Sanjay D. Ghodawat v. RRB Energy Limited(Formerly known asVestas RRB India Ltd)Rep. by its President, S.D.SinghNo.17

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 07.12.2009CORAM :THE HONOURABLE MRS. JUSTICE PRABHA SRIDEVANANDTHE HONOURABLE MR. JUSTICE M. SATHYANARAYANANO.S.A. No.374 of 2009Sanjay D. Ghodawat.. Appellant (Defendant)-vs-RRB Energy Limited(Formerly known asVestas RRB India Ltd)Rep. by its President, S.D.SinghNo.17, Vembuliamman Koil Street,K.K.Nagar West, Chennai, Tamilnadu... Respondent (Plaintiff)- - - - -Prayer : Appeal against the order and decretal order of thisCourt dated 31.8.2009 in Application No.1886 of 2009 in C.S. No.64 of2009.- - - - -For Appellant:Mr. P.S. Raman, Advocate GeneralFor M/s. AZB PartnersFor Respondent:Mr. Satish Parasaranfor M/s.Fox Mandal & Associates- - - - -J U D G M E N T( Delivered by PRABHA SRIDEVAN, J. )The appeal is against the refusal to revoke the leave granted.The defendant/appellant and the plaintiff/ respondent entered into anagreement for supply of Wind Energy Generators ('WEGs' in short).The defendant is a resident of Maharashtra State. The WEGs were tobe set up in Karnataka. The plaintiff has his work office in Chennaiwithin the jurisdiction of this Court. The contract was entered intoon 22.7.2006. The purchase orders, which contained the terms andconditions of the contract, were sent by the defendant to theplaintiff with a request to confirm it and return it at the earliest.The plaintiff accepted it at Chennai and returned it. One of theconditions of the contract is Clause referred to as 'ExpectedGeneration'. As per this term, subject to the conditions regarding https://hcservices.ecourts.gov.in/hcservices/ power curve, etc., the generation of power would be 15,00,000 +/- 5%units per WEG per annum (LCS Reading) at 100% grid availability,failing which the plaintiff was liable to pay Rs.15 lakhs per month. 2. There were problems in the progress of the project becausethe Karnataka Power Transmission Corporation did not make availablethe power evacuation approval. The plaintiff proposed an alternatesite at Harihar for 7 WEGs and 18 WEGs continued at Malgatti inKarnataka. The WEGs were erected and commissioned. The defendant hadto pay a sum of Rs.5,64,56,650/-. The defendant failed to pay on theground that the power generation fell short, and the estimateprovided in the purchase order was one of absolute generationguarantee. Therefore, there was a meeting in Mumbai on 3.11.2007 atthe residence of one P.C.Jain, by which some agreement was arrived atbetween the parties. The minutes of this meeting has been recordedand the copy of the same is also enclosed in the typed set of papers.According to the plaintiff, this ought to be read along with thepurchase order agreement. According to the plaintiff, the non-performance of the WEGs will arise only on its failure to conform tothe power curve. Since the defendant wrongfully withheld the amountmentioned above, there was exchange of correspondence. The defendantindicated that his claim for compensation would be adjusted againstthe amounts payable by him. The defendant also preferred a complaintbefore the National Consumer Disputes Redressal Commission. Thedefendant raised a debit note, unilaterally adjusting their claimagainst the contractual debt. The plaintiff suffered a hugefinancial loss and since the balance amount has not been paid, filedthe suit in this Court, where the purchase order agreements dated22.7.2006 came into existence. 3. Leave to sue was sought for on the ground that the purchaseorder was signed at Chennai and therefore, a part of cause of actionarose at Chennai within the jurisdiction of this Court. The defendantmoved an application for revocation of leave. In the application forrevocation of the leave to sue, the defendant contended that theplaintiff's registered office was in New Delhi and not in Chennai andthis amounted to forum shopping; that the defendant did not carry onbusiness within the jurisdiction of this Court; that the garnishee,viz. the Karnataka Power Transmission Commission is not situatedwithin the jurisdiction of this Court; the entire transaction aroseoutside the jurisdiction of this Court; the various sites identifiedfor erection and installation are situated in Karnataka andMaharashtra and therefore, when no part of the cause of action arosewithin the jurisdiction of this Court, leave ought not have beengranted and they prayed for revocation of leave. The said applicationwhich was rejected and hence this appeal.4. Mr. P.S. Raman, learned Advocate General appearing on behalfof the defendant submitted that no part of the cause of actionvirtually arose within the jurisdiction of this Court, except the https://hcservices.ecourts.gov.in/hcservices/ signing of the purchase order. He submitted that the suit is one forrecovery of money on the failure of the performance of the contract.The performance of the contract was essentially the installation ofWEGs in the State of Karnataka. In any event, the situs of signingof the purchase order is a fact that has to be proved to estasblishthe right of the plaintiff to get a decree and in any event, afterthe meeting on 3.11.2007, the parties had revised their terms andengagement. It was submitted that for the deficiency in thegeneration of power, the defendant had raised consumer complaint andthis suit is nothing but a counter-blast. The adequacy of the powergeneration and the efficiency of WEGs are matters that may requireevidence by the persons on site at Karnataka. The case of thedefendant that the purchase order got modified by the agreement atthe common friends residence in Mumbai can be proved by witnesses whoare in Mumbai. Therefore, even on the ground of forum non-conveniens, the suit ought to have been filed either within the Stateof Maharashtra or Karnataka. On the other hand, the suit has beenfiled only to harass the defendant. 5. Mr. Satish Parasaran, learned counsel appearing on behalf ofthe the plaintiff submitted that it is really not necessary for theengineers or the people on site in Karnataka to give evidence nor isit necessary for anyone to come from Mumbai. The purchase orderprovided for payment of Rs.15 lakhs per month under certainconditions. The question is whether the plaintiff had an absoluteright to claim Rs.15 lakhs or whether it was payable on thefulfilment of certain conditions and therefore, the allegedinconvenience will not really arise. The learned counsel alsosubmitted that in fact, the defendant knew that the site, where thecause of action arose, is Chennai, because the consumer complaintfiled against the plaintiff showed in the cause title, thedefendant's address at Chennai. The learned counsel submitted thatthe question of convenience does not arise in this case. 6. The facts are not really in dispute. The residence of thedefendant is in Mumbai, the site of installation is Karnataka, thenegotiations may have also taken place in Mumbai and the KarnatakaPower Transmission Corporation Ltd., whose decision was a vitalfactor, is also in Karnataka. The purchase order, which sets downthe terms and conditions of the contractual relationship between theparties has, as per the plaint averment, been accepted at Chennai.It is well settled that while considering the revocation of leave, wemainly have to look into the plaint averments and if on the basis ofthe averments, we are satisfied that a part of cause of action arosewithin the jurisdiction of the Court, then leave necessarily has tobe granted or if leave has been granted, it need not be revoked. Thesuit could have been filed in Maharashtra or in Karnataka without adoubt. But, definitely, a cause of action arose within thejurisdiction of this Court. The plaintiff's case is that the meetingbetween the parties on 3.11.2007 really brought into existence a new https://hcservices.ecourts.gov.in/hcservices/ contract substituting the terms and conditions of the purchase orderand that was entered into in Mumbai and therefore, it is hardly ofany consequence that the purchase order was signed at Chennai.Further, it was submitted that as a matter of fact, the plaintiff hadreceived the purchase order in person though the office seal wouldindicate that it had been received in Chennai. We can only look atthe document as it is and it shows that it was received at Chennai.The plaint, in fact, refers to the meeting dated 3.11.2007, but it ispleaded that the Minutes of the said meeting should be read as partand parcel of the purchase order. 7. The crucial clause in the agreement is captioned "ExpectedGeneration", which reads as follows :"Based on the wind date and as per the power curve, theexpected generation of the site is 15,00,000 + 5% units per WEGper annum (LCS Reading) at 100% grid availability. However,VRRB stand guarantee for the performance of the WEG based on thepower curve and performance of the machine. For this purpose,you should install wind mast at site. This guarantee willcommence from one month after the date of commissioning of theWEG. Based on above, any shortfall in generation will becompensated by VRRB at prevailing Power Purchase Rates."According to the appellant, this commitment of Rs.15,00,000/- was anunqualified one and would arise if there was any shortfall in thegeneral of wind power. Whereas according to the respondent, theclause itself begins with the words "Based on the wind data and asper the power curve" and there is no unconditional or unqualifiedcommitment to pay Rs.15,00,000/-. In the meeting dated 3.11.2007,which admittedly was held in Mumbai, certain issues appeared to havebeen resolved. According to the appellant, after this meeting, theoriginal contract got modified and therefore, relying on that, noreliance can any longer be placed on the original contract, based onwhich alone it is now claimed that the agreement was not anunqualified commitment of Rs.15,00,000/-.8. The following decisions were cited :-(a) [A.B.C. Laminart Pvt. Ltd. vs. A.P. Agencies [(1989) 2S.C.C. 163] was a case where the metallic yarn was supplied at Kairaand the contract provided that the disputes were subject to Kairajurisdiction. The suit was filed in Salem. The trial court heldthat it had no jurisdiction to entertain the suit. The Supreme Courtheld that notwithstanding the clause in the contract which mentionedthat all disputes should be resolved at Kaira, "it could not,therefore, be said that the jurisdiction of the court at Salem whichcourt otherwise had jurisdiction under law through connecting factorof delivery of goods thereat was expressly excluded". Further, itwas held that the "acceptance of an offer and its intimation results https://hcservices.ecourts.gov.in/hcservices/ in a contract. Therefore, a suit could be filed in a court withinwhose jurisdiction the acceptance was communicated and theperformance of a contract is part of a cause of action and the suitin respect of the breach can always be filed at the place where thecontract should have been performed or its performance completed, andif the contract is to be performed at the place where it is made, thesuit on the contract is to be filed there and nowhere else". Thesame judgment was pressed into service by both the parties. (b) In Battepati Parthasarathy Gupta vs. The Calcutta Glass andSilicate Works (1936) Ltd. [1948 (2) M.L.J. 101], which was cited bythe learned Advocate General, it was held that from having regard tothe terms of the contract, no part of the cause of action arose inMadras and therefore, leave was revoked. There, the facts were thatthere were two contracts relating to supply of certain glassware.The contracts were admittedly entered into at Calcutta and thequestion was whether any part of the performance of the contract tookplace at Madras. The construction placed on the contract for theapplication for revocation was that the agent would take delivery ofthe goods at Calcutta and despatch the same to his principal atMadras and it was contended by the plaintiff that as per thecontract, the goods would be in the control and custody of thedefendants until the money was paid at Madras. A learned singleJudge of this Court held that the price was fixed FOR Calcutta. Thedelivery of the goods was Calcutta itself. The goods were to bedelivered to the plaintiff or his agent or the plaintiff's place ofbusiness at Madras and in paragraph 10 of the judgment, held that nopart of the performance was contemplated to take place at Madras andtherefore, not even a part of the cause of action arose at Madras.It was further held that the leave was rightly revoked.(c) In S. Nagaraj vs. S. Govindaswamy [A.I.R. 1984 Madras 212],a Division Bench of this Court ordered the return of the plaint, tobe presented before the proper forum. The relevant paragraphs are asfollows :-"5. Mr. M. Srinivasan, learned counsel for theappellant, contends that here is an agreement at Madras,between the plaintiff and respondent I in respect of thedealing in lottery tickets and as such, part of the causeof action has arisen within the jurisdiction of theoriginal side of this Court. Mr. Srinivasan next contendedthat the money in deposit with respondent 2 is beingclaimed by the plaintiff and respondent 2 bank was one ofthe panchayatdars to he dispute between the plaintiff anddespondent 1, that the branch of respondent 2 is at Madrasand that the suit can be filed at Madras in suchcircumstances." https://hcservices.ecourts.gov.in/hcservices/ There, on the side of the defendant, it was contended that no causeof action arose at Madras and the parties ought to have filed thesuit at Coimbatore. It was further held thus:-"8. Nowhere in the plaint it has beta alleged thatthere was an agreement between the plaintiff and defendantI at Madras for the purpose of purchasing a lottery ticketfrom Royal Bhutan Lottery and sharing the prize money, ifwon, equally between them. Mr. M. Srinivasan, learnedcounsel for the appellant fairly conceded that there is aspecific averment to the above said effect in the plaint.But nevertheless, the learned counsel submits that readingthe plaint as a whole, it can be assumed that the partiesintended to share any prize money, if won from the BhutanLottery. We are afraid, we cannot assume such a thing whenthere is absolutely no averment as regards such agreementin the plaint itself."(d) In Parameswari Veluchamy vs. T.R. Jayaraman [O.S.A. No.137of 1997 dated 12.7.2001 – MANU/TN/0529/2001], the plaintiff filed asuit for partition of several properties, amongst which most were inAruppukottai and three properties were situated in the city ofMadras. A learned single Judge of this Court had revoked the leaveon the ground of convenience having regard to the location of theproperties. Despite three items being outside Madras, all thedefendants residing outside Madras, the documents in relation to theproperties being outside Madras and the witnesses required to speakin respect of those properties resided in Madras, it should have beensold where the bulk of the properties were situated. As againstthat, the plaintiff filed an appeal. It was contended on behalf ofthe defendants that the order is a discretionary order and havingregard to all the relevant factors, no interference is called for.The Division Bench held as follows :-"9. There can be no doubt that this Court hasjurisdiction to try any suit in relation to any land whichis situated within the jurisdiction of this Court. Noleave of the Court is necessary in such cases. In casewhere a part of cause of action arises within thejurisdiction of this Court as also in cases where thedefendants do not reside or carry on business or work forgain within the jurisdiction of this Court, leave of theCourt is essential. The grant of refusal of leave isdiscretionary.""12. If the plaintiffs had brought the suit only inrelation to the three items in Madras, as already noticed,question of granting leave would not arise, but havingregard to all the facts of this case, it is clear that a https://hcservices.ecourts.gov.in/hcservices/ mere claim made by them in relation to those propertiescannot be made the foundation on which their claim for ashare in all other properties all of which are outsideMadras should be tried by this Court. It would be liketrying to make an elephant stand on a pin head.""21. Moreover, considerations of convenience are verygermane while determining the question of grant, refusal ofrevocation of leave. Almost all the properties, thedocuments relating thereto and the witnesses who haveknowledge of the same are outside the city of Madras."(e) In Tuticorin Alkali Chemicals and Fertilizers Ltd. vs.Cochin Silicate and Glass Industries [(1992) 2 MLJ 376], a DivisionBench of this Court considered the doctrine of forum conveniens andalso referred to Halsbury's Laws of England in this regard. Therelevant observations are extracted hereunder :-"3. In that very appeal, we also considered as to whata cause of action means and recorded our considered opinionfollowing the decision of a Full Bench of this Court inLakshminarayana Chettiar, In re. (1954) 1 M.L.J. 403 : 67L.W. 123 and a judgment of the Supreme Court in State ofRajasthan vs. Swaika Properties, (1985) 3 S.C.R. 598:Cause of action is a fact which, if traversed would benecessary for the plaintiff to prove in order to supporthis right to a judgment of the court. In other words, itis a bundle of facts, which taken with the law applicableto them, gives the plaintiff a right to relief against thedefendant.The learned single Judge is, however, right in sayingthat in all cases where a part of the cause of action hasarisen within the jurisdiction of one court and the otherpart within the jurisdiction of some other court, therelevant question will be the balance of convenience, butthen has said : "In paragraph 5 of the counter-affidavit,the defendant has stated that the entire evidence whetherdocumentary or witnesses, has to be produced at Madras forconducting the trial which would be highly impossible apartfrom being expensive. The defendants will be subjected toacute hardship and loss on the other hand, the plaintiffwill not be subjected to any hardship as the plaintiff ishaving a branch at Mattancherry, Cochin and theirdistributor Devika Chemicals (P.) Ltd. is also at Cochin.The defendants have also referred to the necessity ofsummoning the records from Central Excise Department tospeak to the supply of goods. Learned counsel for theplaintiff urges that there is no relevance and that it may https://hcservices.ecourts.gov.in/hcservices/ not call for records from the Central Excise Department.But, it is not a matter which has to be considered at thisstage, but, I am of the opinion that the defendants will beput to undue hardship if the suit is filed in this Court.On the other hand, since the plaintiff is having its branchoffice admittedly at Cochin, it will not be put to anyinconvenience if the suit is filed in a competent court atCochin, where admittedly a part of the cause of action hasarisen.""5. We do not say that in considering the balance ofconvenience as to the forum for instituting a suit, itwould be necessary (like the principles of injunction) tosee the ultimate injury that a party may suffer, but we donot find support to our view and we state in no uncertainterms that in deciding whether to refuse leave or not, itwould be necessary to see on facts and not, on assumptions,who shall suffer – the plaintiff or the defendant – if theleave is granted or refused, as the case may be.6. We would have proceeded ourselves to examine thefacts pleaded on behalf of the plaintiff to see whetherfacts show that most of the transactions took place withinthe jurisdiction of this Court or a small part of the causeof action arose within the jurisdiction of this Court, for,if most of the transactions were done within thejurisdiction of this Court, obviously the defendants foundit convenient to transact their business for all purposeswithin the jurisdiction of this Court, but only to defeatthe grant of leave on the Original Side of this Court, theplea of convenience is raised. We would also have examinedourselves as to whether keeping in view the nature of thetransactions between the parties from which transactionsthe present suit has arisen, it would be inconvenient tothe plaintiff if he is asked to go to institute the suit inCochin as pleaded by the defendants. We, however, refrainfor, if we do so, we shall usurp the jurisdiction anddiscretion of the learned single Judge, who is to decidewhether to grant leave or not. Since we are of the opinionthat a proper adjudication is necessary on all relevantfacts of the case before deciding whether to grant leave ornot and since it has not been done in passing the impugnedjudgment, we are inclined to interfere with the impugnedorder. The impugned order, for the said reason, is setaside. The case is remitted to the Original Side of thisCourt for a re-hearing and decision on the question whetherleave should be granted or not, in accordance with law.This appeal is accordingly allowed. No costs." https://hcservices.ecourts.gov.in/hcservices/

9. In the present case, the purchase order was sent to the WorksOffice at Chennai requesting him to return the duplicate copy of theerection and commissioning order as acceptance along with theacknowledgment of cheque received from their end. This was acceptedat Chennai and returned to the plaintiff. Of course, it wassubmitted by the learned Advocate General that though the rubberstamp indicates as if the order was received in Chennai, actually itwas personally received outside the jurisdiction. We are afraid, wecannot go beyond the averments made in the plaint and for thatpurpose, we can look into the documents and determine the issue asthe tenor of the document indicates, at this stage. In this context,we would like to refer to the following observations made in (1948) 2M.L.J. 101 (supra) :-"11. It was further contended by the learned advocatefor the appellant relying upon the observations of Rankin,C.J., in Secretary of State for India in Council vs.Golabrai Paliram, I.L.R. (1931) Cal. 150, followed in HajeeAdam Abdul Shakoor vs. Ali Mohamed Ebrahim Shakoor, I.L.R.(1940) 1 Cal. 497 that when questions of difficulty arisesas to the jurisdiction, they should not be dealt with on anapplication for revocation of leave to sue, but should bedetermined at the trial by the framing of a preliminaryissue. This aspect apparently was not pressed in the Courtbelow. We are unable to find any question of difficulty orimportance in this case which cannot be properly dealt withon application for revocation of leave to sue. For therespondents, it was urged that even if a part of the causeof action arose at Madras, on the ground of balance ofconvenience, the learned Judge was right in revoking theleave. There is no trace of this ground in the affidavitfiled by them in support of their application; nor is itthe ground on which the learned Judge revoked the leave tosue. We are unable to accept this contention of therespondents."10. All the subsequent correspondence were also addressed onlyto the respondent at Chennai. In fact, even in the complaint filedbefore the Consumer Disputes Redressal Commission, the address forservice on the respondent is shown as Chennai. Therefore, it isclear that the defendant was dealing with the plaintiff/respondentherein at Chennai. For deciding convenience, this is not a casewhere, as observed by the Division Bench in Parameswari Veluchamy'scase (supra), where the facts indicated that the elephant is made tostand on a pin head. It is only the construction of the contractwhich is relevant for determining the issue and since prima facie weare of the opinion that the contract was entered into only atChennai, it is not necessary for us to go beyond that and we holdthat the learned single Judge rightly dismissed the application forrevocation of leave. https://hcservices.ecourts.gov.in/hcservices/

11. In the result, the appeal is dismissed. No costs.Consequently, M.P. No.1 of 2009 is also dismissed.Sd/Asst.Registrar/true copy/Sub Asst.Registrar sra/abToThe Sub Assistant Registrar,Original Side,High Court, Madras.1 cc To M/s.AZB Partners, Advocate, SR.666011 cc To M/s.Fox Mandal and Associates, SR.67250O.S.A.No.374 of 2009 JRG(CO)sra 06.01.2010