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2011 Supreme(Mad) 2853

High Court of Judicature at Madras
S. PALANIVELU
M/s. Tractors & Farm Equipments Ltd, Represented by its Vice President (Finance & Secretary)
Versus
New Chandra Motors & Tractors Rep by its Managing Partner & Others
C.S.No.352 of 2003
Decided on : 20-06-2011

Advocates Appeared:
For the Plaintiff:Mr. Krishna Srinivasan, Advocate, M/s. S. Ramasubramaniam, Associates Advocate.
For the Defendants:Mr. P.R. Seetharaman, Advocate.

Headnote:

Dealership Agreement - Agricultural Tractors and Farm Equipments - Clause 28, Section 10 of C.P.C - Dealership Agreement dated 03.01.1996, Clause 6, Clause 16, Clause 17, Clause 26 - The court analyzed the Dealership Agreement, termination notice, and jurisdictional issues under Section 10 of C.P.C. The court found that the suit claim was barred by limitation and the plaintiff failed to establish the liability of the defendants to pay the claimed amount. The court concluded that the suit was liable to be dismissed.

Fact of the Case:

The plaintiff filed a civil suit against the defendants for a sum of Rs.43,66,551.35 together with interest at 24% per annum from the date of plaint till the date of payment with costs. The plaintiff alleged that the defendants failed to perform as per the dealership agreement, breached the terms of the agreement, and owed the claimed amount. The defendants denied the allegations and raised issues related to termination of the agreement, jurisdiction, and limitation.

Finding of the Court:

The court found that the suit claim was barred by limitation as the plaintiff failed to establish the liability of the defendants to pay the claimed amount. The court also concluded that the plaintiff allowed the jurisdictional issue to become final, making it valid and preventing the court from dealing with the jurisdiction clause in the Dealership Agreement. As a result, the court held that the suit was liable to be dismissed.

Issues: The issues included whether the defendants failed to perform as per the dealership agreement, breached the terms of the agreement, whether the suit was hit by Section 10 of Civil Procedure Code, whether the suit was barred by limitation, and whether the court had jurisdiction to try the suit.

Ratio Decidendi: The court's decision was based on the analysis of the Dealership Agreement, termination notice, and jurisdictional issues under Section 10 of C.P.C. The court found that the suit claim was barred by limitation and the plaintiff failed to establish the liability of the defendants to pay the claimed amount. The court also considered the finality of the jurisdictional issue and its impact on the court's jurisdiction to deal with the case.

Final Decision: The court dismissed the suit with costs, concluding that the suit claim was barred by limitation and the plaintiff failed to establish the liability of the defendants to pay the claimed amount.

JUDGMENT :-

1. The Civil Suit is filed for a judgment and decree against the defendants for a sum of Rs.43,66,551.35 together with interest at 24% per annum from the date of plaint till the date of payment with costs.

2. The plaint averments, in brief, are as follows:-

2.(a) The plaintiff is engaged in the manufacture and sale of Agricultural Tractors and Farm Equipments under the brand name "MASSEY FERGUSON" & "TAFE", that the plaintiff has a very wide dealer network spread all over the country having 360 dealers through whom the tractors manufactured by the Plaintiff are being sold, that the dealers operate through dealership agreements that are entered between the dealer and the Plaintiff and the dealer is bound by such terms and conditions set out in the dealership agreement, that the first defendant, then known as M/s Chandra Motors & Tractors, was appointed as a "Dealer" on 29.11.1992 and the 2nd defendant and one Mr.Aswani Kumar were partners in the said firm, that dud to difference of opinion between the partners, Mr.Aswani Kumar had retired from the partnership, that thereafter defendants 2,3 and 4 constituted a ew Partnership under the name and style of the First Defendant and had submitted their proposal to be appointed as Dealer under cover of their letter dated 28.10.1994, along with a copy of the Partnership Deed, that the defendants were appointed as Probationary Dealers vide letter dt.09.12.1994 and thereafter they were appointed as dealers for the plaintiff vide Dealership Agreement dated 3.1.1996 for the District of Bareilly.

2.(b) The efforts of the defendants to sell the plaintiff's products and interest in the same, had been progressively declining and therefore the tehsils of Baheri and Nawabganj in Bareilly District were withdrawn from the purview of the Defendants' Dealership, that the officials of the plaintiff appraised the Defendants performance during the various review meetings and the Defendant was asked to improve upon their performance to that of the competitors' products in the area and the defendants have promised to do so, but they did not sell the average sold the previous years each year in the assigned territory, that the defendant was also not maintaining adequate floor stock fo the plaintiff's products for sale to customers though there has been increased demand of tractors in the territory and the defendants did not envisage any interest in improving the sales, that the decline of the plaintiff's products in the market is only due to the illegal action of the Defendant in trying to discontinue dealing with the products of the plaintiff, even while continuing to be a dealer of the plaintiff's products, has grossly affected the sales of the Plaintiff's products in the market as a result of which the competitors of the Plaintiff, are taking a lead in the market, due to the unscrupulous act of the defendant, that the defendant being a dealer of the plaintiff's products and having huge outstanding of Rs.43,66,551.35 to the plaintiff as on 18.12.2002, has chosen not to solicit sales and distributionship of the Plaintiff's products and that according to the Dealership Agreement entered between the plaintiff and the defendant, as per Clause 28, in case of any disputes arising between the parties, the courts in Chennai alone have exclusive jurisdiction to decide any dispute that may arise under the agreement.

3. In the written statement filed by the 1st, 3rd and 4th defendants, the following are averred:-

3.(a) The alleged dealership agreement between the parties was executed on 3.1.1996 and the same was terminated by the defendant by termination notice dated 29.11.1999, that the suit is hit by the provisions of Section 10 of C.P.C, inasmuch as these defendants have already filed a suit in the Court at Bareilly on the same subject matter against the plaintiff claiming a relief of Rs.60,000/- and that the plaintiff was aware of filing of the suit in Bareilly Court, but the plaintiff did not chose to fi




























































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