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M/s.Dhandapani Cements (P) Ltd. v. M/s.Binny Engineering Ltd.,Chennai-600 001 - Application No.907 of 2002 [2003] RD-TN 884 (13 October 2003)
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 13/10/2003
CORAM
THE HONOURABLE MR.JUSTICE C.NAGAPPAN
Application No.907 of 2002
in
Application No.1194 of 2001
in
C.S.No.300 of 2001
M/s.Dhandapani Cements (P) Ltd.,
69, Ganapathy Nagar,
Thiruvanaikoil,
Tiruchirapalli-620 005. .. Applicant -Vs-
M/s.Binny Engineering Ltd.,
65, Armenian Street,
Chennai-600 001. .. Respondent For applicant : Mr.M.S.Sampath
for M/s.T.K.Seshadri
For respondent : Mrs.K.Bhavadharini.
:ORDER
The applicant has sought for revocation of the leave granted by this
Court on 14.3.2001 in Application No.1194 of
2001 to institute the suit
against the applicant. 2. The applicant is the defendant in the suit and the
respondent/ plaintiff
filed the suit for recovery of a sum of an amount of
Rs.16 ,97 ,166.00, alleged to be due on contract and it obtained leave of
this
Court to sue the applicant company by filing Application No.1194 of 2 001 and
the same was ordered on 14.3.2001, pursuant to
which, the suit was taken on
file. According to the applicant, the respondent/ plaintiff has claimed in
the affidavit filed
in support of the leave application that the counter offer
of the applicant company was accepted by the respondent company at its
Head
Office at Chennai and thus cause of action for the suit arose at Chennai. It
is stated by the applicant that there was
no counter offer made by the
applicant and the respondent company has misrepresented the whole matter in
the affidavit.
According to the applicant company, it is manufacturing cement
and the respondent company is engaged in the manufacture and
erection of
cement plants and in and around September, 1997 the applicant company made
enquiries for erection of new cement
plant and the respondent company, on
17.9.1997, offered the applicant to supply the plant for a price of
Rs.31,86,000/-
and the offer was sent by post by the respondent company to the
applicant at Tiruchirapalli and subsequently, after discussions
at
Tiruchirapalli, the price was settled at Rs.28,1 7 ,000/- and the offer was
accepted by the applicant at Tiruchirapalli and
the contract was made there
and the plaint documents filed by the plaintiff would themselves prove the
above fact. It is
further stated by the applicant that leave to sue has been
granted only due to the false averment in the affidavit that the contract
has
been accepted at Chennai and hence the leave is liable to be revoked. 3. A
counter has been filed by the respondent stating
that the plaintiff company
submitted its offer on 17.9.1997 and a revised offer was made on 20.9.1997
offering to supply the
Mill for Rs.34,20,000/- and the defendant, instead of
accepting the offer, made a counter offer requesting the plaintiff to supply
the Mill for Rs.28,17,000/- and the plaintiff accepted the offer by its letter
dated 22.9.1997 and the contract came into existence
at the registered office
of the plaintiff company, that is, within the jurisdiction of this Court and
the plaintiff's documents
would prove the same. The respondent has further
stated that the contract has been entered into at Chennai and the substantial
part of cause of action has been arisen at Chennai, within the jurisdiction of
this Court and the present application is not
bonafide and liable to be
dismissed. 4. The respondent/plaintiff company is engaged in the
manufacture and erection
of cement plants and on 17.9.1997, it offered to
supply the plant to the applicant/defendant company for a sum of Rs.31,86,0
0
0/-. The offer was made by letter of the respondent company to the applicant
company at Trichirapalli. Pursuant to the offer,
discussions between the
Manager of the plaintiff company and the applicant took place at the factory
of the applicant at
Tiruchirapalli and the price was settled at
Rs.28,17,000/and there itself, the applicant paid an advance of Rs.7 lakhs
by
cheque dated 21.9.1997 to the Manager of the plaintiff company and this is
confirmed in the letter of the plaintiff, dated
22.9.1997, filed as plaint
document No.3. The applicant/defendant, in its letter dated 24.9.1997, which
is filed as plaint
document No.4, enclosed a Demand Draft for Rs.7 lakhs
towards the advance and sought for the return of cheque given to the plaintiff
on 21.9.1997. 5. The learned counsel for the applicant Mr.Sampath contends
that the offer of the respondent/plaintiff was
accepted by the applicant/
defendant company at Trichirapalli and the contract was made at Trichirapalli
and Trichirapalli is
the place of making of the contract and no part of the
cause of action arose within the original side jurisdiction of this Court
and
the grant of leave was mainly based on misrepresentation of facts and hence
the leave is liable to be revoked. In this regard,
the learned counsel relied
on the following decisions. "1) Arthur Butler and Co. Ltd v. District Board
of Gaya (A.I.R. (34 )
1947 Patna) (Head Notes 'd'). The Patna High Court
held thus. It is not every step taken in the completion of a contract
that
determines the jurisdiction of a Court to entertain a suit based on the
contract. The mere making of an offer is
not a part of the cause of action
for a suit based on a contract and the suit cannot be brought at the place
where the offer
originated when the offer was accepted within the jurisdiction
of another Court. 2) Baroda Oil Cakes Traders v. Parshottam
Narayandas
Bagulia and another (A.I.R.1954 Bombay 491) (Head Notes 'd'). The Bombay High
Court held as follows. No part of the
cause of action arose in Baroda though
the plaintiff had sent his offer from Baroda by telegram and though he
received the
acceptance from the defendants by telegram at Baroda. In the
eyes of law the offer was made at Kanpur and the acceptance was
likewise made
at Kanpur, with the result that the whole of the contract was made at Kanpur.
Consequently, the Baroda Court had no
jurisdiction to entertain the suit. 3)
G.Venkatesha Bhat and others v. M.s.Kamlapat Motilal and others (AIR 1957
MADRAS 201).
This Court laid down thus. The making of the contract
itself is part of the cause of action and the determination of
the place where
the contract was made is part of the law of contract. A contract is made when
an offer of one party is accepted
by the other party. An offer, however, must
be distinguished from an invitation to offer. Where the parties personally
meet
at any place and the proposal of one is accepted by the other, that place
will naturally be the place of making the contract. But
if the proposal and
acceptance thereof are made in different places, the place of acceptance will
be the place where the contract
is made." It is settled law that for the
purpose of jurisdiction to entertain the suit based on a contract, the place
of
acceptance is the place of making the contract and that gives rise to the
cause of action.
6. The learned counsel for the respondent contended that the registered office of the plaintiff is at Chennai and hence a part of the cause of action arises at Chennai, within the jurisdiction of this Court. The cement division of the plaintiff company is situated at Meenambakkam away from Chennai and the discussion was held at the factory of the applicant/defendant in Trichirapalli where the revised offer was made and accepted leading to the applicant handing over of the advance of Rs.7 lakhs by cheque to the Manager of the plaintiff company there itself. Thus, it is Trichirapalli, where the whole of the contract was made. 7. There is no question of any counter offer made by the defendant as alleged by the plaintiff in its application seeking for leave to sue. Offers and revised offers were made only by the plaintiff for the supply of the plant to the defendant and the averment of the plaintiff in the affidavit as well as in the plaint that a counter offer made by the defendant was accepted at Chennai is false. 8. In a suit on contract, the making of the contract itself is a part of the cause of action for filing the suit. As already seen, in this suit, the whole of the contract was made only at Trichirapalli and no cause of action or part of it arose within the jurisdiction of this Court and the leave granted has to be revoked. The applicant is entitled for the prayer sought for in this application. 9. The application is ordered as prayed for. The plaint is returned for presentation before the proper Court and time for presentation is four weeks from the date of return.
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