Karnataka High Court
National Insurance Co. Ltd. And Another vs A.B.C. India Ltd. And Another on 27 September, 1991
Equivalent citations: [1991]70COMPCAS744(KAR), ILR1991KAR4100, 1991(4)KARLJ707
JUDGMENT R. Ramakrishna, J.
1. This revision by the plaintiff is directed against the order on issue No. 2, dated September 14, 1988, in O.S. No. 2475 of 1985 by the learned Tenth Additional City Civil Judge, Bangalore City, ordering the return of plaint for presentation before the courts at Calcutta.
2. The admitted facts that can be gathered from the impugned order are as follows :
The second petitioner who is a company engaged in the manufacture of medicines has entrusted certain goods/harmless medicines to the first respondent carriers for transportation from Bangalore to the second respondent at Calcutta. The goods were accepted by the first respondent who issued G.C. notes bearing Nos. 16356, 16359, dated July 29, 1982, and 16493, dated August 19, 1982. The consignment was insured by the second petitioner with the first petitioner. The consignment is said to have been destroyed due to a fire accident during transit in Andhra Pradesh. The first petitioner, who is the underwriter, has settled the claim and has been subrogated to the rights of the second petitioner to recover the value of the damages from the carrier. The petitioners have filed a suit for recovery of the amounts at Bangalore basing the cause of action having arisen on July 29, 1982, land August 19, 1982, at Bangalore when the goods were entrusted to the first respondent for transportation to Calcutta, within the jurisdiction of the courts at Bangalore city.
3. The first respondent, in his written statement, raised the question of jurisdiction to try the suit at Bangalore. It is contended that, in view of a specific agreement contained in each consignment note which is a binding contract of carriage, only the courts at Calcutta shall have jurisdiction to try disputes arising out of the subject consignment notes.
4. It is noted that, on the reverse side of the G.C. notes under the heading General terms and conditions of carriers, under clause 5, it is stated :
"That the courts in Calcutta city alone shall have the jurisdiction in respect of all claims and matter arising under the lorry receipt or of the goods entrusted for transport."
5. The trial court, having regard to the fact that part of the cause of action arose at Bangalore and also part of cause of action at Calcutta, both the courts have jurisdiction to try the suit. But, however, as the contract between the parties as noted in the G.C. note is binding between them, only the court at Calcutta is having jurisdiction to entertain the suit.
6. Sri. R. D. Kolekar, learned counsel appearing for the petitioners, contended that the trial court was not justified in passing the impugned order in the absence of any agreement between the parties as the conditions shown in the G.C. note is a printed one and the same is not binding when, admittedly, the consignor has not accepted the said condition by putting his signature.
7. Per contra, learned counsel appearing for the first respondent has supported the view taken by trial court.
8. The undisputed facts are :
(1) the goods were entrusted at Bangalore by the first petitioner who is also doing business at Bangalore city;
(2) the office of the common carrier, i.e., the first respondent, is also situated at Bangalore city;
(3) the insurance claim was settled at Bangalore.
9. The views expressed by various High Courts and the Supreme Court of India on this point are not uniform on the point of ouster of jurisdiction by contract between the parties. There are instances where the contract was express and both the consignor and the carrier are agreed on such contracts. There are other instances where this condition is printed on the consignment note either in the front portion or back portion. There are instances where this consignment note is signed by the representative of the carrier only and the signature of the consignor is absent and in some other instances, this condition was not brought to the notice of the consignor.
10. In this case, the goods originated at Bangalore and the goods are entrusted to a carrier who is having a regular office at Bangalore. The goods were lost during transit in Andhra Pradesh State. A suit is, accordingly, instituted in Bangalore city.
11. Section 20 of the Code of Civil Procedure deals with the institution of suits where the defendant voluntarily resides or carries on business or personally works for gain or where the cause of action, wholly or in part, arises. A court gets jurisdiction under this section if the defendant resides or carries on business or personally works for gain within the local limits of the jurisdiction or where the cause of action arises, wholly or in part, within such local limits.
12. In Globe Transport Corporation v. Triveni Engineering Works [1984] 2 TAC 180; [1984] ACJ 465, Hon'ble Mr. Justice P. N. Bhagwati, as he then was, held (at page 466 of 1984 ACJ) :
"It is now settled law that it is not competent to the parties by agreement to invest a court with jurisdiction which it does not otherwise possess but if there are more than one forum where a suit can be filed, it is open to the parties to select a particular forum and exclude the other forums in regard to a claim which one party may have against the other under a contract. Clause 17 of the contract of carriage could, therefore, validly confer exclusive jurisdiction on the court in Jaipur city only if it could be shown that the court in Jaipur city would have jurisdiction to entertain the suit filed by the respondents against the appellant. It is true and there we agree with the respondents that no part of the cause of action in the present case arose in the city of Jaipur, and, therefore, the jurisdiction of the court in Jaipur city could not be invoked on the ground that the cause of action or a part thereof has arisen in Jaipur. But the jurisdiction of a court whether under section 19 or section 20 of the Civil Procedure Code can also be invoked on the ground that the defendant resides or carries on business or personally works for gain within the jurisdiction of the court and here it could not be disputed that the appellant does carry on business in the city of Jaipur and if, that be so, there can be no doubt that the court in Jaipur city would have jurisdiction to entertain the suit filed by the respondents against the appellant. In that event, clause 17 of the contract of carriage conferring exclusive jurisdiction of the court in Jaipur city and excluding the jurisdiction of other courts would be valid and effective."
13. In the above decision, the goods were entrusted at Baroda by the consignor to be carried to Naini. The truck met with an accident, the goods were damaged on the way but the damaged goods were delivered to the endorsee. A suit was filed at the Allahabad Civil Judge's Court. There is no mention in the judgment as to whether the consignor was one of the parties to clause 17 condition or, by necessary implication, he has submitted to the jurisdiction enumerated under clause 17.
14. In Hakam Singh v. Gammon India Ltd., , the Supreme Court observed thus :
(The portion quoted is from the decision in Economic Transport Organisation v. United India Insurance Co. [1986] KLT 220, 225 - Ed.) "(17) When there is choice of forum, it is certainly open to the parties to agree on an exclusive forum for settlement of disputes. But such an agreement must be clearly spelled out either by express words or by necessary implication. Ouster of jurisdiction of courts cannot be lightly assumed or presumed. If there is such a concluded agreement, it will certainly operate as estoppel against the parties to the contract. If it is merely a unilateral affirmation or statement made by one of the parties, as long as it is not shown that the statement has been accepted by the other party as a term or condition of the agreement, it cannot be held that there is an agreement to confer exclusive jurisdiction on any court. Particular caution is necessary in regard to such a clause contained in a printed form, as in this case. Where the printed form is signed by both the parties or where a form printed by one party is signed by the other party and forwarded the latter to the former and the printed form contains clear words conferring exclusive jurisdiction on a court at any particular place or ousting jurisdiction of the court at any other place, it may not be difficult to hold that the parties have agreed on such a term. Even in such cases, courts must remember that people often sign order forms containing a good deal of printed matter, without caring to read what is printed. It cannot always be said that everything which is printed may be deemed to form part of the contract. Where a form printed by one party is signed only by that party and delivered to the other party, without anything more, it will be difficult for the court to hold that there has been consensus ad idem in regard to the particular clause. Of course, if there is some other material to indicate acceptance or consent of the party who received the printed form, then the court is free to infer that the clause formed part of the agreement.
(18) If it can be held that the printed clause in the consignment note in this case formed part of the agreement, there is clearly ouster of jurisdiction of courts at Calicut. The form was got printed by the transport undertaking. It was signed by an employee of the undertaking. It was not signed by the consignor, second plaintiff. It was merely delivered to the consignor. Contract was entered into not by correspondence. It was a case of a single transaction covered by a single bill. The words themselves are printed in small letters at the very bottom of the way bill. There is no other material before the court to show that this printed material was brought to the notice of the second plaintiff or that the second plaintiff had accepted the same. In these circumstances, I hold that this particular clause did not form part of the agreement between the parties. Parties did not agree to oust the jurisdiction of the court at Calicut or to vest exclusive jurisdiction in courts at Calcutta."
15. A specific contention was taken by the petitioner in the revision that the consignor was not a signatory to this agreement. The same is not denied by the first respondent. In the absence of a signature or a contract, there was no meeting of minds between the consignor and the carrier.
16. The view taken in Globe Transport Corporation's case [1984] 2 TAC 180; [1984] ACJ 465 (SC), can be found in the views expressed in Sohan Lal v. Jaipur Golden Transport Co. (Pvt.) Ltd. [1979] TAC 200, by Hon'ble Dwarka Prashad J. of the Rajasthan High Court, Gupta Medical Store v. Transport Corporation of India Pvt. Ltd. [1990] ACJ 258 by Hon'ble Mr. Justice J. S. Sekhon of the Punjab and Haryana High Court and in Revatni CP Equipments Ltd. v. Patel Roadways Pvt. Ltd. [1988] ACJ 319 (Mad). Hon'ble Mr. Justice T. Sathiadev has distinguished the action under section 8 of the Carriers Act, 1865, or based upon breach of the contract of the consignment note. If the action is under section 8 of the Carriers Act, the ouster of jurisdiction under the consignment note has not relevance and action can be taken where the cause of action arose. In Savani Transport (Private) Ltd. v. Dunbar Mills Ltd. [1981] 1 Cal HCN 101, Division Bench of the Calcutta High Court held that a claim, be it under the contract or in tort, was agreed to be lodged only at Bombay. It was not open to the plaintiff to avoid that agreement by contending that the suit is not for enforcement of the contractual liability under the consignment notes; an unreported judgment of the Calcutta High Court is made available by the learned advocate in Appeal from Original Order No. 162 of 1980, wherein a Division Bench, consisting of Hon'ble Mr. Sambhu Chandra Ghose, Chief Justice and the Hon'ble Mr. Justice R. N. Pyne, took a similar view on clause 17 of the condition as that taken in Globe Transport Corporation's case [1984] TAC 180; [1984] ACJ 465. Their Lordships opened that the balance of convenience, unless it amounts to denial of justice to the plaintiff, should not be allowed to tilt the scale in favour of the plaintiff as it is considered by R. S. Bachawat J. in Motabhai Gulabdas and Co. v. Mahaluxmi Cotton Mills Ltd. [1953] 91 Cal LJ 1. Their Lordships further held :
"The real ratio to our mind is as we have also stated that unless it amounts to denial of justice on the ground of the balance of convenience a party should be compelled to stick to his forum of choice. In the instant case, there does not seem to be that the balance of convenience is overwhelmingly for trial of the suit by this court. In the premises the parties should be compelled to stick to their bargain and resort to a court of competent jurisdiction in Secunderabad. The suit so far as it is an action in tort must also be stayed in view of the wording of clause 17. See in this connection the case of Savani Transport (Pvt.) Ltd. v. Dunbar Mills Ltd. [1981] 1 Cal HCN 101, wherein a Division Bench of this court stayed a suit in tort."
17. In Kishori v. Chairman, Tribal Service Co-op. Society Ltd. [1988] ACJ 636, Hon'ble Mr. Justice R. K. Varma of the Madhya Pradesh High Court, Indore Bench, has not subscribed have adhered to the printed terms recorded in the goods receipt. It was held at para 4 thus (at page 637) :
"The contention of learned counsel appearing on behalf of the appellant is that the appellant-owner of the truck was not liable for the damage or loss caused to the consignment of fertilizer bags in the accident as the goods were carried on the risk of the owner of the goods, viz., Adim Jati Sewa Sahakari Sanstha as per the terms of the contract for transport of goods printed on the back side of the transport receipt dated November 23, 1981. .. Whether goods were carried on owner's risk and the truck owner absolved from liability-Held : no, as printed terms recorded on the receipt overleaf were not brought to the notice of the owner of the goods at the time of booking."
18. In the case between United India Insurance Co. Ltd. v. Associated Transport Corporation Pvt. Ltd. [1987] ACJ 801, a Division Bench of the Kerala High Court consisting of Hon'ble Mr. Justice U. L. Bhat (as he then was) and Hon'ble Mr. Justice C. Sankaran Nair, did not subscribe to the printed condition contained in the consignment note and by following Hakam Singh's case, , held at para 5 thus (p. 803) :
"We are in respectful agreement with the view expressed in the above decision. Exhibit B-1 series in this case also contain printed words 'subject to Bombay jurisdiction alone,'. Apart from the existence of these printed words, respondent has no case that there was a meeting of minds between the consignor and the carrier and there was a specific agreement in the behalf. The consignment was delivered to the carrier, the carrier took custody of the goods and thereafter issued the receipt or consignment note which contained the printed words. The note was signed only by an employee of the respondent. No doubt, this was handed over to the consignor. But, there was nothing to indicate that there was an agreement between the parties to confer exclusive jurisdiction to the Bombay Court. These printed words by themselves and without anything more would not be sufficient to constitute an agreement to oust the jurisdiction of all courts other than the court specified. In these circumstances, we set aside the finding of the court below that it had no jurisdiction to entertain the suit."
19. This view was followed by Hon'ble Mr. Justice P. K. Shamsuddin in South Eastern Roadways v. United India Insurance Co. Ltd. [1991] ACJ 115 of the Kerala High Court.
20. A similar view is expressed by another Division Bench of the Kerala High Court in Indian Roadways Corporation v. Unneerikutty [1991] ACJ 515.
21. The opinion expressed in Hakam Singh's case, , by the Supreme Court and subsequent judgment of the Kerala High Court cited is that to bind a party to the consignment note regarding jurisdiction, apart from the existence of printed words, there should be a meeting of minds between the consignor and the carrier and there should be specific agreement in this behalf. As a token of agreement, the signature of the consignor is to be obtained or there should be a special contract accepted by the consignor.
22. In England, the law on the subject as laid down by Mellish L.J. in Parker v. South Eastern Railway Co. [1877] 2 CPD 416, as early as in the year 1877, has since then been followed, namely, that the customer is bound by the conditions contained in the ticket or the receipt, subject to the proviso that either he knew all the conditions or that the company or the defendant had done what was reasonable necessary to draw the attention of the customer to such conditions. If it is found that the customer knew all the conditions or that the company did what was reasonably sufficient to give notice notice of the conditions printed on the back of the ticket to the person taking the ticket or the receipt, then such person would be bound by the conditions. The dictum of Mellish L.J. in Parker v. South Eastern Railway Co. [1877] 2 CPD 416 was :
"(1) Did the passenger know that there was printing on the Railway ticket ?
(2) Did he know that the ticket contained or referred to conditions ? and (3) Did the company do what was reasonable in the way of notifying prospective passengers of the existence of conditions".
23. The same principle was followed in Hood v. Anchor Line (Henderson Brothers) Ltd. [1918] AC 837 (HL), where Lord Dunedin made the following observations (p. 846) :
"Accordingly, it is in each case a question of circumstance whether the sort of restriction that is expressed in any writing (which of course includes printed matter) is a thing that is usual, and whether, being usual, it has been fairly brought before the notice of the accepting party."
24. In Thornton v. Shoe Lane Parking Ltd. [1971] 1 ALL ER 686 (CA), Lord Denning again applied the dictum of Mellish L.J. in Parker v. South Eastern Railway Co. [1877] 2 CPD 416, subject to the qualification that, where a condition was exceptionally wide and destructive of the plaintiff's right or was one which was not usually applied in that class of contract, then it was not sufficient to show that the plaintiff had been given notice that the ticket was issued subject to the condition, but it must also be shown that adequate steps had been taken to draw his attention in the most explicit way to the particular exempting condition relied on by the defendant. Thus, a distinction has been made in Thornton's case [1971] 1 ALL ER 686 (CA) by Lord Denning in the ordinary regulatory conditions which are found in that class of contracts and those conditions which are exceptionally wide and destructive of the plaintiff's right and which exempt the defendants from all liability and risk. In that case, the condition was completely destructive of the plaintiff's right, inasmuch as it exempted the defendants not only from the liability for damage to the car parked, but also from liability for any injury to a customer or any other person occurring when the customer's motor vehicle is in the parking building. Thus, the exempting condition may be treated as an exception to the general rule enunciated by Mellish L.J., namely, that the plaintiff would be bound by the conditions written or printed on the ticket or the receipt, if it was shown that he knew of it or that the defendants had done what was reasonably necessary to draw his attention to such condition.
25. Hon'ble Dwarka Prasad J. in Sohanlal's case [1979] TAC 200 expressed his non-concern to bring the case within the exception carved out by Lord Denning in Thornton's case [1971] 1 ALL ER 686 (CA) quoted above, on the ground that the condition contained on the back of the goods receipt in the present case was of the ordinary regulatory type, by which the parties agreed to restrict the forum for the decision of dispute relating to the consignment of the goods carried by the transport company to one of the places where the courts have jurisdiction to entertain the suits about such disputes.
26. I respectfully disagree with the above view and agree with the view taken by the decisions of the Kerala High Court.
27. In the result, this revision petition is allowed. The order passed on issue No. 2 by the learned Tenth Additional City Civil Judge (Coch No. 5) in O.S. No. 2475 of 1985 in set aside.
28. Since the cause of action is of the year 1982, the learned judge is directed to expedite the trial and, in any way, should not exceed six months from the date of receipt of this order.
29. The parties are directed to appear before the trial court on October 21, 1991, to take further instructions.
30. There is no order as to costs.