AGARWAL TRADERS Vs. MAGNA HARD TEMP LTD

JUDGEMENT

(1.) The short question that arises for consideration is whether the IV Additional Judge, City Civil Court, Hyderabad has jurisdiction to entertaint the suit - O.S.No.2163 of 1987 - filed by the respondent herein for recovery of certain amounts from the petitioners, who are defendants therein?

(2.) The respondent-plaintiff filed the suit for recovery of a sum of Rs. 17 lakhs due from the petitioners-defendants towards the value of the goods supplied by the respondent-plaintiff. The petitioners-defendants filed a written statement denying their liability. A preliminary objection was raised in the written statement as to the territorial jurisdiction of the court to entertain the suit. The trial Court framed a preliminary issue relating to territorial jurisdiction as under:

(3.) It is the case of the petitioners defendants that none of the defendants figured in the suit either reside or carry on business or personally work for gain within the jurisdiction of the City Civil Court, Hyderabad. It is also the case of the Petitioners that no part of cause of action for the suit arose within the territorial jurisdiction of the said Court. The subject-matter of the suit relates to certain transactions between the petitioners and the respondent and the first petitioner herein, as a firm, as also proprietary concern, has placed certain orders for supply of material with the branch as well as office of the respondent located at H. No. 4893, Phataknamak, 1 Floor, House Kazi, New Delhi and goods were supplied by the respondent to the first petitioner at New Delhi only and payments were also made by the first petitioner through various cheques and bank drafts on New Delhi Bank. The sales-tax on these transactions was effected as per the law of Sales tax applicable to the Union Territory of New Delhi. It is stated that all cheques, drafts and hundies were negotiated by the respondent at New Delhi only. It is further stated that the transactions between the first petitioner and the respondent were not inter-State Transactions, but they were intra-State transactions within the limits of New Delhi. The petitioners have no direct links with the respondent at Hyderabad either regarding placing of orders for supply of goods or for payment of amount for the goods supplied or for submitting sales-tax, excepting a condition in the two hundies that amounts are to be payable at Andhra Bank, Rashtrapathi Road, Secunderabad. It is also stated that excepting this condition, even payments for these two hundies have also been made at New Delhi. Thus, it is contended by the petitioners that no cause of action arose within the jurisdiction of the trial Court and, therefore, the suit is not maintainable.