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Judgment
P.S. patankar, J.—Rule.
The learned Advocates for Respondents waive notice.
Heard both sides.
The short question involved is whether the Court at Alibag. District Raigad is having territorial jurisdiction to decide the suit or not?
The learned Civil Judge, S.D., Alibag raised the issue of territorial jurisdiction as a preliminary one, and answered in the negatived. The learned Civil Judge, S.D. Alibag came to the conclusion that the contract between the Petitioner and Respondent No. 1 was signed at New Delhi and project was proposed to be implemented in Raigad District (State of Maharashtra). However, no part of project was implemented in Raigad and hence Alibag Court will have no jurisdiction to decide the suit. The said order dated 3.2.1997 is under challenge in this revision.
The Petitioner alleged in the plaint that cause of action arose on 27.7.1995 when the Ministry of Petroleum and Natural Gas, Central Government informed the Petitioner that allocation of the Gas for the project at Pen of the Petitioner is cancelled and therefore the gas cannot be supplied to the project. It is also alleged that the cause of action arose on 11.10.1992 when the Petitioner learnt that the Respondent No. 1 illegally and in utter violation of terms of the contract dated 30.3.1992 has sent a letter to the Respondent No. 2 invoking the Bank Guarantee of the amount of Rs. 5.73 Crores.
The project was to be implemented at Pen, Raigad District. The contract between the parties dated 30.3.1992 inter alia provided that Sponge Iron plant of the Petitioner is located at Pen Tahsil at Raigad District and gas was to be supplied to the same as per terms and conditions incorporated therein. The Performance Bank guarantee was to be provided by the Petitioner under Item 2.02(1). The Petitioner was to carry out the activities of the plant as per Annexure 2 to the said contract. This was as per term No. 2.02(iii) of the contract. Annexure 2 provided for the activities (i) Land Acquisition dated 1.4.1993, (ii) commencement of site development and civil work dated 1.10.1993 (iii) Mechanical Completion of plant dated 15.12.1995 and (iv) commitment of Gas supply dated 31.12.1995.
In the plaint it is further mentioned that the Petitioner was to carry on their erection of the project within the jurisdiction of Pen Taluka. The Petitioner has undertaken the process of acquisition of land. The bank guarantee was to be given in the nature of performance guarantee for the observance of key activities as provided by Annexure 2 as mentioned above, The main activities were to be carried out by the Petitioner and performance was to be completed in Pen Taluka of Raigad District.
There is no dispute that Respondent No. 1 is a Government of India undertaking. It was to supply gas for the Petitioner''s project of manufacturing sponge iron at Pen under the agreement dated 30.3.1992. Respondent No. 1 was to supply gas from Bombay High and satellite field/fields of ONGC.
Against this background the question is whether the Alibag Court is having jurisdiction to decide the suit or not. The learned Counsel for the Petitioner relied upon 2 Judgments of the Apex Court. The first one relied upon is A.B.C. Laminart Pvt. Ltd. and Another Vs. A.P. Agencies, Salem, . The Apex Court observed as follows:-
A cause of action means every fact, which, if traversed, it would be necessary for the plaintiff to prove in order to support his right to a Judgment of the Court. In other words, it is a bundle of facts which taken with the law applicable to them gives the plaintiff a right to relief against the defendant. It must include some act done by the defendant since in the absence of such an act no cause of action can possibly accrue. It is not limited to the actual infringement of the right sued on but includes all the material facts on which it is founded. It does not comprise evidence necessary to prove such facts but every fact necessary for the plaintiff to prove to enable him to obtain a decree. Everything which if not proved would give the defendant a right to immediate Judgment and must be part of the cause of action. But it has no relation whatever to the defence which may be set up by the defendant nor does it depend upon the character of the relief prayed for by the plaintiff.
It was further held (para 15), that the performance of a contract is part of cause of action and a suit in respect of the breach can always be filed at the place where the contract should have been performed or its performance completed.
The learned Counsel for Petitioner next relied upon South East Asia Co. Ltd. v. Nav Bharat Enterprises Pvt. Ltd. and Ors. (1990) 3 SCC 433. In the said case the contract was executed at Bombay i.e. within the jurisdiction of the High Court of Bombay. Performance of the contract was also to be done within the jurisdiction of Bombay High Court. The bank guarantee was executed at Delhi. It was held that no part of cause of action has arisen within the jurisdiction of Original Side of High Court of Delhi. Execution of Bank guarantee does not give cause of action.
In the present case the gas was to be supplied at Pen, Raigad district to the Petitioner by Respondent No. 1 who is instrumentality of Government of India. By letter dated 27.7.1995 the Ministry of Petroleum and Natural Gas, Central Government informed Petitioner that it is not possible for Respondent No. 1 to supply the gas to the Petitioner and further when the Petitioner learnt that Respondent No. 1 was out to invoke the bank guarantee for due performance given by it, the Petitioner filed the present suit. In my opinion, the Court at Alibag, Raigad is having jurisdiction to decide the suit.
The learned Counsel for the Respondents relied upon Fertilizer Corporation of India Ltd. Vs. Sanjit Kumar Ghosh and Another, . It was observed in the said case that performance of contract cannot constitute a part of the cause of action. In the said case the company instituted a suit for recovery of sum of Rs. 8602.14 ps which was alleged to have been spent on the training of defendant No. 1 as apprentice. After training defendant No. 1 was to serve Plaintiff Company at Nangal. The first defendant remained with the Sindri Chemical and Fertilizers Ltd. for training till 16th June, 1958 when he applied for ten days'' casual leave. After the expiry of the leave, the first respondent did not report himself for duty and submitted his resignation without assigning any reason. The resignation was alleged to have been accepted, on condition that the defendant No. 1 should refund the monies spent by the plaintiff upon him. The cause of action mentioned in the plaint alleged to have been taken at Nangal on 18th June, 1958 when the breach of contract occurred. The suit was filed at Nangal. Admittedly no such service was rendered at all. There was no posting of defendant No. 1 at Nangal. In view of this it was held that Nangal Court will have no jurisdiction to decide the suit. It was observed "Now, it cannot be denied that the performance of a contract is an integral part of the cause of action but it is equally important to note that the cause of action must have actually arisen when the suit is filed. Admittedly the time for performance of the contract had not arrived when the suit was brought, the first respondent having resigned before the period of his training."
This has no application here as the present case Respondent No. 1 was to supply gas at Pen, Raigad Petitioner has taken steps to set up the manufacturing plant at Pen.
He then relied upon the Judgment reported in Kisan Sahakari Chini Mills Ltd. v. Richardson and Cruddas (1972) Ltd 1996 (2) M.L.J. 1010 and Hindustan Steel Works Construction Ltd. Vs. Tarapore and Co. and another, and Ansal Engineering Projects Ltd. Vs. Tehri Hydro Development Corporation Ltd. and Another, - for submitting that this Court should not grant any stay of invoking the bank guarantee. In the present case I am granting only two weeks'' stay to enable the plaintiff to approach the Trial Court for getting the interim injunction. The Petitioner had in fact filed an application for interim injunction. But the suit filed by the Petitioner was thrown out by the trial Court on the ground that he has no jurisdiction. I have already held that said Court has jurisdiction to decide the suit. Further I do not wish to make any comment on merits, but just to point out that here Respondent No. 1 is prima facie guilty of breach as it has declined to supply agreed gas to Petitioner making it practically impossible for the Petitioner to set up the plant.
Hence the impugned Judgment and order dated 3.12.1997 passed by the learned Civil Judge. J.D. Alibag is set aside and the learned Judge is directed to decide and dispose of the Special Civil Suit No. 159 of 1996 on merits. The Respondent No. 1 not to invoke the bank guarantee and the Respondent No. 2 not to pay under the said bank guarantee for a period of 2 weeks.
Rule absolute accordingly. No costs.
The learned Counsel for Respondents prayed for leave to approach Supreme Court.
Leave refused.