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2019 Supreme(Del) 2369
IN THE HIGH COURT OF DELHI AT NEW DELHI
Yogesh Khanna, J.
Gini & Jony Ltd. - Appellant
Versus
Creons Infrastructure Pvt. Ltd - Respondent
RFA 942 of 2019, CM APPL Nos.47531 of 2019, 47533 of 2019
Decided On : 03-12-2019
For the Appellant : Mr.Saket Sikri, Mr.Amit P Deshpande, Mr.Ajay Pal, Advs.
For the Respondent: Mr. Naresh K.Daksh, Adv.
The main legal point established in the judgment is the application of territorial jurisdiction based on the place of the cause of action and the formation of the contract, as well as the principle that the debtor has to seek the creditor.
Headnote:
Contract - Territorial Jurisdiction - Companies Act, 1956 - Sec. 20 CPC, Sec. 48 and 49 of the Indian Contract Act - [Companies Act, 1956] - [Sec. 20 CPC, Sec. 48 and 49 of the Indian Contract Act] - The court discussed the territorial jurisdiction based on the place where the cause of action arose, the formation of the contract, and the principle that the debtor has to seek the creditor. The court referred to relevant legal provisions and previous case laws to support its decision on territorial jurisdiction.
Fact of the Case:
The appellant company engaged the respondent for designing and fabricating showrooms but later disowned the work and refused to pay. The appellant disputed the jurisdiction of the court and the amount claimed by the respondent.
Finding of the Court:
The court found that the Delhi courts had jurisdiction to decide the suit based on the place where the cause of action arose and the formation of the contract. The court also held that the respondent was entitled to the recovery of the claimed amount.
Issues: Territorial jurisdiction, existence of contract, and disputed amount.
Ratio Decidendi: The court relied on the principles of territorial jurisdiction, formation of contract, and the debtor's obligation to seek the creditor. It also considered the evidence and communications between the parties to determine the entitlement to the claimed amount.
Final Decision: The appeal was dismissed, and the court upheld the jurisdiction of the Delhi courts and the respondent's entitlement to the claimed amount.
JUDGMENT :
Yogesh Khanna, J.
1. This appeal is preferred by the appellant against the judgment and decree dated 10.05.2019 passed by the learned Additional District Judge-03/South-East District, Saket Courts, New Delhi (hereinafter referred as the learned ‘Trial Court’) in CS No.10261/2016 (old No.1945/2009) whereby the suit of the respondent for recovery of Rs.67,13,124/- was decreed against appellant to the extent of Rs.44,04,937/- with costs and simple interest @ 10% pa from date of filing of suit till realization.
2. The brief facts are:-
(a) the appellant company is incorporated under the Companies Act, 1956 and having its Office in Mumbai and also at other places in India including in Delhi and is engaged in the business of manufacturing, marketing and selling kids wear through retail showrooms and outlets;
(b) the respondent is engaged in the business of advertising, designing, architectural and interior decoration and developing projects, showrooms, outlets, exhibition events etc and is also providing the related services viz. interiors, ordered fixtures etc. to its various customers including various multi-national companies;
(c) the appellant intended to hire services of the respondent for designing, fabrication, providing fittings and fixtures for different Outlets / Showrooms in different parts of India. During the course of discussion, the respondent quoted rate of Rs.1750/- per square feet for fabricating and carrying necessary work in the showrooms of the appellant;
(d) vide its e-mail dated 11.3.2007, the appellant instructed the respondent to fabricate and install necessary interiors in showroom at Rave Moti Mall, Kanpur, Uttar Pradesh, which the respondent agreed and after having prepared the required designs and getting them approved from the respondent, started the work and provided fittings, fixtures etc. When only the glass work was left, the appellant insisted for payment as per work and not as per square feet;
(e) the respondent almost completed the said showroom and affixed all the fittings including flooring by laying vitrified tiles, fixed full height wall partitions, modular wall units and also completed other works and all of a sudden vide e-mail/letter dated 23.04.2007, the appellant asked the respondent to halt the work on the site as the said Mall was to take some time to be operational;
(f) thereafter, the appellant asked the respondent to remove the fittings and fixtures from the said showroom and shift it to other sites. On the respondent asking as to who shall bear the cost of dismantling and transportation etc. for removing/transporting the material to other sites, no response was given by the appellant nor it disclosed any particular site for shifting the materials;
(g) finally, the appellant disowned the said showroom/ shop and asked the respondent to vacate the said shop and remove all its material;
(h) since the fittings, fixtures and interiors were to be dismantled and removed and most of the fittings were to be damaged, the respondent asked the appellant about costs of dismantling, place for sending the dismantled elements, valuation of current work position, cost of designing /hidden etc vide emails dated 03.08.2007 and 06.08.2007, but again no response came from the side of appellant; and
(i) as per terms, practice and understanding the appellant was required to make the payment in advance, but in view of continuing business relations, the respondent did not demand the payment and carry out the work at Kanpur Mall in advance and consequently, raised invoice/bill No.06-07/03/0425 dated 01.08.2007 to the extent of Rs.44,04,937/-, but the appellant avoided its payment. As per terms of the bill, interest @ 24% per annum was payable. From time to time, various communications were sent, but the appellant refuted to discharge its liability. Thereafter, a legal notice dated 22.01.2008 was issued; followed by their suit.
3. The appellant filed its written statement wherein besides other objections allege
