F. A. No. 1 of 2000 ( R)
----
Against the judgment and decree dated 14.10.1999 passed by Shri S. P. Singh, Sub
Judge-II, Saraikela in Money Suit No. 2/95/S.R.1/97.
---
Bihar Air Products Limited, Adityapur Industrial Area, Phase-V ..... Appellant.
-Versus-
1. Andhra Oxygen Pvt. Ltd.
2. Asiatic Oxygen Ltd. .... Respondents.
--
For the Appellant : Mr. Kumar Vimal, Adv.
For the Respondents : Mr. Pradeep Modi, Adv.
--
PRESENT
HON'BLE MR. JUSTICE PRADEEP KUMAR
C.A.V.ON. 9.4.2010 PRONOUNCED ON 26/4/2010
Pradeep Kumar,J The first appeal is directed against the judgment and
decree dated 14.10.1999 passed by Shri S. P. Singh, Sub Judge-II,
Saraikela in Money Suit No. 2/95/S.R.1/97, by which judgment the
learned Sub Judge dismissed the suit on contest with cost.
2. It is submitted by the learned counsel for the appellant
that the learned Sub Judge wrongly dismissed the suit giving a
finding that the suit is barred by law of limitation and decided issue
no. 3 against the plaintiff-appellant. Learned counsel has further
submitted that the learned Sub Judge also committed an error of law
in deciding issue no. 4 that the court at Saraikela had no jurisdiction
to try the suit and as such the judgment of dismissal is bad in law
and only fit to be set aside and the appellant-plaintiff is entitled to
get a decree for refund security amount of Rs.5.75 lakhs with
defendant no.1-Andhra Oxygen Pvt. Ltd. which was deposited with
him as per the agreement entered into between the parties.
3. On the other hand, learned counsel appearing for the
respondents-defendants has submitted that as per the agreement
between the parties the machine i.e. Air Compressor Machine was
installed in the premises of the plaintiff at Gamharia by the
defendant no.1-Company on the condition that he will return the
same in workable condition, but the same is not returned in workable
condition. Then, the respondent-defendant will be liable to claim
damages for the same and entitled to get the cost of the repair of the
machine. Admittedly, the machine was dismantled before arrival of
engineer of respondent no.1-defendant no.1 and subsequently
respondent incurred a heavy expenditure in repair of the Air
Compressor Machine. Learned counsel appearing for the
2
respondents-defendants further submitted that the suit was obviously
time barred and it was filed as an afterthought only to harass the
defendant no.2-Asiatic Oxygen Limited due to their personal
differences. Learned counsel for the respondents-defendants further
submitted that the plaintiff-Bihar Air Products Ltd. filed several
criminal and civil cases against defendant no.2 only to harass the
defendant no.2 and this was also one such suit.
4. After hearing both the parties and going through the
record, I find that the plaintiff's case, in his plaint, is that the
plaintiff's Company incorporated under the Companies Act, 1956
having its registered office at Awatar Building Bistupur,
Jamshedpur. The plaintiff's Company produces Oxygen, D. A.Gas
etc. used for various Industrial purposes and the plaintiff supplied
such gases to its customers and the plaintiff's factory is situated in
Industrial Area Phase-V, Gamharia, P.S. Gamharia within the
jurisdiction of Saraikella Court. I further find that the defendant nos.
1 and 2 are both companies incorporated under the Companies Act,
1956. The plaintiff's company in a Board of Directors meeting on
16.12.1982
, a decision was taken to take one Air Compressor
Machine from the defendant no. 1’s company and an order was
placed with defendant no.1 for Air Compressor Machine on hire
basis. It was agreed that the plaintiff would deposit a sum of Rs. 5.75
lakhs as security deposit with the defendant no.1, refundable when
the said machine would be returned back. It was also agreed that the
plaintiff would pay Rs. 20,000/- per month as rent during the period
the machine will be used by the appellant-plaintiff. In accordance
with the said agreement, the plaintiff deposited Rs. 5.75 lakhs with
the respondent no.1-defendant no.1 as security deposit and the
defendant no.1 delivered the Compressor Machine to the plaintiff’s
Company in the month of March, 1983 at the plaintiff’s premises at
Gamharia. The plaintiff has stated that on 25th August 1989, the said
Air Compressor Machine was dismantled by persons deputed by
defendant no.2-Company authorized by defendant no. 1 for packing
and despatching the machine from the plaintiff’s factory. He further
stated that the defendant no.2 was acting as an agent of defendant
no. 1 for dismantling of the machine, but the same was despatched to
defendant no.1. He filed a letter dated 28.8.1989. He has further
alleged that both defendant nos. 1 & 2 are equally liable for the
3
payment of security deposit. The plaintiff further stated that he sent
a demand letter dated 30.6.1992 demanding the payment, but the
defendants have failed to send back the same, hence he filed the suit.
The plaintiff has further stated that the finding of the trial court that
the defendants had any right to claim the cost of repair in absence of
any agreement between the parties to return the said Compressor
Machine in good and running condition, is bad in law and only fit to
be set aside.
5. On the other hand, the defendants appeared in the suit
and file their written statements stating therein that the plaintiff is a
Company incorporated under the Companies Act and its engaged in
manufacturing gases. It is further stated that the defendants and their
associate Companies entered into a collaboration agreement with the
Bihar State Industrial Development Corporation for setting up a
plant in Bihar at Jamshedpur for manufacturing industrial gases and
accordingly the plaintiff’s Company i.e. Bihar Air Products Ltd.
came into an existence. It was agreed that the Managing Director of
Bihar Air Products shall be nominated by defendant no.2 and
accordingly Shri S.S.Malik was appointed as Managing Director in
Bihar Air Products from its inception being the nominee of the
defendant no.2. The said S.S.Malik of Bihar Air Products suffered
huge loss and as such the said S.S.Malik tendered his resignation on
23rd April, 1992 and his resignation was accepted by defendant no.2.
It is further alleged that subsequently Sri S.S.Malik in connivance
with Bihar State Industrial Development Corporation withdrew his
resignation by his letter dated 28th May, 1992 and thereafter Sri
S.S.Malik, Ex-Managing Director of Bihar Air Products and one
N.C.Mukherjee in collusion with each other filed frivolous cases
such as criminal and civil against the defendant nos. 1 & 2. They
also filed cases at Calcutta High Court, but did not succeed. The
defendants admitted that an old machine was booked with the
defendant no.1 as per the meeting of the Company dated 16.12.1982
and the said old machine was given on hire by defendant no.1 on
security deposit of Rs.5.75 lakhs and on a monthly rental of Rs.
20,000/- per month even it was also agreed with the plaintiff’s
company that he will return the said Air Compressor Machine in a
workable condition and without any technical defects. The defendant
no.1 sent its engineer for the inspection of the said machine and
4
found many defects in the said machine, but in spite of several
requests made by defendant no.1 the appellant-plaintiff failed to
rectify the defects and finally the machine was dismantled on
25.8.89. With the help of defendant no. 2, it was found that the
equipment has become not workable and after spending a huge loss
of Rs. 8-10 lakhs for repair of the said machine the said machine was
made workable, hence the defendant no.1 demanded Rs. 2.25 lakhs
after adjusting security deposit of Rs. 5.75 lakhs. The defendant
no.1 had suffered a loss of Rs. 2.25 lakhs as per the terms and
conditions of the agreement since within the misuse of the plaintiff
the machine become unworkable, hence the plaintiff should fulfill
the damages.
6. After hearing both the parties and on their pleadings
the learned trial court framed the following 9 issues:
1. Is the suit as framed maintainable?
2. Has the plaintiff got any valid cause of action for the
suit?
3. Is the suit time barred?
4. Has this court got jurisdiction to entertain this
suit?
5. Is it a fact that defendant no.2 acted as an agent of
defendant no.1 in removing back the Air Compressor
Machine from the premises of plaintiff’s factory?
6. Whether the defendant no.2 is also liable to pay
security money jointly and severally with defendant
no.1or not?
7. Whether the plaintiff is entitled to receive back the
security deposit from defendant no.1 amounting to Rs.
5.75 lakhs with interest?
8. Is the plaintiff entitled to a decree as claimed for?
9. To what other relief or reliefs of any; the plaintiff is
entitled to get?
7. The learned trial court while deciding the issue no. 5 against
the plaintiff holding that the defendant no. 2 did not act as an agent
with defendant no.1 in dismantling the old compressor machine.
The learned trial court also decided issue no.3 against the plaintiff
and came to a conclusive finding that the suit was hopelessly time
barred and also decided the main issue of jurisdiction that is issue
5
no. 4 holding that the Court at Saraikella had no jurisdiction to try
the suit and finally dismissed the suit.
8. After hearing both the parties and going through the
evidences of plaintiff’s case, I find that as far as issue no. 4 is
concerned on the basis of the correspondence with the plaintiff and
defendant relying on Exts.1/C, 1/A and Exts. 2 to 2/L and also Exts.
3 and Exts. 5 to 5/B. 3, 5 to 5b, the learned trial court found that all
the correspondences were made from the plaintiff’s company head
office, situated at Awatar Building, Bistupur, Jamshedpur and hence
came to a finding that since the company’s Headquarter is at
Jamshedpur and entire correspondences and agreement took place
there, hence only Jamshedpur court has got jurisdiction, but the trial
court lost sight of the fact that the part of cause of action arose
within the jurisdiction of Saraikella at Gamaharia. The agreement
was for installing a compressor machine in the factory of plaintiff’s
company at Gamaharia within the jurisdiction of Saraikella. The
said machine was dismantled by the defendant no. 1’s Company at
Gamaharia and it was despatched to defendant no. 1’s company at
Madras from Gamaharia and hence as per Section 20(c) of the Code
of Civil Procedure a suit lies where the cause of action wholly or in
part arises even the explanation of section 20 says that a corporation
shall be deemed to carry on business at its sole or principal office in
India or, in respect of any cause of action arising at any place where
it has also a subordinate office, at such place. Admittedly, there is a
factory at Gamaharia and it has got subordinate office also at
Gamaharia and as such Saraikella court had jurisdiction to try the
suit and the issue no. 4 which has been decided against the plaintiff
is set aside and the said issue decided in favour of the appellant-
plaintiff.
9. However, as far as issue no.3, the point of limitation is
concerned, which has been submitted by the learned counsel for the
appellant-plaintiff that the suit was filed on 12.1.1995 within 3 years
from the last date of demand made by the plaintiff for the refund of
the said security deposit of Rs. 5.75 lakhs and hence the suit is
within time.
10. It is submitted by the learned counsel for the plaintiff
appellant that since defendant no. 1 never refused the demand and
hence the suit is within time from the date of his last demand.
6
11. On the other hand, the defendants have submitted that vide
letter-Ext-A dated 27.11.89 they denied their claim of the plaintiff
for any refund and specifically stated that they have incurred the loss
for getting the machine in workable condition and demanded Rs.
2.25 lakhs from the plaintiff and as such that is a complete denial of
their demand and hence the suit has to be filed by 27.11.92 and since
the same was not filed within time it was hopelessly barred.
12. From perusal of Ext.-A dated 27th November,.89 and Ext. A/1
dated 18th November, 1989, it is clear that defendant no. 1 refused to
refund the security deposit and as per Article 70 of the Limitation
Act the time is three years from the date of refusal after demand,
since, admittedly by letter as Exts. A and A/1 finally the defendant
no. 1 refused to pay back the security deposit of Rs. 5.75 lakhs and
by its letter dated 27.11.89 it demanded the difference or loss caused
to them at Rs. 2.25 lakhs which they have incurred on the repair of
the equipment, the suit should have been filed within 3 three from
27.11.89.
13. Accordingly, I find that the suit was barred by the law of
limitation and the trial court finding on that score, which requires no
interference by this Court.
14. As far the plaintiff’s claim of refund of Rs. 5.75 lakhs is
concerned, it has been submitted by the learned counsel for the
plaintiff that there was no agreement that the machine has to be
returned in a workable condition, but from perusal of the evidences
as adduced by the plaintiff as also by the defendant, it is clear that
the plaintiff’s witnesses no.3, Shyam Sunder Narora
admitted his evidence at para 11 that there was no written agreement
with the defendant no. 1’s Company with regard to taking the air
compressor machine on rent and the agreements were made on
various meetings and letters. He also admitted in para 12 that it was
agreed between the parties that the plaintiff will return the machine
in workable condition. It is important to note that the plaintiff or
defendnat have not filed any ‘Written Agreement’ nor proved the
same in trial and as such the acceptance made by the plaintiff’s
witness no. 3 has to be accepted as agreement that the plaintiff was
bound to return the same in a workable condition.
15. The plaintiff has also claimed that the machine was
dismantled by defendant no. 1 and they had taken the same on
7
23.8.89 and the machine was in good condition, but it appears from
the evidence of plaintiff’s witness itself that it is not a correct fact,
the plaintiff’s witness no. 6, S.K.M.Sinha has stated, in his evidence,
that the machine was dismantled on 18.8.89 itself and subsequently
when the representative engineer of defendant no. 1 he only received
a dismantled machine and hence the claim of the defendant no. 1 that
they got the machine fully checked at Madras and found that it is not
workable and hence they got the same repair suffering a loss since
repair cost comes to Rs. 8-10 lakhs and they demanded Rs. 2.25
lakhs after adjusting Rs. 5.75 lakhs seems to be a demand as per the
agreement and the claim of the plainfiff for refund of the security
deposit was not maintainable and the trial court rightly decided issue
no. 7 also against the plaintiff.
16. Thus, after discussing all the points raised by the plaintiff and
considering the same as per the evidence and documents I find no
infirmity or impropriety in finding recorded by the trial court on any
of the issue.
17. I find no merit in this appeal and the same is accordingly
dismissed with cost.
[ Pradeep Kumar,J]
Jharkhand High Court, Ranchi,
The 26th April, 2010
JK/NAFR