Delhi High Court - Orders
Ok Play India Limited vs Plannco Steel Products on 15 November, 2021
Author: Amit Bansal
Bench: Amit Bansal
$~20
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CM(M) 1016/2021
OK PLAY INDIA LIMITED ..... Petitioner
Through Mr. Anirudh Wadhwa, Advocate
versus
PLANNCO STEEL PRODUCTS ..... Respondent
Through Ms. Jasmine Detwani, Advocate
CORAM:
HON'BLE MR. JUSTICE AMIT BANSAL
ORDER
% 15.11.2021 [VIA VIDEO CONFERENCING] CM No.40404-40405/2021 (for Exemption)
1. Allowed, subject to all just exceptions.
2. The applications are disposed of.
CM(M) 1016/2021 and CM o.40403/2021 (for Stay)
3. The petition under Article 227 of the Constitution of India impugns the order dated 17th March, 2021 passed by the Commercial Court-01 (West), Tis Hazari Courts in CS(COMM) 196/2019, whereby the application filed on behalf of the petitioner/defendant under Order 7 Rule 10 of the Code of Civil Procedure, (CPC), 1908, on the ground of territorial jurisdiction, has been dismissed.
4. The facts leading to filing of the present petition are: (i) an agreement was entered into between the petitioner and respondent for providing pallet racks and related installation works; (ii) the petitioner issued a purchase Signature Not Verified Digitally Signed CM(M) 1016/2021 Page 1 of 7 By:MAMTA ARYA Signing Date:17.11.2021 14:57:56 order on the respondent for the supply and installation of the said materials and services; (iii) the said purchase order stated that it was subject to "jurisdiction of Courts in Nuh"; (iv) payment of Rs. 3,00,000/- was made by the petitioner to the respondent under the said purchase order; (v) the respondent issued tax invoice to the petitioner which contained a clause which provided that in case of any disputes, Courts at Delhi shall have the jurisdiction; (vi) the said materials were delivered and installed at the premises of the petitioner, however, certain disputes arose in relation to the quality of the aforesaid material and period of delivery; (vii) a commercial suit for recovery was filed by the respondent against the petitioner; (viii) the petitioner filed an application under Order 7 Rule 10 of CPC for rejection of plaint inter alia on the ground that the jurisdiction to the entertain the plaint was with the Courts at Nuh.
5. The Trial Court vide the impugned order has dismissed the application filed on behalf the petitioner under Order 7 Rule 10 of CPC by observing/reasoning that: (i) the document filed with the plaint is the purchase order dated 11th September, 2018, wherein the respondent has mentioned that the jurisdiction will be of the Courts in Nuh; (ii) on the basis of the purchase order, respondent had dispatched the goods vide invoice dated 26th September, 2018; (iii) the invoice mentions that all disputes will be settled in Delhi jurisdiction; (iv) since there is no document to show that both parties had agreed on any single jurisdiction and the averment made by the respondent about the petitioner agreeing about the jurisdiction would be an issue of fact which need to be either admitted or denied by the petitioner;
(v) since at this stage where petitioner has not filed any defence/written statement, respondent's plea on its face value has to be taken into Signature Not Verified Digitally Signed CM(M) 1016/2021 Page 2 of 7 By:MAMTA ARYA Signing Date:17.11.2021 14:57:56 consideration; (vi) the question of jurisdiction being a mixed question of law and facts cannot be decided at this stage; (vii) the petitioner would be at liberty to raise the issue of jurisdiction at an appropriate stage as per law.
6. The counsel for the petitioner submits that in terms of the purchase order issued by the petitioner, the courts in Delhi did not have the jurisdiction to entertain the present suit. He relies upon the judgment of this Court in M/s. OK Play India Limited v. Pradeep Tayal. 2015 SCC Online Del 8714, to contend that where the jurisdiction is provided in the purchase order the same cannot be altered by the invoice issued by the seller.
7. The Supreme Court in Surya Dev Rai v. Ram Chander Rai and others, (2003) 6 SCC 675 has elucidated the principles to be kept in mind while exercising jurisdiction under Article 227 of the Constitution of India. Relevant extracts from paragraph 38 of the aforesaid judgment are set out below:
(4) Supervisory jurisdiction under Article 227 of the Constitution is exercised for keeping the subordinate courts within the bounds of their jurisdiction. When a subordinate court has assumed a jurisdiction which it does not have or has failed to exercise a jurisdiction which it does have or the jurisdiction though available is being exercised by the court in a manner not permitted by law and failure of justice or grave injustice has occasioned thereby, the High Court may step in to exercise its supervisory jurisdiction.
(5) Be it a writ of certiorari or the exercise of supervisory jurisdiction, none is available to correct mere errors of fact or of law unless the following requirements are satisfied: (i) the error is manifest and apparent on the face of the proceedings such as when it is based on clear ignorance or utter disregard of the provisions of law, and (ii) a grave injustice or gross failure of justice has occasioned thereby.Signature Not Verified Digitally Signed CM(M) 1016/2021 Page 3 of 7 By:MAMTA ARYA Signing Date:17.11.2021 14:57:56
(6) A patent error is an error which is self-evident i.e. which can be perceived or demonstrated without involving into any lengthy or complicated argument or a long-drawn process of reasoning. Where two inferences are reasonably possible and the subordinate court has chosen to take one view, the error cannot be called gross or patent.
8. The said judgment of the Supreme Court in Surya Dev Rai supra has been followed by the Division Bench of this Court in Black Diamond Trackparts Pvt. Ltd. & Ors. v. Black Diamond Motors Pvt. Ltd., 2021 SCC Online Delhi 2630, (of which I was the part). The judgment in Black Diamond supra was in context of a petition filed under article 227 of the Constitution of India against the order of dismissal of an application under Order 7 Rule 11 of CPC in a commercial suit and has clearly defined the parameters of interference under Article 227 of the Constitution of India in respect of orders passed in commercial suits against which remedy of revision has been barred in terms of Section 8 of the Commercial Courts Act. The relevant observations of the Division Bench in Black Diamond Trackparts Pvt. Ltd. & Ors. (supra) are set out below:
"29. The reasoning in the aforesaid judgments gave rise to the question, that since the remedy of revision under Section 115 of the CPC though available under the CPC against the order of dismissal of application under Order VII Rule 10 of the CPC, has been taken away under the Commercial Courts Act, whether a petition under Article 227 would lie.
30. We are of the view that once the Commercial Courts Act has expressly barred the remedy of a revision application under Section 115 of the CPC, with respect to the suits within its ambit, the purpose thereof cannot be permitted to be defeated by opening up Signature Not Verified Digitally Signed CM(M) 1016/2021 Page 4 of 7 By:MAMTA ARYA Signing Date:17.11.2021 14:57:56 the gates of Article 227 of the Constitution of India. The scope and ambit of a petition under Article 227 is much wider than the scope and ambit of a revision application under Section 115 of the CPC; whatever can be done in exercise of powers under Section 115 of the CPC, can also be done in exercise of powers under Article 227 of the Constitution. Allowing petitions under Article 227 to be preferred even against orders against which a revision application under Section 115 CPC would have been maintainable but for the bar of Section 8 of the Commercial Courts Act, would nullify the legislative mandate of the Commercial Courts Act. Recently, in Deep Industries Limited Vs. Oil and Natural Gas Corporation Limited (2020) 15 SCC 706, in the context of petitions under Article 227 of the Constitution of India with respect to orders in an appeal against an order of the Arbitral Tribunal under Section 17 of the Arbitration & Conciliation Act, 1996, it was held that if petitions under Article 226 / 227 of the Constitution against orders passed in appeals under the Arbitration Act were entertained, the entire arbitral process would be derailed and would not come to fruition for many years. It was observed that though Article 227 is a constitutional provision which remains untouched by an non-obstante Clause 5 of the Arbitration Act but what is important to note is that though petitions can be filed under Article 227 against judgments allowing or dismissing First Appeals under the Arbitration Act, yet the High Court would be extremely circumspect in interfering with the same taking into account the statutory policy, so that interference is restricted to orders which are patently lacking in inherent jurisdiction. Thus, though we are of the view that gates of Article 227 ought not to be opened with respect to orders in commercial suits at the level of the District Judge against which a revision application under CPC was maintainable but which remedy has been taken away by the Commercial Courts Act, but abiding by the judgments aforesaid, hold that it cannot be said to be the law that jurisdiction under Article 227 is completely barred. However the said jurisdiction is to be exercised very sparingly and more sparingly with respect to orders in such suits which under the CPC were revisable and which remedy has been taken away by a subsequent legislation i.e. the Commercial Courts Act, and ensuring that such exercise of jurisdiction by the High Court does not negate the legislative intent Signature Not Verified Digitally Signed CM(M) 1016/2021 Page 5 of 7 By:MAMTA ARYA Signing Date:17.11.2021 14:57:56 and purpose behind the Commercial Courts Act and does not come in the way of expeditious disposal of commercial suits.
31. We thus hold the petition under Article 227 of the Constitution of India to be maintainable with respect to the order impugned in CM(M) No.132/2021. However the discretion, whether in the facts and circumstances such petition is to be entertained or not, having under the roster been vested in the Single Judge, we leave it to the Single Judge to exercise such discretion."
9. The Division Bench has observed that the jurisdiction under Article 227 of the Constitution of India though not completely barred has to be sparingly exercised and more sparingly in respect of orders in commercial suits where the remedy of revision has been specifically taken away under the Commercial Courts Act.
10. In the present case also, the petitioner could have invoked the remedy of revision under section 115 of the CPC against the impugned order, had it been an ordinary suit. But, since the suit in question is a commercial suit, the remedy of revision has been specifically barred under section 8 of the Commercial Courts Act. Therefore, in light of the observations made by the Division Bench in Black Diamond supra, the jurisdiction under Article 227 of the Constitution of India has to be exercised very sparingly such that the legislative intent and purpose behind the Commercial Courts Act is not negated.
11. In the present case, the respondent has claimed jurisdiction in respect of the Delhi courts on account of goods being supplied from the respondent's office in Delhi and on the basis of invoices issued by the respondent, which have been accepted by the petitioner and in terms of which jurisdiction is that of the courts in Delhi. The Commercial Court has Signature Not Verified Digitally Signed CM(M) 1016/2021 Page 6 of 7 By:MAMTA ARYA Signing Date:17.11.2021 14:57:56 also observed that the issue of jurisdiction would be a mixed question of law and facts and cannot be decided at this stage. Further, liberty has been given to the petitioner to raise the issue of jurisdiction at an appropriate stage.
12. In light of the judgments of Surya Dev Rai supra and Black Diamond supra, this is not a case where the commercial court has acted without jurisdiction or has failed to exercise its jurisdiction vested in it. Nor is there any manifest error apparent on the face of the proceedings. No prejudice has been caused to the petitioner as liberty has been granted to it by the commercial court to raise the issue of jurisdiction at an appropriate stage.
13. There is no infirmity in the impugned order that requires interference of this Court in exercise of its jurisdiction under Article 227 of the Constitution of India.
14. Dismissed.
AMIT BANSAL, J.
NOVEMBER 15, 2021 dk Signature Not Verified Digitally Signed CM(M) 1016/2021 Page 7 of 7 By:MAMTA ARYA Signing Date:17.11.2021 14:57:56