The High Court · 2025

THE HONOURABLE SMT. JUSTICE K. SUJAITA APPE,AL SUIT NO.l 264 0F 2o/o/2 JUDGMENT: 'Jlhis appeal is filed by the appellant-plaintiff aggrieved by the jtrdgment and decree dated 05.09.2001 passed in O.S.No.101 of 1993 on the file of Senior Civil Judge at Kothagudem. O.S.No.1O1 of 1993 was filed for recovery of Rs.6,I1 ,4331- by way of refund of Rs.2,00,0OO/- securiqr deposit with interest @ 24o/o p.a.

2. The plaintiff is a public limited company and manufecturer of Barium salts etc, and the defendant is a partnership firm holding mining lease for 3o2 Acres in sy.No.76 of seripuram village, sudimatla Taluk for extracting Barytes ore, used to enter into agreement with plaintiff-company for their factories. The defendant did not choose to enter into agreemont with the plaintiff company for further period of 10 years with effect from 06.09.1985 to 05.09.199s as per the minutes dated 03.09.1985, inspite of plaintiff company depositi:eg Rs.1,oo,ooo/- each by way of two demand drafts towards securit5r deposit, the defendant terminated the power of Attorney on o3.11.1986 and addressed a letter to the Assistant I / 2 e Director of Geolo$r, Khammam not to issue transit permit to the plaintiff company to lift the raised Barytes ore' The plaintiff company filed O.S.No.1O3 of 1989 on the file of Subordinate Judge, Kothagudem claiming damages and for refund of securiqr deposits. As a counter blast' the defendant filed o.S.No.423oflg8gseekingspecificperformanceofagreement and in the alternative for damages for breach of agreement dated o3.o9.19g5. The praintiff company was therefore, compelledtochooseanothersourceofBarytesforitscaptive consumption.Themineswereultimatelyclosedonl5.0T.l9S8. Theplaintiffanddefendanteffectedcompromiseandentered into fresh contract of lease on 2L'Og'1989 and defendant executed Power of Attorney on 22'09'1989 at Vijayawada in favourofs.Gopalonbehalfoftheplaintiffcompanyandfresh agreementcameintoforcefromol.lo.lgSgforaperiodof6 yearsandtlredefendantagreedtohandoverthemineswithout anylabourunrestbysettlingthedisputeoverretrenchment allowance. However, despite several requests' the defendant faitedtosettlethelabourunrest.Frustratedwiththe defendant,sattitude,theplaintiffterminatedtheagreementon 21.Og.1989, through a letter dated 26'06'1990' 7 'n 3

3. tlespite termination, the defendant filed o.s.No.319 of 1991 a:rd o.S.No.6zr of L992 for recovery of annuar rent with interest and other charges. The plaintiff claims thet the defendant is liable to refund the securiqr deposit upon termination of the contract and pay interest at 24%o per annum, as per trade usage and custom, due to their unlawful retention of the ,leposit. The plaintiff arso claims damages from the defenda,t for supplying inferior quality barites forcing him to purchas,: 27oo metric tons from third parties. The plaintiff estimatel the damages at Rs- 100/- per metric ton from o 1 ' 10' 1989, until the contract termination. As such, the defendant is liable to pay Rs.2,70,o oo/- towards darnages.

4. Tht: defendant fired written statement admitting entering into raising contracts, renewal from time to time, institution of suits, cornpromise thereof, entering into- fresh agreement, and terminati.n of contract, institution of suits at vijayawada and exchange of notices. It was contended that the contract dated 27.09.1989 for the period from 01.10.r9g9 to 30.o9.1995 is binding o. the praintiff. The unilateral termination of contract is illegal and the suit based on illegar termination is not maintainable and plaintiff is riabre to perform his part of contract and to pay the amounts agreed there under and he ) .t a 4 n carrnot claim damages. The contract dated 21.09.1989 was entered into at Vijayawada and the Court at Vijayawada alone is having territorial jurisdiction to try the suit and Kothagudem has no territorial jurisdiction. As per the terms of contract, plaintiff alone has to bear entire expenses for working employees of mines including all employees and labour. The ptaintiff alone is liable to pay emoluments and both the parties entered into compromise the suits in O.S.No.1O3 of 1989 filed at Kothagudem court by the plaintiff and o.S.N o.423 of 1989 filed at Vijayawada Court by the defendant and entered into fresh agreement for six years. The defendant never undertook orally to settle the disputes of retrenchment, allowance, the plaintiff alone is liable and as per the terms of contract, interest towards security deposit has to be adjustable in the fifth and sixth years' As such, plaintiff is not entitled to seek refund. Hence, prayed to dismiss the.suit.

5. Basing on the said pleadings, the trial court framed three issues. On behatf of the plaintiff hv.l was examined and Exs.A.1 to A.10 are marked. on behalf of the defendant Dw' 1 was examined and Exs.B.1 and 8.2 are marked. Basing on the evidence on record, the trial Court dismissed the suit' 5 n Aggrie'ired by the said judgment and decree the present appeal is field.

6. l{eard Sri V. Hariharan, learned counsel for the appellant and Sri P.Govind Reddy, learned counsel appearing for the respondent.

7. llhe contention of learned counsel for the appellant is that when the Court below found that it had no jurisdiction, ought to have rr:turned the plaint for presentation before proper Court. The appellant argues that the court below erred in rejecting the claim clue to lack of jurisdiction. Despite finding that part of the cause of action accrued within its jurisdiction and that the plaintifls factory and registered office Erre also within its jurisdic:tion, the court below held that it had no jurisdiction. The appellant contends that Section 20 of the Civil Procedure Code (CPC) ,s applicable, and since part .of the cause of action accruecl within its jurisdiction, the court had jurisdiction to try the suil..

8. The appellant further contended that the court below failed to appreciate that unless jurisdiction is excluded by agreemont, section 20 of cPC applies to the cause of action. The court t,elow's rejection of plaint on the ground of 1ack of r ( 6 (- jurisdiction is wholly unsustainable and untenable' The appellant also disputes the trial court finding that the security deposit sent by demand drafts within the jurisdiction of the court does not create a cause of action. He further contended that the court below misdirected itself regarding the issue of security deposit and that the judgment is erroneous and unjustified and the court below erred in holding that the cause of action did not accrue at Kothagudem and that the suit is to be lited at Vijayawada. Despite observing that the suit is to be returned for presentation before the proper court having territorial jurisdiction, the court below proceeded to dismiss the suit. g. Learned counsel further contended that the court below ought not to have drawn any adverse inference regarding the contract dated 21.09.1989, as the terms and conditions were not disputed. The parties were aware of the terms of understanding between them, and the court below should have appreciated that there was labour unrest when the contract was entered into. The appellant claims that it is not liable for settling the labour unrest, and the court below's finding against the appellant is unsustainable' n ; i I 7

10. On the other hand, learned counsel for the respondent would submit that the appellant filed suit in Kothagudem court without having jurisdiction. Even according to the appellant earlier suits were filed at vijayawada which was mentioned in his plaint and the same were decided in vijayawada court. Even cn merits also the trial court discussed the suit and dismiss;ed on merits- Therefore, there is no illegality in the judgment of trial court, there are no merits in the appeal and prayed to dismiss this appeal.

11. Considering the submissions made by both the counsel and tht: material on record, now the points to be determined 1 \l'hether the trial court has territorial jurisdiction to entertain the suit ? 2 3 \f,'hether the appellant is entitled for refund of security dr:posit along with damages ? W'hether the judgment of in terference ? FOINT MOs. I TO 3 trial Court needs any L2. The suit is filed by the appelant for refund of security deposit along with damages. The first defence taken by the respondent is that the suit is not maintainable at Kothagudem court a.s the alleged contract was executed at vijayawada r (' l ) 8 l. , basingontheallegedbreachofcontractdated2L.o9.l9S9 whichwasreducedintowriting,butnotfiledbeforetheCourt. The defendant, who retained the original agreement, produced the same in O.S.No'319 of 1991 and it was not marked for want of stamp duty and penalty and the matter is still pending' No document either primary or secondary is filed to prove the said agreement and without filing any document showing the terms of contract, suit is |rled and. relief is claimed basing on the breachofcontract.Theallegationisthatdefendantcommitted breachofcontracton2l.0g.lg8gitself.Thoughnodocumentis lrledbytheplaintiff,itisanadmitteddocumentbythe defendantwhentheyenteredintocontracton2l.o9.l989to raise Byrates ore from the mines under the lease of the defendant for a period of six years on payment of certain amountsandtreatedthesecuritydepositundercontractdated 2|.og.lgSgandthesaidcontractwasterminatedbywayof Ex.A.Safterissuanceofnoticeforrefundofsecuritydepositor damages.Apartofcauseofactionarosetotheplaintiffon 3o.o9.1985and31.10.1985atKothagudemsincebeobtained demand drafts on the bhsis of contract dated 2l'09'1989' Merely because the security deposit sent by demand drafts is treated as security deposit under the suit contract, it cannot be 9 a said t}at part of cau.se of action arose in Kothagudem. Mere taking demand drafts at Kothagudem do not give jurisdiction to the Ko':hagudem Court. Therefore, there is no illegality in the judgme,nt of trial Court with regard to jurisdiction of the Court as no prart of cause of action arose in Kothagudem as the earlier suits were tried at Vijayawada.

13. T'he appellant herein liled suit for recovery of security amounl and also damages. The case of the appellant is that he himsell' terminated the contract and according to him, defendzrnt assured that he will look over retrenchment issue of labour, as no action was taken by the defendant due to the unrest of labour, he terminated the contract. Admittedly, no documr:nt was filed before the Court to show the terms of contract that defendant admitted to set unrest the retrenchment of labour issue. When no document is filed to show the terms of contract, it. cannot be said that defendant breached the said contract. It is not the breach of contract leading to termination of contract by the appellant herein. There is no evidence with regard 1o defendant assurance for retrenchment of labour, even in Ex.A.S termination letter, he has not alleged about it either oral understanding or oral promise by the defendant to settle the labour unrest and in Ex.A.S it is not alleged by the plaintiff a 7 10 6i;' that defendant committed breach of contract, on the other hand, he states that he made best efforts to continue production of Byrates in Garla mines but it is impossible for them to restart the mines in the prevailing situation and it is also noted in Ex.A.S that they will bear the dues to the workmen. The language and tenor used in Ex.A.S shows that as on 26.06.1990, it is not the case of plaintiff that execution of work under the contract becomes impossible due to acts of the defendant or that the defendant committed the breach of contract. L4. The defendant performed his part of contract by executing the GPA under Ex.A.9 and addressing ietter to the Mining Department to issue permits to the representative of the plaintiff and its GPA, but the plaintiff failed to prove any promise or understanding at the time of entering into the written agreement.' The plaintiff already admitted that there are no such terms in the written agreement and it is only an oral agreement between them. Therefore, it cannot be said that it is a breach'of contract by the defendant. Therefore, plaintiff is not entitled for the claim. There is no illegality in the judgment of the trial court and there are no merits in this appeal suit and ,i :l.i 11 the sarne is liable to be dismissed. Accordingly, all the points are ans;wered.

15. In the result, the Appeal Suit is dismissed. There shall be no ordt:r as to costs. It{iscellaneous petitions, pending, if any, shall stand closed SD/.T.VIJAY KUMAR DEPUTY REGISTRAR G //TRUE COPY// SECTION OFFICER To,

1. TheSeniorCivilJudge, Kothagudem. (with records, if any) 2. One CO to SriV.Hari Haran, Advocate [OPUC] 3. One CO to Sri P.Govind Reddy, Advocate [OPUC] 4. Two CD Copies SVS/psl n' ,i" '<r 4 f1@ .-v- ( n : ,' I t! s a , . "t .tl :'16.a" a- ., &r'. :r'i HIGH COURT DATED:05/08/2025 JUDGMENT + DECREE AS.No.1264 ot 2002 (J t "[ rrE s 1 0 I{Afl 2S26 H lP 2 DRAFTS \ a DISMISSING THE APPEAL SUIT u .It .r*&rr**.*",. [ 3385 I IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD TUESDAY,THE FIFTH DAY OF AUGUST TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SMT JUSTICE K.SUJANA FIRST APPEAL NO: 1264 OF 2002 Between: M/s.Barium Chemicals Ltd., Ramavaram, rep. by Umesh Bhatnagar Barium Chemicals Ltd., R/o Kothagudem, present General Manager Sri Barium Colony, Ramavaram, AND M/s. Viswabharathi Managing Corporation, Vijayawada, rep. by its Managing Partner, V. Basavaiah Choudary R/o D.No.13-88, Patamata Lanka, Vijayawada- 14 ...AppellanUPlai ntiff Appeat under section e6 of c p.c asainst tn" ;rog,l!:i:#T":r::";:l# 05-09-2001 made in O.S.No.101 of 1993 on the file of the Court of the Senior Civil Judge, Kothagudem. This appeal coming on for hearing and upon perusing the grounds of appeal, the Judgment and Decree of the Lower Court and the material papers in the case and upon hearing the arguments of Sri V.Hari Haran on behalf of Appellant and Sri P.Govind Reddy for the Respondent. r} This Court doth Order and Decree as follows: 1 . That tlre Appeal suit No.1264 of 2002 be and hereby is dismissed 2. That there shall be no order as to costs in this appeal. SD/.T.VIJAY KUMAR DEPUTY REGISTRAR 6 SECTION OFFICER //TRUE COPY// To,

1. The Se,nior Civil Judge, Kothagudem 2. Two CE Copies SVSiPSL w a HIGH COURT DATED:0510812025 DECRET: AS.No.1264 ot 2OO2 DISMISSING THE APPEAL SUIT \ , {.