IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated :26.11.2008 Coram The Honourable Mr.Justice S.RAJESWARAN Tr.C.M.P.No.325 2008 M/s.Kikani Exports (P) Limited, No.105, West Periasamy Road, R.S.Puram,Coimbatore 641 002. ... Petitioner/Defendant Vs. M/s.Sree Mangayarkarasi Mills (P) Limited, Puliankulam 625 201, Near Silaiman, Madurai. ... Respondent/Plaintiff This Transfer Civil Miscellaneous petition has been filed under Sec.24 read with 151 of C.P.C. to withdraw and transfer O.S.No.145 of 2006 pending on the file of the III Additional Sub Court, Madurai to the file of Additional District Court (Fast Track Court-1), Coimbatore to be tried along with O.S.No.972 of 2004. For Petitioner : M/s.Iyer & Thomas For Respondent : Mr.S.V.Subramanian O R D E R This Transfer Civil Miscellaneous petition has been filed to transfer the O.S.No.145 of 2006 pending on the file of the III Additional Sub Court, Madurai to the file of Additional District Court (Fast Track Court-1), Coimbatore to be tried along with O.S.No.972 of 2004. 2. This Transfer petition has been filed by the defendant in O.S.No.145 of 2006 pending on the file of the III Additional Sub Court, Madurai. 3. The petitioner herein wants to transfer O.S.No.145 of 2006 to the Additional District Court (Fast Track Court-I), Coimbatore to be tried along with O.S.No.972 of 2004 filed by the petitioner herein against the respondent herein. 4. The case of the petitioner is as follows: The petitioner filed O.S.No.972 of 2004 before the District Court, Coimbatore which is now pending on the file of the Additional District Judge,(Fast track Court No.I), Coimbatore, against the respondent herein, seeking the relief of damages and other reliefs. The case of the petitioner in O.S.No.972 of 2004 is that the respondent herein has committed breach of contract which resulted in huge loss and damages to the petitioner. When the said suit was pending, the respondent https://hcservices.ecourts.gov.in/hcservices/ herein after filing the written statement, filed another suit in O.S.No.145 of 2006 against the petitioner before the III Additional Sub Court, Madurai, seeking certain reliefs arising out of the same transaction. The petitioner, therefore filed an application under Sec.10 C.P.C., for stay of the latter suit and the same is pending. The respondent filed Transfer petition in O.P.No.19 of 2007 before the District Court, Madurai, seeking transfer of the suit in Coimbatore, to be tried and heard along with the suit in Madurai. The said transfer petition was dismissed by the District Court, Madurai, on 12.9.2007. The respondent has also filed an application in I.A.No.96 of 2007 in O.S.No.972 of 2004 contending that the court at Coimbatore has no jurisdiction to try the suit and it is only the Court at Madurai, which has got jurisdiction to try the suit. The said application filed in I.A.No.972 of 2004 was also dismissed. 5. According to the petitioner herein, the respondent has no intention of getting along with the suit at Coimbatore. It is stated by the petitioner that the parties to the suit are the same and the documents required for trial in both the suits are also common. O.S.No.145 of 2006 filed before the Sub Court, Madurai is a latter suit and therefore, the same is to be transferred to Coimbatore to be tried along with O.S.No.972 of 2004. Hence, they have filed the above transfer petition for the aforesaid relief. 6. This Court ordered notice on 8.8.2008 and the respondent entered appearance through their counsel and filed a counter affidavit. 7. In the counter affidavit filed by the respondent, it is stated that they are manufacturers of Cotton Yarn and the petitioner herein placed orders for supply of Cotton Yarn for a total quantity of two containers during October 2003, for complying with the export orders placed on them. On the basis of the purchase orders placed by the petitioner herein for export, the respondent supplied only 14515 Kgs of Cotton Cone Yarn vide invoices dated 2.12.2003, for a total value of Rs.9,55,012/- each against the terms of issuance of Form-H Declaration, as per Sec.5(3) of the Central Sales Tax Act 1959. The respondent has not collected any sales tax in the bills raised by them and claimed exemption of tax in the returns filed under the CST Act. For the export sales effected to the petitioner, Form H prescribed under the CST Act and other export documents are mandatory requirements to be submitted before the authorities to claim exemption of tax. Since the petitioner failed to issue Form H and other export documents, the Commercial Tax Officer disallowed the claim of exemption of tax and levied a sum of Rs.76,401/- being 4% tax under TNGST Act vide order dated 4.3.2008. Since the petitioner has not issued Form H and other export documents, they have filed a suit in O.S.No.145 of 2006 in Madurai praying for a mandatory injunction, directing the petitioner to issue Form H Declaration or in the alternative, to pass a decree and judgment against the petitioner to pay a sum of Rs.76,401/- being the tax amount levied and penal interest of Rs.36,201/- payable for the period from 20.01.2004 to 20.02.2006 along with damages and other reliefs. https://hcservices.ecourts.gov.in/hcservices/ 8. According to the respondent, the nature of relief in both the suits are totally different and the suit filed in Coimbatore is not maintainable for want of jurisdiction. It is further stated by the respondent that in the suit filed at Coimbatore, there is one more defendant and that person was not a party in the suit filed by them. Hence, according to the respondent, no case has been made out for transferring the suit pending before the Sub Court, Madurai to Coimbatore to be tried along with O.S.No.972 of 2004. 9. I have heard the learned counsel appearing for the petitioner and the learned counsel for the respondent. I have also gone through the documents filed in support of their submissions. 10. A perusal of the plaint filed by the petitioner in O.S.No.972 of 2004 will show that it was filed by the petitioner herein for directing the respondent herein to pay a sum of Rs.7,45,512/- together with future interest on the said sum calculated at 18% per annum. According to the plaint averments, the petitioner is an exporter and Commission agent engaged in export of Cotton and Cotton Yarn. In the normal course of business, the petitioner herein through the second defendant in the suit placed orders on the respondent herein for 100% Spun Cotton Yarn. The Yarn was being purchased by the petitioner for exporting it to Korea and Beherin. According to the petitioner herein, the respondent was backing out of its contractual commitments on account of the steep and steady rise in the price of yarn in the National and International Market and therefore, the respondent did not want to sell the yarn at the contracted price. The non performance of the contract and the attitude of the respondent herein resulted in the petitioner herein facing huge loss in addition to the loss of goodwill in the international market due to non supply of the cotton contracted for in time. For the breach committed by the respondent herein in respect of the two contracts, the petitioner herein claimed that they sustained a loss of Rs.7,45,512/- and hence, they filed O.S.No.972 of 2004. 11. According to the plaint averments, in O.S.No.145 of 2006, filed by the respondent herein, the petitioner herein as a merchant exporter placed order with the respondent herein for the purchase of Cone Yarn against H-Form basis and they requested not to levy tax on the sales effected to them. Based on the promises of the petitioner herein to send H Form declaration, the respondent supplied Yarn without levying and collecting any sales tax. But, the petitioner failed to send H Form Declaration as agreed to. The respondent's Assessing Officer directed them to produce original Declaration Forms and Books of Accounts in support of the turnover reported through their Returns to complete the final assessment. As the respondent herein claimed exemption under Sec.5(3) of the CST Act, they should produce the original H Form declaration in support of the claim of exemption. Since the petitioner failed to send H Form Declaration, the respondent was unable to produce the same before the Assessing officer. Hence, the respondent filed O.S.No.145 of 2006, for a mandatory injunction directing the petitioner herein to issue Form H Declaration or in the alternative, to pass a decree and judgment to pay a sum of Rs.76,401/- being the consequential tax amount, penal https://hcservices.ecourts.gov.in/hcservices/ interest of Rs.38,201/-. They also prayed for a direction directing the petitioner herein to pay Rs.10,000/- as damages for the mental agony and reputation of loss suffered by them. 12. From the above, it is clear that the cause of action for both the suits filed by the parties is the purchase order placed by the petitioner herein on the respondent for purchase of Cotton Yarn to be sent to their foreign buyers in Korea and Beherin. According to the petitioner herein, as there is a breach of contract by the respondent herein, they suffered damages and according to the respondent herein, even though it was an export sale, the petitioner failed to send necessary forms for getting sales tax exemption resulting in loss to them. 13. Therefore, it is very clear that against the damages claim filed by the petitioner in O.S.No.972 of 2004, the respondent filed another suit for damages and for the money to be recovered from the petitioner for the extra tax paid by them. Thus, it is very clear that the second suit is in the nature of a counter claim to the claim of the petitioner's suit. In such circumstances, I am of the considered view that both the suits could be tried together and since the suit filed by the petitioner is of the year 2004 and the same was also filed in the District Court, Coimbatore, the second suit filed by the respondent in the year 2006 could be transferred to Coimbatore to be tried along with O.S.No.972 of 2004. 14. In the result, I am satisfied that the petitioner has made out a case for transfer and accordingly, the transfer petition is allowed as prayed for. No cost. 15. Considering the fact that the first suit was filed in the year 2004, I direct the Additional District Court (Fast Track No.I), Coimbatore, to take up both the suits jointly on transfer and dispose them on merits and in accordance with law, within four months from the date of receipt of a copy of this order. Sd/- Asst. Registrar. /true copy/ Sub Asst. Registrar. vaan To 1. The III Additional Sub Judge, Madurai. 2. The Additional District Judge (Fast Track Court-1),Coimbatore + 1 cc to Mr.H.Karthik Seshatri, Advocate, Sr.66197 + 1 cc to Mr.S.V.Subramanian, Advocate, Sr.66211 TR.C.M.P.No.325 of 2008 SSN(CO) EM/3.12.08 https://hcservices.ecourts.gov.in/hcservices/