Madras High Court
Pepsi Co. India Holding Pvt. Ltd. Rep. By ... vs Ananda Agencies Rep. By Its Proprietor, ... on 6 December, 2006
Equivalent citations: 2007(1)CTC166, (2007)1MLJ286
Author: P. Jyothimani
Bench: P. Jyothimani
ORDER P. Jyothimani, J.
1. This revision petition is filed by the second defendant in the suit in O.S.No. 36 of 2005, under Article 227 of the Constitution of India.
2. The first respondent M/s. Ananda Agencies rep.by its proprietor has filed a suit in O.S.No. 36 of 2005 against the second respondent Sri Balaji Marketing and the petitioner herein as defendants 1 and 2 respectively for a permanent injunction restraining the defendants from selling the PEPSI COKE products in Thiruthuraipoondi Town which is under the exclusive right of agency of the plaintiff and also for a direction against the second defendant who is the petitioner herein to supply the products, Pending suit, the first respondent also filed I.A.No. 172 of 2005 praying for an order of interim injunction and the Trial Court has granted an exparte injunction on 15.34.2005, The petitioner being the second defendant and the second respondent in I.A. has filed I.A.No. 180 of 2005 to vacate the order of interim injunction granted in the above I.A.No. 172 of 2005 and also another I.A.No. 181 of 2005 for fixing an early date.
3. The petitioned has also filed counter affidavit in I.A.No. 172 of 2005 and the said counter affidavit was signed by D. Sreeram in the capacity of Territory Development Manager of the petitioner's company and also on behalf of the first defendant in the suit. It was thereafter, the first respondent/plaintiff has filed I.A.No. 194 of 2005 praying for rejecting the counter affidavit filed by the petitioner in I.A.No. 172 of 2005 on the ground that the said D. Sreeram was not authorized person to sign the affidavit. The Trial Court has allowed I.A.No. 180 of 2005 in I.A.No. 172 of 2005 by vacating the exparte order of injunction granted in I.A.No. 172 of 2005 dated 15.04.2005 by holding that the said D. Sreeram can sign the affidavit, apart from concluding that the issue relating to the jurisdiction and cause of action can be decided only at the time of trial during evidence and also finding that the plaintiff is not an exclusive agent of PEPSI COKE for the area and on the basis of the balance of convenience the order of interim injunction granted was vacated by the Trial Court.
4. It was aggrieved by the said order the plaintiffs/petitioners who has filed I.A.No. 172 of 2005 in O.S.No. 36 of 2005, has filed C.M.A.No. 7 of 2005 and the First Appellate Court has allowed the appeal filed by the plaintiff, by making the interim injunction granted by the Trail Court in I.A.No. 172 of 2005 absolute on the reason that D. Sreeram has not been authorized to conduct the case on behalf of the PEPSI COKE and he is not a necessary party and also by arriving at a conclusion that even though the PEPSI COKE can give dealership to some other person in respect of its products, the same can be done only after canceling the dealership agreement given to the plaintiff.
5. It was as against the order of the Appellate Court in C.M.A.No. 7 of 2005, the petitioner has filed C.R.P.No. 1750 of 2005 and it was consequent to the order passed in C.M.A.No. 7 of 2005 by the First Appellate Court, the Trial Court has allowed I.A.No. 194 of 2005 filed by the plaintiff/first respondent for rejection of the counter affidavit by the petitioner/second defendant in I.A.No. 172 of 2005 and it was as against the said order dated 29.11.2005, the petitioner has filed C.R.P.No. 1822 of 2005, since the said I.A.No. 194 of 2005 was allowed, consequently, the Trial Court has also allowed I.A.No. 172 of 2005 on 29.11.2005 making the injunction absolute against which the petitioner has filed C.R.P.No. 1823 of 2005.
6. The learned Counsel for the petitioner would submit that as far as the first point as to whether the said D. Sreeram has any authority to file an affidavit on behalf of the petitioner/second defendant, he would "submit that a reference to the affidavit filed in respect of I.A.No. 180 and 181 of 2005 shows that he has sworn the affidavit in the capacity of Territory Development Manager of the second defendant. That apart, he would submit that the First Appellate Court while allowing C.M.A.No. 7 of 2005 has failed to appreciate that the Trial Court has found that there are at least 3 letters addressed by the second defendant marked Ex.A.1 to A.3 dated 18,04.2005, 19.03.2003 and 01.07.1997 authorising the said D. Sreeram who act on behalf of the second defendant company and the same has not been considered by the Appellate Court, That apart, it was the specific case of the petitioner/second defendant that the District Munsif Court, Thiruthuraipoondi has no jurisdiction as per the agency agreement.
7. It is the contention of the learned Counsel for the petitioner that when the plaintiff himself has filed the suit relying upon the distribution agreement entered by the plaintiff and the second defendant dated 03.12.2003, when there was a specific clause stating that the said agreement has been entered at Chennai-2 and the rights of either parties in respect of the said agreement shall be instituted in a competent court only in the city of Chennai and no other courts have jurisdiction and in the presence of the said clause to which the plaintiff has specifically agreed, the suit as such is not maintainable and liable to be dismissed for want of jurisdiction and the first appellate Court has failed to consider the said aspect.
8. Further, it is the contention of the learned Counsel for the petitioner that the distribution agreement also specifically provides a clause namely clause No. 4, giving rights to the petitioner/second defendant to appoint any other distributors in respect of all or any of the products in the said town and therefore, it is not as if, there is an exclusive distributorship given to the plaintiff,
9. In such circumstances, the suit filed by the plaintiff for a injunction restraining the defendants not to sell the products of the petitioner/second defendant through any other persons except the plaintiff is totally opposed to the very contents of the agreement which is binding upon the parties.
10. The learned Counsel also would submit that the learned First Appellate judge has failed to consider the specific clause of the agreement, while setting aside the order of the Trial Court in vacating the order of injunction dated 29.11.2005.
11. To substantiate his contention, the learned Counsel also would rely upon the judgement of the Gujarat High Court rendered in India Oil Corporation Ltd. v. Pragat Gas Service, Baroda and Anr. reported in 1993 (1) Gujarath Law Reporter 82, apart from the judgement of the Division Bench of this Court rendered in Consolidated Agencies__a__Partnership__firm__rep. by___its__partner A.L. Lakshmanan v. Gujarat Carbon and Industries Ltd. Office Town, R.C. Putt Road. Baroda and Anr. reported in 2002(3) LW 514 and Anr. judgement of this Court reported in 2002(vol. 112) Company cases 630 to substantiate his contention that when once the agreement contains a clause regarding the jurisdiction, the same is binding upon the parties.
12. He would also rely upon the judgement of the Hon'ble Apex Court rendered in Shriram City Union Finance Corporation Ltd. v. Rama Mishra reported in AIR 2002 SC 2482 to contend that the said clause in the distribution agreement giving jurisdiction to the Civil Court at Madras cannot become invalid, since it is open to the parties to choose one of the two competent courts to decide the disputes among themselves. In respect of the contention that the affidavit filed by the Territory Development Manager D. Sreeram does not vitiate the contents, he would rely upon the judgement of this Court rendered in the The Airport Director, Airport Authority of India, Chennai Airport. Chennai v. Gnanasekaran reported in 2004(2) MLJ 701 holding that any person who is conversant to the fact, is entitled to file an affidavit. To substantiate his contention he would rely upon another judgement of this Court rendered in L.C. Saptharishi v. E.D. Balasubramaniam reported in 2008(1) LW 130 wherein, in respect of an application under Order 9 Rule 13 of the Civil Procedure Code, when, an affidavit was filed by the counsel, this Court has directed the Trial Court to decide the matter on merits.
13. On the other hand, Mr. N. Shankaravadivel learned Counsel appearing for the first respondent would submit that when the agreement provides for a distribution right to the plaintiff, without termination of the same, the second defendant cannot have a right, not only to interfere with the agency work of the plaintiff but also cannot distribute the product which are the subject matter of the agreement and therefore, the order passed by the First Appellate Court in C.M.A.No. 7 of 2005 is perfectly in order. While the learned Counsel would not deny the clause in the distribution agreement empowering the second defendant/revision petitioner, to independently supply the materials to others which are the subject matter of the distribution agreement, the learned Counsel would submit that in fairness, when a distribution agreement is given to area it means that the second respondent being the manufacturer, should exclusively give their rights.
14. I have heard the learned Counsel for the petitioner as also the learned Counsel for the first respondent and also perused the entire records.
15. At the outset, when it is admitted that there was a distributor agreement between the petitioner/second defendant and the first respondent/plaintiff dated 03.12.2003 some of the clauses in the said agreement are relevant to consider in this case. Clause 4 of the said agreement, since the same is relevant, is produced here under:
The company shall have the rights to appoint such number of other Distributors in respect of all or any of its Products in the town in which the Distributor is situated or any at any other place as the company deems fit and the company shall also have the absolute right to sell all or any of its products to any other person/persons at any time in the said town or elsewhere to whom the company wishes to sell.
It makes very clear that apart from the first respondent/plaintiff having been appointed as a distributor, the petitioner/second defendant has retained his right of appointing any other distributor in the same area. Therefore, on the face of the said terms of contract, which is binding on the parties, there can be no dispute about the right of the petitioner/second defendant to appoint any other distributors. This aspect has been totally over looked by the First Appellate Court. On the face of the said clause, there can be no injunction against the petitioner/second defendant, who is the manufacturer.
16. It was in fact, considering the said fact and also various other documents filed before the Trial Court, the Trial Court has correctly come to a conclusion that there is absolutely no proof on the part of the plaintiff to show prima fact that the plaintiff/first respondent is a only person having exclusive right of dealership in the Thiruthuraipoondi Taluk. In fact the Trial Court has considered the various documents including the registration certificate issued in the sales tax department and came to the categoric conclusion that there is absolutely no evidence to prove that the plaintiff/first respondent has exclusive right of the dealership in Thiruthuraipoondi Taluk.
17. Unfortunately, the First Appellate Court has not considered, any one of the issues, while granting order of injunction in favour of the first respondent/plaintiff. In respect of the next contention about the veracity or maintainability of the Territory Development Manager of the petitioner/second defendant, D. Sreeram in filing the affidavit for the purpose of vacating the order of injunction. As it is seen that the petitioner/second defendant has in fact produced three letters to show that the said D. Sreeram was nominated by the petitioner/second defendant, which includes Ex.A.1 dated 18.04.2005, Ex.A.2 again giving authorization as a Territory Development Manager, apart from Ex.A.3 dated 01.07.1997, permitting him as a Customer Executive of the petitioner/second defendant and on factual assertion of the entire documents, there is no difficulty to come to the conclusion that the person who has filed the affidavit on behalf of the petitioner/second defendant is not some one, who is unauthorized. Unfortunately, this fact has not also been considered by the learned First Appellate Court. While dealing with an application to set aside the exparte decree filed under order Rule 13 of the Civil Procedure Code, this Court has considered more than one occasion and categorically decided that affidavit filed by a person who is conversent with the facts is sufficient. As rightly pointed out by the learned Counsel for the petitioner in the judgement of this Court rendered in The Airport Director, Airport Authority of India. Chennai Airport. Chennai v. Gananasekaran reported in 2004(2) LLJ 701, the affidavit filed by the advocate to set aside the exparte decree, was taken to be a valid one. Even though it is the general rule that in each of the case affidavit has to be filed by the concerned parties, the relevant passage of the said judgement reads as follows:
5. No doubt, it is true that each and every affidavit has got to be filed by the concerned party or by their authorised person, agent or attorney or person who knows the facts of the case also. Here, the advocate on record filed the affidavit wherein he has specifically stated that he was well aware of the facts of the case and only in the said circumstances, he has filed an affidavit to set aside the ex parte decree and also an application to condone the delay. The circumstances under which the defendant was set ex parte, explained by the deponent and it was only within the knowledge of the advocate on record and he knows the facts of the case and only in the said circumstances, he had filed the affidavit. That apart, the concerned advocate holds vakalat for the defendant and hence, he is entitled to represent his party. The petitions have been filed only to safeguard the right and interest of the party and it is not prejudicial to the interest of the party, and hence, it cannot be said that the advocate on record is not entitled to file the affidavit and petition on behalf of his party, when especially the said petitions have been filed to safeguard the interest of that party.
18. This was also the view taken earlier by this Court in the judgement rendered in L.C. Saptharishi v. E.D. Balasubramaniam reported in 2000(1) L.W. 130, holding that any person who is conversant with the facts of the case and who is witness to what transpired before court, is competent to file affidavit.
19. A reference to the affidavit filed by the said D. Sreeram in the present case in I.A.No. 180, 181 of 2005 in O.S.No. 36 of 2005 shows that he was not only filing the affidavit in the capacity of the Territory Development Manager of the petitioner/second defendant but also is well conversant with the facts and circumstances of the case. The said paragraph reads as follows:
1. I swear this affidavit in the capacity of Territory Development Manager of 2nd Defendant company and also on behalf of the 1st defendant and I am duly authorized to do so. I have read the plaint and the affidavit in the I.A. and I am conversant with the facts and circumstances of the case.
20. Therefore, there is absolutely no difficulty to come to the conclusion that the affidavit filed on behalf of the petitioner/second defendant for the purpose of vacating the order of injunction, was filed a person who was authorized and it cannot be rejected on the technical ground as if, the said D. Sreeram is outsider.
21. Unfortunately, again the learned First Appellate judge has taken a technical stand that there was no authorization from the petitioner/second defendant to the said D. Sreeram to conduct the case. By virtue of the legal position and also on the facts of the case, when records are available before the court, to show that on many occasions the said D. Sreeram was authorized to act on behalf of the petitioner/second defendant, it was not proper for the First Appellate court to come to a conclusion on the technical ground as if, the affidavit cannot be taken into consideration.
22. In respect of the next contention regarding the jurisdiction of the court, again a reference to the distributors agreement is relevant, paragraph 32 of the distribution agreement dated 03.12.2003, shows that the parties have agreed that any dispute among them has to be referred within the city of Chennai. The Clause 32 runs as follows:
32) This Agreement has been signed and executed in Third floor, Wellington Plaza, 90, Anna Salai, Chennai 680002. The Distributor agree that the place of payment for all goods sold or supplied to him by the company under this agreement is the city of Chennai and that any suit to enforce the rights of either party under or in respect of this agreement shall be instituted in and tried by a competent court only in the city of Chennai and in no other Court and the Distributor further expressly agrees to submit to the jurisdiction of such court.
23. Even though, the Trial Court has observed that about the jurisdiction point a decision can be arrived at only at the time of trial of the suit and found that on material evidence before the court, it is proved abundantly by the petitioner/second defendant that he is entitled for the vacating of order of injunction and the jurisdiction issue has not been considered by the learned First Appellate judge also, it is relevant to point out some of the judicial precedents. It has been the consistent stand by our courts that by parties agreeing to given jurisdiction to a Civil court in an area, does not mean the exclusion of the jurisdiction of the other court and therefore, the same cannot be taken as ouster. It was based on the said principle laid down by the Hon'ble Apex court, in the case of Indian Oil Corporation v. Pragat Gas Service. Baroda and Anr. reported in 1993(1) Gujarat Law Reporter 82, the Gujarat High Court while referring to the two judgements of the Hon'ble Supreme Court rendered in. Globe Transport Corporation v. Tireveni Engineering Works reported in 1984 GLH 63 (SC) and ABC Laminart Private Ltd. v. A.P. Agencies, Salem . holding that if the parties by agreement opted for jurisdiction of a particular court excluding other courts and if that court had jurisdiction such an agreement would be legal and valid and must be given effect to and based on the said decisions of the Hon'ble Supreme Court, the Gujarat High Court has held in the following lines:
12. In view of these decisions of the Hon'ble Supreme Court, in my opinion, the submission of Mr. Shelat appears to be well-founded and deserves to be accepted. In the instant case, the plaintiff has obtained an agreement from the defendants. Clause 36 thereof is clear, unambiguous and specific. As per that clause, the corporation was bound to approach Civil Court at Bombay for taking an action against the defendants. If in the light of such provisions, a contention was taken by the defendants that the suit filed by the plaintiff Corporation in Baroda Court was not maintainable and that contention was upheld by the court, it cannot be said that the order passed by the trial court is contrary to law or requires any interference. I am also of the opinion that for the purpose of deciding this preliminary issue, the Court will have to take into account the necessary facts and circumstances though for a limited purpose of deciding the preliminary issue on question of law regarding the jurisdiction of the Court. In the instant case, upholding the preliminary objection of the defendants, the court has passed the impugned order. Looking to the judgements of the Hon'ble Supreme Court and particularly in A.B.C. Laminarts Pvt. Ltd.,(supra), it becomes clear that the impugned order passed by the trial Court directing the corporation to file suit in an appropriate court at Bombay is according to law and does not require any interference. In the result, I do not find any substance in any of the contentions raised by the learned Counsel for the appellant and the appeal requires to be dismissed. The appeal is accordingly dismissed, however, in the facts and circumstances, with no order as to costs.
24. A Division Bench of this Court in the judgement rendered in A partnership firm rep, by its partner A.L. Lakshmanan v. Gujarat Carbon and Industries Ltd. Baroda and Anr. reported in 2002 (3) LW 514 has also taken the view that vesting of jurisdiction in a particular court by agreement between parties to try dispute between them in the contract and such clause cannot be lightly disregarded, even though holding that as far as the jurisdiction of the court is concerned, the same has to be decided on the facts and circumstances of each case. The relevant portion of the said Hon'ble Division Bench is as follows:
10.2 It is well settled in law that the issue regarding jurisdiction of the Courts has to be decided upon the facts and circumstances of each case. Equally, it is well settled that where there are two or more competent Courts which can entertain a suit consequent upon a part of the cause of action having arisen within the jurisdiction of each of these courts, parties to the concerned transaction can contract to vest jurisdiction in one of the courts to try disputes which may arise as between themselves. Therefore, even though the irregular exercise of jurisdiction is a matter in which the parties can waive as held in Nanak Chand Case, referred supra, in our considered opinion, if the parties to the contract agree with a consensus on a particular term of the agreement that the dispute shall be decided only by a particular court having jurisdiction, the ouster or exclusion of the other courts cannot be lightly disregarded merely because of the absence of the words 'only' or 'alone' in the said clause. We are therefore unable to subscribe ourselves to the view that the parties to the agreement can waive the irregular exercise of the jurisdiction as he 14 in Nanak Chand Case, referred supra, or with the view expressed in M/s. Sponge Iron India Ltd., case, referred supra, that the ouster of the jurisdiction of other courts cannot be implied in the absence of the words 'only' or 'alone' in the clause of the agreement between the parties which deals with the jurisdiction of this Court.
25. In the present case, as I have elicited, the terms of contract, wherein the term only "shall" and therefore, the same has to be taken into consideration for the purpose of jurisdiction issue also, even to decide about the prima faci case of granting or not granting of order of injunction.
26. In fact, the Hon'ble Supreme Court has also affirmed that any agreement affecting jurisdiction of courts will not become invalid and it is for the parties to choose any one of the two competent courts to decide the disputes. The relevant portion of the judgement of the Hon'ble Supreme Court is run as follows:
9. In the present case the impugned order of the High Court and the order passed by the appellate court arises out of the order passed by the Civil judge, Bhubaneshwar. We have to keep in mind there is difference between inherent lack of jurisdiction of any court on account of some statue and the other where parties through agreement bind themselves to have their dispute decided by any one of the court having jurisdiction. Thus the question is not whether the Orissa Courts have the jurisdiction to decide respondent's suit but whether the respondent could have invoked the jurisdiction of that court in view of the aforesaid Clause 34. A party is bound either by provision of the constitution, statutory provisions or any rule or under terms of any contract which is not against the public policy. It is open for a party for his convenience to fix the jurisdiction of any competent court to have their dispute adjudicated by that court alone. In other words if one or more court has the jurisdiction to try any suit, it is open for the parties to choose any one of the two competent courts to decide their disputes. In case parties under their own agreement expressly agrees that their dispute shall be tried by only one of them then the party can only file the suit in that court alone to which they have so agreed. In the present case as we have said through Clause 34 of the agreement, the parties have bound themselves that any matter arising between them under the said contract, it is the courts in Calcutta alone which will have jurisdiction. Once parties bound themselves as such it is not open for them to choose a different jurisdiction as in the present case by filing the suit at Bhubaneshwar. Such a suit would be in violation of the said agreement.
27. In the face of the judgements referred to above, I am of the considered view that the courts below ought to have taken the same into consideration. In any event, the learned First Appellate judge has proceeded on the protext, as if, there are no sufficient document, especially in the light of the various documents which has been correctly analyzed by the learned Trial judge and therefore, I am of the considered view that the order of the learned First Appellate judge decree passed in C.M.A.No. 7 of 2005 is unsustainable in law and on facts and liable to be set aside and accordingly the same is set aside. C.R.P.No. 1750 of 2006 stands allowed. Since C.R.P.No. 1822 of 2005 is arising from the consequent order passed by the Trail Court based on the order of the First Appellate Court in C.M.A.No.7 of 2005, since I have held that the judgement of the learned First appellate judge in C.M.A.No. 7 of 2005 is unsustainable, C.R.P.No. 1822 of 2005 also stands allowed. Since the judgement in C.M.A.No. 7 of 2005 is set aside, I.A.No. 172 of 2005 in O.S.No. 36 of 2005 filed by the first respondent/plaintiff has to be dismissed and therefore, C.R.P.No. 1823 of 2005 stands allowed. The first respondent shall pay the cost of Rs. 5,000/- to the petitioner. It is also made clear that the Trial Court is directed to proceed with the trial and dispose of the suit expeditiously, after-giving opportunity to the parties. Consequently, C.M.Ps. are closed.