Karnataka Nirawari Nigarm vs The State of Karnataka

A.V. Chandrashekara, J.—The present appeal is filed under Section 96, Code of Civil Procedure challenging the judgment and decree passed by the I Addl. Senior Civil Judge Gulbarga in O.S. No. 165/2010. The appellants are the defendant Nos. 3 to 6 in the suit. Respondent Nos. 1 and 2 are the defendant Nos. 1 and 2 in the suit. Respondent No. 3 is the plaintiff in the suit.

The parties are referred to as plaintiff and defendant Nos. 1 to 6 as per their ranking in the trial Court.

Suit filed for recovery of amount of Rs. 10,24,755/- with interest at 18% per annum from the date of suit till its-realisation along with cost has been decreed as prayed for on 24.09.2011. It is this judgment and decree which is called in question on various grounds as set out in the appeal memo.

The facts leading to the filing of the suit are as follows:

a) Plaintiff is a proprietary firm in Gulbarga city. 6th respondent represents Karnataka Niravari Nigam Limited which is a Company incorporated under the provisions of Companies Act and its registered office at Bengaluru. The plaintiff has been supplier of various types of materials to the Government, semi Government agencies. According to the plaintiff, defendant No. 1 was in need of Unitex flooring carpet, beck bound PU-22A and PU-22B and other various materials for rehabilitation center in Gandorinala project Defendant No. 5 the Chief Engineer is stated to have fixed the rates for the above said materials on the recommendations of 6th defendant.

(b) 6th Defendant the Executive Engineer called for tender in regard to supply of above materials. The plaintiff furnished tender for supply of above said two materials and his tender was accepted. An order was issued for supply of the above said materials and plaintiff was called upon to supply the same at the rate of Rs. 150/- per Sq. ft. for worth of Rs. 3,57,120/- for Unitex flooring carpet 2304 Sq.ft, beck bound PU-22A, 825 kgs and beck bound PU 22-B 0175 kgs at the rate of Rs. 2,975/- for sum of Rs. 5,05,756/-. The plaintiff is stated to have supplied the above said materials to the store keeper of Division No. 1 at Gulbarga depot and store keeper is stated to have received the above said goods and issued challan to plaintiff on 15.05.1999 and 20.01.2000. The supply made by the plaintiff to the satisfaction of the defendants.

(c) The defendants, according to the plaintiff, were required to make payment immediately after supply of the materials. Defendants did not make payment but agreed to make the payment. But the defendant went on postponing the said payment one or the other reasons. The Executive Engineer of the defendant No. 6 is stated to have written a letter to the plaintiff on 29.09.2009 admitting the claim of the plaintiff. It is the case of the plaintiff that Government found many discrepancies in the price of the items and other materials and a committee was appointed to submit a report. The Committee made an enquiry and submitted its report on 07.03.2002 to the Government and prices were fixed in respect of various items. The said Committee directed to make payment of all the bills of all the suppliers on the basis of the price fixed by it in the report. According to the plaintiff there was no fixing in the rates of these materials supplied by the plaintiff, when the report was submitted by the Committee. It is further averred that defendants went on postponing to make payment on the ground that the Committee would fix the rates in respect of items supplied by the plaintiff. According to the plaintiff, the said enquiry report has nothing to do with the supply of materials made by the plaintiff.

(d) Defendant No. 4 write a letter on 31.01.2005 to defendant No. 6 showing the names of the various agencies and the amount due to them. In the said letter name of the plaintiff is shown along with the amount due. Defendant No. 6 requested defendant No. 5 in this regard to make payment to the plaintiff.

(e) In spite of several oral requests the defendants did not make payment. Hence a notice was issued through advocate calling upon to pay the above said amount of Rs. 6,40,472/- with interest at 18% per annum from 1999. In spite of receipt of the said notice, the defendants did not make the payment and hence the plaintiff was forced to file a suit for recovery of principle amount of Rs. 6,40,472/- with accrued interest of Rs. 3,84,283/- from 1999 to 2010. The cause of action stated to have arisen in the month of February 2010 and subsequently when defendants denied in the last week of October 2010.

Defendant Nos. 1 and 5 had been represented by Additional Government Pleader and defendant Nos. 5 and 6 had been represented by Sri Gourish S. Khashampur and defendant Nos. 2 and 4 had been placed ex-parte. No written statement was filed by the defendants. Hence, the plaintiff Mohammed Jaffar has been examined as PW 1 and he has got marked 80 documents in all. Ultimately the suit of the plaintiff is decreed that the plaintiff is entitled to receive a sum of Rs. 10,24,755/- with interest at 9% per annum vide judgment dated 24.09.2011.

Several grounds have been urged in the appeal memo challenging the said judgment and decree. Learned counsel for the appellants has argued that defendant could not file written statement in time because of non-availability of old records. It is argued that the trial court has not given any finding in regard to the limitation, more particularly, when the claim was made in the year 2010 relating to supply of materials made in 1999. It is further argued that the trial court had no territorial jurisdiction, when the cause of action arose at Chittapur where materials supplied were received by the 6th respondent. It is further argued that the defendant Nos. 1 and 2 have nothing to do with the transactions in question and that the learned Judge has not properly analysed the oral and documentary evidence. It is further argued that even if Ex. P-1 is accepted as genuine document, there is nothing on record to show that the 6th defendant has unequivocally admitted to make the payment of time barred bill.

Per contra the learned counsel for the plaintiff/respondent No. 3 has supported the judgment and decree of the trial court holding that there is no reason to disbelieve the oral and documentary evidence placed on record and that Ex. P-1 is an important document which saves limitation in view of unequivocal undertaking make payment of the balance amount. It is further argued that the trial court has rightly appreciated the oral and documentary evidence.

After going through the records and hearing arguments, the following points arise for consideration of this court:

1) Whether the trial court has considered the territorial jurisdiction and the aspect of the limitation?

2) Whether any interference is called for?

REASONS

Point No. 1: It is true that plaintiff is a firm in Gulbarga. The correspondence placed on record would show that the Executive Engineer i.e., 6th defendant placed orders for certain materials to the plaintiff and on the basis of said request materials were supplied by the plaintiff to 6th defendant at Chittapur in Gulbarga district and admittedly there is a Court of Senior Civil Judge in Chittapur. Section 20 of Code of Civil Procedure mandates that in a suit of recovery of money suit can be filed either at the place where cause of action or where the defendant resides. Admittedly, 6th defendant has its office at Chittapur taluka. The records discloses that the plaintiff. 1 resides at Gulbarga and defendant Nos. 2 and 3 have its corporate office at Bengaluru. 4th defendant is nothing to do with the plaintiff. 4th defendant is an Audit office of the 3rd defendant. 5th defendant is the Chief Engineer of Karnataka Niravari Nigam and has its zonal office at Gulbarga. Admittedly, evidence placed on record does not disclose plaintiff had privity of contract with the 5th defendant''s zonal office at Gulbarga. This aspect of the matter has not been discussed by the Trial Court. What is averred in the plaint regarding cause of action as found in para 12, same has been reproduced hereunder;

"12. The above stated facts constitute the cause of action and immediate cause of action in the month of February 2010 and subsequently the defendants have flatly denied in the last week of October 2010 to make payment to the plaintiffs..."

Nothing is averred about the exact place where the cause of action arose. Para 12 disclose about the cause action arising when the supply was made and subsequently in the month of February 2010 when the defendants refused to make payment. In the said cause of action there is no reference about letter dated 29.09.2009 of the 6th defendant admitting the liability. 5th defendant is not a necessary party in the present suit. In order to file the suit in the Gulbarga city, he has made party in the suit. As already stated above, there is no privity of contract is only between the plaintiff and the 5th defendant. The privity of contract between plaintiff and the 6th defendant. Thus, the trial Court has failed to make a discussion about the territorial jurisdiction of the Court of Senior Civil Judge at Chittapur. Even in the absence of written statement of the defendants, the, Court is expected to apply its mind to the facts of the case and to give finding about the territorial jurisdiction and legitimacy of the claim. Hence, the point No. 1 is answered in the negative.

Point No. 2: The plaintiff has relied upon Ex. P-1 which is the letter dated 29.09.2009 addressed by the 6th defendant Executive Engineer to plaintiff. The contents of Ex. P-1 is as follows;

"It is to inform you that as per records of the office, you have supplied the materials to an extent of Rs. 8,53,212/- and out of which Rs. 2,12,780/- has been paid. The balance amount of Rs. 6,40,472/- is pending for payment. The pending bills has been submitted to Chief Accounts Officer, Dharwad for making payment."

Plaintiff himself has referred to the Committee constituted by the Government to look into fixation of various materials supplied to Karnataka Niravari Nigam and in respect of other irrigation projects. The plaintiff himself has made a specific averment in the plaint that report submitted by the said Committee has nothing to do with the present supply of the materials. That report is not made available in the trial court. What is the finding of the said Committee is not made known. It assumes more importance in the light of not making any payment after 1999. It is understandable as to how a letter Ex. P-1 dated 29.09.2009 was issued, more emphasis is placed on Ex. P-1 which is stated to have saved the limitation. The very document Ex. P-1 is seriously disputed by the appellants. There appears to be a strong force in the said submission, more particularly in the light of committee''s report referred to by the plaintiff in the plaint. Hence, the point No. 2 is answered in the negative.

Point No. 3: In view of findings on point Nos. 1 and 2 absolute interference is called for. It is submitted by the learned counsel for the appellant that the decretal amount has already been deposited by the appellants before the trial court and hence there can be no apprehension regarding protection of the interest of the plaintiff even in the event of suit once again being decreed. Hence the appeal will have to be allowed and matter has to be sent back so that the appellants to file their written statement on the very day of appearance before the trial court.

ORDER

The appeal is allowed. The judgment and decree passed in O.S. 165/2010 dated 24.09.2011 is set aside. The matter is remitted to trial court for consideration of the matter afresh, keeping in mind the observations made by this Court.

The appellants shall appear before the Trial Court on 19.01.2015 without fail and shall file their written statement on the said date. A sum of Rs. 5,000/- shall be paid as cost to the plaintiff on the date of appearance without fail or appellants at liberty to deposit before the trial court prior to the date of their appearance.

Learned Judge of the trial court shall dispose of the suit within four months from the date of first appearance of the parties before the trial court without a waiting fresh summons.

In view of the appeal being allowed and matter being remanded, and the entire court fee shall be refunded to the appellants.