Zasha Advertising Pvt Ltd v. Abhijit Roy

1. This appeal is preferred by the appellant/plaintiff against the order dated 07.01.2019 passed by the learned Additional District Judge-4/ South-West District, Dwarka Courts, New Delhi (hereinafter referred as the learned ‘Trial Court’) in CS No.18/2019 whereby the suit of the appellant under Order XXXVII CPC for recovery of Rs.4,71,320/- against the respondent/defendant was dismissed in limine.

2. The brief facts are: a) on 26.05.2018 the Respondent placed purchase order upon the Appellant at Delhi for taking the Appellant's service for branding AC bus with effect from 27.05.2018 for a period of one month at the rate of Rs.78,000/- excluding GST per bus per month; b) on 02.07.2018 being satisfied by the Appellant's services, the Respondent placed another purchase order dated 02.07.2018 for continuing the above-mentioned services for another period of one month; 2019:DHC:6532 c) on 17.07.2018 in order to discharge the Respondent's liability as per purchase order dated 26.05.2018, the Respondent issued a cheque bearing no.000003 dated 17.07.2018 of Rs.3,68,160/-, drawn on Punjab & Sind Bank, Branch New Alipore, Kolkatta in favour of the Appellant. However, the Respondent requested the Appellant not to present the said cheque for encashment as the Respondent had been running into financial crunch; d) after repeated requests and reminders for making the payment of the outstanding amount by the Appellant's officials, the Respondent made part payment of Rs.1,20,000/- to the Appellant against the purchase order dated 26.05.2018; e) on 20.08.2018 thereafter, in order to discharge the Respondent's liability as per the purchase order dated 02.07.2018, the Respondent issued a cheque bearing no.000022 dated 20.08.2018 of Rs.3,68,160/-, drawn on Punjab & Sind Bank, Branch New Alipore, Kolkatta in favour of the Appellant. However, the said cheque got dishonored upon its presentation by the Appellant with its banker; f) on 11.10.2018 thereafter the Appellant and its officials approached the Respondent repeatedly with request to pay the due amount to the Appellant. After much persuasions, the Respondent paid an amount of Rs.70,000/- against the purchase order dated 26.05.2018. The Respondent also instructed the Appellant to present the cheque bearing No.000022 dated 20.08.2018 for an amount of Rs.3,68,160/-, drawn on Punjab & Sind Bank, Branch NewAlipore, Kolkatta in the last week of October, 2018 with promise and undertaking that the same would be honored upon its presentation. Further the Respondent also undertook and promised to pay the balance amount as soon as possible; g) on 02.11.2018 the above stated cheque bearing no.000022 dated 20.08.2018 of Rs.3,68,160/-, drawn on Punjab &Sind Bank, Branch New Alipore, Kolkatta was presented for clearance by the Appellant to its Banker, namely Federal Bank, Marathahalli Branch (FMH), Bangalore within the statutory period, the said cheque was dishonored due to stopping of payment by the Respondent. The said cheque and returning memo dated 02.11.2018, containing the remarks "payment stopped by the drawer" was received by the Appellant thereafter; h) on 05.11.2018 The Appellant had also caused a legal notice to be served upon the Respondent, calling upon the Respondent to pay the abovementioned amount; i) on 06.12.2018 the Respondent, replied to the said legal notice, wherein making certain false and frivolous allegations, however admitting the abovementioned amount and further made payment of a sum of Rs.75,000/- to the Appellant. Hence the sum of Rs.4,71,320/- is still due and payable by the Respondent to the Appellant; j) on 05.01.2019, abovesaid Civil Suit No.18/2019 under order XXXVII of CPC was filed before the District Judge, South West, Dwarka Courts, Delhi and which was marked to the learned Trial Court; k) on 07.01.2019 the learned Trial Court dismissed the suit without issuing notice for non-maintainability of the same holding the learned Trial Court lacks territorial jurisdiction and the suit is not maintainable in the present form; hence the present appeal.

3. The suit has been dismissed on two grounds viz a) territorial jurisdiction; and b) the purchase order being in the name of Sharma's Advertising Private Limited and whereas suit has been filed in the name of Zasha Advertising Private Limited.

4. Qua the territorial jurisdiction, learned Trial Court had noted:-

5. The suit of the appellant was dismissed in limine. A bare perusal of the plaint would reveal, respondent alleges to have placed the purchase order(s) at the registered office of the appellant situated within the territorial jurisdiction of this Court, per paragraph No.22 of the plaint. Further, admittedly there was no clear agreement between the parties as to where the payment was to be made and in the absence of such agreement, per settled law, it is the debtor who has to chase the creditors. Admittedly, the creditor is based in Delhi.

6. It was too early a stage to form an opinion qua the territorial jurisdiction and to dismiss the suit. Even otherwise, if the learned Trial Court was of the view it does not have territorial jurisdiction to entertain the suit, it ought have to acted per order VII rule 10/10A CPC. Further in M/s.Alphabetics Private Limited vs Lohia Jute Press AIR 2004 Delhi 374 it was noted:-

7. Thus a perusal of plaint discloses a part of cause of action here, hence the suit ought not to have been dismissed in limine.

8. Coming to contention b) the suit been dismissed on the ground the purchase order and legal notice bear the name of M/s.Sharma's Advertising Private Limited whereas the suit has been filed in the name of M/s.Zasha Advertising Private Limited and hence there was no cause of action for the present company to file this suit, and the learned Trial Court noted:-

Zasha Advertising Pvt Ltd whereas the documents relied upon by the plaintiff i.e. Purchase Order dated 26.05.2018 of IM/s Koncepts & Kreations is in the name of M/s Sharma's Advertising Pvt Limited. Further, the photocopy of cheque is also issued in the name of M/s.Sharma Advertising Pvt Ltd and not in the name of the plaintiff M/s.Zasha Advertising Pvt Ltd. Surprisingly, even the legal notice issued to the defendant by the Advocate for the plaintiff starts from the words "Under the instructions from and on behalf of our client,Sharma Advertising Private Limited". Further, reply to the defendant's letter dated 06.12.2018 also reveals that M/s Sharma Advertising Pvt Ltd received part payment out of total sum of Rs.5,45,320/-. It is manifest from perusal of plaint that all the relevant documents by way of which the plaintiff is, claiming recovery are in the name of M/s Sharma Advertising Pvt. Ltd and not in the name of plaintiff. The arguments of learned counsel that name of the plaintiff company was earlier M/s Sharma Advertising and which has been got changed to M/s Zasha Advertising Pvt Ltd with the consent of Registrar of Companies (ROC) is also not of any help to the plaintiff. A copy of certificate issued by the ROC has been placed on record is dated 19.04.2018 and all the documents relied upon by the plaintiffs appear to be prepared/issued thereafter. It is not understandable when documents are after the date of change of name with ROC then why name of M/s Sharma's Advertising Pvt Ltd is appearing on the documents and not the name of M/s Zasha Advertising Pvt Ltd. No plausible explanation could be furnished on behalf of the plaintiff in this regard. Hence, I do not find any substance in the arguments advanced. The present suit, therefore, not maintainable before this court. The same is, therefore, dismissed in limine."

9. It is the submission of the appellant earlier the name of the appellant was M/s.Sharma's Advertising Private Limited and they had applied for the change of the name of the company. Admittedly, M/s.Sharma's Advertising Private Limited and M/s.Zasha Advertising Private Limited are not different companies and as a matter of fact both the names are of same company. It is also not the case of the respondent M/s.Zasha Advertising Private Limited is a different company than M/s.Sharma's Advertising Private Limited. The entire transaction has been carried out by the appellant in earlier name of the company as the business dealings with the respondent were going on prior to the change of the name. It is the respondent who placed the purchase order in the old name of the company. The name of both the companies are also embodied in the memo of parties in the plaint, which perhaps was not noticed by the learned Trial Court while passing the impugned order. Prima facie change of name of the company though has come into existence but in fact it is the very same company with the same Board of Directors and in the control of same Management.

10. Section 23 of the Companies Act, 1956 reads as under:-