2003 (12) TMI 661 - HC - Indian Laws

Summary

Issues Involved:
1. Maintainability of the suit under Order XXXVII CPC.
2. Territorial jurisdiction of Delhi Courts.
3. Claim for interest at 24% per annum.
4. Alleged damages and losses due to delayed supplies.

Issue-wise Detailed Analysis:

1. Maintainability of the Suit Under Order XXXVII CPC:

The defendant argued that the suit was based on a running account and thus not maintainable under Order XXXVII CPC. The plaintiff contended that the suit was based on a written contract comprising the offer, acceptance via purchase orders, and subsequent invoices, which constituted the written contract. The court found the defendant's submission misconceived, stating that the suit was indeed based on a written contract and acknowledgment of balance, and the mere maintenance of a running account did not change the nature of the suit. Therefore, the suit was maintainable under Order XXXVII CPC.

2. Territorial Jurisdiction of Delhi Courts:

The defendant claimed that the courts in Delhi lacked jurisdiction, arguing that the contract was concluded in Bangalore, and relevant actions took place in Karnataka, Kerala, or Goa. The court, however, noted that the purchase orders were received in Delhi, and the invoices raised by the plaintiff included a clause conferring exclusive jurisdiction to courts in New Delhi. Furthermore, payments were received in Delhi. The court referred to the Supreme Court's observations in ABC Laminart Pvt. Ltd. v. A. P. Agencies, Salem, emphasizing that a material part of the cause of action had arisen in Delhi. Thus, the court concluded that Delhi Courts had jurisdiction.

3. Claim for Interest at 24% Per Annum:

The defendant contested the claim for interest at 24% per annum, stating there was no agreement for such a rate. However, the court found that the terms and conditions on the invoices stipulated an interest rate of 24% per annum for delayed payments. Therefore, the claim for interest was deemed valid and sustainable.

4. Alleged Damages and Losses Due to Delayed Supplies:

The defendant argued that the plaintiff delayed supplies, causing damages and losses, including penalties imposed by Bangalore Mahanagar Palika. The court noted that the defendant acknowledged the receipt of goods and repeatedly confirmed their liability. The court also found that the claims for damages appeared to be an afterthought, as the defendant had not raised any debit notes for shortages or damages within the stipulated time. Additionally, the court highlighted that the interest on the acknowledged principal amount would offset the claimed damages. Consequently, the court directed the defendant to deposit the acknowledged principal sum of Rs. 29,09,052/- within four weeks as a condition for granting leave to contest. Failure to deposit the amount would result in the dismissal of the application for leave to contest and the suit being decreed as prayed.

Conclusion:

The court disposed of IA No. 2294/02, directing the defendant to deposit the acknowledged principal sum as a condition precedent for leave to contest. The application for leave to contest would be dismissed, and the suit decreed if the defendant failed to comply.