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2006 Supreme(Del) 1853
High Court Of Delhi
Pradeep Nandrajog
INDIA INTERNATIONAL TEXTILE MACHINERY EXHIBITIONS SOCIETY - Appellant
Versus
INDIA TRADE PROMOTION ORGANISATION - Respondents
CS (OS) 1861 Of 1994
Decided On : 10/11/2006
A.B.DIAL, A.N.HAKSAR, MOHINDER S.RUPAL, Navneet Mishra, SUMATI ANAND, Udayan Jain
Headnote:
LIMITATION - Contract - Article 113 - The suit was filed within the limitation period as the cause of action accrued when the defendant unequivocally rejected the plaintiff's request on 19. 8. 1991. The suit is governed by Article 113 of the Limitation Act.
Fact of the Case:
The plaintiff, a society registered under the societies Registration Act 1860, sought to hold an exhibition at New Delhi and paid a sum of Rs. 15 lacs to the defendant, a Government of India Enterprise, for licensing space. The plaintiff later requested a refund when it decided to hold the exhibition in Bombay.
Finding of the Court:
The court found that there was no concluded contract between the parties as negotiations did not result in a finalized agreement. The defendant was held liable to refund the sum of Rs. 15 lacs to the plaintiff with interest at 11% per annum from 19. 8. 1991 till the date of payment.
Issues: The issues involved whether the suit was within limitation, whether there was a concluded contract between the parties, and whether the defendant had the right to forfeit the amount of Rs. 15 lacs deposited by the plaintiff.
Ratio Decidendi: The cause of action accrued when the defendant unequivocally rejected the plaintiff's request on 19. 8. 1991, and the suit was held to be within limitation under Article 113 of the Limitation Act. The court also found that there was no concluded contract between the parties, and the defendant had no right to forfeit the sum of Rs. 15 lacs.
Final Decision: The suit was decreed in favor of the plaintiff, and the defendant was ordered to refund the sum of Rs. 15 lacs with interest at 11% per annum from 19. 8. 1991 till the date of payment.
PRADEEP NANDRAJOG, J.
( 1 ) AN interesting question of law regarding limitation arises for consideration (as a preliminary issue) in the suit. The other issue involved is, whether a contract concluded between the parties and whether defendant is entitled to retain the sum of Rs. 15 lacs received by it from the plaintiff.
( 2 ) SHORN of verbose details, plaintiff a society registered under the societies Registration Act 1860 promotes the interest of those in textile business. Defendant, a Government of India Enterprise, is the custodian of a land in New Delhi where trade fairs are held. The complex is called Pragati maidan.
( 3 ) PLAINTIFF was desirous of holding an exhibition at New Delhi and wanted defendant to license a space to it.
( 4 ) IN response to the query from the plaintiff, on 18. 07. 1990 defendant sent a telegram stating that in principle it had agreed to provide an area of approximately 13,000 sq. meters. Rs. 25 lacs towards advance license fee was directed to be deposited. It was informed that thereafter defendant would confirm the space to be licensed and the duration of the license.
( 5 ) THEREAFTER letters were exchanged between the parties. Parties corresponded as to what space and which particular hall would be made available. License fee per square meter which would be charged was discussed. Issues of rebate etc. was discussed.
( 6 ) WHEN these discussions were going on, in the month of August, October and November 1990, three payments in sum of Rs. 5 lacs each were paid by the plaintiff to the defendant.
( 7 ) UNFORTUNATELY, the covering letters under which payments were tendered have not been filed by the parties and therefore one cannot ascertain as to what was written by the plaintiff when the three amounts were tendered.
( 8 ) ON 26. 11. 1990, defendant wrote a letter to the plaintiff inter alia, recording as under:-"dear Shri Rao, please refer to the correspondence resting with your letter dated 5th November, 1990 regarding INDIA-ITME Exhibition to be organized by your Association at pragati Maidan, New Delhi in December 1992. We have noted that your space requirement will be varying between 15000 sq. mts. to 20000 sq. mts. We would like to know the exact space requirement of your Association for this Exhibition so that accordingly we can finalise other related details. Meanwhile, replies to the queries raised in your letters dated 3rd August, 11th September, 15th october and 5th November, 1990 are as follows:"
( 9 ) ON 22. 12. 1990, much after the three payments were received, defendant handed over to the plaintiff guidelines as per which defendant was licensing space to third party in Pragati Maidan. Inter alia, vide clause 1 (iv)guidelines stipulated that a formal agreement would have to be signed between the parties. The same reads as under:-"formal agreement will have to be signed between the licensee and India Trade promotion Organization. "
( 10 ) CORRESPONDENCE continued. Parties could not agree on mutual terms. On 11. 3. 1991, defendant sent a telex message to the plaintiff informing as under:-"for SHRI RAO EXECUTIVE DIRECTOR FM DINESH COOMAR MANAGER TFAI (.)KINDLY REFER TO THE MEETING MR. PARIKH AND YOU HAD WITH US ON 25th FEB REG INDIA itme EXHIBITION TO BE HELD AT PRAGATI MAIDAIN IN DEC 92 (.)WE NOW CONFIRM THAT TFAI WOULD BE IN A POSITION TO OFFER YOU SPACE FM 27th NOV 92 TILL 26th DEC 92 WITH DATES OF EXHIBITION TO BE 12th DEC TO 20th DEC 92 (.)KINDLY CONFIRM YR ACCEPTANCE (.) REGARDS"
( 11 ) NO confirmation of acceptance was given by the plaintiff to the defendant. On 31. 7. 1991, plaintiff wrote a letter to the defendant that it was no longer interested in holding an exhibition in New Delhi. Its members wanted an exhibition to be held in Bombay. Closing the chapter, plaintiff requested that sum of Rs. 15 lacs paid by it be refunded.
( 12 ) ON 19. 8. 1991, defendant wrote back to the plaintiff informing as under:-"shri Rasik Parekh, chairman, india International Textile Machi
