Jurisdiction depends on the nature of the suit and the location of the cause of action; forfeiture of payments requires proof of actual loss suffered due to breach of contract.

J U D G M E N T

[RFA.203/2008, CO.71/2009]

Dated this the 9th day of April, 2021 Dr.Kauser Edappagath, J.

This appeal and cross objection arise from the judgment and decree in OS No.137/2002 dated 30th October, 2007 on the file of the Principal Sub Judge, North Paravur.

2. The suit was one for return of the amount paid as advance pursuant to Exts. A1 to A6 and A9 sale agreements. The defendants before the Court below are the appellants. The plaintiff is the respondent. The parties are referred to as shown in the Original Suit unless otherwise stated.

3. The plaintiff, Icon Integrated Industries and Software Limited, is a public limited company registered under the Indian Companies Act having its registered office originally at Athani, Aluva, which is within the jurisdiction of the Court below. Originally, Icon Industries was a partnership firm registered under the Indian Partnership Act. The partnership was converted into a public limited company in the name and style ‘Icon Integrated Industries and Software Limited’ later on. The first defendant is a public limited company having its Head Office at Mumbai. It owns its division at Athani, Aluva known as ‘Kerala Electric Lamp Works Division’ (KELW Division), which is arrayed as the second defendant.

4. Icon Industries, the erstwhile partnership firm, and the first defendant entered into a sale agreement dated 17/07/1999 (Ext. A1) by which the first defendant agreed to sell its KELW Division (second defendant) situated at Athani including land, buildings and structure erected on the said land along with all the movable assets belonging to KELW Division more particularly described in the schedule of the plaint for a total consideration of `4 crores. As per Ext. A1 sale agreement, a sum of `10 lakhs was paid by way of advance. When the partnership firm was converted into limited company, the assets and liabilities of the firm were transferred to the plaintiff company and accepting the original sale agreement (Ext. A1), a supplemental agreement was entered into between the plaintiff and the first defendant on

14/04/2000 (Ext. A9). As per Ext. A9, the total consideration of `4 crores was fixed as the sale consideration and it was agreed to complete the sale within 120 days of Ext. A9. As per the supplemental agreement, a sum of `125 lakhs was given to the first defendant as advance amount. It was stipulated in Ext. A9 that if the transaction of sale was completed on or before 30/04/2000, the sale consideration would be revised to `500 lakhs and if the transaction of sale was completed between 01/5/2000 to 31/05/2000, the sale consideration would be `515 lakhs and the advance amount shall be increased by another `75 lakhs. The advance amount was stipulated to be paid by the plaintiff to the first defendant on or before 02/05/2000. Pursuant to that, an amount of `75 lakhs was paid by the plaintiff to the first defendant on 02/05/2000. Thus, total consideration of `522.50 lakhs was fixed as sale consideration on the terms and conditions mentioned in Exts. A1 and A9. Again, as per mutual consent, five more supplemental agreements were entered into between the parties which were marked as Exts. A2 to A6 and the date for performance was extended till 31/07/2001 retaining all other terms and conditions of the original agreement. Another sum of `55 lakhs was paid by the plaintiff to the first defendant on 07/11/2000 towards further advance sale consideration. Thus, a total sum of `255.25 lakhs was paid by the plaintiff to the first defendant towards part payment of sale consideration out of the total sale consideration of `522.50 lakhs.

5. According to the plaintiff, it was ready and willing to perform its part of the contract within the extended period of performance, but, the defendants were not ready and willing to perform their part of the contract. It is alleged that before the stipulated period mentioned in the last supplemental agreement, the first defendant did not perform various obliga