A. v. N. Tubes Limited Company VS Dynamic Engineering
2025-12-17
HIRDESH
body2025
DigiLaw.ai
ORDER : 1. The present miscellaneous appeal under Order 43 Rule 1(a) of CPC has been preferred by the appellant–plaintiff challenging the legality, correctness, and propriety of the order dated 18.02.2015 passed by the learned Additional District Judge, Gohad, District Bhind (hereinafter referred to as “the trial Court”) whereby, after framing issues and recording the evidence of both the parties, the trial Court held that it lacked territorial jurisdiction to entertain the suit and consequently dismissed the suit while directing return of the plaint under Order 7 Rule 10 CPC. 2. Short facts giving rise to the present appeal for its adjudication, as narrated therein, are that the appellant–plaintiff instituted a civil suit for recovery of a sum of Rs.2,76,558/- against the respondent–defendant on the pleadings that the appellant Company supplied welded steel tubes to the respondent from its factory situated at Malanpur, District Bhind. The description of the goods supplied was mentioned in Challan-cum-Excise Gate Pass No. AVN/94/12/289 dated 02.12.1994. The goods were dispatched through Truck No. MP-07-N-3006 and transported via Industrial Transport of India under Lorry Receipt No. 3638 dated 02.12.1994. It was further pleaded that the appellant issued Invoice No. 94/12/03 dated 02.12.1994 for an amount of Rs.1,79,583.40. The goods were received by the respondent on 11.12.1994 and acknowledgment was given by the respondent’s representative. Towards payment of the said goods, the respondent issued Cheque No. 687179 dated 12.01.1995 for Rs.1,79,583.40, which upon presentation was dishonoured. Thereafter, the appellant lodged an FIR at Police Station Malanpur, resulting in registration of Crime No. 71/95, and criminal proceedings are stated to be pending. Despite issuance of a registered legal notice dated 30.01.1995, the respondent failed to make payment, compelling the appellant to institute the civil suit. It was specifically pleaded that since the goods were supplied from the appellant’s factory at Malanpur, District Bhind, a part of the cause of action arose within the territorial jurisdiction of the trial Court at Gohad. 3. Upon notice, the respondent filed a written statement raising preliminary objections regarding territorial jurisdiction and court fees. It was contended that no part of the cause of action arose at Malanpur and that the transaction was concluded at Indore/Pithampur, District Dhar. 4. The trial Court framed several issues including Issue No. (vii) regarding maintainability of the suit and Issue No. (xi) regarding territorial jurisdiction.
It was contended that no part of the cause of action arose at Malanpur and that the transaction was concluded at Indore/Pithampur, District Dhar. 4. The trial Court framed several issues including Issue No. (vii) regarding maintainability of the suit and Issue No. (xi) regarding territorial jurisdiction. After recording evidence and hearing final arguments, the trial Court decided the said issues against the appellant, held that it lacked territorial jurisdiction, and passed the impugned order dismissing the suit and returning the plaint. Aggrieved thereby, the present miscellaneous appeal has been filed. 5. Learned counsel for the appellant–plaintiff, Shri P. C. Chandil, contended that the impugned order passed by the trial Court is contrary to law and the evidence available on record. It is submitted that the trial Court committed a grave error in holding that it lacked territorial jurisdiction. From the oral and documentary evidence led by the appellant, it stands fully established that the respondent placed the supply order at the appellant’s factory at Malanpur and the goods were manufactured and dispatched from Malanpur, District Bhind. Hence, a substantial part of the cause of action clearly arose within the territorial jurisdiction of the trial Court. It is further contended that the trial Court completely ignored material evidence demonstrating that the goods were dispatched under Central Excise Challan No. 289 dated 02.12.1994 through Industrial Transporters from Malanpur and were subsequently received by the respondent at Pithampur, District Dhar, on 11.12.1994. Mere receipt of goods at another place does not oust the jurisdiction of the Court where the contract was performed in part. Shri Chandil further argued that the findings recorded on Issue No. (vii) and Issue No. (xi) are perverse, illegal, and based on misreading of evidence, and therefore liable to be set aside. It was also submitted that even assuming (without admitting) that the trial Court lacked territorial jurisdiction, it had no authority to dismiss the suit. At best, the trial Court could have proceeded strictly in accordance with Order 7 Rule 10-A CPC. The impugned order is self-contradictory inasmuch as on one hand it directs return of the plaint, while on the other hand it dismisses the suit for want of jurisdiction. Learned counsel for the appellant emphasized that after filing of the written statement, a full-fledged trial was conducted, evidence of both parties was recorded, and final arguments were heard.
The impugned order is self-contradictory inasmuch as on one hand it directs return of the plaint, while on the other hand it dismisses the suit for want of jurisdiction. Learned counsel for the appellant emphasized that after filing of the written statement, a full-fledged trial was conducted, evidence of both parties was recorded, and final arguments were heard. In such circumstances, the trial Court ought to have followed the mandatory procedure under Order 7 Rule 10-A CPC by intimating the appellant and fixing a date for presentation of the plaint before the competent Court. Failure to do so has resulted in serious prejudice to the present appellant. Lastly, it was contended that the respondent admittedly received the goods and issued a cheque towards payment which was dishonoured. Therefore, the liability stands proved, and the trial Court should have decided the matter on merits instead of returning the plaint at such an advanced stage of the proceedings. On these grounds, it is prayed that the impugned order be set aside and the trial Court be directed to decide the suit on merits on the basis of the evidence already recorded. 6. Per contra, learned counsel for the respondent–defendant, Shri Arman Ali, supported the impugned order and opposed the appeal. It is vehemently contended that the trial Court has rightly held that it lacked territorial jurisdiction, as no part of the cause of action arose within Malanpur or Gohad. The respondent neither placed any order at Malanpur nor entered into any contractual obligation there. The entire transaction, including offer, acceptance, delivery, and payment, took place at Indore/Pithampur, District Dhar. It is contended that the Indore office of the appellant received the offer from the respondent, delivery was made at the respondent’s factory at Pithampur, and the cheque was also handed over at Indore. Merely dispatching goods from Malanpur does not confer territorial jurisdiction upon the Court at Gohad. It is further contended that the goods supplied were defective in quality and repeated complaints and reminders were sent to the appellant on 31.12.1994, 18.02.1995, and 14.03.1995, but no corrective action was taken. Under these circumstances, the respondent was justified in stopping payment of the cheque. It is also argued that territorial jurisdiction goes to the root of the matter, and the trial Court was duty-bound to decide the issue once it was raised and proved.
Under these circumstances, the respondent was justified in stopping payment of the cheque. It is also argued that territorial jurisdiction goes to the root of the matter, and the trial Court was duty-bound to decide the issue once it was raised and proved. There is no illegality in returning the plaint after full trial if the Court finds that it lacks jurisdiction. Regarding Order 7 Rule 10-A CPC, it is submitted that the provision is procedural in nature and non- compliance thereof does not vitiate the order, particularly when no prejudice has been caused to the appellant, who is free to present the plaint before the competent Court. On these grounds, learned counsel for the respondent prayed for dismissal of the miscellaneous appeal. 7. Heard learned counsel for the parties and perused the impugned order dated 18.02.2016 passed by the learned Additional District Judge, Gohad, District Bhind, as well as the entire material available on record. 8. The moot question that arises for determination in the present appeal is whether the learned Trial Court had territorial jurisdiction to hear the suit or not? 9. In the present case, the learned trial Court, after a detailed appreciation of pleadings and evidence, recorded a categorical finding that no part of the cause of action arose within the territorial jurisdiction of the Gohad Court. The evidence of plaintiff witness Rajkumar Bhalla (PW-1) reveals that although the plaintiff relied upon challan-cum-excise gate pass Ex.P-1, transport receipt Ex.P-2, invoice Ex.P-3, and dishonoured cheque Ex.P-4, the cross-examination of PW-1 clearly established that the registered and operational office of the plaintiff company was situated at Indore. All offers, acceptances, and correspondence were exchanged through the Indore office. The defendant’s offer Ex.D-1 and its confirmation Ex.D-2 were addressed to AVN Tubes Ltd., Indore. The cheque was issued, presented, and dishonoured at Indore. The complaints regarding quality and shortage were also addressed to the Indore office. The trial Court also noted an unexplained delay of nine days between dispatch of goods on 02.12.1994 and alleged delivery on 11.12.1994, making it improbable that the goods were directly delivered from Malanpur to the defendant. On the contrary, documentary evidence produced by the defendant established that the goods were routed through the plaintiff’s Indore warehouse and delivered at Pithampur, District Dhar.
On the contrary, documentary evidence produced by the defendant established that the goods were routed through the plaintiff’s Indore warehouse and delivered at Pithampur, District Dhar. No evidence was adduced to show that any agent of the defendant visited Malanpur or that any contractual obligation was discharged there. The trial Court held that merely because an excise gate pass was generated at Malanpur, no cause of action can be said to have arisen within the territorial jurisdiction of the Gohad Court. 10. On the basis of aforesaid detailed analysis, it is found that learned Trial Court rightly concluded that the Courts at Indore or Dhar alone had territorial jurisdiction, and accordingly decided Issue No. 7 and Issue No.11 against the plaintiff. This Court finds no perversity or illegality in the finding of the trial Court regarding lack of territorial jurisdiction. 11. The next question that arises is whether learned Trial Court had committed any illegality in passing the impugned order without following due procedure prescribed under Order 7 Rule 10-A CPC or not? 12. Order 7 Rule 10 CPC reads as under: “The plaint shall at any stage of the suit be returned to be presented to the Court in which the suit should have been instituted.” 13. Order 7 Rule 10-A CPC confers 'Power of Court to fix a date of appearance in the Court where plaint is to be filed after its return' which reads as under: “(1) Where, in any suit, after the defendant has appeared, the Court is of opinion that the plaint should be returned, it shall, before doing, so, intimate its decision to the plaintiff. (2) Where an intimation is given to the plaintiff under sub-rule (1), the plaintiff may make an application to the Court- (a) specifying the Court in which he proposes to present the plaint after its return, (b) praying that the Court may fix a date for the appearance of the parties in the said Court, and (c) requesting that the notice of the date so fixed may be given to him and to the defendant.
(3) Where an application is made by the plaintiff under sub-rule (2), the Court shall, before returning the plaint and notwithstanding that the order for return of plaint was made by it on the ground that it has no jurisdiction to try the suit,- (a) fix a date for the appearance of the parties in the Court in which the plaint is proposed to be presented, and (b) give to the plaintiff and to the defendant notice of such date for appearance. (4) Where the notice of the date for appearance is given under sub-rule (3)- (a) it shall not be necessary for the Court in which the plaint is presented after its return, to serve the defendant with a summons for appearance in the suit, unless that Court, for reasons to be recorded otherwise directs, and (b) the said notice shall be deemed to be a summons for the appearance of the defendant in the Court in which the plaint is presented on the date so fixed by the Court by which the plaint was returned. (5) Where the application made by the plaintiff under sub-rule (2) is allowed by the Court, the plaintiff shall not be entitled to appeal against the order returning the plaint." 14. From a conjoint reading of the aforesaid provisions, it is manifest that a plaint can be returned at any stage of the proceedings; however, once the defendant has appeared, strict compliance of Order 7 Rule 10-A CPC becomes mandatory. However, having reached such a conclusion, the trial Court was legally bound to follow the procedure prescribed under Order 7 Rule 10-A CPC. 15. On perusal of impugned record, it clearly shows that the defendant had already appeared before the Court. The written statement had been filed. Evidence of both parties had been recorded and final arguments had been heard. In such circumstances, the trial Court ought to have intimated the plaintiff of its decision and afforded an opportunity to specify the competent Court where the plaint was proposed to be presented, and thereafter fix a date for appearance of the parties in that Court. The trial Court failed to follow the mandatory procedure under Order 7 Rule 10-A CPC and instead dismissed the suit while simultaneously directing return of the plaint, which is procedurally unsustainable. 16. Accordingly, the miscellaneous appeal is partly allowed.
The trial Court failed to follow the mandatory procedure under Order 7 Rule 10-A CPC and instead dismissed the suit while simultaneously directing return of the plaint, which is procedurally unsustainable. 16. Accordingly, the miscellaneous appeal is partly allowed. The impugned order dated 18.02.2016 is affirmed to the extent of the finding that the trial Court lacks territorial jurisdiction, but is set aside to the extent it dismisses the suit without compliance of Order 7 Rule 10-A CPC. The trial Court is directed to return the plaint strictly in accordance with the provisions of Order 7 Rule 10-A CPC, intimate both the parties of its decision, and thereafter fix a date for appearance of the parties before the competent Court having territorial jurisdiction. 17. No order as to costs.