THE HON’BLE SRI JUSTICE ABHINAND KUMAR SHAVILI AND THE HON’BLE SMT. JUSTICE TIRUMALA DEVI EADA CITY CIVIL COURT APPEAL No.50 OF 2008 JUDGMENT: (Per Hon’ble Smt. Justice Tirumala Devi Eada)

This is an appeal filed by the appellant being aggrieved by the judgment and decree, dated 14.03.2005, passed in O.S.No.268 of 1996 by the learned III Senior Civil Judge, City Civil Court, Secunderabad (for short “the trial Court”).

2. The appellant herein is the defendant and the respondent herein is plaintiff before the trial Court and the parties herein are referred to as they were arrayed in the suit before the trial Court for the sake of convenience and clarity.

3. The brief facts of the case before the trial Court are that the plaintiff is a company which supplies industrial components, epoxies/cold welding components etc., and the defendant has been carrying on the business of distribution and sale of this material and therefore, it has been buying and distributing the plaintiff’s products. Since the defendant has been purchasing large quantities of material, the plaintiff has permitted the defendant to avail the credit facility. But during the course of transactions, the defendant failed to pay the amounts, inspite of reminders made by the plaintiff and when the plaintiff has presented the cheques they were dishonoured. Even after the dishonor of cheques, when the plaintiff requested the defendant company, the defendant has failed to pay the same and further raised invoices and the plaintiff has supplied the material but the defendant has failed to pay any amount, thereafter, the plaintiff getting vexed with the attitude of the defendant, filed the suit for recovery of money.

4. The defendant company has filed its written statement admitting that he is a dealer of the plaintiff company but had denied the averments with regard to the payment saying that the plaintiff is playing fraud on him and that he was induced by M/s.Rourkela Steel Plant to place such bulk order and that the same could not be consumed by the customers and the fact of non receipt of orders from any of the customers was brought to the notice of the plaintiff but the plaintiff still induced them to purchase more material and thus, he raised the invoices and it is further contended that the letter dated 30.03.1996 written by the defendant to the plaintiff would also make it clear that the payment released by M/s.Rourkela Steel Plant, and that the orders placed by the defendant on 19.04.1996 also show that the order was being placed on the assurance given by the Area Sales Manager of the plaintiff company and that the defendant was ready and willing to return the goods that were supplied to them but the plaintiff avoided to receive the same. He further averred that as per the terms and conditions of the dealership issued to the defendant by the plaintiff, the defendant was to be the sole distributor of the products and that he is entitled to a trade commission of 23% in the sales made by the plaintiff company in the area for which the defendant was appointed as authorized dealer. It is his further contention that the Rourkela branch of the company has taken goods worth Rs.90,000/- by duly signing the challan and the defendant has not received any payment for the same. Thus, the defendant is entitled to a sum of Rs.90,000/-

and thereby, he filed a counter claim to that effect.

5. To the said counter claim, the plaintiff has again filed a written statement denying the material allegations and contended that the defendant is not entitled for the amount claimed in the counter claim.

6. Based on the above rival pleadings, the trial Court has framed the following issues:

“1. Whether this Court has no territorial jurisdiction to try the suit claim?

2. Whether the defendant is a dealer of the plaintiff company?

3. Whether there is short supply of goods to the defendant vide invoice dt.19.04.1996?

4. Whether the plaintiff is liable to account for the commission at the rate of 23% to the