Rajiv Sahai Endlaw, J. - (1.) IA No. 6069/2011 (of the defendant for leave to defend) in CS(OS) No. 576/2010.
(2.) THE plaintiff has instituted this suit under Order 37 of the CPC for recovery of Rs. 1,49,21,015/ - due from the defendant to the plaintiff towards following invoices: JUDGEMENT_433_LAWS(DLH)4_2013.htm towards the price of the Cold Rolled Stainless Steel Coils sold, supplied and delivered by the plaintiff to the defendant together with Rs. 48,33,765/ - towards interest @ 12% per annum from the due date of payment of each of the aforesaid invoices and till the date of institution of this suit. It is further the case of the plaintiff that a meeting was held by the parties on 02.06.2009 with the following agenda: AGENDA: Regarding Old outstanding of Rs. 1,49,21,015.00 as per IUP Jindal account statement and Approximately Rs. 1,29,00,000.00 as per M/s. Conee Chains Account statement and restart future Business on mutually agreed terms & conditions. and in the Minutes drawn of the said meeting and signed by the representatives of the parties, it was agreed as under: DISCUSSIONS & CONCLUSION: Mr. Manish Gandhi agreed to reconcile the IUP Jindal A/C statement with their books of accounts. The old pending payment of Rs. 1,49,29,015.00 bearing invoice value as follows: JUDGEMENT_433_LAWS(DLH)4_20131.htm It has been mutually agreed that M/s. Conee Chains will issue Demand Draft of 35% of the Purchase order value along with every purchase against old pending payment order and additional Rupees fifteen lakh will also be released by Conee Chain in every quarter month against old pending payment as mentioned above. The Purchase order will be released on 20th day of every month based on the prices quoted by IUP JINDAL and agreed by Conee Chain and material will be supplied in every next month. As the material is produced, IUP JINDAL will issue the Proforma invoice. M/s. Conee Chains will send draft LC copy, on confirmation from IUP Jindal, shall release Letter of credit. On receipt of LC the material will be dispatched immediately. In case the above agreed conditions are not acceptable by the management or failure due to any reason (the same will be communicated within 2 weeks) M/s. Conee Chain agreed to release Rs. 6.0 lakh through Demand draft against old outstanding every month commencing from the month of July '09 and additionally Rupees Fifteen Lakh will be released every quarter month against old pending dues. Upon no payment by the defendant of the amount in terms of the aforesaid Minutes also, this suit was filed. Summons for appearance and thereafter for judgment were issued and the defendant has applied for leave to defend pleading: (i) that the invoices raised by the plaintiff on the defendant on which the suit is based are not bills of exchange or promissory notes and therefore not covered under Order 37 of the CPC; (ii) this Court does not have territorial jurisdiction to try this suit -invocation of the territorial jurisdiction of this Court by the plaintiff pleading discussions, negotiations and agreement have been reached at Delhi and the payments having been made at Delhi is wrong - the officials of the plaintiff had approached the defendant for business at the factory of the defendant at Tamil Nadu and the parties agreed that the defendant would place orders at the plaintiff's Chennai office; all payments were made by the defendant by Letters of credit payable at Haryana; all materials were dispatched by the plaintiff from Haryana and received by the defendant at Tamil Nadu; (iii) the suit is barred by time, having been filed beyond three years from the date of the invoices; (iv) there is no acknowledgment by the defendant of the amount claimed by the plaintiff; (v) " no amount reflected in the books of account of the defendant can be said to be due when disputes have been raised with regard to the materials relating to invoices reflected in the accounts. All such amounts contained in the books of account are subject to such disputes."; (vi) that the plaintiff sent short supply of many sizes ordered and excess of others - though the plaintiff was informed of the same but the defendant never received the shortage quantity and the size supplied in excess are still available with the defendant as dead inventory; the representative of the plaintiff at Chennai Sh. Hanumantha Rao had inspected the defective goods at the defendant's factory and had acknowledged the same; (vii) the claim of the plaintiff therefore that amounts are due under the aforesaid invoices is wholly misconceived and a total misrepresentation of facts; (viii) that though the plaintiff had represented its goods to be competitively priced but the defendant had learnt later on that the plaintiff was charging exorbitantly high price for the same material which were available in the market for lesser price - though the plaintiff had been promising to rectify the same, it was never done; (ix) that though the purchase order dated 08.03.2007 placed by the defendant on the plaintiff was at Rs. 240/ - per kg., the plaintiff in invoice no. 11515 dated 19.03.2007 had priced the material at Rs. 275 and Rs. 251 per kg. and which was never agreed; (x) that the plaintiff had also not supplied the goods ordered by the defendant on 12.05.2008 & 16.06.2009 and on account of which the defendant had suffered losses of more than Rs. 1 crore; (xi) that there was huge shortage in the last four supplies resulting in mismatch of quantity of approx. 5 tons and on account of which also, the defendant suffered losses; (xii) that the payment towards the invoices subject matter of this suit was being withheld by the defendant only because of the dispute arising in respect therefor and which the plaintiff has failed to resolve; (xiii) that there is no agreement for payment of interest and the claim for interest is outside the purview of order 37 of the CPC; 2. The counsel for the parties have been heard. 3. The counsel for the defendant has addressed arguments on two aspects only i.e. on the aspect of territorial jurisdiction and with reference to the copy of the letter dated 28.06.2007 filed by the defendant along with its documents with respect to the supplies vide invoices no. 11515 and 12249 stating "...... we have received material in which some of material rejected as per the following list and we have inform regarding this to Mr. Hanumantha Rao, your representative came and inspected the material. Hence we are sending back the material to you as per the list which please note and do the needful." The material listed thereunder is of the total value of Rs. 3,25,898.90p. 4. Reliance in support of the objection as to the territorial jurisdiction is placed on Rashtriya Mahila Kosh vs. Youth Charitable Organisation 2005 Law Suit (Delhi) 913. The senior counsel for the plaintiff, on the aspect of territorial jurisdiction has referred to various judgments which will be discussed hereinbelow and has with respect to the letter dated 28.06.2007 contended that neither any proof of dispatch or delivery thereof has been filed nor the defendant at any time had returned any goods; alternatively it is contended that the impact of the said letter is at best of Rs. 3,25,898.90 only and from the factum that except for the said letter, the defendant has not been able to produce the letter qua any other supplies it is obvious that the pleas qua the other supplies are without any basis.
(5.) I have weighed the rival contentions aforesaid. I will take up the aspect of territorial jurisdiction first.;