Back
2014 Supreme(Mad) 682
High Court of Judicature at Madras
R. KARUPPIAH, J.
M/s. Ganesh Rajah Organisation rep. By its Partner, A. Ganesh Rajah
Versus
M/s. National Agricultural Marketing Federation of India Ltd., (NAFED)
S.A. No. 826 of 2004
Decided On : 21-03-2014
For the Appellant:V. Bhiman for Sampath Kumar & Associates, Advocates.
For the Respondent:S. Chandrasekar, for Vijaya Dharani, Advocates.
The main legal point established in the judgment is that the trial court had jurisdiction to entertain the suit as part of the cause of action arose within its jurisdiction. Additionally, the evidence not available for cross-examination could not be relied upon.
Headnote:
Jurisdiction - Cause of Action - Companies Act, 1956 - Indian Limitation Act - Non-joinder of necessary parties - Refund of service charges - [Jurisdiction] - [Export of Onions] - [Companies Act, 1956, Indian Limitation Act] - The court discussed the jurisdiction of the trial court, cause of action, and the issue of non-joinder of necessary parties. The court held that the trial court had jurisdiction to entertain the suit as part of the cause of action arose within its jurisdiction. The court also found that the suit was not barred by the law of limitation and was not bad for non-joinder of necessary parties. The court concluded that the plaintiff was entitled to the refund of service charges from the defendant.
Fact of the Case:
The appellant filed a suit against the respondent for the refund of service charges and development fund. The appellant had an order to export onions to Malaysia, but the cargo was shut out, and no export was made. The respondent refused to refund the amount, leading to the suit.
Finding of the Court:
The trial court found in favor of the appellant, holding that the appellant was entitled to the refund of service charges from the respondent. The first appellate court reversed the decision, stating that the trial court lacked jurisdiction and allowed the appellant to file a suit before the District Munsif Court at Bombay within three months. The second appeal was admitted on the substantial questions of law related to the jurisdiction and the consideration of evidence by the first appellate court.
Issues: The issues included the entitlement of the plaintiff to recover the suit claim, the jurisdiction of the court, the law of limitation, and the non-joinder of necessary parties.
Ratio Decidendi: The court held that the trial court had jurisdiction to entertain the suit as part of the cause of action arose within its jurisdiction. The court also found that the suit was not barred by the law of limitation and was not bad for non-joinder of necessary parties. The court further held that the evidence of DW1, which was not available for cross-examination, could not be relied upon.
Final Decision: The second appeal was allowed, and the decree and judgment passed by the first appellate court were set aside. The decree and judgment passed by the trial court were confirmed.
1. The appellant/plaintiff in the original suit filed this second appeal against the decree and judgment dated 13.01.2003 made in A.S.No.163 of 2002 on the file of IV Additional City Civil Court, Chennai, reversing the Judgment and decree dated 31.07.2001 passed in O.S.No.9425 of 1995 on the file of I Assistant City Civil Court, Chennai.
2. For the sake of convenience, the plaintiff in the Original Suit is referred as appellant and the defendant in the Original Suit is referred as respondent hereafter.
3. The appellant/plaintiff filed a suit for payment of a sum of Rs.1,10,495/-together with interest @ 18% p.a. of Rs.71,750/-.
4. Briefly the case of the appellant is that the respondent is a limited liability company incorporated under the Companies Act, 1956, having its registered office at New Delhi and is carrying on its business at its Regional Office, Madras. The appellant is carrying on the business of export of onions along with the other commodities. The export of onions is canalised by the Union of India and the respondent is the canalising agency. According to the appellant, the appellant had an order from National Farmers Association of Malaysia for exporting 20,500 bags of onions weighing 512.5 Metric Tonnes and the appellant approached the respondent for permission to export the same. Further, the appellant had remitted a sum of Rs.71,750/-towards service charges and development fund by Demand Draft No.181906 dated 19.02.1987 issued by Canara Bank Bombay. The respondent issued Authorisation/Allotment Order No.BY/FT/ONION/808/86-87 dated 20.02.1987, authorising the export of 512.5 M.T. of onions to Malaysia. The appellant filed the shipping bill in respect of cargo with customs authorities at Bombay and the cargo was booked for carriage by vessel S.S.MERMAID. The appellant kept the cargo ready for shipment and he was expecting the communication from steamer agent for moving the cargo to the Harbour for effecting the shipment. However, the appellant was informed by the steamer agent of S.S.MERMAID that the vessel would not touch Penang, Malaysia but instead it would sail to Singapore directly as per instructions of the vessel owners. The cargo was thus shut out and could not be exported as there was no immediate convenient vessel for carrying it. The respondent had stipulated in its authorisation letter dated 20.02.1987 that the export was to be made on or before 28.02.1987. The appellant had to liquidate the cargo in the local markets. Notice of shut out was given to the customs authorities at Bombay on 23.03.1987 who certified the shut out and also cancelled the shipping bill in respect of the aforesaid cargo of onions. Since the cargo was shut out and no export was made in pursuance of the appellant's authorisation letter dated 20.02.1987, the appellant by its letter dated 23.3.1987 requested the respondent to refund the sum of Rs.71,750/-deposited with it on 20.02.1987. But, the respondent rejected the claim by its letter dated 27.03.1987, the appellant made further requests by letters dated 26.06.1988 and 07.09.1988 to the respondent and Government of India respectively. But, the respondent reiterated its refusal in its letter dated 16.12.1988. The refusal of the respondent is illegal and without any basis. Therefore, the respondent is liable to pay a sum of Rs.71,750/- with interest @ 18 % p.a. to the appellant from 20.02.1987 till payment in full. Hence, the suit.
5. The respondent/defendant filed the detailed written statement in which it is admitted that the respondent is a society registered under the Multi State Cooperative Societies Act and the respondent is the canalising agent for Agricultural products like onions, etc. According to the respondent, the suit is liable to dismissed in limini on the ground that the respondent is only the Regional Office for the southern region at Madras and this Court does not have jurisdiction to entertain the suit as no cause of action has arisen within the jur
