Kopargaon Sahakari Sakhar Karkhana Ltd. v. Kadwa Sahakari Sakhar Karkhana Ltd., & Ors.

Heard Mr. Vaibhav Joglekar Advocate for the Petitioner. The petitioner has filed this Civil Revn. Application challenging the order of the learned Judge of Co. Operative Court, Nashik, Dist. Nashik dated 31st August, 2012 passed below application Exh.No.49 in ABN Case No.1268 Of 2008, whereby the petitioner's application filed under Order VII Rule 11(a) of “The Code of Civil Procedure,1908” came to be rejected.

2. Respondent No.1 Kadwa Sahakari Sakhar Karkhana Ltd., has filed Dispute bearing ABN Case No.1268 Of 2008 in the Co. Operative Court, Nashik, against respondent No.s. 2,3,4 and the petitioner for recovery of an amount of Rs.31,71,562/- alongwith interest at the rate of Rs.15% per annum, from the date of dispute till the recovery of whole claim. It is case of respondent No.1 that it wanted to sell out 2000 metric ton molasses of “A” Grade. Accordingly, by issuing an advertisement, they invited the tenders. Present respondent No.2 Jeetson Transport ２ Co.(Original Deft.No.1) who is dealing in the business of transportation of molasses, submitted the tender for purchase of “A” grade molasses @ Rs.4500/- per metric ton, as an agent of the petitioner / Sugar Factory. Specific averments are made in the plaint that respondent No.2 had an authority in that regard from the petitioner. After negotiation, respondent No.2’s tender which was filed on behalf of the petitioner, was accepted @ Rs.5100/- per metric ton. The respondent No.2 however, did not lift the consignment of molasses which was lying in a deliverable condition. Respondent No.1 thereafter, constrained to publish re-tender for sell of the 2000 metric ton molasses, as respondent No.2 and the petitioner failed to lift and receive consignment of molasses. Thereafter, said molasses was ultimately sold to M/s. Shivam Transport and M/s. Balaji Chemical @ Rs.3525/- per metric ton. Thus, respondent No.1 suffer pecuniary loss @ Rs.1575/- per metric ton. Thus, petitioner suffers total pecuniary loss @ Rs.1575/- per metric ton for 2000 metric ton molasses, amounting to Rs.31,50,000/-.

3. In this dispute, as stated above, the application was taken up by the petitioner in the Co Operative Court, Nashik under Order VII Rule 11(a) of “The Code of Civil Procedure,1908” for rejection of the plaint, on the allegations that the plaint does not disclose cause of action, which came to be rejected by the impugned order, therefore, present application.

4. Mr. Vaibhav Jogalekar, the learned counsel for the petitioner took me through the plaint annexed at Exh.No. “A”, alongwith the annexture and submitted that if the plaint is read out alongwith the documents annexed thereto, then it is clear that no cause of action accrued to respondent No.1 for filing the suit against the petitioner. He further submits that, none of the document annexed to the plaint supports to respondent No.1’s contention that there is agency-agreement between respondent No.1 and the petitioner. He relied on the following decisions of Hon’ble Apex Court and this court. ３ (i) I.T.C. Ltd., Versus D.R.A.T. & Ors., reported in (1998) 2 SCC, 70. SNP Shipping Services Pvt.Ltd., Versus World Tanker Carrier (ii) Corpn., reported in AIR 2000 Bom. 34. Sopan Sukhdeo Sable & Ors., Versus Asstt. Charity Commissioner (iii) & Ors., reported in (2004) 3 S.C.C. 137. (iv) Harshad J. Shah & another Versus LIC of India & Ors., reported in (1997) 5 S.C.C. 64.

5. Having perused the plaint, alongwith annexture and ratio laid down in the decisions, cited supra, I do not find merit in the present application. The petitioner is the original defendant No.4 who has filed an application under Order VII Rule 11 (a) of “The Code of Civil Procedure,1908” for rejection of the plaint on the ground that, plaint does not disclose cause of action. It is settled law by now that, while dealing with the application filed under Order VII Rule 11 (a) of the Code, the court has to look into the plaint and its annexture only. At that stage, it is not permissible for the court to go into the merit or veracity of the allegations made in the plaint. Let’s, therefore, see whether averments made in the Dispute discloses accrual of the cause of action. Paragraph Nos. 5 and 10 in this regard are relevant which are reproduced hereinafter :-- PARA NO.5 It is submitted that defendant No.1 was dealing with the business of transportation of molasses being the agent and having authority of Kopargaon Sahakari Sakhar Karkhana Ltd., who had submitted the tender as stated above for the “A” grade at the rate of Rs.4500/- per MT. However, after due discussion and negotiations with the tender committee members of the plaintiff karkhana, the defendant No.1 quoted the rate and in writing and expressed willingness to lift the said 2000 Mts of molasses from the site of the plaintiff karkhana at the rate of Rs.5100/- per MT and showed willingness to start the delivery of the said consignment which was lying in deliverable conditions within 8-10 days from the date of order. Plaintiff humbly submits that their ４ Committee Members (Board of Directors) selected the defendant No.1 company being the highest bidder amongst the bidders. It is humbly submitted that the defendant No.1 company was duly represented by Shri.G.G. Mahadik who signed the said letter on 28/5/2005 and accordingly the orders were issued by the plaintiff karkhana in favor of the defendants. PARA NO.10 It is humbly submitted that the defendants acted in the past and it is also the practice amongst the transporters that they act on behalf of the manufacturers having license thereof and the defendant No.1 is estopped from staling that it had no authority to submit the tender on behalf of the principals plaintiff with due care and the practice and the customs thereof, acted at the instance of defendant No.4 and filed tenders at his volition. The defendants never, at any stage, decline the authority of their manufacturers or licensees and are responsible to pay the difference of amount of non lifting of the molasses as per the terms of the agreement quoted in their tenders. Hence, the plaintiff has filed the instant suit or the following amount : Rs.31,50,000-00 Amount of loss suffered by Rs.19,062-00 plaintiff 15% interest by way of damages from 2/8/2005 till the date of filing of the suit. 1500-00 1000-00 Notice charges Typing and xerox charges Rs.31,71,562-00 Total amount.

6. The averments made in the above paragraphs of the plaint if read alongwith the resolution, referred to above, in my opinion are sufficient to constitute the cause of action as against the petitioner. Therefore, the impugned order cannot be faulted with. ５

7. Respondent No.1 has also relied upon Resolution No.7 dated 28th May, 2005 passed by the Board of Directors of the petitioner. Copy of said resolution No.7 is annexed with the plaint. Resolution No.7 shows that the petitioner agrees to purchase 2000 metric ton molasses @ Rs.5100/- per metric ton through respondent No.2. The resolution supports the averments made in the plaint.

8. The learned counsel for the petitioner further points out that, there is no document showing Agency Agreement between the petitioner and respondent No.1 and in absence of the same, suit cannot be proceeded. Submission has no merit. Respondent No.1 in order to succeed is required to prove Agency Agreement between petitioner and respondent No.2, however, respondent No.1 can discharge this burden by leading cogent evidence at the stage of the trial. Respondent No.1 is not excepted to prove its case at the stage of hearing of the application filed under order VII Rule 11(a) of the Code.

9. observed as under :- The Hon’ble Apex Court in the case of I.T.C. Ltd. Case, cited supra has “ While dealing with the application filed under Order VII R.11(a) of the code, the court has to ascertain whether the plaint created an illusion of cause of action by cleaver drafting....” There is no dispute about the proposition laid down by the Hon’ble Apex Court in the case, cited supra. However, in the present case, after perusal of the plaint, I do not find that, respondent No.1 has created an illusion of cause of action by cleaver drafting. In plaint paragraph Nos. 5 and 10 referred here-in-above, respondent No.1 has made clear cut and specific allegation against the petitioner, which are supported by the Resolution No.7 dated 28th May, 2005 passed by the Board of Directors of the petitioner. Considering the facts and circumstances of present case, the ratio laid down in the above case law is not applicable. ６

10. observed that, In the case of SNP Shipping Services Pvt.Ltd., cited surpa, it has been “ Generally only plaint is looked into but, if plaint is based on document the same can also be looked into....” This proposition also cannot be disputed, however, in the present case I have found that there is sufficient averments in the plaint so as to constitute the cause of action against the petitioner.

11. So far as ratio laid down in the case of Sopan and Harshad's, cited supra, are concerned, same deals with Agency Agreement. Respondent No.1 in the present case may prove the Agency Agreement at the stage of trial, therefore, ratio laid down in above case laws is not applicable to the present case.

12. Taking totality of the circumstances into account, I do not find any error in the impugned order so as to enable me to interfere in the above said Revision in my jurisdiction conferred under section 115 of “The Code of Civil Procedure,1908”. The Civil Revision Application is without any merit and, same is accordingly dismissed. (RANJIT MORE, J.)