20 January 2020


High Court of Delhi

Tribhuvan Enterprises & Anr v. Thakkar Petrochemicals Ltd. & Anr.




When parties mutually agreed for jurisdiction of Delhi Courts and fact that, goods were supplied from Delhi, Delhi High Court has jurisdiction

Appellants-Defendants were appointed as Clearing and Forwarding Agents and Stockists of respondents-Plaintiffs and on account of appellants-defendants withholding stock of lubricants, out of outstanding amount of `5 lacs odd, security deposit of `3 lacs was adjusted and thereafter, suit for recovery of principal amount was instituted on ledger account and interest thereon was also claimed. Stand of Appellants- Defendants before trial Court was that, lubricants were of substandard quality and were not saleable and counter-claim was made for refund of security amount with interest and for commission of goods as well as loading and unloading charges. Trial Court had returned findings in favour of Respondents-Plaintiffs and against appellants-defendants on counter-claim as well.

Form ‘F’ sent by appellants to second respondent-Thakar Chemicals would not constitute a sale as it was a mere transfer and thus, no liability arises and that trial court has gravely erred in decreeing respondents’ suit against the appellants.

Clearing and Forwarding Agreement was between Appellants and Respondent No.1, but stocking of goods for distribution was made available by sister-concern of first respondent i.e. second respondent. No doubt, invoices, ledger account, delivery challan, goods receipts, etc., are of second respondent, but Communications of 1st March, 1996 and of 2nd May, 1996 were sent by Appellant to first respondent regarding stock position of goods lying with Appellants.

Issuance of form ‘F’ to second respondent by itself would not justify Appellants’ plea of there being no privity of contract with Respondents because admitted communication of 19th June, 1996 by Appellants to first respondent talks of submission of form ‘F’ and transferring of lubricants and goods by respondents to appellants. In such a situation, appellants cannot be heard to say that there was no sale of goods by Respondents to appellants and plea of appellants of there being no privity of contract with first appellant is without any basis as they have not disputed their status of consignee agent in respondents’ communication whereby it was intimated to Appellants that due to change in policy, the status of consignee agent was being changed to super-stockists. Security deposit was rightly adjusted by Respondents against outstanding amount. In face of documentary evidence on record, it cannot be said that there was lack privity of contract between the parties. Jurisdictional plea raised by Appellants is without any basis as parties had mutually agreed that, jurisdiction would be of Delhi Courts and in view of fact that, goods were supplied to Appellants at Gwalior from Delhi by Respondents. Affirming judgment of trial Court, High Court dismissed the appeal.

Tags : Contract Privity Sale of goods Jurisdiction

Share :