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2019 Supreme(Del) 2575
IN THE HIGH COURT OF DELHI
Yogesh Khanna, J.
MASYC PROJECTS PVT. LTD. - Appellant
Vs.
NILACHAL IRON AND POWER LTD - Respondent
Regular First Appeal No. 313 of 2018
Decided On : 24-10-2019
Tarun Sharma, Adv., Akanksha Kapoor, Adv., Pradeep Singh, Adv., Gaurav Kejriwal, Adv., Gurpreet Hora, Adv.
The main legal point established in the judgment is the application of territorial jurisdiction and the provisions under Order VII Rule 10 and 10(A) CPC in determining the maintainability of the suit.
Headnote:
Territorial Jurisdiction - Recovery Suit - Order VII Rule 10 and 10(A) CPC - Kolkata Court has exclusive jurisdiction - Suit not maintainable in Delhi - Suit barred under Order II Rule 2 CPC - Appellant entitled to return of plaint to be presented to the court in which the suit should have been instituted
Fact of the Case:
The appellant filed a suit for recovery of Rs.20,37,506/- which was dismissed by the Trial Court primarily on grounds of territorial jurisdiction. The respondent admitted that the conveyor systems supplied by the appellant have been running successfully.
Finding of the Court:
The Trial Court concluded that it lacked territorial jurisdiction as per the purchase order clause, and held the suit barred under Order II Rule 2 CPC. The Court also considered the provisions under Order VII Rule 10 and 10(A) CPC.
Issues: Territorial jurisdiction, Suit maintainability in Delhi, Suit barred under Order II Rule 2 CPC, Applicability of Order VII Rule 10 and 10(A) CPC
Ratio Decidendi: The Court found that Kolkata Court had exclusive jurisdiction and the suit was not maintainable in Delhi. It also held that the suit was not barred under Order II Rule 2 CPC. The Court considered the provisions under Order VII Rule 10 and 10(A) CPC and concluded that the plaint should be returned to be presented to the court in which the suit should have been instituted.
Final Decision: The appeal was allowed, and the impugned judgment and decree were set aside. The plaint was ordered to be returned to the appellant to be presented to the court in which the suit should have been instituted.
JUDGMENT
Yogesh Khanna, J.
This appeal is preferred by the appellant against the judgment and decree dated 19.12.2017 passed by the learned Additional District Judge06/West District, Rohini Courts, Delhi (hereinafter referred as the learned 'Trial Court') in CS No.11280/2016 whereby the suit filed by appellant for recovery of Rs.20,37,506/- was dismissed, primarily, on grounds of territorial jurisdiction.
2. The brief facts which led to the filing of the suit, as are noted in impugned judgment are as under:-
"1. xxxxxxxxx the plaintiff company is engaged in manufacture of material handling equipments like belt, conveyors, conveying and systems etc. The defendant placed a purchase order bearing no. NIPL/47/2003-2004 dated 02.07.2003 on the plaintiff for system design, detail design, manufacture and supply complete material handling system for a 350 TFD sponge iron plants to be located at Kandra near Jamshedpur in Jharkhand at the price of Rs.1,37,33,000/-. It is contented that vide letter dated 25.08.2003, plaintiff conveyed to the defendant of change in the length in the conveyor as advised by the defendants consultant TGS (Tata Group). Therefore, the purchase order was increase to Rs.1,42,30,303/-, thereafter several other orders have been placed by the defendant during the business. It is contented that on the regular insistence of the defendant, the plaintiff gave performance bank guarantee prior to erection commissioning for 10% (5% + 5%) of the basis supply of value amounting to Rs.13,73,000/-. It is contented that defendant was now threatening to encash the bank guarantees on the basis of non execution of work in time which were against the terms for which the said performance bank guarantees were given and had there been any delay in execution of work (supply of equipment) on the part of the plaintiff in terms of purchase order dated 02.07.2003, defendant could have invoked clause no.11.0 stipulated liquidated damages of said purchase order while releasing the final payment of Rs 13,73,000/- by cheque no.049950 dated 22.11.2004 to the plaintiff but defendant did not do so because they were well aware that there was no delay on part of the plaintiff for execution of work stipulated in their purchase order dated 02.07.2003 whereas defendant themselves delayed the supplies due to various reason including non compliance of various terms by the defendant and also there was variation in design at the defendant in as much it has been changed and varied the length arid conveyors for which the defendant amended the purchase order only on 03.11.2004 vide their letter of even date whereas plaintiff has requested these documents since 25.08.2003 therefore, plaintiff had filed a suit bearing no.244/2005 on 23.11.2005 alongwith the application U/o 39 rule 1 and 2 CPC seeking ex parte stay order for invoking performance bank guarantees. Vide order dated 03.12.2005 the Sh D C Anand, Ld ADJ was pleased to decline to grant injunction in favour of plaintiff resulting into appeal bearing, FAO No.425/2005 preferred but the same was also dismiss by the Hon'ble High Court of Delhi and subsequently SLP was also dismissed as such interim stay was vacated and the defendant has encashed the said bank guarantees. The earlier suit vide dated 09.12.2006 has been dismissed for non prosecution.
2. It is contented that the said bank guarantees have been encashed on the ground that the work of erection has been delayed whereas work of period was given by a separate purchase order by the defendant on M/s Elcoma Engg Pvt Ltd which no doubt is a group of companies of plaintiff but is a separate entity in law. In any event, in the work of erection there was no condition of bank guarantee; to be given by the said M/s Elcoma Engg. Pvt India and as such on account of any such delay on the part of M/s Elcoma Engg. Pvt Ltd the aforesaid bank guarantees given by the plaintiff could not have been encashed. Furthermore, the total value of the work of Rs.6,80,000/- and c
