SANDEEP POLYMERS PVT LTD Vs. BAJAJ AUTO LTD

JUDGEMENT

(1.) Challenge in this appeal is to the order passed by a learned Single Judge of the High Court of Bombay, Nagpur Bench, directing return of the plaint, as according to the High Court the Court at Nagpur had no jurisdiction to entertain a part of the claims made in the suit. The plaintiff was granted liberty to represent the plaint in the Court having jurisdiction at Pune. The trial Court was directed to follow the procedure under Order 7 Rule 10-A of the Code of Civil Procedure, 1908 (in short the CPC) for return of the plaint to the plaintiff.

(2.) Background facts in a nutshell are as follows: The appellant filed a special civil suit No.881/91 for recovery of Rs.79,63,99,736/- as damages for breach of contract. The stand of the plaintiff in the plaint was that it is the manufacturer of moulds and high precision plastic component for the industrial application specially for use by automobile industry. It has its manufacturing operations at Nagpur and the defendants have entered into an agreement with it for lifetime supply of its products. It has made huge investments at Nagpur amounting to rupees thirty crores and that it has a most sophisticated factory at Nagpur. Plaintiff is supplying its products to the Defendant No.1 for almost two decades. The defendant No.1 vide registered letter dated 03.11.1999, which was received by the plaintiff at its Nagpur office on 11.11.1999, has terminated its agreement with the plaintiff. Due to the said termination, the machineries which were installed by the plaintiff specifically for manufacturing moulds for the defendant No.1 would remain idle and that there will be no use of its unit installed at Nagpur. The plaintiff, therefore, contended that it is entitled to compensation of damages inasmuch, as the defendant No.1s action of refusing to honour its promise and assurance was illegal and arbitrary. The defendant Nos.1, 3 and 4 filed an application under Section 9A read with Order 7 Rule 11 of CPC submitting therein that the suit was clearly abuse of process of law and was not maintainable. The registered office of defendants 1 and 2 was at Pune and that the defendant Nos.3 and 4 are the residents of Pune, whereas the defendant No.5 has its registered office at Tokyo (Japan). The lease agreements between defendant No.1 and the plaintiff had been executed at Pune, and supplies were made by the plaintiff to defendant No.1 at Pune/Aurangabad, i.e. outside the territorial jurisdiction of Civil Judge, Senior Division, Nagpur and, therefore, it had no territorial jurisdiction to entertain the suit and the suit deserves to be dismissed summarily. It was denied by the respondents-defendants that the plaintiff has set up its factory at Nagpur at the instance of defendant No.1. It was further contended that the plaintiff has deliberately suppressed the fact that it has its registered office at Mumbai and neither of the parties to the suit resided at Nagpur. The respondents further averred in the said application that the parties by consent have restricted the jurisdiction to Pune Court only. The said term pertaining to jurisdiction is contained in all the purchase orders placed by defendant No.1 with the plaintiff. Plaintiff had deliberately filed a part of the purchase order and suppressed that part of the purchase order from the Court which contained the clause regarding jurisdiction. The non-applicant/plaintiff filed its reply to the said application reiterating the averments made in the plaint. It reiterated that it had made huge investments at Nagpur on the assurance made by the defendant No.1. The plaintiff, further, submitted in its reply that the cause of action for suit has arisen substantially, if not wholly, within the territorial jurisdiction of the learned Court at Nagpur. Goods were supplied from Nagpur and the cost thereof is received at Nagpur and that the goods have also been delivered at Nagpur. Substantial part of the claims in the plaint was on account of damages etc. for breach of Memorandum of Understanding (in short MoU) and the breach of assurances given by the defendant No.1. The plaintiff, therefore, submitted that if the substantial cause of action arises out of damages on other counts and if the small part of the claim arises out of purchase order, the claim cannot be separated and, therefore, it was in the interest of justice that the Court should entertain the present suit.

(3.) The learned trial Court, after considering the rival contentions raised on behalf of the parties, found that the suit was outcome of the damages caused to the Unit of the plaintiff because of the breach of the contract. He further observed that the letter of termination was received by the plaintiff at Nagpur. It is further observed in the order that the term about jurisdiction pointed out on behalf of the defendants was relating to the breach of contract under order of purchase and not relating to the damage caused to the plaintiff by termination of the entire contract which was admittedly for the lifetime. The learned trial Court, therefore, held that the cause of action to file present suit arises at Nagpur and, therefore, directed the suit to proceed according to law.