of the plaintiff's company on commission basis. defendant no. 1 was to act as an agent of the plaintiff's company for purchasing cotton from the maharashtra federation and the plaintiff was to pay defendant no. 1 for the services rendered. the plaintiff's company placed an order for 15000 bales of cotton and remitted rs.75 lacs by a demand draft on 11.1.1999 to the defendants for deposit of earnest money with the federation. the amount was deposited by the defendants for the purchase of cotton bales with the federation and federation allotted 11000 bales of cotton in favour of the defendants. the dispute arose in between the parties and as such, the plaintiff's company filed a suit for recovery of the amount alongwith interest.3. defendants pleaded that they are based at mumbai and their registered office is at ahmehabad in gujarat. the defendants were appointed as agents by the plaintiff's company for purchase of the cotton in the state of maharashtra and the purchase was to be made from maharashtra federation on inspection and approval by the representatives of the plaintiff's company in the state of maharashtra and thereafter, the defendants were to take the delivery of the cotton. it was alleged that no part of transaction took place at nalagarh or within any other place in the state of himachal pradesh and as such, the court in state of himachal pradesh had no jurisdiction to try the suit. the suit was tried by the learned single judge, who framed the following issue:whether this court has jurisdiction to hear the suit? opp. the parties led their evidence in support of the issue and after hearing the parties, the learned single judge passed the judgment for return of the plaint under order 7 rule 10 c.p.c. holding that no cause of action had arisen at nalagarh or at any place within the state of himachal pradesh, being aggrieved, the appellant has filed the present appeal.4. we have heard the learned counsel for the parties and have also gone through the evidence produced by both the parties and have gone through the record of the case.5. to substantiate his plea that the jurisdiction of the court was there under the provisions of section 20 of the code of civil procedure, the learned counsel for the appellant had submitted that no written agreement was executed in between the parties and it was only by means of correspondence in between the parties that the terms were settled and since the cheque was sent from nalagarh in district solan and it was debited also in their account by the defendants at nalagarh, as such, part of the cause of action had arisen at nalagarh and, therefore, this court has jurisdiction to try the suit. to substantiate his plea, the learned counsel for the appellant had relied upon the following decisions:reliance was placed upon the decision in bhagwandas goverdhandas kedia v. girdharlal parshottamdas and co. and ors. 0065/1965 : air 1966 supreme court 543. in that case, the acceptance was made by telephone. it was observed by their lordships while referring to the provisions of section 20 of c.p.c. and the provisions of contract act that mere making of offer does not form part of cause of action. acceptance of offer and its intimation by internal manifestation is necessary for contract. there was proposal and acceptance by telephone conversion. it was observed that contract is made at place when acceptance is received and part of cause of action for suit for damages for breach arises at that place. it was also held that the analogy of contract by post and telegram does not apply.6. reliance was also placed upon the decision in a.b.c. laminart pvt. ltd. and anr. v. a.p. agencies, salem : air 1989 supreme court 1239. the observations made in para-18 are relevant and are being reproduced below:where there may be two or more competent courts which can entertain a suit consequent upon a part of the cause of action having arisen therewithin, if the parties to the contract agreed to vest jurisdiction in one such court to try the dispute which might arise as between themselves the agreement would be valid. if such a contract is clear, unambiguous and explicit and not vague it is not hit by section 23 and 28 of the contract act. this cannot be understood as parties contracting against the statute. mercantile law and practice permit such agreements.7. it was further held that in case of breach of contract, the suit can be filed at the place where it was made. the place of performance is also part of cause of action. the suit can be filed there also. it was observed that the determination of the place where the contract was made is part of the law of contract. but making of an offer on a particular place does not form cause of action in a suit for damages for breach of contract. ordinarily, acceptance of an offer and its intimation result in a contract and hence a suit can be filed in a court within whose jurisdiction the acceptance was communicated.8. the decision in firm bodh raj mahesh kumar v. earl chawla and co. (p) ltd. and anr. : air 1974 punjab and haryana 2, was relied upon. in that case, the cheque was issued at amritsar bank. the defendant handed over the cheque to his bankers to collect the same and the bankers did not collect the same. it was observed that it is immaterial whether the cheque is collected by the defendant himself at amritsar or through an agent at amritsar. the mere transaction of money by the agent from amritsar to delhi would not in any manner alter the position. it was observed as under in para-4 of the judgment:it is well settled under section 20 of the code of civil procedure that a suit can be instituted within the local limits of the jurisdiction of a court where the cause of action wholly or in part arises subject of course to the provisions of sections 15 to 19 of the code of civil procedure. this case does not fall in any one of those provisions and must necessarily be governed by section 20 sub-clause.9. on the other hand, the learned counsel for the respondents submitted that the transaction was completed at maharashtra itself and since no part of cause of action had arisen in nalagarh, this court has no jurisdiction to try the suit and jurisdiction was with the courts at maharashtra. to substantiate his plea, he placed reliance upon the decision in jaharlal pagalia v. union of india : air 1959 calcutta 273. the observations made in para-6 may be reproduced as under:the expression cause of action has one meaning in relation to the basis of a claim and another in relation to the jurisdiction of court. the former is the restricted and the latter is the wider meaning of cause of action. in the restricted sense it includes facts constituting the infringement of the right and is thus the cause which is the foundation of the suit. in the wider sense it includes facts constituting the right itself.10. this decision does not help the respondents since it only distinguishes the term cause of action in relation to the basis of a claim and in relation to the jurisdiction of the court. in regard to the jurisdiction of courts it was held that the former is restricted and the latter is the wider meaning of cause of action.11. our attention has been drawn to the statement of dw-1 brij mohan sekhsaria, chairman of the defendants' company, who stated that after approval of the purchase of the cotton by representatives of the plaintiff's company in maharashtra. the plaintiff's company used to send them payments in bombay. thereafter delivery orders had been obtained from maharashtra federation and delivery orders used to be given to the transport company nominated by the plaintiff's company. the transportation charges used to be paid by the plaintiff's company. he admitted that the transport was arranged by them and payment was to be made by the plaintiff but he had not specifically stated which transport company was nominated by the plaintiff and what is the correspondence in this regard. he has proved the bills and stated that the plaintiff's company has no branch in h.p. however, he admitted that supply of cotton were conveyed from nalagarh. he however denied the suggestion that the cotton were to be supplied at nalagarh, though his own statement shows that delivery orders used to be given to the transport company and it is clear from a perusal of statement of pw-1 i.j.s. sethi on behalf of the plaintiff's company that these cotton bales were received at their factory at nalagarh, which suggestion was not denied in cross-examination. he denied the suggestion that the transport used to be arranged by their selectors but stated that those were arranged by the defendants. it was also stated by him that the defendants used to receive the payment in maharashtra but it was debited in their account at nalagarh. he has clearly stated that the plaintiff's company had engaged the defendants to purchase the cotton on behalf of the plaintiff's company from maharashtra cotton federation.12. a further perusal of the statement of dw-1 brij mohan sekhsaria shows that the orders for the supply of cotton were conveyed from nalagarh and the payments used to be received at bombay from nalagarh. the orders for the supply were also conveyed from nalagarh and he denied the suggestion that the cotton was to be supplied at nalagarh which appears to be incorrect since the cotton was received at nalagarh from where the payment was made. it is clear from perusal of section 20 of the civil procedure code that the suit can be filed at any place where part of the cause of action had arisen. the learned single judge had referred to some decisions but these were mainly in regard to the jurisdiction of the court in the writ matters as to whether the writ could be filed at the registered office or at any other place and, therefore, those decisions cannot be said to be very helpful.13. however, it is clear from the above discussion that the orders were sent from nalagarh. the payment was also made from nalagarh and since there was no written agreement in between the parties excluding the jurisdiction of court at nalagarh i.e. out of state of h.p., therefore, part of cause of action has arisen at nalagarh from where amount was sent or encashed and the orders were conveyed from nalagarh and as such, part of the cause of action had arisen at nalagarh within the state of himachal pradesh. therefore, once the jurisdiction of the himachal pradesh court was not specifically barred by means of any contract entered into between the parties, the courts within the state of h.p. had the jurisdiction to try the suit and as such, the findings to the contrary are liable to be set aside. the appeal is accepted and findings are set aside. the case shall be tried again by the learned single judge by framing the other issues out of the pleadings of the parties and disposing of them in accordance with law. the parties through their counsel are directed to put up appearance before the learned single judge on 15th october, 2009.