H. Imtiyaz Hussain, J.@mdashThis Civil Ist. Appeal has been filed by firm Mohd. Sultan and Co. through its proprietor Mohammad Sultan S/o
Mohammad Jamal R/o Kothibagh Pattan against the judgment of Principal District Judge, Srinagar dated 12.10.2000 in a COS No. 119/1997.
2. The appellant firm filed a suit for damages for Rs. 15 lacs against M/s Oswal Woolen Mills Limited through its Managing Director and another in
this Court on 13.08.1997. It was the case of the appellants that Mohd. Sultan S/o Mohammad Jamal R/o Kothibagh Pattan is running business in
the name of M/s Mohd. Sultan and Sons dealing with carpets and teazels. He is the sole proprietor of the firm. According to him, on the motivation
and assurance of the defendants he started producing teazels which the defendants required for manufacturing of woolen goods.
3. Vide OWM/279/89 dated 26.8.1989 the defendants placed an order with the plaintiff-appellant asking him to supply teazels from 2"" to 4"" size
@ 0.47 paisa per piece and was asked to supply maximum quantity. It is stated by the plaintiff that he collected the teazels from the
farmers/growers and supplied the same to the defendants. Thereafter vide order dated 28.5.1991 the defendants again placed order for the supply
of teazels and in terms of order dated 29.04.1992 the plaintiff supplied the teazels to the defendants @ 70 paisa per piece. In terms of order dated
14.3.1993 the plaintiff was asked to supply 10 lac to 12 lac pieces of teazels @ 70 paise per piece and the said quantity was supplied in time.
According to the plaintiff he had no option but to accept the said order because the farmers/growers had already grown the said material in their
agricultural farms and the goods were ready for supply. In terms of the above said supply order dated 4.4.1994 the plaintiff had to supply teazels
to the defendants till 31.12.1994 @ 60 paisa per piece upto the quantity of 10 to 15 lacs of teazels pieces. The plaintiff purchased the material
(teazels) from the growers and thereafter dispatched one truck load of teazels through Super Golden Transport Corporation under G.R. No.
49430 on 13.8.1994. The said transport company loaded this material in truck No. JK02B 4255 and the plaintiff paid an amount of Rs. 6480/- to
the said transport company for said purpose. It is stated by the plaintiff that the defendant refused to take the delivery of the goods which were
delivered through the above said truck. The plaintiff on receiving this message contacted defendant No. 2 on telephone and requested him to take
the delivery but he refused to do so and asked him to slash down the rate. The plaintiff on refusal of the defendants filed a suit for mandatory
injunction at Ludhiana praying therein that the defendants be directed to take the delivery of goods but the court at Ludhiana did not pass any
interim order and ultimately the said suit was withdrawn by the plaintiff. The plaintiff, therefore, filed the suit for damages before this Court against
the defendants for payment of Rs. 15 lacs alongwith interest @ 18% with effect from August, 1994 till its realization.
4. During the pendency of the suit, the suit was transferred to the court of Pr. District Judge, Srinagar. The defendants before the trial court raised
three preliminary objections regarding the jurisdiction, maintainability of the suit and limitation. The following issues were struck by the trial court on
these objections:-
(a) Whether this court has no jurisdiction to try the sui? OPD
(b) Whether the suit is liable to be dismissed under Order 23 Rule 4 & Order-2 Rule-2 CPC? OPD
(c) Whether the suit is liable to be dismissed as time barred? OPD
5. The trial court after hearing the parties and considering the matter decided all the three issues against the plaintiff, as such by means of the
impugned judgment the suit of the plaintiff was dismissed. The following decree was passed in the case on 12.10.2000.
On the adjudication of issues as settled in the suit the findings on all the preliminary issues having been recorded against the plaintiffs, the suit
cannot proceed further and is accordingly dismissed.
6. Being aggrieved by the said order of dismissal the present Civil Ist. Appeal has been filed by the plaintiff-appellant on the ground that the
impugned judgment is against the facts and circumstances and also against the law. As per the memorandum of appeal the judgment has been
passed on erroneous proposition of law and fact and is, therefore, liable to be set aside.
7. Heard the learned counsel for the appellant. The trial court has on consideration of the matter found that since the cause of action in the case has
arisen at Ludhiana the court at Srinagar had no jurisdiction to try the suit. The trial court further found that since the plaintiff had earlier filed a suit at
Ludhiana the present suit was hit by the provisions of Order 23 CPC. The trial court further found that the suit of the plaintiff was time barred.
8. So far the jurisdiction part is concerned, the main ground taken by the trial court to arrive at the conclusion is that the contract was entered into
at Ludhiana and that the cause of action, therefore, arises at Ludhiana. The trial court has referred to the provisions of Section 20 CPC which
deals with the jurisdiction of the courts and has on consideration of the authorities submitted by the learned counsel for the appellant found that the
court at Srinagar had no jurisdiction to hear the case. The trial court has in this behalf observed as under:-
On a plain perusal of the above section it is manifestly clear that suits will lie in the courts where either the defendants reside or conducts business
or where the cause of action has risen within the parameters of the contractual liabilities of the parties. Therefore, as it is not shown in the present
proceedings that either the defendants reside or have a business or cause of action has arisen within the territorial jurisdiction of this court,
therefore, the issue is decided in favour of the defendants and against the plaintiff.
9. A civil suit under the provisions of Section 20 of CPC will lie where either the defendants resides or cause of action wholly or partly arises. In
suits for damages the cause of action arises where the contract has been entered into or where the same is repudiated or where any of the part of
the contract was to be performed. In the present case there is no dispute on the fact that the order placed by the defendants with the plaintiff was
for supply of teazels. The order was admittedly placed at Ludhiana but it was to be executed at Srinagr as the supply was to be made from
Srinagar. In fact the plaintiffs-appellants have performed their part of the contract by handing over the goods to the goods carrier at Srinagar as
such a part of the cause of action arose at Srinagar. The Srinagar court, therefore, was also definitely having the jurisdiction to hear the suit. The
findings of the trial court that the court at Srinagar had no jurisdiction is, therefore, erroneous and cannot be upheld.
10. In A.B.C. Laminart Pvt. Ltd. and Another Vs. A.P. Agencies, Salem, , the Supreme Court held that place of performance also is part of cause
of action in case of breach of contract. The court observed:
In the matter of a contract there may arise cause of action of various kinds. In a suit for damages for breach of contract the cause of action consists
of the making of the contract, and of its breach, so that the suit may be filed either at the place where the contract was made or at the place where
it should have been performed and the breach occurred. The making of the contract is part of the cause of action. A suit on a contract, therefore,
can be filed at the place where it was made. The determination of the place where the contract was made is part of the law of contract. But making
of an offer on a particular place does not form cause of action in a suit for damages for breach of contract. Ordinarily, accordance of an offer and
its intimation result in a contract and hence a suit can be filed in a court within whose jurisdiction the acceptance was communicated. 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. If the contract is to be performed at the place where it is made, the suit on the contract is to
be filed there and nowhere else. In suits for agency actions the cause of action arises at the place where the contract of agency was made or the
place where actions are to be rendered and payment is to be made by the agent. Part of cause of action arises where money is expressed or
impliedly payable under a contract. In cases of repudiation of a contract, the place where repudiation is received is the place where the suit would
lie. If a contract is pleaded as part of the cause of action giving jurisdiction to the Court where the suit is filed and that contract is found to be
invalid, such part of cause of the action disappears. The above are some of the connecting factors.
11. So far the second point regarding the maintainability of the suit is concerned, I find that the findings of the trial court on this issue can also not
stand on the ground that the trial court has itself in its order impugned observed that in the instant case the cause of action appears to be different.
The trial court has, however, found that since the plaintiff could have asked for the relief of damage in the suit filed at Ludhiana and the same having
been not done the bar imposed by Order 23 Rule 2 CPC applied and the present suit was not maintainable now. It may be mentioned here that
the trial court has itself observed that the plaintiff had taken the plea that he had no knowledge of cancellation of the supply order dated
27.06.1994 at the time the plaintiff filed suit for mandatory injunction on 29.09.1994 in the court at Ludhiana. It is only when the plaintiff got the
knowledge that he could have applied for the relief of damage before the court at Ludhiana. Whether the plaintiff had the knowledge of
cancellation of supply order or not is purely a question of fact which can be proved by the party on adducing proper evidence before the trial
court. Without affording the party an opportunity to adduce evidence on the issue the court could not have come to the conclusion that the plaintiff
was in know of the fact of cancellation of supply order at the time the plaintiff filed suit at Ludhiana. The finding of the trial court on this issue is,
therefore, set aside.
12. So far the issue of limitation is concerned, here also I find that the trial court has fell into patent error in holding that the suit was hit by limitation.
The plaintiff has pleaded that he got the knowledge of refusal on 14.08.1994 and that he filed the suit within a period of three years as prescribed
by the law of limitation. The trial court has not appreciated this fact and has wrongly assumed that the suit was hit by limitation. The reasons
provided by the trial court does not appear convincing or in accordance with the provisions of law.
13. The result is that the appeal is accepted. The judgment impugned is set aside.
