Back
High Court Of Himachal Pradesh
V.E.MEHROTRA,LOKESHWAR SINGH PANTA
SHREE DIGRIJAY CEMENT CO.LTD. - Appellant
Versus
CHAMERA HYDRO-ELECTRIC PROJECT - Respondent
Letters Patent Appeal No. 26 of 1991
Decided On : 12/18/1991
JURISDICTION - CONTRACT - CEMENT CONTROL ORDER - CAUSE OF ACTION - REFUND OF ADVANCE - [ORDER VII RULE 11 READ WITH SECTIONS 21, 148 AND 151 OF THE CODE OF CIVIL PROCEDURE] - [SECTION 26 OF THE CODE OF CIVIL PROCEDURE] - THE COURT HELD THAT THE SUIT FOR REFUND OF ADVANCE ALONG WITH INTEREST COULD BE FILED IN THE COURT WITHIN WHOSE JURISDICTION THE ACCEPTANCE OF THE OFFER WAS COMMUNICATED.
Fact of the Case:
CHAMERA HYDRO-ELECTRIC PROJECT (PLAINTIFF) PLACED AN ORDER WITH DIGVIJAY CEMENT COMPANY (DEFENDANT) FOR SUPPLY OF 4,000 MT OF CEMENT. THE DEFENDANT ISSUED AN INVOICE FOR THE AMOUNT AND THE PLAINTIFF MADE 100% ADVANCE PAYMENT. THE DEFENDANT FAILED TO SUPPLY THE CEMENT AND REFUNDED ONLY A PART OF THE ADVANCE. THE PLAINTIFF FILED A SUIT FOR RECOVERY OF THE BALANCE AMOUNT ALONG WITH INTEREST IN THE HIMACHAL PRADESH HIGH COURT.
Finding of the Court:
THE COURT HELD THAT THE CONTRACT BETWEEN THE PARTIES WAS VALID DESPITE THE STATUTORY ORDER FOR SUPPLY OF CEMENT. THE MAKING OF THE CONTRACT WAS PART OF THE CAUSE OF ACTION AND THE SUIT COULD BE FILED IN THE COURT WITHIN WHOSE JURISDICTION THE ACCEPTANCE OF THE OFFER WAS COMMUNICATED. THE COURT ALSO HELD THAT THE PRINTING OF THE WORDS "SUBJECT TO JAMNAGAR JURISDICTION" IN THE INVOICE/PROFORMA BILL DID NOT EXCLUDE THE JURISDICTION OF THE HIMACHAL PRADESH HIGH COURT.
Issues: 1. WHETHER THE CONTRACT BETWEEN THE PARTIES WAS VALID DESPITE THE STATUTORY ORDER FOR SUPPLY OF CEMENT? 2. WHETHER THE SUIT COULD BE FILED IN THE HIMACHAL PRADESH HIGH COURT? 3. WHETHER THE PRINTING OF THE WORDS "SUBJECT TO JAMNAGAR JURISDICTION" IN THE INVOICE/PROFORMA BILL EXCLUDED THE JURISDICTION OF THE HIMACHAL PRADESH HIGH COURT?
Ratio Decidendi: 1. THE COURT RELIED ON THE SUPREME COURT DECISION IN M/S VISHNU AGENCIES (PVT) LTD. ETC. ETC. V COMMERCIAL TAX OFFICER, ELURU ETC. ETC. AIR 1978 SC 449, WHICH HELD THAT A TRANSACTION EFFECTED IN COMPLIANCE WITH THE OBLIGATORY TERMS OF A STATUTE MAY NEVERTHELESS BE A SALE IN THE EYE OF LAW. 2. THE COURT RELIED ON THE SUPREME COURT DECISION IN A. B. C. LAMINAN PVT LTD, AIR 1986 SC 1239, WHICH HELD THAT THE MAKING OF A CONTRACT IS A PART OF THE CAUSE OF ACTION AND THAT ORDINARILY THE ACCEPTANCE OF AN OFFER AND ITS INTIMATION RESULTS IN A CONTRACT SO THAT THE SUIT CAN BE FILED IN A COURT WITHIN WHOSE JURISDICTION THE ACCEPTANCE WAS COMMUNICATED. 3. THE COURT HELD THAT THE PRINTING OF THE WORDS "SUBJECT TO JAMNAGAR JURISDICTION" IN THE INVOICE/PROFORMA BILL DID NOT EXCLUDE THE JURISDICTION OF THE HIMACHAL PRADESH HIGH COURT AS THERE WAS NOTHING TO SUGGEST THAT THE PARTIES HAD AGREED THAT ONLY THE COURTS AT JAMNAGAR WILL BE THE VENUE FOR SETTLEMENT OF THEIR DISPUTE.
Final Decision: THE COURT DISMISSED THE APPEAL AND HELD THAT THE SUIT COULD BE FILED IN THE HIMACHAL PRADESH HIGH COURT.
V. K. Mehrotra, J.— Shree Digvijay Cement Company Ltd., Digvijayagram, Gujarat (for short, "the Company") has assailed in this Letters patent appeal the judgment and order of a learned single Judge (Justice Ms. Kamlesh Sharma) in O. M P. No 93 of 1991 in civil suit No. 112 of 1990 instituted by Chamera Hydro-Electric Project, Banikhet District Chamba. (briefly, "the Chamera Project"), against it in this Court. The third defendant in the suit is the Regional Commissioner for Cement Industry, Government of India, New Delhi.
2. The suit seeks recovery of a sum of Rs. 58.39,711,51, under Order VII Rule 1 read with section 26 of the Code of Civil Procedure along with interest from the date of the filing of the suit till the date of payment at the rate of 17-1/2% per annum from the Company. Summons of the suit was issued to the Company on November 20, 1990 for March 4, 1991 The Company appeared before the Court in protest and made an application purporting to be under Order VII Rule 11 read with sections 21, 148 and 151 of the Code of Civil Procedure. On the facts mentioned in this application, the Company prayed that the suit be dismissed as having been instituted before a Court which had no territorial jurisdiction to try it and that pending the disposal of the application time for filing the written statement may be suitably enlarged. The matter was heard by the learned single Judge, after plaintiff Chamera Project filed a reply to the application of the defendant Company, at some length. By the order under challenge the learned Judge rejected the application and directed the defendants to file their written statements. So far, no written statement has been filed by the defendant-Company in view of an order passed by this Court on September 4, 1991 in this appeal saying that the Company shall not be required to file its written statement during the pendency of the present appeal.
3. According to the allegations contained in the plaint, Chamera Project approached Proforma defendant No. 3, Regional Development Commissioner, Cement Industry, (North Region) Government of India for allocation of quota of cement to ensure observance of the time schedule for the construction activities of the gigantic and prestigeous Chamera Project. By an authorisation dated December 31, 1985, a release order of 4,00u MT of cement was issued in favour of Chamera Project which was to be supplied by the defendant-Company. Following it, an order was placed by the Chamera Project through its letter dated January 15, 1986 with the defendant-Company for supply of 4,000 MT of portland cement within the validity period. The defendant Company forwarded a proforma invoice dated January 20, 1986 to the Chamera Project towards the value of 4,000 MT of cement of receipt whereof plaintiff Chamera Project remitted 100% advance of Rs. 35,12,329.60 to the defendant-Company. The amount was paid through a bank draft dated February 18, 1986 which was sent to the defendant-Company through registered post on February 20, 1986. The Company did not supply even a single metric tonne of cement inspite of having received 100% advance payment for the supply as cost price
4. The case of plaintiff Chamera Project further is that the failure on the part of the defendant-Company to supply cement within the stipulated period caused irreparable loss to the Project. The plaintiff reserved the right to file a suit for compensation/damages on account of the loss so suffered. However, through letters dated March 28, March 29, and April 21, 1986 and thereafter through the personal visit of their representatives, plaintiff Chamera Project requested the defendant-Company to despatch the cement but without any response. The validity period was got extended by plaintiff Chamera Project to June 30, 1986 and on May 20, 1986 a further request was made to the defendant-Company to make the snpply. This too did not bear any fruit Plaintiff Chamera Project followed up the matter with both the def
AI
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
