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2002 Supreme(Mad) 113
IN THE HIGH COURT OF MADRAS
S. Jagadeesan, P.D. Dinakaran, JJ.
L. Venkatesan, Propr. Sriram Constructions
Vs.
S.K. Puniyakodi and 6 Ors.
O.S.A. No. 433 of 2001 and C.M.P. No. 22364 of 2001
Decided On: 19.02.2002
For Appellant/Petitioner/Plaintiff: R. Subramaniam, Adv.
For Respondents/Defendant: Rangarajan, Adv.
The central legal point established is that a suit against parties with no privity of contract is not maintainable.
Headnote:
Privity of Contract - Suit for Recovery - Order VII Rule 2 of the Civil Procedure Code - S. Jagadeesan, J.
Fact of the Case:
The plaintiff filed a suit for recovery of a sum of money and a permanent injunction. The defendants filed an application to reject the plaint on the ground of no privity of contract and lack of cause of action against them. The application was allowed, and the suit was dismissed as far as the defendants were concerned. The plaintiff appealed against this decision.
Finding of the Court:
The court found that there was no privity of contract between the appellant and the respondents, and the plaint did not disclose any cause of action against the respondents. The court upheld the order of the learned Single Judge, dismissing the suit against the respondents.
Issues: Privity of contract, cause of action, maintainability of the suit
Ratio Decidendi: The suit against parties with no privity of contract is not maintainable as per the legal principle established in the cases of Aries Advertising Bureau v. C.T. Devaraj and Nand Kishore v. State of Bihar.
Final Decision: The original side appeal was dismissed, and no costs were awarded. The C.M.P. was also dismissed.
S. Jagadeesan, J.
1. The plaintiff in C.S.No. 156 of 2001 on the file of this Court is the appellant herein.
2. He filed the said suit for recovery of a sum of Rs. 13,91,213 with further interest at 18% per annum on the principal amount at Rs. 10,22,951.58 from the date of plaint till the date of realisation and for a permanent injunction restraining the defendants from dispossessing the plaintiff from the suit property.
3. The respondents herein, who are defendants 2 to 8 in the suit, filed an application in Appln.No.2135 of 2001 to reject the plaint in so far as the respondents herein are concerned on the ground that there is no privity of contract between the appellant and the respondents herein and also the plaint does not disclose any cause of action against the respondents herein.
4. The learned Judge, by his order dated 27.9.2001, allowed the said application and ordered deletion of the respondents herein in the suit and the suit was dismissed so far as the respondents herein are concerned. Aggrieved by the same, the present appeal has been filed.
5. Learned counsel for the appellant contended that the respondents herein entered into an agreement with the first defendant in the suit for joint promotion of the plaint schedule property whereby the first defendant undertook to construct the flats and agreed to raise 50% of the construction with the respondents herein. Similarly, the respondents herein agreed to transfer 50% of the undivided share of their interest in the land in favour of the first defendant or their nominee or nominees. Pursuant to the said agreement, the plaintiff was entrusted with the construction work by the first defendant and following the agreement, the plaintiff constructed the building. Hence, he is entitled to recover the construction charges from the first defendant and the respondents herein. Hence, the said suit has been laid against all the parties.
6. On the contrary, learned counsel for the respondents herein contended that there is no privity of contract between the appellant and the respondents herein. The agreement pertaining to the joint promotion is only between the first defendant and the respondents herein. Whatever the work done by the appellant herein may be with regard to the entrustment of the same by the first defendant in the suit to the appellant herein. Hence, the appellant can make a claim only against the first defendant alone. The plaint also does not disclose any cause of action against the respondents herein. Hence, there is absolutely no need to interfere with the order of the learned Single Judge, who allowed the application filed by the respondents herein only on the ground that there is no privity of contract between the appellant and the respondents herein and if at all any claim is made by the appellant herein, it can only be against the first defendant in the suit.
7. We have carefully considered the above contentions of the learned counsel on either side.
8. In order to appreciate the contentions of the learned counsel for the appellant, it is necessary for us to have a look at the averments made in the plaint. The relevant portions read thus:
"....The plaintiff states that the first defendant entrusted the construction work with the plaintiff as per letter dated 17.10.1997 and followed by agreement of the same date and duly signed by their Project Manager Mr.N. Gopal and further agreed to pay bill amounts on presentation of the bill for payment as and when the value of work done reached Rs.5,00,000/- and above.
The plaintiff states that the said letter and agreement dated 17.10.1997 filed along with this plaint and the terms and conditions mentioned thereon may be read as part and parcel of this plaint. The plaintiff states that the defendants 2 to 8 are also aware of the entrustment of construction work in favour of the plaintiff, since the defendants 2 to 8 also agreed to get constructed buildings for them....
...The plaintiff was informed that the defendants
