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2017 DIGILAW 974 (GAU)

Nezone Biscuits Pvt. Ltd. v. K. M. Enterprises

2017-07-24

AJIT BORTHAKUR

body2017
JUDGMENT : Ajit Borthakur, J. 1. This appeal under order 41 Rules 1 and 2 of the Code of Civil Procedure is directed against the judgment and decree, dated 22.04.2010, passed by the learned Civil Judge, Sonitpur, Tezpur, in Money Suit No. 15 of 2007, whereby the suit has been dismissed with costs holding lack of territorial jurisdiction to try the suit and consequently, there is no cause of action in favour of the plaintiff-appellant. Being aggrieved with the aforesaid judgment and decree the Plaintiff Company-Appellant preferred this appeal. Heard Mr. A. Ganguli, learned counsel for the appellant and Mrs. M. Hazarika, learned senior counsel appearing for the defendant-respondent. 2. The brief fact of the case is that the Plaintiff Company-Appellant having its registered office at Tezpur in the District of Sonitpur manufactures and sales biscuits and its production and sale office being situated at Tezpur controls the production activities as well as distribution and sale network of the products. The defendant-respondent herein carries on its business at Tinsukia and being one of the dealers of the Plaintiff Company-Appellant, the defendant-respondent used to purchase the products of the Plaintiff Company-Appellant of various biscuits produced by it since long and the defendant-respondent used to furnish purchase orders at Tezpur, through electronic communication means or through representatives and after receipt of the supply orders, the Plaintiff Appellant-Company delivered the consignments at Tinsukia for valuable consideration and bills were used to be prepared and submitted to the defendant-respondent for payment. Such business practice of the Plaintiff Company-Appellant was continuing with the Defendant/Respondent and at the end of the financial year their books of accounts were used to be calculated and closed. According to the Plaintiff Company-Appellant, in the course of business transactions during the period 2004 to 2007, the defendant-respondent was to pay an outstanding amount of Rs. 4,64,028.00/- to the Plaintiff Company-Appellant. The Plaintiff Company-Appellant, after long deliberations with the Defendant/Respondent, issued and served Legal Notice, but did not yield any positive result and ultimately in the compelling situation filed the instant Money Suit before the Court of learned Civil Judge, Sonitpur at Tezpur. The Defendant/Respondent contested the suit amongst others disputing the territorial jurisdiction of Tezpur Court to try the suit. 3. The Defendant/Respondent contested the suit amongst others disputing the territorial jurisdiction of Tezpur Court to try the suit. 3. The Defendant/Respondent admitting their dealership relation with the Plaintiff Company-Appellant submitted that the Defendant/Respondent never went to Tezpur for business purpose and it was the Plaintiff Company-Appellant who sent goods to Tinsukia through their representatives as per indent/invoice and in this manner, the business was carried out. In this regard the Defendant/Respondent was not required to come to Tezpur, as alleged by the Plaintiff Company-Appellant herein. 4. The learned Court below after going through the pleadings and hearing the parties framed the following issues:- "1. Whether there is cause of action for the plaintiff to file the suit? 2. Whether the suit is maintainable in its present form? 3. Whether this Court has territorial jurisdiction to try the present suit? 4. Whether the plaintiff is a body corporate under the Companies Law having its registered office at Tezpur? 5. Whether the defendant is liable to pay Rs. 4,64,028/- to the plaintiff as remaining outstanding balance for the purchasing biscuits from the plaintiff produced and manufactured by the plaintiff? 6. Whether the plaintiff is entitled to a decree as prayed for? 7. To what other relief/reliefs, the parties entitled to law and equity?" 5. The learned trial Court after hearing the parties and consideration of the documents exhibited by the plaintiff company-appellant answered the issue Nos. 1 and 3 in the negative. In view of issue Nos. 1 and 3, being decided in the negative, the learned trial Court held that the issue Nos. 2, 4 and 5 deemed to be complete nullity and therefore, these issues were not discussed and decided by the court. Similarly issue Nos. 6 and 7 were also answered in the negative and against the plaintiff company-appellant. 6. One witness/PW namely, Ranjan Kr. Powdel adduced evidence wherein he stated that the orders for consignment of plaintiff company-appellant's products were placed at Tezpur over telephone or through its representatives at Tinsukia by the defendant-respondent herein, at Tezpur and as per the said supply orders, the consignments of biscuit products were used to be sent for delivery at Tinsukia. 7. Mr. Powdel adduced evidence wherein he stated that the orders for consignment of plaintiff company-appellant's products were placed at Tezpur over telephone or through its representatives at Tinsukia by the defendant-respondent herein, at Tezpur and as per the said supply orders, the consignments of biscuit products were used to be sent for delivery at Tinsukia. 7. Mr. A. Ganguli, learned counsel for the appellant submitted that the impugned judgment suffers from series of infirmities, in as much as, the learned trial Court having found itself no territorial jurisdiction to try the suit, ought to have returned the plaint for filing in the competent Court having territorial jurisdiction to try it instead dismissing the suit and ignored the settled position of law that in a suit for recovery of money for goods supplied to the debt or, part of the cause of action arises at the place, where the money is expressly or impliedly payable. 8. Per contra, it is the submission of Mrs. M. Hazarika, the learned senior counsel for the defendant-respondent that the monetary transaction had taken place at Tinsukia and as such, the suit had to be instituted at Tinsukia U/S. 20(c) of the Civil Procedure Code. Learned senior counsel for the defendant-respondent has also submitted that wrong identity of the plaintiff/appellant in the court is a fatal discrepancy, since the PW No. 1 might have been tutored by Plaintiff Company-Appellant. 9. It is true that u/s. 20 C.P. Code, a suit can be instituted within the local limits of jurisdiction, where the plaintiff/appellant resides or carries on business or where the cause of action wholly or in part arises. In the present suit, admittedly, both the plaintiff company/appellant and defendant/respondent are the residents of Tezpur and Tinsukia respectively. However, the suit was filed at Tezpur on the ground that the transactions took place at Tezpur. Hence, it has to be examined, whether the transactions had taken place at Tezpur or not. 10. On perusal of the pleadings of the parties in Money Suit No. 15/2007, it transpires that it is an admitted position that the defendant firm-respondent herein, which carries on business at Tinsukia, Assam has been appointed as dealer of the products of the plaintiff company-appellant herein, situated at Tezpur, Assam, and supplied and sold its biscuit products at Tinsukia through the defend ant firm-respondent, as per indents. Each of the parties has examined one witness in the suit and after completion of adjudication on the above issues, the learned trial Court at Tezpur dismissed the suit vide the impugned judgment and decree on the grounds of its lack of territorial jurisdiction and for want of cause of action. 11. Assigning the reasons for dismissal of the suit, the learned trial Court having considered the pleadings and evidence led by the parties, found that the plaintiff company-appellant has not stated in the plaint about the mode of transaction in regard to placing of orders for supply of products by the defendant-respondent dealer of the plaintiff company-appellant, following which the plaintiff company-appellant delivered the consignments of its biscuit products at Tinsukia, although the plaintiff's evidence (PW-1) reveals that the supply orders by the defendant-respondent were placed, either over telephone or through their representatives at Tinsukia. It is further found that the plaintiff company-appellant instituted the suit through its authorized signatory namely, one Prakash Chand Bader, whereas one Avni Bader, who is one of the Directors of the plaintiff company-appellant sworn in an affidavit in support of the averments made in the plaint and both have not been called as witness and instead examined one Ranjan Kumar Powdel (PW-1) for which his evidence is not admissible in evidence. On the other hand, the learned trial Court found that no part of cause of action or cause of action arose at Tezpur as the-defendant-respondent dealer received the plaintiff company's consignments at Tinsukia, therefore, the cause of action for the suit wholly arose at Tinsukia. 12. Section 2(h) of the Contract Act defines a contract as an agreement enforceable by law. But, it is not necessary that every contract to be valid must be in writing. There can be a binding contract between the parties on the basis of oral agreement, that is, informal contract, unless there is a law, which requires the agreement to be in writing. The essence of a valid contract is the offer and acceptance of proposal between the parties. In the absence of documentary evidence, existence of oral agreements has to be proved by adducing oral evidence. The essence of a valid contract is the offer and acceptance of proposal between the parties. In the absence of documentary evidence, existence of oral agreements has to be proved by adducing oral evidence. The question involved in this appeal being related basically to the points of territorial jurisdiction of the learned trial Court to try the suit and cause of action for the suit, this Court finds it apposite to look into the aforesaid two points only. 13. In the above backdrop of facts of the suit, the plaintiff company-appellant delivered the consignments of its products admittedly at Tinsukia to the defendant-respondent as per the latter's orders for supply. Therefore, as per Section 20 of the Contract Act, the plaintiff company-appellant has option to sue the defendant-respondent buyer of its products for recovery of unpaid price of the products so supplied either at its aforesaid place at Tezpur or at Tinsukia, where the defendant-respondent carries on the business of dealership for the plaintiff company-appellant herein, because the cause of action has arisen wholly or in part at the aforesaid two places. Therefore, this Court is of the opinion that as the cause of action for the suit arose at the aforesaid two places, the appropriate Courts at Tezpur and Tinsukia have territorial jurisdiction to try the suit and accordingly, having regard to the pleadings of the parties, the issue Nos. 1 & 3 are to be decided in the affirmative. 14. In a similarly situated case, a single Judge of Delhi high Court reiterated the settled principle of law in Satyapal Vs. Slick Auto Accessories Pvt. Ltd. & Ors., reported in AIR 2014 Del. 115 , that the debtor has to seek the creditor, where no place of payment being agreed upon and payment should be made to the creditor, where he resides and works for gain, the Court at his aforesaid place has territorial jurisdiction to entertain a suit for recovery of price of sale of goods. 15. It is seen that the learned trial Court having dismissed the suit after discussions of relevant evidence on the above two issues has not rendered any decision on the three issue Nos. 2, 4 & 5 framed by it. 16. Accordingly, the Appeal stands allowed, and the impugned judgment and decree, dated 22.04.2010, passed in Money Suit No. 15/2007 is hereby set aside. 17. 2, 4 & 5 framed by it. 16. Accordingly, the Appeal stands allowed, and the impugned judgment and decree, dated 22.04.2010, passed in Money Suit No. 15/2007 is hereby set aside. 17. The suit is remanded to the learned trial Court with a direction to decide the issues except the issue Nos. 1 & 3, if necessary affording opportunity, to adduce additional evidence/evidences by both the parties, if so advised and of hearing, in accordance with law. Send back the LCR along with a copy of this judgment and order.