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2011 DIGILAW 345 (DEL)

WIN Cable & Datacom Pvt. Ltd v. Grass Link Advertising Pvt. Ltd.

2011-03-15

V.K.JAIN

body2011
V.K. Jain, J. 1. This is a suit for recovery of Rs. 24,69,079/-. The plaintiff company is engaged in the business of reception and distribution of satellite television, broadcast signal and other electronic signal primarily to various local cable operators and business affiliates. Defendant No. 1 is running an advertising agency which procures advertisements from various companies for advertising through cable feed of the plaintiff company. Defendant No. 2 is a leading multinational company and the case of the plaintiff is that the defendant No. 1, while placing orders for running advertisements on the cable network of the plaintiff company, was acting as an agent of defendant No. 2 company. It is alleged that the plaintiff company, on request of defendant No. 1 advertised products of defendant No. 2 through its cable network and raised invoices on the defendants from time to time. A sum of Rs. 21,09,335/- is stated to be outstanding against the defendants towards payment for the advertisements carried by the plaintiff company on its network. The case of the plaintiff is that the defendants have failed to pay the outstanding amount despite repeated requests. It has accordingly sought recovery of the principal amount of Rs. 21,09,335/- along with interest amounting to Rs. 3,59,744/-. 2. In its written statement, the defendant No. 2 has taken a preliminary objection that this is barred by Order 2 Rule 2 CPC, as the suit amount was not claimed by the plaintiff company in a previously instituted suit which is pending in the Court of Additional District Judge. It is claimed by defendant No. 1 that it was maintaining a running account with the plaintiff company and there was no system of maintaining separate accounts for each client of defendant No. 1 company. On merits, it is alleged that the invoices have been raised by the plaintiff company immediately on receipt of release order and without running the advertisements, meaning thereby that they are merely proforma invoices which get their confirmation only on successful running of the advertisement as per the release order, which, in turn, can be established through the telecast certificate, with the CDs accompanied by a monitoring report issued by an independent agency, along with telecast certificate. According to the defendant, no such monitoring report has been filed by the plaintiff company. According to the defendant, no such monitoring report has been filed by the plaintiff company. It is further alleged that on instructions and specifications from its client, the defendant No. 1 purchased advertising time/space in various advertising media including electronic media. It is claimed that defendant No. 2 had assigned the work of carrying out of advertisements to defendant No. 1, based upon which it had placed release orders on the plaintiff company. 3. I.A. No. 7657/2009 has been filed by defendant No. 1 under Order VII Rule 11 read with Order 2 Rule 2 of the Code of Civil Procedure. 4. The case of the applicant/defendant No. 1 is that the plaint is liable to be rejected under Order VII Rule 11(d) of the Code of Civil Procedure since it is barred by Order 2 Rule 2 thereof. Order VII Rule 11(d) of the Code of Civil Procedure provides for rejection of the plaint, if the suit appears, from the statement made in the plaint to be barred by any law. 5. The legal proposition in the matter is well- settled. The Court while considering an application for rejection of the plaint can look into only the averments made in the plaint and the documents filed by the plaintiff. The defence taken by the defendant is not to be considered while examining such an application and validity of the documents filed by the plaintiff also cannot be examined at this stage. 6. A Division Bench of this Court in Inspiration Clothes & U v. Colby International Ltd., 88 (2000) DLT 769, held that the power to reject the plaint can be exercised only if the Court comes to the conclusion that even if all the allegations are taken to be proved, the plaintiff would not be entitled to any relief whatsoever. It was also observed that where the plaint is based on a document, the Court will be entitled to consider the said document also to ascertain if a cause of action is disclosed in the plaint or not though the validity of the document cannot be considered at this stage. In Avtar Singh Narula & Anr. v. Dharambir Sahni & Anr., 150 (2008) DLT 760 (DB), this Court reiterated that the power to reject the plaint has to be exercised sparingly and cautiously though it does have the power to reject the plaint in a proper case. In Avtar Singh Narula & Anr. v. Dharambir Sahni & Anr., 150 (2008) DLT 760 (DB), this Court reiterated that the power to reject the plaint has to be exercised sparingly and cautiously though it does have the power to reject the plaint in a proper case. In Popat and Kotecha Property v. State Bank of India Staff Assn., 2005 7 SCC 510 , Supreme Court noted that the real object of Order 7 Rule 11 of the Code of Civil Procedure is to keep irresponsible law suits out of the Courts and discard bogus and irresponsible litigation. It was further held that dispute questions cannot be decided at the time of considering an application filed under Order 7 Rule 11 of CPC. 7. In the present case, the suit cannot be said, on the basis of averments made in the plaint and the documents filed by the plaintiff, that the suit is barred by any law. In fact there is no reference in the plaint or in the documents filed by the plaintiff, to the suit stated to be pending before the learned Additional District Judge. Therefore, Order VII Rule 11(d) of Code of Civil Procedure doesn't seem to be attracted. 8. On merits, the application has been opposed by the plaintiff. It is stated in the reply that the plaintiff company has been raising individual invoices in respect of advertisements which were being carried on its cable feed on the instructions of defendant No. 1 and defendant No. 1 had been representing three different multinational companies before the plaintiff company and each invoice carried the name of the concerned multinational company as well as of defendant No. 1. It is further stated that the suits of the plaintiff pending in this Court, before the Additional District Judge, Delhi and before the Civil Judge, Delhi are based on various release orders and invoices and are not based solely on the statement of accounts filed with the suits. According to the plaintiff, the amounts, which these multinational companies owe to the plaintiff company cannot be clubbed in one suit, their liability towards the plaintiff company being distinct and separate from others. 9. During the course of the arguments, the learned counsel for the applicant/defendant No. 1 stated that he was pressing the application only under Order 2 Rule 2 of the CPC. 9. During the course of the arguments, the learned counsel for the applicant/defendant No. 1 stated that he was pressing the application only under Order 2 Rule 2 of the CPC. Order II Rule 2 CPC to the extent it is relevant provides that every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action and where he omits to sue in respect of, or intentionally relinquishes, any portion of his claim, he shall not afterwards sue in respect of the portion so omitted or relinquished. The explanation below this Rule to the extent it is relevant provides that successive claims arising under the same obligation shall be deemed to constitute one cause of action. 10. The expression `cause of action', in the context of Order II Rule 2 of CPC would mean all those facts which the plaintiff in order to obtain judgment will have to prove, if disputed by the defendant. In order to succeed, the plaintiff will have to prove (i) that defendant No. 1, while placing release orders for advertisements to be carried on the cable feed of the plaintiff, was acting as an agent of defendant No. 2 company; (2) the release orders placed by defendant No. 1 with the plaintiff company from time to time; (3) carrying of advertisements in terms of the release orders on the cable feed; (4) that the advertisements were carried by it in conformity with the release orders placed by defendant No. 1 and (5) the amount to which the plaintiff is entitled for carrying the advertisements on its cable feed. When different orders are placed from time to time and those orders are executed on different dates, each order for carrying advertisements of a particular company would constitute a distinct and separate cause of action. If all the advertisements are carried on different dates but under a common/umbrella contract/order for carrying advertisements, all the advertisements carried pursuant to such contract/order may constitute a common cause of action, despite the advertisement being carried on different dates. But, where the release orders are distinct, it cannot be said that all of them constitute a common cause of action. But, where the release orders are distinct, it cannot be said that all of them constitute a common cause of action. In order to succeed in the suit, the plaintiff will be required to prove each and every order placed by defendant No. 1 with it as also carrying of advertisements in terms of those release orders. In a given case, the parties may agree that despite orders being placed on different dates and also being executed on different dates, all the executions of such orders will constitute a common cause of action or will be deemed to be part of one unified contract for carrying such advertisements. However, in the present case, this is not the case of the parties that the advertisements, which the plaintiff carried on different dates were executed under a common contract/order placed by defendant No. 1 on it nor do the parties claim that they had agreed to treat all the release orders placed on different dates as a common/unified contract thereby converting it into a common cause of action. 11. In K.E.A.K. Ahmed Sahib & Co. v. M.K. Pakir Mohamed Rawther, 1924 Rangoon 145, a Division Bench of the High Court was of the view that each order and delivery of goods is a separate transaction and a separate cause of action, unless they are successive claims arising under the same obligation within the explanation at the end of rule 2 of Order 2. It was further observed that the question is really dependent on the contract between the parties. If all the goods were supplied under a single contract, it would be within the explanation, unless there was an express stipulation that each delivery or each month's deliveries should be deemed to be a separate contract. It was also observed that it was possible that in a particular case, there may be either a contract, or a course of dealing from which an implied contract might be inferred to the effect that the entire series in a particular month or for other specific period should be treated as a single cause of action. It was also observed that it was possible that in a particular case, there may be either a contract, or a course of dealing from which an implied contract might be inferred to the effect that the entire series in a particular month or for other specific period should be treated as a single cause of action. However, in the case before this Court, neither there is any contract between the parties to treat all the transactions as a single contract giving rise to single cause of action nor is it the case of the parties that the goods were supplied by the plaintiff to the defendant on different dates under a single contract. 12. Moreover, the case of the plaintiff before this Court is that defendant No. 1 was acting as an agent of defendant No. 2 while placing release orders with it for carrying advertisements of defendant No. 2 on its cable feed. Presumably, same is the case of the plaintiff with respect to advertisements of the other two multinational companies carried by it on its cable feed, on the instructions of defendant No. 1. At this stage, the Court cannot go into merits of the case set up by the plaintiff in this regard and cannot decide whether defendant No. 1 while placing release orders with the plaintiff company was acting as agent of defendant No. 2 or not. If defendant No. 1, while placing release orders with the plaintiff company was acting as the agent of various multinational companies represented by it, it was not open to the plaintiff to implead all the three multinational companies in the same suit, the cause of action being different against these separate multinational companies. Order 1 Rule 3 of the CPC, to the extent it is relevant, provides that all persons may be joined in one suit as defendants where (a) any right to relief in respect of, or arising out of, the same act or transaction or series of acts or transactions is alleged to exist against such persons, whether jointly, severally or in the alternative; and (b) if separate suits were brought against such persons, any common question of law or fact would arise. The plaintiff company could not have claimed any relief against defendant No. 2 before this Court in the suit, which it had filed against defendant No. 1 M/s Grass Link Advertisement Pvt. Ltd. and T.C.L. Electronics Pvt. Ltd. and is stated to be pending in the Court of the Additional District Judge, Delhi. Therefore, it is difficult to accept that the suit is hit by Order 2 Rule 2 of the CPC merely because in the suit filed against defendant No. 1 and T.C.L. Electronics Pvt. Ltd., the plaintiff company did not claim the amount involved in the suit. 13. The learned counsel for defendant No. 1 has relied upon the decision of Gujarat High Court in Gujarat Electricity Board, Baroda and others v. Saurashtra Chemicals, Porbandar, AIR 2004 Gujarat 83. A perusal of the judgment would show that the suit in the case before Gujarat High Court was based on accounts, the subject matter of the previously instituted suit as well as the subsequently instituted suit was the same and so were the parties to the suit, except that State of Gujarat, which was joined as party defendant in the earlier suit was not joined as a defendant in the subsequent suit. The Court felt that a tricky omission of one of the party defendants in whose absence effective and executable decree could be passed, would not help the plaintiff in bringing the second suit on the same cause of action or grievance. It was in these circumstances that the subsequently instituted suit was held to be barred by Order 2 Rule 2 of the CPC. The facts of the case before this Court, however, are entirely different. Each advertisement carried by the plaintiff pursuant to the release order placed with it by defendant No. 1 constitutes a distinct cause of action and the parties to the previously instituted two suits are not common since defendant No. 2 was not a party to the previously instituted suit whereas T.C.L. Electronics Pvt. Ltd. is not a party to the present suit. Since the case of the plaintiff company is that defendant No. 1 was acting as an agent of defendant No. 2, it cannot be said that defendant No. 2 is an unnecessary party to the suit. This judgment, therefore, does not help the applicant in any manner. 14. Since the case of the plaintiff company is that defendant No. 1 was acting as an agent of defendant No. 2, it cannot be said that defendant No. 2 is an unnecessary party to the suit. This judgment, therefore, does not help the applicant in any manner. 14. For the reasons given in the preceding paragraphs, I find no merit in the application and the same is hereby dismissed.