Allowed

M/S. Rajeshwari Constructions v. Government of Andhra Pradesh and 3 Others

Telangana HC27 Jan 2025CMA/465/2008

Case brief

AI extract

What is this about?

Appeal against dismissal for lack of territorial jurisdiction allowed. High Court held cause of action arose at Hyderabad as contract termination notice was received there, and principal employer was located there, making trial court's refusal error. Original decree on merits confirmed.

What did the court decide?

Finding of no territorial jurisdiction set aside; decree on merits of underlying suit confirmed; remaining issues dismissed.

M/S. Rajeshwari Constructions Vs… — Contract and Commercial Disputes | Telangana HC (2025)

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[^{337e ]}

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lN rHE^{H|GH '.IIff$rtJ=oBHEoF TELANGANA}

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Mo N^DAY T^{H E} HSSfi ,' iX'oY#r?nf,l?["Jo"

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PRESENT

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THE HON'BLE^{SRI JUSTICEP' SAM KOSHY} THE HoN'BLE^{snr iilSrrceN'TUKARAMJI}

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CIVIL Mls^GLLAN EOUS APPE^{AL No} : 465 of 2008

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Between

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M/s. Raiesh wariconskuclion:,qbi[9;?3Sr1li["rllr*'fi :#y]S['3i,*ifl^; representedReddY,^Age , 3y ;':^{jli: HPJ : B i.?x,l3l ill,', vi uijo} "i

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"'APPetlanUPlaintiff

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AND

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Government^{of Andhra Pradesh, Representedby its- secretary (Prolects)} ' iiiilii;i'I'bln.o [p.wl ;p;'th;i'^{secretary''Hvderabad'}

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Superintendent^{Engin€er (C'E'RP)' Construction Circle -l' Kurnool District'}

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Chief^{Engineer, Major lrrigation' Governmentof Andhra Pradesh' Erramanzil'} Hyderabad.

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Chief Engineer^{(Projects), Governmentof Andhra Pradesh' Near Railway} Station, euddaPah.

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... ResPondentslDefendants

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Appeal filed^{under order 43 Rule 1 (a) of C P C aggrieved by the} Judgment and^{Decreedated15-1 1-2007 passedin o'S'No161 of 2003 on the} fileoftheCourtoftheXllAdditionalChiefJudge,CityCivilCourtatHyderabad (Fast Track Court).

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This appeal coming^{on for hearingand upon perusing the grounds of appeal'} theJudgmentandDecreeofttreCourtbelowandthematerialpapersinthecase and upon hearing the^{argumentsof Sri M.V' DurgaPrasad'learned senior counsel} fortheAppellantandofADDlTloNALGPFoR'lRRlGATloNfortheRespondents.

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This Gourt doth^{Orderand Decree as follows:}

HIGH COURT

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DATED:27t01t2025

DECREE

CMA.No.465 of 2008

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ALLOWING THE APPEAL

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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD

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MONDAY, THE TWENTY SEVENTH DAY OF JANUARY TWO THOUSAND AND TWENTY FIVE

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PRESENT

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THE HON'BLE SRI JUSTICE P. SAM KOSHY ANO THE HON'BLE SRI JUSTICE N.TUKARAMJI

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CIVIL MISCELLANEO US APPEAL No: 465 of 2008

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Appeal filed under order 43 Rule 1 (a) of C.p.C. aggrieved by the Judgment and Decree dated 15-1'r-2007 passed in o.s.No.16.r of 2003 bn the file of the court of the Xil Additionar chief Judge, city civir court at Hyderabad (Fast Track Court).

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Between:

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M/s. Rajeshwari Construction_s, plot No.63, Road No..l, Jubilee Hills, Hyderabad, Reddy' Age:57 represented bv its Manaoing partner Sri vears' R:/"o 6an;aii Hlrs' p. nv;;;ffi chandra setrrar neaoy,-b/"'F. %-rk.i^*

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...Appelranupraintiff

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AND

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1 . Government of Andhra pradesh, Represented by its Secretary (projects) Irrigation & C.A.D (p.W) Departmeni, S."reti.X'HyOerabaO.

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Superintendent Engineer (c.E.R.p), construction circle -1, Kurnool District.

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chief Engineer, Major lrrigation, Government of Andhra pradesh, Erramanzil, Hyderabad.

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4 Chief Engineer (Projects), Government of Andhra pradesh, Near Railway Station, Cuddapah.^-

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...Respondents/Defendants

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Counsel for the Appellant: Sri M.V. Durga prasad

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Counsel for the Respondents: ADDITIONAL Gp FOR IRRIGATION

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The Court delivered the following: JUDGMENT

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THE HON'BLE SRIJUSTICE P. SAM KOSHY AND THE HON'BLE SRIJUSTICE N. TUKARAMJI

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CIVIL MISCELLANEOUS APPEAL NO./165 OF^20OB

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JUDGMENT: (Per Hon'ble Sa Jusfice N. Tukanmji)

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Challenging the^propriety of the decree and iudgment^dated 15.11.2007 in O.S.No.161 of 2003^passed by the Xll^Additional Chief Judge, City Civit Court, Hyderabad, the^{plaintiffpreferred} this appeal.

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We have heard Sri M.V. Durga Prasad, learned. Senior Counsel for the appellant and the learned Additional Government Pleader for lrrigation representing the respondents.

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The relevant facts in brief are that the appellant as^plaintiff filed the suit seeking direction to the defendants to render the accounts and settle the bills by^paying an amount estimated at Rs.94,98,907/- with future interest al 24o/o per annum with costs. The Court below having considered the issues, on the ground of tenitorial^jurisdiction returned the plaint for its^presentation before the appropriate Court. Aggrieved thereby, the plaintiff^preferred

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this appeal.

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PS(J&NTRJ, cma^rt65 2008

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4. Learned counsel for the appellant^{would submit that though}

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the agreement was entered^{and the works to be executed i.e.} modernization of K.C.Canal^{are within Kurnool District, withinthe} territory of State of Andhra^{Pradesh as the then Governmentand} the Principal Office of the^{ChiefEngineer are stationedin} Hyderabad and G.O.Ms.No.36^{dated 06.03.'1997, Government} Memo dated 07.05.1995 were^{issued from Hyderabad,part of} cause of action which is within^{the territorial jurisdictionof the} Court below. He further^{pleadsthat as per Section 20(c) of the} Code of Civil Procedure,^{1908 (CPC) the Court withinwhich} cause of action arises^{wholly or partly wouldhave jurisdictionto} try the mafter. Additionally^{pleaded that, while deliberating the} other issues the Court^{belowhad favourablyaccepted the} appellants' entitlement to^{the suit claim.That apart,the fact of} appellant receiving communication^{of termination of contract,in} the address within^{the jurisdiction of the Court below also forms} part of cause of action. Therefore,^{returningthe suit for wantof} territorial^{jurisdictionis ex facie improper and unsustainable, as} such prayed for interference.

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On this aspect, the^{learnedcounsel for the appellant placed}

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reliance on the following authorities:

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PSIJ&NTRJ, cma 465 2008

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(i)

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A.B.C. Laminart Pvt. Ltd. and another v. A.P.Agencies, Salem - (1909) 2 SCC ,63,

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(ii) (ii,l State of Andhra pradesh v. T.V.Kishna Reddy (died) by L.Rs. - 2oog (1) ALD 660 (DB),

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(iii) Government of Andhra^pradesh represented by its Secretary, lnigation (project Wng) Department, Hyderabad and others v. B.Koteshwara Rao and antoher- 1993(2) ALT SS3;

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(iv) Kusum lngots & Alloys Ltd. v. tJnion of tndia and another - (2004) 6 SCC 254,

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and asserted that the place of receipt of communication of termination of contract constitutes part of cause of action, as such the suit before the trial Court is maintainable.

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Per contra, learned counsel for the respondents has pleaded in support of the impugned judgment. He submits that admittedly the r36n{s261, execution of work and the administrative agency overseeing the work are within the district of Kurnool, Andhra Pradesh. The respondents/defendants have raised objection as to territorial jurisdiction in their written statement. Further at relevant time the then Government over the territory of Andhra Pradesh was in Hyderabad. As such issuance of instructions, memos and the Government orders were from

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PSKJ&NTRJ, cma^,155 2008

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Hyderabad but the department was at Kurnool. Thus, merely pointing to the government order or communication, the appellanUplaintiff cannot claim cause of action. Even otherwise, the Court below had granted liberty to present the plaint before appropriate forum for proper determination of the matter. The appellant without availing proper remedy, pursuing this appeal.

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Further by citing the^judgment in New Moga Transpoft Co., through its Proprietor Kishanlal Jhanwar v. United lndia lnsurance Co.Ltd. and others - (2004) 4 SCC 677 pleaded that the Hon'ble Supreme Court has held that the parties cannot confer^jurisdiction on a Court even by agreement when such Court otherwise does not have^jurisdiction to deal with the matter.

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We have carefully considered the submissions of the leamed counsel and perused the materials on record.

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By the rival claims, the essential issue for consideration is whether the Court below has territorial^jurisdiction to entertain the suit filed by the appellant.

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lt is peffnent to note that to determine the suit claim the trial Court had framed the following issues:

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PSKJ&NTRJ, cma 465 2008

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Whether the determination of contract is contrary to G. O. M s. No. 36 dated 06.03. 1 99t?

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Whether the defendants have commifted any breach of contract because of which the plaintiff could not peiorm the remaining paft of contract?

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Whether the plaintiff is entitted to the suit amount?

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Whether the plaintiff is entifled to the interest, if so, at what ratet?

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Whether the surt is not maintainable under law and while deliberating on this aspect, the Court has framed additional issue i.e. whether this Couft has got tenitoial jurisdiction to try the suit?

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To what relief?

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Having considered the oral and documentary evidence placed by the parties, the Court below had concluded the issue Nos.1 to 4 by holding that the appellant is entifled for Rs.32,13,000/- and Rs.1 1,16,4101- together with interest at 12%;o per annum from the date of termination of contract i.e. 06.03.1g97 and 08.07.1999 respectively tifi realization. However, on issue No.5 by observing that the court has no territoriar jurisdiction to decide the matter, declined to pass decree and directed the appellant to present the suit before the appropriate Court having jurisdiction.

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PSKJ&NTRI. cma 465 200E

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ln order to appreciate this issue the relevant facts relating to cause of action needs attention. Admittedly the respondents/defendants (Superintending Engineer and Chief Engineer) issued, processed, finalized tender and entered into agreement with the appellant as^per the Government orders, instructions/directions of the then Government of Andhra Pradesh from its administrative headquarter at Hyderabad. This factor is categorically establishing that the Government of Andhra Pradesh had appointed the respondents of its department to conduct the proceedings on its behalf. lndisputably, the parties to the contract can be made liable in case of any breach or for its enforcement.

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lt is pertinent to note that the interface between the State Government and its department function in a theoretical framework of principal and agency, though no formal^written understanding, as the function of the respoMents are^{within the} ordinary course of business of the State^{Government,fromthe} acts of the situation or out of necessity of the^{process adoptedin} the functioning, the inter connection between the^{principali.e.} State and its agency i.e. department is making out an^implied agency. ln this position, the implementation of contract^{by the} tlird^{party with the agency would become distinct as the rights}

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PSKJ&NTRI, cma 465 2008

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and obligations of the principal and the agent would be subject to the provisions of the contract. Section 226 of the lndian Contract Act, 1872 (for short, 'the Contract Act') prescribes that when act is done by an agent within the scope of authority its acts are binding on the principal. ln the case on hand, as the respondent had acted on behalf of the principal, the principal is also equally liable as the agent was authorized by the principal to enter into contract.

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ln this view, the jurisdiction of the Courts prescribed under the Code of Civil Procedure, 1908 (the CpC) if considered, the jurisdictions of pecuniary territorial and subject matter are the factors in determining the competency of the Courts to entertain a cause. Section 9 of the CPC specifies that all the Courts in lndia shall have jurisdiction to try all suits of civil nature except for the suits to which cognizance is expressly or impliedly barred. The stipulations as to the jurisdiction finds place under Sections 16 to 20 CPC. ln regard to tenitorial jurisdiction Section 20 of CpC assumes importance as it provides that the suits relating to the contracts may be instituted either the place where the defendant ordinarily resides or carries on business or where any part of cause of action arises. Accordingly by the places enumerated, different Courts may have jurisdiction to entertain the suit lils^

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PSKJ&NTU. cma 465 200t

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also settled position that the plaintiff as dominus /lfls has right to chose forum (See Nahar lndustial Enterprises Ltd vs. Hongkong & Shanghai Banking Corp - 2009 (9) SCC 646).

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Pertinently Section 20(3) of CPC provides that a suit shall be instituted where the c€luse of action wholly or in part arises. The Contract Act does not specify the factors which gives rise to cause of action in whole or in part. Therefore determination of these aspects shall be considered by co-relating the relevant facts with the provisions of the Contract Act and the CPC

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As opined earlier, respondents' location, place of contract, execution of work and payments are within the district of Kurnool of Andhra Pradesh and the employer i.e. principal/the Government who conducted the proceedings on its behalf, through the respondents, was at Hyderabad. Therefore, either at the place of contract or its execution, as well as, at the place of principal employer/State the respondents can be legally held liable. For this reason, this Court is of the considered opinion that institution of suit by the appellant at Hyderabad is acceptable as it . .is within the prescription of Section 20 of CPC

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PSIiJ&NTRJ. cma 46J 2008

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( (

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That apart, it is clear from the findings of the trial Court that the communication in regard to removal from contract was intimated to the appellant at Hyderabad. The Hon,ble Supreme Court in ABC Laminad (supra) has held that the place where the cessation of contract is received would create part of cause of action. ln these peculiar facts and circumstances, we hord that the trial Court had jurisdiction to try the suit, as such, finding in the impugned judgment regarding territorial jurisdiction is riabre to be and is accordingly set aside.

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At this juncture it shalr be noted that, as the other materiar issues were determined by the trial Court upon relevant evidence placed by the apperrant and respondents and on due deriberation. Neither of the parties raised any dispute as to propriety or othenrvise on other issues. In the circumstances, considering the fact that the findings recorded in the impugned judgment on the issues 1 to 4 are just and reasonabre, the concrusions are hereby confirmed.

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