Allowed

A.P. State Trading Corporation Ltd. v. Auro Logistics Ltd.

Telangana HC6 Nov 2009CMA/802/2006

Case brief

AI extract

What is this about?

The court allowed this appeal and set aside the lower court order dismissing an injunction application in a commercial dispute. The matter was remitted to the Court below for fresh consideration on merits, noting the lower court failed to appreciate varied circumstances of breach, fraud, and contract details.

What did the court decide?

The impugned judgment and decree in I.A.No.2337/2005 in O.S.No.248 of 2005 dated 23-09-2005 are set aside. The matter is remitted to the Court below for fresh consideration on merits.

A.P. State Trading Corporation Ltd. Vs… — Contract and Commercial Disputes | Telangana HC (2009)

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THE HONOURABLE SRI JUSTICE B.PRAKASH RAO

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AND

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THE HONOURABLE SRI JUSTICE B.CHANDRA KUMAR

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C.M.A.No.802 of 2006

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-----------THE ------- DAY OF NOVEMBER, 2009

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Between:

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Andhra Pradesh State Trading Corporation Ltd, Rep by its Vice Chairman & Managing Director, Regd. Office at 5-10-174, Fateh Maidan Road, Hyderabad. .. Appellant

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And

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Auro Logistics Ltd., rep. By its M.D.R.Yatin Reddy, Regd. Office at Ponneri State High Way, Elavambedu Village, Ponneri Taluq, Thgiruvallur District and office at 130, Angappa Naicken Street Chennai, Tamilnadu And Others .. Respondents

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THE HONOURABLE SRI JUSTICE B.PRAKASH RAO

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AND

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THE HONOURABLE SRI JUSTICE B.CHANDRA KUMAR

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C.M.A.No.802 of 2006

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JUDGMENT: (Per the Ho’nble Sri Justice B.Prakash Rao)

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This appeal is by the plaintiff aggrieved against the orders dismissing an application by it seeking for an injunction restraining from initiating any steps for recovery of the amounts credited on 31-3-2004 to the plaintiff’s account on the basis of export documents by the defendant No.2.

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In the suit filed by it, the plaintiff sought for recovery of amount of Rs.13,21,43,907/- against the defendants 1 and 3 jointly and severally along with interest and for a permanent injunction against the said bank/defendant No2 for taking any similar such steps against defendant No.1 for realization of a decree for a sum of Rs.2,27,93,796.00 with future interest and other reliefs

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The entire case of the plaintiff rests on the footing that in spite of the Memorandum of Understanding entered into between the plaintiff and defendant No.1, it had transacted directly with the defendant No.3 and exported the goods in the breach of the said terms. Therefore, having regard to the nature of debates as went on and the claim as sought to be

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made on by the 2^nd defendant, it is not sustainable as long as the claim of the plaintiff is decided and the liabilities are properly fixed. Therefore, pending the said suit the plaintiff sought for injunction. The said application was resisted by the respondents herein inter alia on various grounds and denying the claim as such apart from the plea that the very application is not maintainable in view of Section 41 of the Specific Relief Act. The Court below on consideration of the submissions made from both sides did not find in favour with the appellant and dismissed the application, hence, the appeal.

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It is to be stated that this appeal along with CCCA.No.255 of 2006 arises out of an order allowing an application filed under Rule 11 of Order 7 at the instance of 3^rd defendant and rejecting the plaint as per orders in I.A.No.593 of 2006 dated 22-7-2006. The said appeal was allowed as per

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the Judgment and decree dated today i.e 6-11-2009 setting aside the said orders and remitting the matter back to the Court below for consideration

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afresh, on merits, and in accordance with Law, especially, after considering another application which is pending in I.A.No.2150/2006, filed by the appellant plaintiff itself under Order 6 Rule 17 of the Code of Civil Procedure seeking for amendment of the plaint.

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Coming to the present appeal, it is seen that the Court below, after

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taking into account the claim, held that having regard to the provisions of Section 41 of the Specific Relief Act and the right of the bank as provided for under the provisions of the Debt Recovery Act, the plaintiff is not entitled for injunction. The Court below did take into consideration the facts and held that it is not open for the plaintiff to seek any such injunction in view of the very specific stand taken in the correspondence between the parties.

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During the course of the arguments, on behalf of the respondents

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apart from the principles laid down by the Supreme Court in Cotton Corporation of India v. United Industrial Bank^[1] and Ram Preeti Yadav vs. U.P.Board of High School and Intermediate Education^[2] , the Court

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below did not find any reason to show indulgence in favour of the appellant.

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After taking into consideration the submissions, and especially, in view of the findings as given on facts disentitling the appellant/plaintiff to seek for such injunction in view of its own letter dated 31-3-2004 marked as

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Ex.15 and the intimation given by the defendant No.1 in Ex.P.17 dated 1-42004, it was held that the plaintiff could not have sought for such injunction. Further, having regard to the nature of transaction and the circumstances as it went on and the blame as sought to be put forth by the plaintiff as against defendant No.1 by trying to wriggle of the contract and make the direct export to the defendant No.3 and the other varied circumstances as pointed out in the other application and the paras, which are sought to be added by way of amendment, and further that the matter has been remitted back for fresh consideration, on merits, by allowing party to have the say and the Court below to look into the pleadings in its entirety, we are of the view that

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this matter also can as well be

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re-appreciated from proper perspective with due attention to the respective case of the parties and as to whether on these facts and circumstances, the plaintiff would be entitled to any interim relief as sought for. We do not, however, wish to express any opinion on merits, but however, the fact remains that even in this application, the Court below has not taken into consideration the varied circumstances and the specific allegations of the breach of contract, fraud and the collusion apart from the liabilities, if any, arising in a quasi contract. Therefore, we leave it open for the Court below to consider afresh, keeping in view the case on hand as it speaks from all

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the parties and their say in the pleadings.

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Accordingly, the appeal is allowed. The judgment and decree passed in I.A.No.2337/2005 in O.S.No.248 of 2005, dated 23-09-2005, on the file of Chief Judge, City Civil Court, Hyderabad is set aside and the matter is remitted back to the Court below for consideration a fresh. The lower Court shall dispose of the application afresh on merits, after giving notice and opportunity to both sides, in accordance with Law. No costs.

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_________________ B.PRAKASH RAO,J

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____________________ B.CHANDRA KUMAR,J

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Dt:6-11-2009 Grk

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THE HONOURABLE SRI JUSTICE B.PRAKASH RAO

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AND

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THE HONOURABLE SRI JUSTICE B.CHANDRA KUMAR