Indo Swiss Jewels Ltd. vs HMT Watches Ltd.

K.L. Manjunath, J.—The appellant who was plaintiff in the suit has presented this appeal, being aggrieved by the judgment and decree passed in O.S. No. 15652/2003 dated 30.05.2008 by the City Civil Court, Bangalore. Heard the learned counsel for the parties.

According to the plaint averments, plaintiff is an ancillary unit of the respondent-defendant Company. Respondent is HMT Watches Limited. Based on the order placed by the respondent, the plaintiff had supplied the materials to the Bangalore Unit so also to the unit of Ranibagh in Uttar Pradesh and another unit located at Tumkur. The suit was filed claiming a sum of Rs. 1,16,47,250/- with interest on Rs. 1, 14,90,581/- together with future interest at 22% p.a. on the principal amount.

The defendant contested the suit. Several pleas were raised by the respondent in regard to the maintainability of the suit and clubbing of cause of action of three different units and institution of the suit at Bangalore and also the limitation.

The trial Court has framed the following issues:

Whether the plaintiff proves that the defendants are due and liable to pay to them a sum of Rs. 1,16,47,250/- towards sale consideration of jewels and mineral glass watch crystal including interest at the rate of 22% p.a.?

Whether the plaintiff further proves that they are entitled to recover future interest from the defendants at the rate of 22% p.a. on Rs. 1,14,90,581/-?

What order or decree?

Addl. Issue:

Whether the defendant proves that the suit on the file of the plaintiff is barred by Limitation?

Addl. Issue No. 2 framed at the time of judgment:

Whether this Court has jurisdiction to entertain the suit in respect of claim with Ranibagh (U.P.) Unit?

To prove their respective contentions, one M.L. Ahuja, was examined as PW 1 on behalf of the plaintiff and he relied upon Exs. P1 to P196. One S.S. Umesh, was examined as DW 1 on behalf of the respondent and he relied upon Ex. D1 to D28. The Trial Court, after considering the entire evidence held that the plaintiff can recover only dues pertaining to the Bangalore Unit and Tumkur Unit with 22% p.a. to be calculated from 06.11.2002 and future interest at 10% p.a. on principal amount from the date of suit. Additional issues 1 and 2 were held in negative. Therefore the present appeal is filed by the appellant-plaintiff contending that the Trial Court has wrongly dismissed the claim of the appellant in regard to the materials supplied by the appellant to the respondent in respect of its Ranibagh Unit situated at Uttar Pradesh and also not granting current interest at 22% p.a.

Therefore, what is to be focused by us in this appeal is only in regard to the rejection of the claim of the appellant in respect of the materials supplied by the appellant to the respondent unit at Ranibagh, Uttar Pradesh and current interest awarded at 10% p.a.

We have heard Mr. Srivatsa, learned Senior Counsel appearing for the appellant and Mr. Christopher, learned counsel appearing for the respondent.

The contention of Mr. Srivatasa are two fold:

According to him, the respondent is the Head Office of the HMT Watch factory. Though it has got different units, ultimately the registered Company is in Bangalore. Since the defendant is having its registered office in Bangalore, the suit filed by the plaintiff even in respect of the materials supplied to Ranibagh unit is maintainable. Alternatively, he contends if the Court was of the opinion that the Court of Bangalore had no territorial jurisdiction to entertain the claim of the appellant in respect of Ranibagh unit, the Trial Court should have directed the appellant to re-present the plaint in so far as Ranibagh unit is concerned, before the proper Court. So far as the interest is concerned, he contends that the appellant is a Small Scale industry. Therefore the appellant is entitled to claim interest at 22% p.a. under the provisions of the Micro, Small Medium Enterprises Development Act, 2006.

The learned Counsel for the respondent contends that both grounds urged by the appellant''s Counsel are untenable. According to him, the cause of action for the alleged supply of material to Ranibagh unit was entirely different and Court at Bangalore had no territorial jurisdiction to entertain the same. He submits that atleast the appellant could have requested the Trial Court to permit the plaintiff to re-present the plaint before Ranibagh Court within the period of limitation.

Since such an action has not been taken by the appellant, it is too late in the day for the appellant to contend that the Trial Court has committed an error in rejecting the claim of the appellant. So far as awarding of interest is concerned, the appellant, in the entire pleadings or in the evidence, has not placed any material to show that the appellant is either a micro or small medium enterprises and that interest has to be awarded to it under the aforesaid provision of law. When there is no pleading and when the Act has not been relied upon by the appellant in the Trial Court, the Trial Court is justified in not granting the interest at 22% p.a. In the circumstances he requests the Court to dismiss the appeal.

Having heard the learned Counsel for the parties, the following points are to be considered by us in this appeal:

Whether the Trial Court was required to return the plaint is so far as the supply of materials made to Ranibagh to be prosecuted before the proper court?

Whether the interest awarded is proper?

The supply of material to Ranibagh is concerned, Ranibagh is situated in the State of Uttar Pradesh. The cause of action for the suit has arisen so far as transactions of Ranibagh unit is concerned within the state of Uttar Pradesh, as the parties have restricted their jurisdiction to sue to that place.

Merely because the Head Office of the HMT Watches is situated in Bangalore, the plaintiff could not have claimed the claims of Tumkur and Ranibagh, together by filing one comprehensive suit at Bangalore. The cause of actions are different, claims are different and parties are different. Therefore, in such circumstances, the appellant was required to file a separate suit in regard to the claim of Ranibagh Unit is concerned.

Even if the plaint is wrongly presented before the Court which has no territorial jurisdiction, it was for the Court to have returned the plaint under Order 7 Rule 10 CPC directing the parties to present the same before the proper Court in order to save the limitation. Since such a procedure is not followed by the Trial Court, we are of the opinion that the Trial Court has committed an error in rejecting the claim of the appellant so far as it relates to transactions of Ranibagh.

Therefore, we are of the opinion that in the interest of justice and in view of Order VII Rule 10 read with Rule 10A of CPC, we have to direct the appellant to present it before the Court of Ranibagh on or before 30th March 2014. If such a plaint is presented before the competent court in the state of Uttar Pradesh, the same shall be tried in accordance with law.

So far as the second point is concerned, as rightly pointed out by the learned Counsel for the respondent, there is no pleading to the effect that the appellant is entitled to claim interest under the provisions of the Micro Small Medium Enterprises Development Act, 2006. When there is no pleading and evidence to the effect, this Court cannot find fault with the current interest awarded at 10%.

In the result, the present appeal is allowed in part. The judgment and decree passed in O.S. No. 15652/2003 by the City Civil Judge, Bangalore, on 30.05.2008 is modified and allowed in part, confirming the judgment and decree of the Trial Court in directing the respondent to pay a sum of Rs. 59,59,931/- (Rupees Fifty nine lakhs fifty nine thousand nine hundred and thirty one only) with interest at 22% p.a. from 06.11.2002 to the date of filing the suit and thereafter to pay interest at 10% p.a. on the aforesaid decretal amount of Rs. 59,59,931/- till realization. However, the appellant is permitted to represent the plaint before the competent Court in respect of the claim of Ranibagh unit of Uttar Pradesh. Registry is directed to send the records to the Trial Court expeditiously to enable the plaintiff to take return of the plaint, by keeping the certified copy of the plaint in respect of the Bangalore and Tumkur units.