Nitco Construction Materials (P.) Ltd. vs Shree Venkateswara Engineering Contractors and others

Murgod, J.—This appeal is filed against the order dated August 30, 1991, passed by the learned City Civil Judge, Bangalore, ordering the return of the plaint for presentation before the proper court.

The facts giving rise to this appeal are as under :

Defendant No. 1 was having a contract with International Airports Authority for erecting an airport building at Meenambakkam, Madras. The defendants wanted a sub-contractor for doing the mosaic flooring work at Madras. In that behalf, the appellant was approached. The appellant went to Madras and made an offer. That offer was accepted at Madras by the defendants with a condition that the appellant had to furnish bank guarantee for due performance of the contract. The appellant gave an indemnity bond to his banker at Bangalore and his banker executed a bank guarantee which was transmitted from Bangalore to Madras and at Madras, defendant No. 1 accepted the bank guarantee and permitted the appellant to go ahead with the contract. After completion of the contract disputes arose with regard to the demand of certain amount in respect of liability to pay sales tax to the State Government of Madras. The appellant instituted the suit making a claim against the defendants in the court at Bangalore. Among other grounds, it was contended by the defendants that the court at Bangalore had no territorial jurisdiction as no part of the cause of action had arisen in the limits of the court at Bangalore. This was taken up as a preliminary issue and after the parties adduced evidence, they were heard and the trial court recorded a finding holding that the court at Bangalore had no territorial jurisdiction to try the suit and directed the return of the plaint for presentation before the proper court at Madras. Aggrieved by that order, the appellant has approached this court.

The contention of the appellant is that after he made an offer on December 1, 1983, it was accepted by the respondents subject to the condition that he had to furnish a bank guarantee and after an exchange of a series of letters he gave an indemnity bond to his banker at Bangalore and he sent on July 13, 1984, the bank guarantee by posting it to Madras and, therefore, a part of the cause of action had arisen at Bangalore and, therefore, the trial court had committed an error in holding that no part of the cause of action had arisen at Bangalore.

Learned counsel for the respondents submitted that the talks preceding the acceptance of the offer of the appellant had taken place at Madras and that the letter of offer of the appellant had been delivered to the appellant''s representative at Madras and the whole of the contract had to be performed at Madras and furnishing of the bank guarantee had also to be done to the satisfaction of the International Airports Authority at Madras and by merely choosing to post the bank guarantee from a place outside Madras, the appellant cannot confer jurisdiction on a court situated outside Madras.

The point for consideration is, whether a part of cause of action as contemplated u/s 20(c) of the Civil Procedure Code, 1908, has arisen within the limits of the court at Bangalore by furnishing an indemnity bond to the banker at Bangalore and by posting the bank guarantee from Bangalore as contended on behalf of the appellant.

As per the plaint averments and the evidence of the appellant''s witness, the appellant''s representative went to Madras and made an offer to the defendant and that offer came to be accepted by the defendants by giving a letter of acceptance at Madras to the representative of the appellant. The said acceptance contained a condition with regard to furnishing a bank guarantee for performance of the contract at Madras. The bank guarantee had to be furnished not in favour of the defendants but in favour of International Airports Authority. It was only after furnishing the bank guarantee that the appellant was permitted to take up the work. The bank guarantee was admittedly posted by the appellant''s banker at Bangalore and it was received by the International Airports Authority at Madras, and, thereafter, the defendants permitted the appellant to go ahead with the performance of the contract.

The admitted facts as adverted to above show that the offer was made at Madras, It was accepted at Madras, the place of performance of the contract was at Madras, the whole of the agreement was to be performed and completed at Madras. The place where the appellant manufactured the tiles and how he carried them to Madras are all irrelevant. The facts disclose that the bank guarantee had to be furnished to the International Airports Authority at Madras. It was not necessary that the bank guarantee had to be sent only from Bangalore. Depending on the convenience of the appellant, he could have arranged to furnish the bank guarantee by choosing a banker at Madras or from any other place. In the instant case having taken the bank guarantee at Bangalore, if the appellant had posted the same to Madras from a place outside the limits of the court at Bangalore that circumstance could not have conferred jurisdiction on the court at that place to try the suit on the ground that a part of cause of action had arisen at the place where the bank guarantee came to be posted. Place of posting of the bank guarantee is not a material part of the contract. The condition precedent was the furnishing of bank guarantee to the satisfaction of the International Airports Authority at Madras. Merely because it could have been done by posting a bank guarantee from any place outside Madras, it cannot be argued that a part of cause of action would accrue at such place. The cause of action is a bundle of facts which taken with the law applicable to them gives the plaintiff a right to relief against the defendant. It is a bundle of facts which it is necessary for the plaintiff to prove in order to succeed in the suit. For seeking the necessary relief of amount claimed in the suit, it is not at all necessary for the appellant to prove the sending or posting of the bank guarantee from Bangalore. It is also not necessary for the appellant to prove the execution of the indemnity bond in favour of his banker at Bangalore. Therefore, the facts relied on as giving rise to a part of cause of action in Bangalore are not material facts which entitle the appellant to the relief prayed for in the suit. Therefore, the ground made out for contending that a part of cause of action has arisen in Bangalore by posting the bank guarantee at Bangalore, in the circumstances of the case, is not acceptable and the conclusion arrived at by the trial court is unexceptionable. The point under consideration is held against the appellant. Therefore, there is no merit and the appeal is rejected.

The appellant is granted three weeks'' time to take back the plaint and present it before the proper court.