In the Court of Ms. [ENTITY], Additional District Judge-04, South District, Saket Courts, New Delhi. [CASE NUMBER] Vardhman Infrafab Private Limited, Formely known as M/s. Vardhman Appliances (P) Ltd., having its Registered Office at K-43, Second Floor, Green Park (Main), New Delhi-110016 Plaintiff Versus Tapas Elecpower Engineering Pvt. Ltd., 1/148-C, (Basement), Safdarjung Enclave, New Delhi-110029. (exparte vide order dated 27.03.2017). Defendant Date of institution of the suit : 01.12.2010. Date reserved for judgment : 20.10.2018 Date of pronouncement of judgment : 31.10.2018. JUDGMENT
Suit for Recovery alongwith Interest, Damages and Compensation.
1. The brief facts of the case as stated in the plaint are that the plaintiff company deals in fabrication work and has its registered office at K-43, Second Floor, Green Park (Main), New Delhi, and the present suit is filed through Sh. [ENTITY], Director of the plaintiff company. The defendant company also has its registered office at 1/148-C (Basement), Safdarjung Enclave, New Delhi. It is stated by the plaintiff that the defendant [CASE NUMBER].Ltd.v.TapasElecpowerEngineeringPvt.Ltd.1/24 company got the supply order from ABB qua the "Transformer Tanks" and for which purpose had confirmed, approved and contracted the plaintiff company for setting up an assembly line for fabrication of transformer casings to be supplied to ABB.
1.1 The plaintiff company was contracted by the defendant company vide scope of work defined in the Letter of Intent dated 23.07.2005 (hereinafter referred to as L.O.I.) for the purposes of carrying out fabrication of transformer tanks for 16KVA HVDS transformers and 10 KVA HVDS transfers tanks for M/s. ABB. The basic order value was Rs.4,46,40,000/- and payment terms amongst other agreed by the defendant was that the running payments will be made within 30 days of receipt of goods. That the defendant company intermittently released payments in favour of the plaintiff company which payments however were not in accordance with the scheduled terms of payment. That the business relationship was ostracized by the defendant company unilaterally from November, 2007 onwards (realization of last payment of Rs.46,582/-). The plaintiff continued the production/ fabrication of material which got piled- up, to meet the contractual demands of defendant and for which purpose the burden of huge mobilization of it's men and material was borne by the plaintiff. Non release of further orders by the defendant resulted in idling [CASE NUMBER].Ltd.v.TapasElecpowerEngineeringPvt.Ltd.2/24 of plaintiff's men, material and machinery, resulting in losses, which multiplied with the passage of time. Owing to the commitment of material for supply in terms of the contract/work order/purchase order, plaintiff's business languished because the defendant gradually started fabrication of material from it's work-site situated at Kadipur Industrial Area, Gurgaon and Vadodara, Gujarat. The fabrication of material by the defendant company from its work-site, evidences the intent and purpose of defendant company, which was to engage the plaintiff into a sham contract. The sole objective of the defendant was to understand, study the facilitation with which plaintiff company performs and in the process acquire knowledge with regard to fabrication of material (transformer tanks), later, to be exploited at defendant's work-site.
1.2. The defendant company in the interregnum gave several assurances and made promises to the plaintiff company but even the admitted outstanding, against supply of materials, in the sum of Rs.4,80,929/- have not been settled till date. Legal Notice dated 03.06.2010 was got issued by the plaintiff through its lawyers to which a counter-blast reply dated 08.07.2010 was returned leveling false and baseless allegations. The defendant acknowledged the receipt of Form D for the financial year 2005- 2006 and 2006-2007 vide two letters dated 10.11.2008 and 26.11.2008. [CASE NUMBER].Ltd.v.TapasElecpowerEngineeringPvt.Ltd.3/24 The defendant adopted the contrary stand in reply dated 08.07.2010.
(i) In paragraph (5) 'Tapas' claims that supply/delivery of "Finished Tank" by trucks was never performed while in the very next paragraph (6), 'Tapas' alleges that goods were supplied only upto 12.05.2006 and for which payment was made in November, 2007. The defendant company admitted making late payment by more than 18 months, which delay in payment is wholly contrary to the terms and conditions stipulated in the contract dated 23rd July, 2005.
(ii) Similarly, in paragraph (7), 'Tapas' acknowledges the receipt of Form
-D. It is stated by the plaintiff that when there were no supplies, there was not even a whisper as to why Form - D for the year 2005-2006 and 2006-
2007 were issued in the first instance on 10.11.2008 and 16.11.2008 respectively.
(iii) In paragraph (8) alleges that the goods were never supplied on time. In the said paragraph (8) it is also alleged that the quality of tanks was bad and
(iv) In paragraph (9), U-Turn in the form of false allegations goes back to the goods not being supplied in time.
From reading the reply dated 08.07.2010, it becomes clearly evident that the defendant is unable to decide its stand i.e. first, it is stated that the goods were not at all supplied and then it is contended that the same were not supplied on time and thirdly it is alleged that the good supplied were of deficient quality. Hence, the defendant company vainly attempts to wriggle out from payment of legitimate dues payable to the plaintiff company. 1.3 It is further stated that to meet the huge contractual needs, a sum of [CASE NUMBER].Ltd.v.TapasElecpowerEngineeringPvt.Ltd.4/24 Rs.15,00,000/- towards development and setting up of dedicated production line of special tooling and special purpose machines was also spent by the plaintiff company which otherwise was within the contractual scope of defendant and the cost to be borne by him. The plaintiff hugely suffered on account of reputation and goodwill aside from losses which relegated to infrastructure, wastage of raw material, rusting of machinery, jigs and fixtures, loss in terms of number of working hours w.r.t. men/ fabricators, business etc. The plaintiff is forced to file the present suit seeking Recovery, Damages and Compensation of money towards material supplied to defendant company, cost of tooling. That the defendant during the course of trade also stole the intellectual property whether concerning the fabrication of material or relating to resources and deceptively and deceitfully usurped plaintiff's business including contracts, skilled workers and other related aspects deftly handled by the plaintiff till the time of such usurpation entitling the plaintiff to also claim damages apart form compensation.
1.4 The plaintiff has sought a decree for recovery of Rs.4,80,929/- against the materials supplied to defendant with compound interest @ 36% per annum with monthly rest, till the date of realization; to pass decree towards tooling in the sum of Rs.15,00,000/- with compound interest @ [CASE NUMBER].Ltd.v.TapasElecpowerEngineeringPvt.Ltd.5/24 36% per annum with monthly rest, till the date of realization; to award damages in the sum of Rs.1,00,000/- with compound interest @ 36% per annum with monthly rest, till the date of realization; to award compensation in the sum of Rs.1,00,000/-.
2. Written statement was filed on behalf of defendant denying and disputing the averments made in the plaint. It is stated that the present suit has been filed at Delhi because the defendant company is having Registered Office at Delhi only. It is denied that the defendant company during the course of trade also stole the intellectual property concerning the fabrication of material or relating to resources and deceptively and deceitfully usurped the plaintiff's business including contracts, skilled workers and other related aspects deftly handed by the plaintiff. That the intellectual property belonged to A.B.B. who were the owners of fabricated designs and drawings/contracts were of defendant's through which the defendant received the A.B.B. order and placed L.O.I. on plaintiff company. The plaintiff has concealed that as per L.O.I dated 23.07.2005, the order was based on the successful execution of the pilot batch of 1000 numbers and after successful delivery commencement for the pilot batch, regular procurement was to be done @ 80 pieces per day or more, however regular order was dependant on delivery and quality of performance of [CASE NUMBER].Ltd.v.TapasElecpowerEngineeringPvt.Ltd.6/24 pilot batch and the letter dated 23.07.2005 written by the defendant company to the plaintiff company is not in dispute. It is not in dispute that the running payments was agreed to be made within 30 days of the receipt of goods by the defendant and even a cheque of Rs.1,00,000/- bearing No.353127 of Punjab National Bank, Meerut Branch was also given to the plaintiff which has not been mentioned by the plaintiff. It is partly correct that for the purpose of quality control and inspection with respect to the material fabricated by the plaintiff, the person of the defendant company was present but he was not the Director of the defendant company. The plaintiff company delayed the fabrication and supply of the material. As per the commitment made by the defendant to his client M/s A.B.B, the defendant was bound to supply the tanks of quality as per the drawings approved by M/s A.B.B and also to complete the contract in time. Due to the delay caused by the plaintiff in completing the contract as per letter of intent dated 23.07.2005, the defendant company was compelled to compromise with the quality of goods and the defendant company has to accept the material of sub standard quality. As a result of which the defendant company lost its reputation plus financial loss as M/s. A.B.B. rejected lot of material being the material sub-standard and below quality and not as per their standard and secondly because the goods were never supplied in time although everything was time bound and it was a time [CASE NUMBER].Ltd.v.TapasElecpowerEngineeringPvt.Ltd.7/24 bound contract as per L.O.I dated 23.07.2005.
2.1 It is denied that defendant company did not release the payment in accordance with scheduled terms of payment and it is stated that every payment was made by the defendant company on time. The copy of Statement of Account is filed alongwith the Written Statement. It is stated that the account of the plaintiff is false and fabricated. By letter dated 24.03.2006 plaintiff company instructed the defendant company to release the amount of Bill no.8293 and 8080 in the sum of Rs.104554/- and Rs.92,617/- to M/s. Sanjeev Industrial Corporation, B-147, Nehru Ground, Faridabad as bills were raised by M/s. Sanjeev Industrial Corporation in the name of the plaintiff and this payment was made by the defendant on behalf of the plaintiff company but it was never credited in the account of the defendant and there are so many other lapses in the account statement filed on behalf of the plaintiff.
2.2 It is stated that the defendant company never ostracized unilaterally the business relationship with the plaintiff company from November, 2007 because the last supply was made to the defendant company against the L.O.I. dated 23.07.2005 on 12.01.2006 vide bill No.58 of Rs.10,594 as the plaintiff failed to fulfill his obligations for supply of tanks thereafter and till 12.01.2006, Rs.21,17,400/- had been paid to the plaintiff company against [CASE NUMBER].Ltd.v.TapasElecpowerEngineeringPvt.Ltd.8/24 his supply worth Rs.16,97,165/-. The defendant company made the payment of Rs.46,582/- to the plaintiff company on 10.11.2007 not under the L.O.I. dated 23.07.2005 but against the supply of some other material. It is denied that the plaintiff continued the production/fabrication of material which got piled up to meet the contractual demands of the defendant. It is also denied that the defendant company did not give further orders to the plaintiff company resulting in idling of plaintiff's workmen, material and machinery and it is also denied that it further causes the financial loss to the plaintiff company. It is stated that instead on account of non-supply of the material by the plaintiff company to the defendant company, the defendant company has suffered a loss of reputation and loss of finance at the hands of its customers and in the general market. Inspite of the order of the supply of pilot batch of 1000 tanks, the plaintiff company only supplied 947 pieces out which 126 pieces were rejected by M/s. A.B.B. therefore it does not lie in the mouth of the plaintiff to say that the material of the plaintiff company piled up due to non-giving further supply order by the defendant compelled. It is denied that a sum of Rs.4,80,929/- has not been paid to the plaintiff company till date. It is stated that the plaintiff company in para 6(f) has admitted that he received a sum of Rs.46,582/- in November, 2007 which was final payment towards the final settlement of the account between the parties and it is worth [CASE NUMBER].Ltd.v.TapasElecpowerEngineeringPvt.Ltd.9/24 mentioning that this settlement was not in respect of L.O.I. dated 23.07.2005 but was in respect of the further time to time orders given by the defendant company to the plaintiff company towards the supply of the components and not in respect of tanks. It is denied that plaintiff had to spend Rs.15,00,000/- towards development and setting up of dedicated production line of special tooling and special purpose machines. It is stated that the work of development of special tooling and special purpose machine was the job of the defendant as per clause I in the heading, "Our Scope" in Letter of Indent dated 23.07.2005, as such, the same was carried out by defendant company. It is also stated that it was not within the contractual scope to establish and set up the other machines by the plaintiff company. When the plaintiff company is accepting a contract vide Letter of Intent dated 23.07.2005 he was bound by the terms and conditions of the same. The plaintiff company was already in the fabrication business that is why the defendant has given him the L.O.I dated 23.07.2005. No cause of action has arisen in Delhi within the ordinary territorial jurisdiction of this court as the work was done at Gurgaon and all the meetings were held at Gurgaon, material was supplied at Gurgaon, both the companies are registered in the Gurgaon for the purpose of Sales Tax, VAT and Excise. All other averments made in the plaint are denied.
[CASE NUMBER].Ltd.v.TapasElecpowerEngineeringPvt.Ltd.10/24
3. Defendant was proceeded exparte vide order dated 27.03.2017.
4. From the pleadings of the parties, the following issues were framed on 10.12.2012:
1. Whether the defendant has violated the terms of the letter of intent dated 23.07.2005? OPP.
2. Whether the plaintiff is entitled to damages and compensation to the tune of Rs.21,80,929/- or any other amount from the defendant? OPP.
3. If the aforesaid amount is payable to the plaintiff, then what would be the rate of interest payable and for what period? OPP.
4. Whether this Court does not have the territorial jurisdiction to entertain the present suit? OPD.
5. Whether the present suit is barred by limitation? OPD.
6. Relief.
4.1 Vide order dated 01.10.2013, an additional issue was framed which is as under:
Additional Issue: Whether the present suit is barred by limitation? OPD.
5. In support of her case, the plaintiff examined Sh. [ENTITY] as PW-1, who tendered his affidavit in evidence as Ex.PW1/1. He reiterated and reaffirmed the contents of the plaint and replication and has relied upon following documents :
Ex.PW1/A is Board Resolution dated 01.06.2010.
[CASE NUMBER].Ltd.v.TapasElecpowerEngineeringPvt.Ltd.11/24 Ex.PW1/B (colly) is Bills/Challans (bearing page nos.8 to 60). Ex.PW1/C is Legal Notice dated 03.06.2010.
Ex.PW1/D is reply dated 08.07.20100 to the Legal Notice.
5.1 No other PW was examined by the plaintiff in support of its case and ex-parte PE was closed vide order dated 04.09.2017.
6. Final arguments heard. Record perused. My findings on the issues are as follows:
Issues No.1 : Whether the defendant has violated the terms of the letter of intent dated 23.07.2005? OPP.
AND Issues No.2:Whether the plaintiff is entitled to damages and compensation to the tune of Rs.21,80,929/- or any other amount from the defendant? OPP.
7. Both these issues are decided together as both involve appreciation of common facts and law. It is the case of the plaintiff that the plaintiff company especially set up an assembly line for fabrication of transformer casings pursuant to Letter of Intent dated 23.07.2005. However, the plaintiff has not made entire payment for the goods supplied by the plaintiff to the defendant and a sum of Rs. 4,80,929/- is due and outstanding which is payable by the defendant to the plaintiff, as per the statement of account maintained by the plaintiff. Further, the defendant abruptly stopped [CASE NUMBER].Ltd.v.TapasElecpowerEngineeringPvt.Ltd.12/24 releasing further orders leading to the idling of plaintiff's men, material and machinery and thus the defendant is liable to pay a sum of Rs. 2 lacs to the plaintiff company towards the damages and compensation and also liable to pay an amount of Rs. 15 lacs spent by the plaintiff towards development and setting up of dedicated production line of special tooling and special purpose machines.
7.1 It is a settled law that the plaintiff has to stand on its own legs and prove his case on preponderance of probabilities, and he cannot take advantage of the weakness of the defence of the defendant. The plaintiff has filed the statement of account/ledger maintained by the plaintiff in respect of business done with the defendant for the period 01.04.2006 to 31.03.2008. However, for unexplained reasons, the plaintiff has not exhibited and relied on the ledger account, in his evidence by way of affidavit. Even otherwise, the said ledger is neither stamped nor signed and is also not supported with mandatory Certificate under [SECTION] of [ACT]. The plaintiff has also filed one Tapas Statement for period of 2005 to 2008. The same has also not been relied on by the plaintiff in his evidence by way of affidavit for unexplained reasons. The said Tapas Statement reflects that an amount of Rs. 16,82,130/- was due and outstanding whereas as per the Ledger filed on record, an amount of [CASE NUMBER].Ltd.v.TapasElecpowerEngineeringPvt.Ltd.13/24 Rs. 4,80,929/- is shown to be due and payable by the defendant. The plaintiff has failed to explain the variance between two account statements placed on record by the plaintiff. The defendants have categorically denied the correctness of the statement/ledger filed by the plaintiff. So, the plaintiff miserably failed to prove that an amount of Rs.4,80,929/- was due and payable by the defendant to the plaintiff towards the material supplied by the plaintiff to the defendant.
7.2 Further more, the Letter of Intent dated 23.07.2005 reflects that the development of special tooling and special purpose machine was within scope of work of defendant and not the plaintiff. No document has been placed on record by the plaintiff in order to show that terms of engagement were later altered or amended and the plaintiff was assigned the work of development and setting up of dedicated production line for which he spent an amount of Rs. 15 lacs.
7.3 The plaintiff has also not given any criterion/parameter for assessing the damages and compensation as Rs.2 lacs. No document has been proved on record that the plaintiff suffered loss/damages worth Rs. 2 lacs on account of cessation of further orders by the defendant. The plaintiff in the legal notice Ex. PW1/C pegged the damages suffered by the plaintiff as Rs.25 lacs but arbitrarily reduced the same to Rs. 2 lacs in the present suit.
[CASE NUMBER].Ltd.v.TapasElecpowerEngineeringPvt.Ltd.14/24 Thus, the plaintiff also failed to prove on record that plaintiff suffered damages worth Rs.2 lacs on account of discontinuance of further business dealings by the defendant with the plaintiff. So, both the issues are decided in favour of the defendant and against the plaintiff. Issues No.3: If the aforesaid amount is payable to the plaintiff, then what would be the rate of interest payable and for what period? OPP.
8. In view of the finding on issue No.1 & 2, this issue is decided in favour of the defendant and against the plaintiff.
Issue No.4 :Whether this Court does not have the territorial jurisdiction to entertain the present suit? OPD.
9. The plaintiff has the choice to file a suit in any of the forums which answer the requirements of [SECTION] of [ACT]. In so far as [SECTION] is concerned, the plaintiff may file a suit against a defendant where the defendant actually and voluntarily resides, or carries on business or personally works for gain. [SECTION], while following the same measure, provides that where there are more than one defendant to a suit, and one or more of them do not reside or carry on business or personally work for gain, within the territorial jurisdiction of the court within which the suit is instituted, then the plaintiff, is required to take leave of the court, or such defendant(s) acquiesce in the institution of [CASE NUMBER].Ltd.v.TapasElecpowerEngineeringPvt.Ltd.15/24 the suit against them. As against this, [SECTION] of [ACT] gives liberty to a plaintiff to file a suit in a court within whose jurisdiction the cause of action wholly or in part arises. The explanation to the section provides, in so far as a corporation is concerned, it shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place. It is no longer res integra that corporation includes a company. [See [PRECEDENT]]. Furthermore, the explanation only expounds on the concept of "business" carried on by a corporation. Therefore, if a corporation is sued in a place where its sole or principal office is located, it cannot be heard to say that the suit will not lie in that court because it does not carry on business at its sole or principal office, in view of the deeming fiction created by the explanation. Similarly, the second part of the explanation attracts itself to a set of circumstances where the cause of action arises and the subordinate office of the defendant-corporation is located. Therefore, if in a given case, a principal office of the defendant was located, say at place 'A' and the cause of action arose in place 'B', where the defendant also had its subordinate office located, the jurisdiction for filing the suit would lie in place 'B' and not in place 'A'. [See [PRECEDENT] at page 277, 278 paragraph 12] [CASE NUMBER].Ltd.v.TapasElecpowerEngineeringPvt.Ltd.16/24 " 12. We would also like to add that the interpretation sought to be placed by the appellant on the provision in question renders the explanation totally redundant. If the intention of the legislature was, as is said on their behalf, that a suit against a corporation could be instituted either at the place of its sole or principal office (whether or not the corporation carries on business at that place) or at any other place where the cause of action arises, the provisions of clauses (a), (b) and (c) together with the first .part of the Explanation would have completely achieved the purpose. Indeed the effect would have been wider. The suit could have been instituted at the place of the principal office because of the situation of such office (whether or not any actual business was carried on there). Alternatively, a suit could have been instituted at the place where the cause of action arose under clause (c) (irrespective of whether the corporation had a subordinate office in such place or not). This was, therefore, not the purpose of the explanation. The Explanation is really an explanation to clause (a). It is in the nature of a clarification on the scope of clause (a) viz. as to where the corporation can be said to carry on business. This, it is clarified, will be the place where the principal office is situated (whether or not any business actually is carried on there) or the place where a business is carried on giving rise to a cause of action (even though the principal office of the corporation is not located there) so long as there is a [CASE NUMBER].Ltd.v.TapasElecpowerEngineeringPvt.Ltd.17/24 subordinate office of the corporation situated at such place. The linking together of the place where the cause of action arises with the place where a subordinate office is located clearly shows that the intention of the legislature was that, in the case of a corporation, for the purposes of clause
(a), the location of the subordinate office, within the local limits of which a cause of action arises, is to be the relevant place for the filing of a suit and not the principal place of business. If the intention was that the location of the sole or principal office as well as the location of the subordinate office (within the limits of which a cause of action arises) are to be deemed to be places where the corporation is deemed to be carrying on business, the disjunctive "or" will not be there. Instead, the second part of the Explanation would have read "and in respect of any cause of action arising at any place where it has a subordinate office, also at such place " 9.1 In order to appreciate this aspect of the matter, one needs to understand what would constitute a cause of action. Cause of action, as commonly understood, is a bundle of facts which the plaintiff must prove, if traversed, to entitle him to a judgment, in his favour, by the concerned court. Cause of action has no relation whatsoever with the defence set up by the defendant nor does it depend upon the character of the relief prayed for by the plaintiff.
[CASE NUMBER].Ltd.v.TapasElecpowerEngineeringPvt.Ltd.18/24 9.2 In this context, the following observations of the Supreme Court made in [PRECEDENT] at page 717, in paragraph 6 being apposite, are extracted hereinafter:
" 6. It is well settled that the expression "cause of action"
means that bundle of facts which the petitioner must prove, if traversed, to entitle him to a judgment in his favour by the Court. In [PRECEDENT] Lord [ENTITY] said:
" the cause of action has no relation whatever to the defence which may be set up by the defendant, nor does it depend upon the character of the relief prayed for by the plaintiff. It refers entirely to the ground set forth in the plaint as the cause of action, or, in other words, to the media upon which the plaintiff asks the Court to arrive at a conclusion in his favour."
9.3 A more elaborate exposition of the expression cause of action is given in [PRECEDENT]. [PRECEDENT]. The relevant observations made in paragraph 17 at page 304, is extracted hereafter:
" 17. The expression "cause of action" has acquired a judicially settled meaning. In the restricted sense cause of action means the circumstances forming the infraction of the right or the immediate occasion for the action. In the wider sense it means the necessary conditions for the maintenance of the suit, [PRECEDENT] including not only the infraction of the right, but the infraction coupled with the right itself. Compendiously the expression means every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the Court. Every fact which is necessary to be proved, as distinguished from every piece of evidence which is necessary to prove each fact, comprises in "cause of action". It has to be left to be determined in each individual case as to where the cause of action arises.
9.4 Reference in this behalf may also made to the observation of the Supreme Court in the case of The [PRECEDENT]:
" 3. We have been referred to the well-known observations of [ENTITY] J. in [PRECEDENT] and to the definition of "cause of action" given in [PRECEDENT] which are all referred to in 75 Ind App 121 : Lord [ENTITY], defined "cause of action" to mean "Every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the court. It does not comprise every piece of evidence which is necessary to prove each fact, but every fact which is necessary to be proved."
[ENTITY] J. agreed and said:
"Everything which, if not proved, gives the defendant an immediate right to judgment, must be part of the cause of action."
[CASE NUMBER].Ltd.v.TapasElecpowerEngineeringPvt.Ltd.20/24 9.5 In the context of what constitutes a cause of action, in respect of a suit arising out of a contract, one may advert to [SECTION], which was part of [SECTION] of Act of 7 of 1888. This Explanation was, however, omitted. A reference to this explanation is found in paragraph 13 at page 171 in the judgment of the Supreme Court in the case [PRECEDENT]. The relevant part of the [SECTION] is extracted hereinbelow:
" 13. Under [SECTION] of the [ACT] subject to the limitation stated theretofore, every suit shall be instituted in a court within the local limits of whose jurisdiction the cause of action, wholly or in part arises. It may be remembered that earlier [SECTION] of Act of 1888 added [SECTION] as under: "[SECTION] In suits arising out of contract the cause of action arises within the meaning of this section at any of the following places, namely:
(1) the place where the contract was made;
(2) the place where the contract was to be performed or performance thereof completed;
(3) the place where in performance of the contract any money to which the suit relates was expressly or impliedly payable "
9.6 A perusal of the explanation would show that in a matter concerning [CASE NUMBER].Ltd.v.TapasElecpowerEngineeringPvt.Ltd.21/24 a contract, there may arise various kinds of causes of action. Amongst others, the place where the contract is made, or where in the performance of the contract any money was expressly or impliedly payable, would form, a part of the cause of action.
9.7 In the present case, the plaintiff has not proved that the defendant has only sole registered office at Delhi and does not have any other subordinate office outside Delhi. In fact, the invoices Ex. PW1/B (Colly) reflects that the goods were supplied at the premises/office of defendant at Sushant Lok-1, Basement, Gurgaon. Further more, as per Ex. PW1/B (Colly), the goods were consigned from the office of plaintiff at Udyog Vihar, Gurgaon, Haryana to the office of defendant at Sushant Lok, Gurgaon, Haryana. The Letter of Intent dated 23.07.2005 also reflects that the delivery of finished tanks was to be made to the defendant at Gurgaon, Haryana. Thus, no part of cause of action has arisen within the jurisdiction of court of Delhi. The plaintiff has stated that Letter of Intent was offered by the defendant in Delhi. However, he has not so deposed in his evidence by way of affidavit Ex. PW1/1. Even otherwise, mere offer of Letter of Intent by the defendant at Delhi is not sufficient to confer jurisdiction on Delhi Court. So, this issue is decided in favour of the defendant and against the plaintiff. [CASE NUMBER].Ltd.v.TapasElecpowerEngineeringPvt.Ltd.22/24 Issues No.5: Whether the present suit is barred by limitation? OPD.
10. The present suit been filed by the plaintiff on 30.10.2010. It is stated by Ld. Counsel for the plaintiff that admittedly the last payment of Rs.46,582/- has been made by the plaintiff vide cheque bearing No. 209581 and the same was encashed from the bank of the defendant on 15.11.2007. So, the present case is filed within the limitation period of three years in view of [SECTION] of [ACT].
10.1 [SECTION] of [ACT] provides as under:
19. Effect of payment on account of debt or of interest on legacy. - Where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duly authorized in this behalf, a fresh period of limitation shall be computed from the time when the payment was made:
Provided that, save in the case of payment of interest made before the 1st day of January, 1928, an acknowledgment of the payment appears in the handwriting of, or in a writing signed by, the person make the payment."
10.2 The defendant in the present case has contended in the Written Statement that the payment of Rs.46,582/- to the plaintiff company on 10.11.2007 was not concerning the transaction in question but against [CASE NUMBER].Ltd.v.TapasElecpowerEngineeringPvt.Ltd.23/24 supply of some other material. However, the defendant failed to lead any evidence and thus has not proved on record that the last payment of Rs.
46,582/- made by cheque by the defendant was against supply of some other material not concerning the transaction in question i.e transaction related to Letter of Intent dated 23.07.2005. Even as per the defendant, the last supply was made to the defendant company by the plaintiff on 12.01.2006 and thus the payment of Rs. 46,582/- was made before the expiration of limitation period and as the payment was made through cheque, the requirement of an acknowledgment being given by the person making the payment, also stands satisfied. So, fresh period of limitation is to be computed from the date of payment i.e 10.11.2007 and thus the present suit filed on 30.10.2010 is filed within the limitation period. So, this issue is decided in favour of the plaintiff and against the defendant. Relief.
11. The suit of the plaintiff is dismissed.
12. No order as to cost.
13. Decree sheet be prepared accordingly.
14. File be consigned to the Record Room.
Announced in the open court. ([ENTITY]) 31.10.2018. Additional District Judge-04. South District, Saket Court. New Delhi. [CASE NUMBER].Ltd.v.TapasElecpowerEngineeringPvt.Ltd.24/24 [ENTITY] Date: 2018.11.01 15:24:10 +0530