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Minerals and Metals Trading Corporation of India Ltd. Vs. Indian Metals and Ferro Alloys Ltd., Bomikhal - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtOrissa High Court
Decided On
Case NumberCivil Revn. No. 682 of 1979
Judge
Reported inAIR1981Ori76; 51(1981)CLT55
ActsCode of Civil Procedure (CPC) , 1908 - Sections 20
AppellantMinerals and Metals Trading Corporation of India Ltd.
RespondentIndian Metals and Ferro Alloys Ltd., Bomikhal
Appellant AdvocateR. Mohanty and ;R. Sharma, Advs.
Respondent AdvocateB.K. Mohanty and ;P.K. Mishra, Advs.
DispositionRevision dismissed
Cases ReferredIn S. P. Consolidated Engineering Co. (P) Ltd. v. Union of India
Excerpt:
.....applying the rule, as a rule of justice, equity and good conscience, would arise only when the court finds that no place of payment is expressly stated in the contract nor is it possible to find such place of payment indicated in the contract by necessary implication, on the relevant evidence on record......this fact. it is contended by the defendant that as a forwarding letter was sent along with the signed contract, it would be deemed that the contract was complete, after the suggestions made by the plaintiff were accepted by the defendant. from ext. c it appears that some modifications and suggestions were made relating to payment of sales tax. there is no material on record to show that these were at any time accepted or embodied in the contract. in the written statement, it has not been averred by the defendant that there was no concluded contract after the signature of the plaintiff in the contract form. from the evidence of the aforesaid two witnesses, it is clear that there was preliminary negotiation at new delhi and the agreement was sent by the defendant to the plaintiff and.....
Judgment:
ORDER

N.K. Das, J.

1. The defendant in a proceeding under Section 20 of the Arbitration Act challenges the decision of the trial Court on the question of jurisdiction which was decided as a preliminary issue.

2. The plaintiff and the defendant entered into an agreement for sale of silicon by the plaintiff to the defendant. As difference arose in respect of the contract i.e. regarding payment and other ancillary matters, the plaintiff filed the case for reference of the disputes for arbitration by virtue of the arbitration clause in the contract.

Besides other objections, the defendant has challenged the jurisdiction of the Court at Bhubaneswar in entertaining the suit. It is contended that the agreement was negotiated, concluded and finally accepted at New Delhi and no part of the cause of action in respect of the dispute arose at Bhubaneswar. The matter came up before this Court in Civil Revision No. 510/77 which was remanded to the trial Court with direction to take evidence as to whether the cause of action arose within the jurisdiction of the Court at Bhubaneswar. After remand, two witnesses were examined -- one for the plaintiff and another for the defendant. The trial Court has held that a part of the cause of action arose at Bhubaneswar because the acceptance of the contract was done by the plaintiff at Bhubaneswar and part payments under the contract were also made at Bhubaneswar.

3. In Para. 8 of the plaint, it has been averred that negotiations and discussions were made at Bhubaneswar and also at New Delhi. In paragraph-11 of the plaint it is stated that ultimately formal agreement was signed by the plaintiff at Bhubaneswar and forwarded the same to the defendant for signature along with a covering letter. In para. 23 it is also averred that the cause of action for the suit arose within the territorial jurisdiction of the Court of the Subordinate Judge, Bhubaneswar as a part of the negotiation took place and the contract was signed by the plaintiff at Bhubaneswar.

4. According to Section 20 of the Civil P. C. a suit shall be instituted in a Court within the local limits of whose jurisdiction the cause of action, wholly or in part, arises. 'Cause of Action' has been held in Mahommed Khalil Khan v. Mahbub Ali Mian, AIR 1949 PC 78, to be every fact which will be necessary for the plaintiff to prove if traversed in order to support his right to the judgment. It has no relation whatever to the defence that may be set up by the defendant nor does it depend upon the character of the relief prayed for by the plaintiff. It refers to the media upon which the plaintiff asks the Court to arrive at a conclusion in his favour.

This Court in Orissa Mining Corporation Ltd. v. Joint Secretary, (1977) 1 Cut WR 440: (AIR 1978 Orissa 96), has also held that 'cause of action' means every fact which, if traversed, had to be proved by the plaintiff in order to support his right, to the judgment of the Court. The observations of the Privy Council make it clear that the words 'if traversed' do not refer to any probable defence that may be taken in the written statement or the counter. Allegations made in the plaint have to be scrutinised to determine if any of the facts stated therein are required to be proved if traversed for giving a judgment in the case and it is to be seen whether any limb of the bundle of facts is available or detected or found in a particular place where the suit is filed (See S.P. Gahtavat v. Principal, Regional Engineering College Warrangal, (1977) 2 Cut WR 874). The Supreme Court in Bhagwandas Goverdhandas Kedia v. Girdharial Parshottamdas and Co., AIR 1966 SC 543, has held that in a contract there must be intent to accept and some external manifestation of that intent by speech, writing or other act, and acceptance must be communicated to the offeror, unless he has waived such intimation, or the course of negotiations implies an agreement to the contrary. Acceptance and intimation of acceptance of offer are, therefore, both necessary to result in a binding contract. Cause of action arises at the place where offer is accepted.

5. P. W. 1 was the Secretary of the plaintiff. According to him, Ext. 1 is the memorandum of preliminary negotiation and thereafter the defendant sent the contract form to the plaintiff at Bhubaneswar and he signed the document on behalf of the plaintiff at Bhubaneswar. This document was sent along with a forwarding letter to the defendant. He also states that payment for the supply was to be made at Bhubaneswar, and in fact some payments have been made by the defendant to the plaintiff at Bhubaneswar. He has been cross-examined by the defendant, but nothing has been brought out in his cross-examination to dislodge the aforesaid facts. D. W. 1 has been examined on behalf of the defendant. This witness admits that the draft copy of the contract was sent by her along with a letter and the plaintiff signed the contract and returned the same to the defendant. The contract was signed subject to certain conditions laid down in the forwarding letter Ext. C. She asserts that the contract was concluded at New Delhi by accepting the offer, as laid down in the covering letter, but in the cross-examination she has admitted that the plaintiff signed the contract before the same was sent to the defendant along with Ext. C.

The aforesaid facts would show that the contract was sent by the defendant to the plaintiff and it was signed by the plaintiff at Bhubaneswar. There is no dispute about this fact. It is contended by the defendant that as a forwarding letter was sent along with the signed contract, it would be deemed that the contract was complete, after the suggestions made by the plaintiff were accepted by the defendant. From Ext. C it appears that some modifications and suggestions were made relating to payment of sales tax. There is no material on record to show that these were at any time accepted or embodied in the contract. In the written statement, it has not been averred by the defendant that there was no concluded contract after the signature of the plaintiff in the contract form. From the evidence of the aforesaid two witnesses, it is clear that there was preliminary negotiation at New Delhi and the agreement was sent by the defendant to the plaintiff and the latter signed the same at Bhubaneswar. This would show that the acceptance of the offer was made at Bhubaneswar and, as such, the cause of action also arises at Bhubaneswar. In this respect, I do not find any illegality in the findings of the trial Court that part of the cause of action arises at Bhubaneswar.

6. There is another aspect of the matter, in Civil Revision No. 510/77 this Court directed the trial Court to take evidence relating to jurisdiction of the Court. In his evidence, P. W. 1 has stated that the payment was to be made at Bhubaneswar and, in fact, a part payment has also been made at Bhubaneswar. The trial Court has held that the cause of action also arises within the jurisdiction of the Court where the payment is to be made.

In S. P. Consolidated Engineering Co. (P) Ltd. v. Union of India, AIR 1966 Cal 259, it has been held :

'The English Common Law Rule that 'a debtor must seek the creditor' is universal in its application, since it is founded on justice and equity. It is surely not a technical rule of English Law, wrongly made applicable to India. It is beneficent rule, inflexible and is of universal application. The rule cannot be said to be nothing more than a presumption, rebuttable by contrary evidence. When there is evidence to indicate the place where the parties to a contract intended that the debt was payable, then the Court will hold that such place of payment has beenIndicated in the contract itself, though not expressly but by implication. The occasion for applying the rule, as a rule of justice, equity and good conscience, would arise only when the Court finds that no place of payment is expressly stated in the contract nor is it possible to find such place of payment indicated in the contract by necessary implication, on the relevant evidence on record. There is no scope for the application of the rule in cases where the Court can find, on construction a positive or a negative intention as to the place of payment -- Positive intention to pay not at the creditor's place, as for example, where the debtor bank or company, to the knowledge of all, pays its debt to the creditors at its place of business or negative intention when the creditor resides outside the realm. In the latter case, the Court will hold that by necessary implication there was no duty on the debtor to find out the creditor outside the realm and in consequence the debt is payable not at the creditor's residence or place of business but at the debtor's. The question becomes important for the purpose of determining the jurisdiction of the Court and for such purpose the residence or place of business of a foreign creditor is irrelevant.'

7. When there is direct and unchallenged evidence on record that payment is to be made at Bhubaneswar and actually part payment has been made at Bhubaneswar, the cause of action also arises partly within the jurisdiction of the Court at Bhubaneswar. In this respect also the findings of the trial Court cannot be interfered with.

8. On the aforesaid analysis, I hold that the order of the trial Court does not amount to exercise of jurisdiction illegally or with material irregularity.

9. In the result, the revision fails and is accordingly dismissed with costs. Hearing fee is assessed at Rs. 100/-.


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