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High Court Of Calcutta
Anil Kumar Sen, S. N. Sanyal
STATE OF ORISSA - Appellant
Versus
GOENKA INVESTMENT AND MINING INDUSTRIES PVT.LTD. - Respondent
C. O. 3494 Of 1982
Decided On : 03/17/1983
JURISDICTION - Suit for Damages - Termination of Agreement - Place of Termination - Notice Served at Two Places - Interpretation of Contractual Clause - Authority of Agent - Section 229 of the Contract Act - Legal Consequences of Notice to Agent.
Fact of the Case:
The plaintiff, Goenka Investment and Mining Industries Private Limited, filed a suit in the 1st Court of the learned Subordinate Judge at Alipore, claiming damages for wrongful termination of an agreement by the defendant, the State of Orissa. The plaintiff alleged that the defendant appointed them as an agent for mining coal and that the defendant wrongfully terminated the agreement by a notice served on April 15, 1975. The defendant raised a plea of lack of jurisdiction, arguing that the notice of termination was served upon the plaintiff's manager at Talcher, Orissa, and that no part of the cause of action arose within the jurisdiction of the court. The learned Subordinate Judge decided a preliminary issue on the point of court's jurisdiction in favor of the plaintiff, holding that a part of the plaintiff's cause of action arose within the jurisdiction of the court.
Finding of the Court:
The High Court held that the learned Subordinate Judge erred in holding that the purchases made and expenditures incurred by the plaintiff at their Calcutta office constituted a part of the cause of action. The court held that such purchases and expenditures were relevant for determining the quantum of damages suffered, but they did not constitute a part of the cause of action.
Issues: 1. Whether the purchases made and expenditures incurred by the plaintiff at their Calcutta office constituted a part of the cause of action? 2. Whether the notice of termination of the agreement was effectively served at Talcher or at Calcutta?
Ratio Decidendi: 1. The court held that the purchases made and expenditures incurred by the plaintiff at their Calcutta office were not a part of the cause of action, but were relevant for determining the quantum of damages suffered. The court relied on the decision of the Supreme Court in Firm Pannalal Janakidas v. Mohanlal, where it was held that the quantum of damages is not a part of the cause of action. 2. The court held that the notice of termination of the agreement was effectively served at Calcutta, not at Talcher. The court interpreted Clause 54 of the agreement between the parties, which provided that notices were to be given to a person appointed and authorized in terms of the clause, and in the absence of such a person, notices were to be served at the registered office of the plaintiff. The court found that the defendant was aware of this restrictive covenant and that they had taken care to serve the notice at the Calcutta office on April 18, 1975. The court also held that S. R. Chandra, the plaintiff's manager at Talcher, was not authorized to receive the notice of termination and that his lack of authority was known to the defendant. Therefore, the service on him on April 17, 1975, could not and did not terminate the agreement.
Final Decision: The High Court dismissed the defendant's revisional application and upheld the decision of the learned Subordinate Judge on the preliminary issue, though on grounds different from those assigned by him.
( 1 ) THIS is a revi-sional application at the instance of the defendant, the State of Orissa (hereinafter referred to as the defendant) and is directed against an order dated June 10, 1982, passed by the learned Subordinate Judge, 1st Court, Alipore, in Money Suit No. 18 of 1978. By the order impugned, the learned Subordinate Judge has decided a preliminary issue on the point of court's jurisdiction to try the suit.
( 2 ) GOENKA Investment and Mining Industries Private Limited, a Company incorporated, under the provisions of the Companies Act, 1956 (hereinafter referred to as the plaintiff) instituted the aforesaid suit claiming a decree for a sum of Rs. 2,82,97,355. 62 by way of damages and alternatively claiming an enquiry into the damages suffered by them and for a decree for such sum as may be found due on such enquiry. The plaintiff's case shortly is that by an agreement dated July 15, 1971, the defendant appointed the plaintiff an agent for mining, getting and raising coal from a colliery known as Handidhua Colliery situate within the District of Dhenkanal in the State of Orissa and for sale and despatch of coal for a period of 25 years with effect from the date of the agreement on terms and conditions set out in the agreement. Pursuant to the said agreement it is claimed by the plaintiff that they not only purchased certain plants, machineries and other colliery accessories of the value of Rs. 3,75,000/-from the defendant but purchased still other machineries, tools and equipments for the purpose of operating the mine. The plaintiffs further pleaded that they incurred various other expenses for retrieving the colliery and making it free from water and setting up an elaborate establishment for the mining operation to be carried on by them in terms of the agreement. It is claimed that all this was done by them on the defendant's representation and warranty that the agreement would continue and subsist for 25 years but the defendant wrongfully and illegally terminated the said agreement by a notice dated April 15, 1975, served upon the plaintiff on April 18, 1975, and took possession of the colliery on June 11, 1976. As a result the plaintiff suffered enormous loss, the particulars whereof being set out in the plaint. They claimed a decree for damages in the manner set out hereinbefore.
( 3 ) THIS suit was filed in the 1st Court of the learned Subordinate Judge at Alipore and the plaintiff pleaded jurisdiction in such court on the ground that the plaintiff suffered loss and damages within the jurisdiction of the said court as also on the ground that the cause of action arose at No. 6, Alipore Park Road, Calcutta, within the jurisdiction of the said court, when a notice of termination was served upon the plaintiff at that place.
( 4 ) THE defendant filed a written statement contesting the claim put forward by the plaintiff on its merits. But at this stage we are not concerned with that part of the defendants defence. In the written statement, however, the defendant raised a specific plea that the learned Subordinate Judge has no territorial jurisdiction to try the suit. Reason assigned for such a plea was that the defendant neither resides nor carries on business within the jurisdiction of the learned Subordinate Judge, the colliery in dispute is situate beyond the jurisdiction and that no part of the cause of action can be said to have arisen within the jurisdiction of that court. It was pleaded specifically that the notice of termination of the agreement was served upon the plaintiffs through their manager at Handidhua Colliery, Talcher, in the State of Orissa on April 17, 1975. In view of such a plea raised on behalf of the defendant a preliminary issue was framed as to whether the court of the learned Subordinate Judge has jurisdiction to try the suit. This issue was decided by the learned Subordinate Judge on evidence both oral and documentary. The evidence led by the parses establishes beyond disp
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