Andhra HC (Pre-Telangana)
M/S. East India Transport Agency, ... vs National Insurance Co. Ltd. And Another on 7 September, 1990
Equivalent citations: I(1992)ACC289, 1991ACJ944, AIR1991AP53, AIR 1991 ANDHRA PRADESH 53, (1991) 1 APLJ 32, (1991) 2 ACJ 944, (1993) 3 CURCC 549, (1992) 1 TAC 151, (1992) 1 ACC 289, (1990) 2 ANDHWR 501, (1990) 3 ANDH LT 481, 1994 SCFBRC 21
ORDER manent Panduranga Rao, J.
1. This revision petition has been referred to a Full Bench by our learned brother Bhaskar Rao, J. stating that the decisions in Rajarao v. A. P. T. Company (1969) 2 APLJ 151 and Spl. Secy. Govt. of Rajasthan v. Venkataramana Seshaiyer, run in divergence with each other on the question of deciding the territorial jurisdiction of the Court to try the suit and that the divergence of the views of the two Division Benchs has, therefore, got to be resolved by a Full Bench.
2. The facts leading to the filing of the revision petition are briefly as follows:
The sole defendant is the revision petitioner. The suit has been filed by the first plaintiff-Insurance Company and the second plaintiff, who is the owner of the goods, for recovery of damages for short delivery of goods. The second plaintiff has entrusted the consignment of Chlorinated Paraffin Wax to the branch of M/s. East India Trnasport Agency at Delhi for being transported to Hyderabad. When the second plaintiff has taken delivery of the consignment at Hyderabad, a shortage of 300 kgs was detected. The defendant has issued a shortage certificate. The first plaintiff-insurer having paid the value of the shortage found in the consignment delivered to the second plaintiff, instituted the suit for recovery of the amount paid by it in the Court of the Xth Assistant Judge, City Civil Court, Hyderabad. The owner of the goods also joined as the second plaintiff.
3. The defendant challenged territorial jurisdiction of the City Civil Court, Hyderabad to entertain the suit on the ground that as per the contract, as evidenced by Ex. B. 1 lorry receipt, only the Courts in Calcutta have jurisdiction to entertain the suit and that by virtue of the specific term contained in Ex. B. 1 lorry receipt, the jurisdiction of the Courts at Hyderabad to entertain the suit is specifically excluded.
4. The learned Xth Assistant Judge considered the question of jurisdiction as a preliminary issue and held that he had jurisdiction to entertain the suit. Challenging that decision, the defendant-transport company has preferred the revision petition.
5. When the revision came up for hearing before our learned brother Bhaskar Rao, J, it was contended by the petitioner that the delivery of the consignment to the defendant being on the basis of Ex. B.1 lorry receipt, the terms and conditions printed on Ex. B. 1 lorry receipts are binding on the plaintiff and consequently the plaintiffs arc precluded from filing the suit at Hyderabad as the Courts in Calcutta alone have got jurisdiction to decide the suit. The respondents-plaintiffs, on the other hand, submitted that the consignment was entrusted to the defendant in the capacity of carrier in Delhi; that when the consignment was delivered at Hyderabad, the shortage was detected at Hyderabad; that the shortage certificate was issued at Hyderabad and that as such, the suit based on the shortage certificate issued at Hyderabad is maintainable in the Courts situated at Hyderabad. Some decisions were cited before our learned brother Bhaskar Rao, J. who held that the decisions in BID Parry (India) Ltd. v: M/s. Savani Transports, AIR 1980 Andh Pra 30 and Savani Transport v. United India Fire and General Insurance (1980) 2 Andh LT 167 have no application to the facts of this case because in both those cases, the plaintiff and the defendant have agreed that only the Courts in Bombay will have jurisdiction to decide any dispute between the parties. The learned single Judge held that the stipulation in the lorry receipt that the Courts in Bombay alone would have jurisdiction is valid is applicable to cases where the plaintiff and the defendant are parties to the agreement. As mentioned already, the learned single Judge felt that there is a divergence of opinion between the two Division Benches in the cases referred to in Rajarao v. A. P. T. Company (1969) 2 APLJ 151 (supra) and Spl. Secy. Govt. of Rajasthan v. Venkataramana Sesha-iyer (supra).
6. In Rajarao v. A. P. T. Company ((1969) 2 APLJ 151) (supra), M/s. Dumex and Co., having its Head Office at Madras consigned two cases of medicines to the plaintiff to be delivered at Vijayawada as per Ex. B.2 consignment note dated 17-1-1961. When the plaintiff presented Ex. B.2 consignment note, only one of the cases of medicines was delivered by the lorry office at Vijayawada and the second case was not delivered. During the course of correspondence it was stated by the lorry office that attempts were being made to trace the second case and that it would be delivered, the moment it was traced. As the second case of medicines was not delivered in spite of long lapse of time, the plaintiff instituted the suit for compensation for the goods lost because of the negligence of the lorry office. The defendant challenged the jurisdiction of the Subordinate Judge's Court at Vijayawada to entertain the suit on the ground that Ex. B-2 lorry receipt executed by the defendant in favour of M/s. Dumex and Co., contained a term that any dispute arising between the parties with regard to the contract of carriage will be got settled by filing a suit at Madras. The learned Subordinate Judge upheld the objection with regard to the jurisdiction and returned the plaint for presentation to the proper Court situated in Madras. The Division Bench on a perusal of Ex. B.2 lorry receipt held that it was transferred by M/s. Dumex and Co., in favour of the plaintiff; that it is only on the basis of Exs. A.3 and B.2 which were transferred to the plaintiff that he claimed the delivery of the goods consigned by M/s. Dumex and Co.; that the plaintiff cannot accept delivery in so far as one case which was given to him on the basis of those notes and refuse to abide by the other term of the same contract that a suit arising out of that transaction could be laid only in the appropriate Court in Madras; that the plaintiff steps info the shoes of M/s. Dumex and Co.; that therefore, any suit filed by him would have to be entertained only by the Court at Madras and that the Court at Vijayawada could have no jurisdiction to entertain any such suit. Their Lordships have endorsed the view taken by the learned Subordinate Judge that the transferee (who is the plaintiff in that suit) under Exs. A.3 and B.2 steps into the shoes of M/s. Dumex and Co. and since admittedly there is a privity of contract between the defendant and M/s. Dumex and Co., the plaintiff is bound by the contrct under which both the parties have undertaken to institute the suit arising out of that contract at Madras. Their Lordships of the Division Bench repelled the contention of the learned counsel for the plaintiff therein that the term of contract entered into in Ex. B.2 in regard to the place where the suit can be brought is opposed to public policy referred to in S. 28 of the Contract Act and the contract is, therefore, void, holding that what all S. 28 of the Contract Act says is that no contract can be entered into by the parties, the effect of which would be to oust completely the jurisdiction of any Court. The Division Bench clarified that it is permissible for the parties to enter into a contract to restrict their choice of forum to one or more places available. The Division Bench further held that it is for the plaintiff to choose one of the forums provided under S. 20 of the Code of Civil Procedure to institute the suit. That judgment proceeded on the basis that there is a privity of contract between M/s. Dumex and Co., and the defendant, and the plaintiff who laid the suit by virtue of the transfer in his favour under Exs. A.3 and B.2 steps into the shoes of M/ s. Dumex and Co., and hence is bound by the term contained in Ex. B.2 limiting the jurisdiction of the Court to entertain the suit.
7. The decision in Spl. Secy. Govt. of Rajasthan v. Venkataramana Seshaiyer (supra) relates to the claim based on a lottery ticket. The plaintiff therein purchased one Rajasthan State lottery ticket from one D. Sudarshana Rao, who was an employee of the third defendant at Visakhapatnam in November 1972 for Re. 1/-. Basing on the address furnished by the plaintiff, the third defendant went to the plaintiffs house and informed him that the ticket purchased by him from the third defendant's salesman had won the first prize of Rs. 2,50,000/-. The plaintiff laid the suit for recovery of the prize money. The Division Bench of this Court held that unless the terms of the contract are arrived at after due negotiation, they cannot be held binding merely because a ticket is later issued containing certain terms; that there must also be proof that the terms were meant to be contractual; that the said terms must have been brought to the notice of the contracting party at or before the time when the contract was entered into and that if the printed terms of the lottery ticket did not become part of the contract, they cannot be enforceable unilaterally, for otherwise, it will amount to an alteration of the terms of the original contract. Their Lordships observed that the material on the reverse of the lottery ticket that "the legal jurisdiction of the lottery shall be at Jaipur only" was printed in small print; that there is nothing in the evidence to show that the printed matter on the reverse of the ticket is part of any negotiation nor is there any other contract signed between the parties. It is further held that there is nothing in the evidence to show that the attention of the plaintiff was drawn to the subject-matter at or before the time when the plaintiff paid Re. 1/- for purchasing the lottery ticket and that there is nothing to suggest that the plaintiff bound himelf by what is printed on the back side of the lottery ticket. The Division Bench held that the Sub-Court at Visakhapatnam had jurisdiction to entertain the suit. This decision which deals with the conditions printed on the reverse of the lottery ticket lays down the principle that in the absence of proof that the terms of contrct are arrived at after due negotiation, they cannot be binding between the purcahser of the lottery ticket and the State Government sponsoring the lottery. This principle is altogether different from the one arising under Rajarao v. A. P. T. Company (1969-2 APLJ 151) (supra).
8. We, therefore, do not visualize any divergence of opinion between the two Division Benches. However, since an important question of law with regard to the territorial jurisdiction of the Civil court to entertain a suit is involved and an authoritative pronouncement of the Full Bench would be a guidance for the trial Courts to follow, we heard the arguments of both the learned counsel on this question in detail.
9. The learned counsel for the revision petitioner argued that the consignee's name was shown at the time of delivery of the goods; that Ex. B.1 lorry receipt contains the clause that any dispute arising between the parties should be determined by the Courts situated in Calcutta only; that the second plaintiff has acted upon Ex. B. 1 and obtained delivery; that the plaintiffs must rely upon Ex. B. 1 as a whole but not in part; that Ex. B. 1 is the whole basis for making a claim against the defendant; that the terms and conditions constitute inseparable part of the said document and that since the second plaintiff-consignee is bound by the terms of the contract, the first plaintiff who is the Insurance Company is also equally bound by the terms of Ex. B. 1 lorry receipt and as such, only the Courts in Calcutta can have territorial jurisdiction to entertain the suit.
10. In support of his contention, he relied upon the decision in I. A. Corporation v. Jothaji, . In that case, the respondent who is a merchant at Madras sent a parcel of pen nibs valued at Rs. 1,600/- to Calcutta through the Indian Airlines Corporation (the petitioner). Before accepting the goods for carriage, the petitioner issued Ex. P. 1 consignment note setting out the terms and conditions of the carriage. In the front portion of Ex. P. 1, the agent of the respondent who despatched the goods signed a statement that he was aware of and was accepting the general conditions of carriage and special conditions, more particularly referred to and set out on the reverse of that document. One of the special conditions which was legibly printed on the reverse of the consignment note limited the liability for loss or damage to the goods to the actual value thereof or the declared value thereof or Rs. 300/-, whichever is the lowest. The learned Judge held that the contract limiting the liability of the carrier as contained in Ex. P. 1 is valid and enforceable. That decision is based upon the finding of fact that the consignor or his agent has signed the declaration expressly agreeing to all the conditions in the consignment note. That decision has no application to the facts of this case because admittedly Ex. B.1 does not contain the signature of any of the plaintiffs. In the instant case, the learned Xth Assistant Judge found as a fact that Ex. B.1 contains the signature of the transport company at Delhi. Thus, there is no material to show that Ex. B. 1 in any way constitutes a contract entered into between the parties to the suit at the time of entrustment of the consignment to the defendant-transport company in Delhi.
11. Rama Rao, J. held in M/s. B. A. Transport Co. v. Bankatial (1982) 1 APLJ 284 that the contract between the parties with regard to the exclusion of jurisdiction of a Court can be either express or implied; that such a contract is binding and conclusive on the parties to the agreement and that it cannot be fastened on the third party unless it is satisfactorily shown that the third party is privy to the contract or acted upon the contract consciously knowing the effect and implications of the said agreement. In the absence of any semblance of evidence or surrounding circumstances to indicate that the plaintiffs were conscious of Cl. 17 of Ex. A.1 in that case, or that they acted upon the same, the learned Judge held that the Court at Bombay has no jurisdiction and that the Court at Hyderabad has jurisdiction. The learned Judge further held that there was absolutely no privity of contract regarding the jurisdiction between the plaintiffs and the first defendant and that the cause of action for the plaintiffs as against the first defendant arose at the point and time when shortage of goods was discovered and when Ex. A.2 shortage certificate was issued.
12. The learned counsel for the petitioner relied upon the decision in Globe Transport Corpn. v. Triveni Engineering Works . In that case, the appellant was carrying on transport business in Jaipur. The consignor entrusted goods to the appellant at Baroda for carriage to Naini, Allahabad. The goods were damaged in transit due to an accident and the damaged goods were delivered to the respondent, who was the endorsee of the consignment note. One of the conditions of the consignment note (Cl. 17) was that the Court in Jaipur alone shall have jurisdiction in respect of all claims and matters arising under the consignment. But the respondents filed suit for damages against the appellant in the Court of Civil Judge, Allahabad, being the place where the goods were delivered. The Civil Court as well as the High Court held that since no part of the cause of action had arisen in Jaipur, the Civil Court in Jaipur had no jurisdiction. The Supreme Court while allowing the appeal held that though it is not competent to the parties by agreement to invest a Court with jurisdiction which it does not otherwise possess, it is open to the parties by agreement to select a particular forum and exclude other forums in regard to claims which one party may have against the other under a contract and that since the appellant was carrying on business in Jaipur, the Court in Jaipur would have jurisdiction to entertain the suit filed by the respondent. In that view, their Lordships held that Cl. 17 of the contract of carriage therein conferring exclusive jurisdiction on the Court in Jaipur City and excluding the jurisdiction of other Courts would be valid and effective. We must straightway observe that the Supreme Court proceeded on the basis that the plaintiff had agreed to the terms and conditions contained in the consignment note. It is in that view that their Lordships were of the view that it is open to the parties to select a particular forum and exclude the other forums in regard to the claims which one party may have against the other under the contract. The question whether the consignor had notice of the terms and conditions contained in the consignment note was not considered by the Supreme Court but, on the other hand, the decision proceeds on the basis that the parties are aware of and agreed to the terms and conditions contained in the consignment note filed therein.
13, The Supreme Court had occasion to consider this question in a subsequent decision in A. B. C. Laminart Pvt. Ltd. v. A. P. Agencies, Salem, . In paragraph 15 of the judgment, their Lordships held that the making of the contract is part of the cause of action; that the performance of a contract is part of cause of action; that a suit in respect of the breach can always be filed at the place where the contract should have been performed or its performance completed; that so long as the parties to a contract do not oust the jurisdiction of all the Courts which would otherwise have jurisdiction to decide the cause of action under the law, it cannot be said that the parties have by their contract ousted the jurisdiction of the Court and that where the parties to a contract agreed to submit the disputes arising from it to a particular jurisdiction which would otherwise also be a proper jurisdiction under the law, their agreement to the extent they agreed not to submit to other jurisdictions cannot be said to be void as against public policy. This decision also proceeds on the basis that the parties to the contract agreed to confer jurisdiction on the Civil Courts in Kaira thereby unambiguously and explicitly excluding the other jurisdictions.
14. In this case, as rightly pointed out by the learned counsel for the plaintiffs-respondents, there is no concluded contract between the consignor or consignee with the carrier (the defendant). Therefore, there is no scope for any negotiation between the parties expressly undertaking to limit the jurisdiction of any particular Court for determination of disputes arising under the contract. The learned counsel further argued that the suit is not based upon the contract but it is based upon the statutory liability of the defendant to reimburse the loss caused to the consignment during transit. A Division Bench of Bombay High Court in Road Transport Corpn. v. Kirloskar Brothers Ltd., held that in the event of loss of goods caused by neglect of the defendant, which is a common carrier, the defendant is liable, notwithstanding anything contained in the terms and conditions in the consignment note. The Division Bench further held that in order that the terms or conditions on the overleaf of a consignment note passed by a common carrier should be binding on the consignor or the consignee and in order that it should operate as a special contract between a consignor or consignee on the one hand and the carrier on the other hand, the consignment note must be signed by the consignor or the consignee and constitute a contractual document or at least must be identified as an integral part of the contractual document. Their Lordships held that in cases of unsigned consignment notes containing clauses limiting the liability of the carriers as well as excluding the jurisdiction of certain Courts and restricting it to a specific Court only, such clauses or terms or conditions must be brought to the notice of the consignor of the goods. The Division Bench further clarified that if such terms and conditions are not brought to the notice specifically and adequately, then the consignor or the consignee would not be bound by those terms and it will be open for them to file a suit in any competent Court having jurisdiction other than the one mentioned in the clauses excluding jurisdiction of other Courts.
15. Ramaswamy, J. (as he then was) held in M/s. Patel Roadways Pvt. Ltd. v. The Republic Forge Co. Ltd., , that the parties can choose the territorial jurisdiction of one of the Courts where part of cause of action arose and that the agreement between the parties with regard to exclusion of jurisdiction of a Court is binding on the parties thereto. His Lordship further held that a third party is not bound unless it is shown that he is made aware of its implications. It is found that there was no concluded evidence that the respondent has agreed to the conditions postulated in the consignment note on which reliance has been placed by the respondent. Under those circumstances, it is held that it cannot be concluded that the respondent had agreed by implication for the note in the consignment viz., that the dispute should be settled at the Courts in Bombay. The learned Judge observed that no part of cause of action had arisen at Bombay and that the cause of action has arisen only at Hyderabad where the goods are to be delivered or at Bangalore where the goods have been entrusted to the petitioner.
16. The decision in M/s. Patel Roadways Pvt. Ltd. v. The Republic Forge Co. Ltd. (supra) applies to the facts of this case because here is absolutely no evidence in this case that the first plaintiff who is a third party is made aware of the implications of Ex. B.1 lorry receipt and so no part of cause of action had arisen in Calcutta. A part of cause of action has arisen at Hyderabad where the goods were intended to be delivered and were in fact short delivered to the second plaintiff. A part of cause of action has arisen at Delhi where the goods have been entrusted to the revision petitioner (transport company). Since no part of cause of action has arisen at Calcutta due to absence of appraisal of the contents of Ex. B. 1, it is not open to the defendant to contend that the Courts in Calcutta alone have got jurisdiction to entertain the suit.
17. The learned counsel for the respondents-plaintiffs relied upon a Division Bench decision of Kerala High Court in United India Insu. Co. Ltd. v. Associated Transport Corpn. . In that case it is held that the printed words do not constitute an agreement to oust the jurisdiction of all Courts. The Division Bench observed that 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 by 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 oh such a term. Even in such cases, it is held that the Courts must remember that people often sign order forms containing a good deal of printed matter without caring to read what is printed; that it cannot always be said that everything which is printed may be deemed to form part of the contract; that 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 and that if there is some other material to indicate the 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. In that case, the lorry receipt contained a clause that only Bombay Court had jurisdiction. Basing on the receipt, the lower Court held that it had no jurisdiction. The Division Bench of the Kerala High Court set aside that judgment and held that the Court below had jurisdiction to entertain the suit. As we have observed already, there is absolutely no material in this case to indicate the acceptance or consent of the second plaintiff which received the printed form contained in Ex. B. 1 or that its attention was drawn to the specific term contained on the reverse of Ex. B.I that the Courts in Calcutta alone have jurisdiction to decide the dispute between the parties.
18. The learned counsel for the revision petitioner argued that inasmuch as Ex. B.1 was marked by consent in the lower Court, it is deemed that the respondents-plaintiffs have agreed to all the terms and conditions contained in Ex. B. 1 and as such, they are precluded from contending that the attention of the second plaintiff (the consignee) was not drawn to the specific term contained on the reverse of Ex. B. 1 as to the jurisdiction of the Court. In support of his contention, he relied upon a Division Bench decision of the Madras High Court in A. V. S. Perumal v. Vadivelu Asari, . The decision relied upon by the learned counsel for the petitioner does not support his contention. It lays down that permitting a document to be marked by consent only means that the party consenting is willing to waive his right to have the document in question proved and that formal proof of the document which is marked by consent is not required. The marking of a document by consent does not mean that the opposite party has agreed to abide by all the terms and conditions contained therein. As held by the Division Bench, marking of a document by consenl only dispenses with the formal proof of the document. It does not preclude the opposite party from challenging the validity of any of the terms contained in the document. By reason of the plaintiffs giving their consent to mark Ex. B.1 in the lower Court, they cannot be precluded from contending that the second plaintiff had no knowledge of the specific term and condition mentioned in Ex. B. 1 with regard to the jurisdiction of the Court to entertain any dispute arising under Ex. B. 1. The proof of a document is different from its admissibility and the binding nature of the document. The giving of consent only dispenses with the proof of the document but it does not estop the party giving the consent from challenging the validity of the document or its contents thereof. Since the rights and liabilities of the parties are not contractual but arise under the statute against the defendant who is a carrier, Ex. B.1, which shows the entrustment of goods, is only a piece of evidence.
19. The learned counsel for the revision petitioner relied upon S. 39 of the Sale of Goods Act and contended that the delivery of goods by the seller to the carrier amounts to delivery of goods to the buyer and as such, the defendant is not liable for the loss or damage caused during the transit of the goods. That is a matter to be determined by the Court while fixing the liability of the defendant for the admitted short delivery of the goods. S. 39 of the Sale of Goods Act has therefore, no bearing on the determination of the territorial jurisdiction of the Court to entertain the suit. Therefore, the effect of S. 39 of the Sale of Goods Act does not arise for consideration at this stage.
20. From the above discussion, we approve of the decisions of Ramaswamy, J. in M/s. Patel Roadways Pvt. Ltd. v. The Republic Forge Co. Ltd. ( (supra) and of Rama Rao, J. in M/s. B. A. Transport Co. v. Bankatlal (1982) 1 APLJ 288 (supra) that in the event of entrustment of goods to a carrier under a consignment note and a claim arising out of such a contract, the third party to the consignment note is not bound by the terms and conditions contained in the consignment note limiting the jurisdiction of the Court to decide the dispute unless it is shown that such a third party's attention is specifically drawn to such a clause contained in the consignment note and he is made aware of its implications. Such a term excluding the jurisdiction the Court cannot bind a third party unless it is shown that he acted upon the contract consciously knowing the effect and implications of such a contract. The decision in Rajarao v. A. P. T. Company ((1969) 2 APLJ 151) (supra) is distinguishable on the facts of this case inasmuch as in that case, M/s, Dumex and Co., was held to be aware of the term of the contract with regard to the jurisdiction of the Court and that the plaintiff who has stepped into the shoes of M/s. Dumex and Co., is bound by such a term. In the instant case, inasmuch as a part of cause of action has arisen at Hyderabad, we hold that the decision of the learned Xth Assistant Judge holding that he has got jurisdiction to entertain the suit is perfectly correct and does not call for any interference.
21. We answer the reference accordingly and dismiss the civil revision petition with costs, confirming the decision of the learned Xth Assistant Judge, City Civil Court, Hyderabad on issue No. 3 in O.S. No. 3573 of 1980. Since the suit is of the year 1980, we direct the learned Xth Assistant Judge to dispose of the suit expeditiously preferably within a period of three months from the date of receipt of a copy of this order.
22. Order accordingly.