PREMIER EXPORTS Vs. HINDUSTAN COLD STORAGE

JUDGEMENT

(1.) Suit wherein this IA seeking leave to defend suit came to be filed, was instituted under Order XXXVII Civil Procedure Code by the plaintiff alleging that defendant No. 1 is a partnership firm whereof defendants 2 to 8 are the partners. Pursuant to the orders placed by defendant No. 1, the plaintiff-firm had supplied goods to it and in the books of accounts of plaintiff maintained in due course of business, a sum of Rs. 51,56,058.09 was due from the defendants. The plaintiff issued a legal notice to defendant No. 1 through its counsel on ll th April, 1992 to which a reply was sent by it through its advocates. It is stated that thereafter matter was settled and a Memorandum of understanding dated 8/04/1994 was executed between the parties pursuant to which defendant No. 1 agreed to pay a total sum of Rs. 41 lacs to the plaintiff. According to this MOU, Rs. 10 lacs were to be paid on 8/04/1994, Rs. 5 lacs on 8/07/1994, Rs. 5 lacs on 8th August, 1994, Rs. 5 lacs on 8/09/1994, Rs. 5 lacs on 8th Ocotber, 1994, Rs. 5 lacs on 8/11/1994 and Rs. 6 lacs on 8/12/1994. Defendants paid Rs. 10 lacs through cheque No. 048682 dated 8/07/1994, Rs. 5 lacs through cheque No. 048683 dated 8/07/1994, Rs. 5 lacs through cheque No. 048687 dated 23/09/1994, Rs. 5 lacs through cheque No. 048691 dated 14/11/1994 and Rs. 5 lacs through cheque No. 190520 dated 3/03/1995 leaving a balance of Rs. 11 lacs. It is further pleaded that plaintiff is entitled to interest @ 21% per annum as per usual market usage and which is also the normal banking rate as per the directives of RBI. Rs. 13,125.00, Rs. 17,500.00 and Rs. 52,500.00 have been claimed towards interest for the delayed payments made on 23/09/1994 14/11/1994 and 3/03/1995 respectively. Further sum of Rs. 1,60,000.00 has been claimed on balance amount of Rs. 11 lacs at the said rate upto 30/09/1995. It is alleged that defendants have failed to pay principal balance amount of Rs. 11 lacs, Rs. 2,43,125.00 being the aggregate amount of interest and Rs. 5,500.00- towards notice, charges, totalling Rs. 13,48,625.00- despite service of legal notice. It is this amount for which decree is sought to be passed by the plaintiff against the defendants.

(2.) In the application (IA No. 6872/99) which is on the affidavit of Aziz A.Madni, it is averred that defendant No. 1 placed orders with the plaintiff from time to lime from Mumbai and gods were supplied by the plaintiff to defendant No. 1 at its cold storage in village Kaveser in Distt. Thane, Maharashtra. During negotiations before arriving at the memorandum of understanding dated 8/04/1994 and thereafter also the defendant No. 1 had requested the plaintiff to return to defendant No, 1 one imported Meat mincing machine (Laska brand-made in Australia) which was sent to plaintiff on 14/06/1991 in addition to packing materials of defendant No. 1 lying with the plaintiff. The then market value of said machine was Rs. 6 lacs. The value of pacing materials lying with plaintiff was Rs. 6,84,862.40. The plaintiff had agreed to return said Meal mincing machine to defendant No. 1 in good condition and relying upon plaintiff's words, the defendant No. 1 executed said Memorandum of understanding bona fide believing that plaintiff would return the machine and packing materials to defendant No. 1. Despite repeated requests, the plaintiff has failed to return the machine and packing materials. It is for this reason that balance amount of Rs. 11 lacs was not paid by the defendant to the plaintiff. It is further stated that suit as framed is not maintainable under Order XXXVII Civil Procedure Code. It is also alleged that payments were made by defendant No. 1 to the plaintiff at Mumbai, defendant No. 1 carries business at Mumbai and remaining defendants also reside in Mumbai. Memorandum of Understanding was subject to Bombay jurisdiction. This Court thus has no territorial jurisdiction to try this suit. It is claimed that there was no agreement between the parties to pay interest on any of the instalments including arrears and the plaintiff is not entitled to claim interest much less @ 21% per annum.

(3.) In the reply which is on the affidavit of Mohd. Mushrafeen Qureshi, one of the partners of plaintiff-firm, it is asserted that suit is maintainable under the provisions of Order XXXVII Civil Procedure Code and this Court has territorial jurisdiction to try the suit as goods were supplied from Delhi and payments made by defendant No. 1 through its partners at Delhi. It is alleged that plaintiff is entitled to interest @ 21% per annum as claimed.