Karnataka High Court
S.A.L. Limited., vs Shreenidhi Trading Company, on 4 February, 2011
Author: Aravind Kumar
Bench: Aravind Kumar
-1-
IN THE HIGH COURT OF KARNATAKA
4
CIRCUIT BENCH AT DHARWAD
DATED THIS THE Q4T1-I DAY OF FEBRUARY. 201 1
BEFORE
THE HON'BLE MRJUSTICE ARAVIND KUMAR
CIVIL REVISION PETITION NO.1019/2010 [10]
BETWEEN:
S.A.L. LIMITED.,
REGISTERED OFFICE.
5/1, SHREEJI HOUSE,
AHMEDABAD. GUJRAT.
REP BY AUTHORISED DIRECTOR,
KIROL KANJARIA,
S/0.HEMANT BHAI KANJARIA.
PETITIONER
(By SRI JAYAVI'ITAL RAO KOLAR, SR. COUNSEL FOR
SMT. VEENA HEGDE ADV.)
AND:
SHREENIDHI TRADING COMPANY.
BY ITS PROPRIETOR,
SHRI BADRINARAYANA NANDKISHOR LADDE,
AGE: 40 YEARS, 0CC: BUSINESS,
R/O.R.NO.345, KIRAN NIVAS,
OPP: ALL INDIA RADIO STATION,
HOSPET.
2. SHRI.RAJENDRA V.SHAH,
AGE: MAJOR, 0CC: BUSINESS.
CHAIRMAN OF S.A.L.STEEL LTD..
R/O,ADMINISTRATIVE OFFICE,
9TH FLOOR, GNFC INFORMATION TOWER.
SARKHAEJ, GANDHINAGAR HIGHWAY.
BODAKDEV. AHEMADABAD380 054.
3. SHRI.RAJENDRA ARORA,
AGE: MAJOR, 0CC: BUSINESS.
MANAGING DIRECTOR OF S.A.L.STEEL LTD.,
R/0.ADMINISTRATIVE OFFICE,
9TH FLOOR, GNFC INFORMATION TOWER,
SARKHAEJ, GANDHINAGAR HIGHWAY,
BODAKDEV, AHEMADABAD-380 054.
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'a
4. SHRLSUJALA.SHAH,
AGE: MAJOR, 0CC: BUSINESS,
DIRECTOR (PURCHASE),
R/O.ADMINISTRATIVE OFFICE,
9TH FLOOR, GNFC INFORMATION TOW
ER,
SARKHAEJ, GANDHINAGAR HIGHWA
Y,
BODAKDEV, AHEMADABAD-380 054.
5. SHRI.RAKESH RANJAN,
AGE: MAJOR, 0CC: BUSINESS,
ASSISTANT GENERAL MANAGER (PUR
CHASE),
R/0.ADMINISTRATIVE OFFICE,
9TH FLOOR, GNFC INFORMATION TOW
ER,
SARKHAEJ, GANDHINAGAR HIGHWA
Y,
BODAKDEV, AHEMADABAD-380 054.
6. SHRLDEEPAK KUBERDAS SHAH,
AGE: MAJOR, 0CC: BUSINESS,
DIRECTOR, S.A.L.STEEL LTD.,
R/O.PLOT NO.55, WARD NO. bA,
OPP: IFFCO COLONY,
GANDHIDHAM, GUJRAT-370 201.
7. SHRI.DYNANSHANKAR G.PANDEY,
AGE: MAJOR, 0CC: BUSINESS,
EXECUTIVE DIRECTOR, S.A.L.STEEL
LTD..
R/O.ADMINISTRATIVE OFFICE,
9TH FLOOR, GNFC INFORMATION TOW
ER,
SARKHAEJ, GANDHINAGAR HIGHWA
Y,
BODAKDEV, AHEMADABAD-380 054.
8. SHRI.SURESH D.SHAH,
AGE: MAJOR, 0CC: BUSINESS,
DIRECTOR, STEEL MILL & PERSON
AL,
S.A.L.STEEL R/O.ADMINISTRATIVE OFF
ICE,
9TH FLOOR, GNFC INFORMATION TOW
ER,
SARKHAEJ, GANDHINAGAR HIGHWA
Y,
BODAKDEV, AHEMADABAD-380 054.
9. SHRI.BABULAL M.SINGHAL,
AGE: MAJOR, 0CC: BUSINESS,
DIRECTOR COMMERCIAL, S.A.L.STEEL
LTD.,
R/O.ADMINISTRATIVE OFFICE,
9TH FLOOR, GNFC INFORMATION TOW
ER,
SARKHAEJ, GANDHINAGAR HIGHWA
Y,
BODAKDEV, AHEMADABAD-380 054.
10. SHRI.AMBALAL C.PATEL,
AGE: MAJOR, 0CC: BUSINESS,
DIRECTOR, S.A.L,STEEL LTD.,
R/ O.ADMINISTRATIVE OFFICE,
-3-
9TH FLOOR, GNFC INFORMA
TION TOWER,
SARKHAEJ, GANDHINAGAR HIG
HWAY.
BODAKDEV, AHEMADABAD-38
0 054.
11, SHRI.OULAM HUSSAIN MOHA
MMED SHAIKH,
AGE: MAJOR, 0CC: BUSINESS
,
DIRECTOR, S.A.L.STEEL LTD
..
R/O.3-B, MUSLIM SOCIETY
,
MITHAKALI, NAVARANGPU
RA,
AHEMADABAD 360 009.
-
12. SHRI. HARSHAD SHAH,
AGE: MAJOR, 0CC: BUSINESS
,
DIRECTOR, S.A.L.STEEL LTD
.,
R/O.ADMINISTRATIVE OFFIC
E,
9TH FLOOR, GNFC INFORMA
TION TOWER,
SARKHAEJ, GANDHINAGAR
HIGHWAY,
BODAKDEV, AHEMADABAD
-380 054.
13, SHRI,JETHABAI M.SHAH,
AGE: MAJOR, 0CC: BUSINESS
,
DIRECTOR, S.A.L.STEEL LTD
.,
R/O.ADMINISTRATIVE OFFIC
E,
9TH FLOOR, GNFC INFORMA
TION TOWER,
SARKHAEJ, GANDHINAGAR HIG
HWAY,
BODAKDEV, AHEMADABAD
-380 054.
14. SHRI.TEJPAL S.SHAH,
AGE: MAJOR, 0CC: BUSINESS
,
DIRECTOR OF S.A.L.STEEL LTD
.,
R/O.ADMINISTRATIVE OFFIC
E,
9TH FLOOR, GNFC INFORMA
TION TOWER,
SARKHAEJ, GANDHINAGAR
HIGHWAY,
BODAKDEV, AHEMADABAD
-380 054.
15, SHRI.UMESH YADAV,
AGE: MAJOR, 0CC: BUSINESS
,
CHIEF CHEMIST & IN-CHARGE
,
HOSPET SECTION OF S.A.L.S
TEEL LIMITED,
9TH FLOOR, GNFC INFORMA
TION TOWER,
SARKHAEJ, GANDHINAGAR HIG
HWAY,
BODAKDEV, AHEMADABAD
-380 054.
(By Sri. K.L.PATIL: S.S.BETU RESPONDENT$
RMATH ADVs. FOR C/Ri>
THIS CRP IS FILED UNDER
SEC. 115 OF CPC., AGAINST
JUDGMENT DATED:08-02-20 THE
10 PASSED IN O.S.N0.22
THE FILE OF THE PRL. CIV /20 09 ON
IL JUDGE(SR.DN) & JMFC.,
ANSERING THE PRELIMINARY HO SPE T,
ISSUE NO.5 IN NEGATIVE.
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This c. R. petition coming on for dictating orders this day,
the Court made the following:
ORDER
This is a defendant's revision petition questioning the order dated 08.02.2010 passed in O.S. No.22/2009 by the Pri.
Civil Judge (Sr.Dn.) and JMFC, Hospet whereunder a finding on preliminary Issue No.5 regarding territorial jurisdiction has been answered in the negative and it has been held that Hospet Court has got territorial jurisdiction to try the suit.
2. Heard the learned advocates appearing for parties namely Sri Jayavittal Rao Kolar, learned Senior Counsel appearing for petitioner and Sri K.L.Patil, learned counsel appearing for respondents.
3. Petitioner is the defendant and respondent is the plaintiff before the trial court. The parties are referred to as per the ranks in the trial court.
4. It is contended by Mr.Kolar that trial court erred in holding that Civil Court at Hospet has got jurisdiction to try the suit when admittedly defendant is from the State of Gujarath and agreements to supply iron ore and all other terms and conditions of supply were incorporated in the purchase orders issued by the defendant which clearly stipulated that dispute if any was subject to courts at "Ahmedabad Only" and as such, he -5- I contends that finding of the trial court is erroneous on the question ofjurisdiction as envisaged in Section 20(c) of CPC. He would also contend that trial court erred in holding that PW-1 had never agreed to the Clauses 19(j) and 20 of purchase orders, only on the basis of oral evidence, ignoring the exclusion clauses found in the purchase orders which was in writing. He would also contend that trial court ignored to take note of the fact that despite Clauses 19(j) and 20 found on the back-side or the reverse side of the purchase orders, which came to be admitted by PW-1 and findings of the trial court that he had not signed the purchase orders and as such said clauses are not binding on him is an erroneous finding. He would also elaborate his submission by contending that trial court erred in not noticing the fact that defence set up by defendant was not that the court at Hospet had no jurisdiction at all, but the defence was that in view of the exclusion Clause 19(j) and 20 agreed to by parties, Court at Hospet had no jurisdiction and would submit that question of delivery at Hospet by plaintiff would not make any difference when parties had agreed to vest the jurisdiction in court at Ahmedabad and exclude the jurisdiction of Hospet Court. He would further contend that findings of the trial court that as per Ex.P-19 to Ex.P-1036 covering letters and cash memos reflected that the "disputes are subject to Hospet jurisdiction' without considering that these documents are all t subsequent to Ex.P-1 to Ex.P-18 and therefore, had absolutely no bearing on the issue involved for determination. He would also submit by contending that reasonings given by trial cour t to hold preliminary issue No.5 in the negative are based mostly on inferences and presumptions and not on proper appreciat ion of documentary evidence tendered by defendants and cont rary normal usage, custom/practice adopted in inter-state trade . He would also draw attention of the Court to plaint para graphs 3 and 11 to contend that cause of action also arose at Ahm edabad and in the evidence of PW- 1, has admitted that goods were dispatched as per purchase orders and thus, plain tiff was deemed to have understood the contents of purchase orde rs and having supplied the materials pursuant to such purc hase orders, it cannot be said that there is no cause of actio n at Ahmedabad and contends that two clauses 19j) and 20 are deemed to be concluded contracts as envisaged under Section 4 of the Indian Contract Act.
5. In support of his submissions, he has relied upon the following judgments:
(a) AIR 1996 DELHI 92 MIS. PROGRESSIVE CONSTRUCTIONS LTD.
Vs. BHARAT HYDRO POWER CORPORATION LTD.
(b) AIR 1989SC 1239 ABC LAMINART PVT. LTD. AND ANOTHER Vs. AP AGENCIES SALEM -7- '(c AIR 2002 SC 2402 MIs. SHRIRAM CITY UNION FINANCE CORPORATION LTD.. Vs. RAMA MISHRA
(d) A1R2004SC2154 NEW MOGA TRANSPORT COMPAN Y Vs. UNITED INDIA INSURANCE CO. LTD . AND ANOTHER
(e) AIR 2004 SC 2432 M/s. HANIL ERA TEXTILES LTD.. Vs. M/S. PUROMATIC FILTERS (P) LTD.
(f) AIR 2002 MAD 396
M/S. CONSOLIDATED AGENCIES Vs.
M/S.
GUJARAT CARBON AND INDUSTRIES
LTD.
AND ANOTHER
(g) AIR 2008 SC 685
LAXMAN PRASAD Vs. PRODIGY
ELECTRONICS AND ANOTHER
(h) AIR 1977 BOM 298
VITHAL Vs. ANSABAI AND ANOTHER
(I) (2010) 1 SCC 83
GRASIM INDUSTRIES LTD. AND ANO
TEHR
Vs. AGARWAL STEEL
(j) (2009) 3 SCC 107
RAJASTHAN STATE ELECTRICITY BOA
RD Vs.
UNIVERSAL PETROL CHEMICALS LIMITED .
6. Per con.trcz, Sri K.L. Patil. learned cou nsel appearing for plaintiff would submit that eve n prior to issuance of purchase orders, on the basis of oral instructions of the defendant and as is the practic e, goods were supplied to defendant from Hospet and no par t of cause of action arose at Ahmedabad. He would submit that cause of action for the suit is to be presumed or looked into by examining the plaint averments and when the defendant sets up a plea of ouster of -8- jurisdiction of the Court, burden is cast heavily on him to prove that Court of competent jurisdiction does not in fact has jurisdiction to try such a suit He would submit that defendan t is having a Branch Office at Hospet. Officials of the defendants are at Hospet; they have interacted and co-ordinated with plaintiff at Hospet; offer is given to supply goods at Hospet;
goods have been supplied from Hospet, goods have proceeded on delivery by road transport as well as by rail transport from Hospet and as such Civil court of Hospet does have jurisdiction and not the court of Ahmedabad. He would elaborate his submissions by further contending that when purchase orde r dated 25.05.2006 was issued as per Ex.P-1, immediately plaintiff brought to the notice of defendant that he is not agreeable to the terms and conditions stipulated by defendant including clauses now pressed into service and on the very same day, defendant through its Senior Assistant General Manager (Purchase), wrote a letter which came to be marked as Ex.P 1038 dated 25.05.2006, specifically assuring the plaintiff that this discussions held between plaintiff and representatives of the defendant at Hospet had been discussed at Ahmedabad Office and clarification was issued saying that the purchase orders are normally in a standard format and it was understood by the parties that clauses mentioned therein need not be given effect to by parties. It is contended that to substantiate this aspect, the Proprietor of the plaintiff Firm got himself examined as PW- I and he has explained the circumstances under which 1 came to be issued, as also queries raised by the plaintiff immediately thereunder and reply received from defendant dated 25.05.2005, Ex.P1038 would clearly go to show that parties never agreed upon such a condition which is now pressed into service and with regard to these two clauses being pressed into service, there was no meeting of minds between the parties and evidence tendered by plaintiff has remained unrehutted. Sri Paul would bring to the notice of this Court, cross-examination of plaintiff dated 05.01.2010 to substantiate that exclusion clause to oust the jurisdiction of Hospet court was not agreed to between the parties. He would submit that even otherwise as admitted by the learned counsel for defendant, the Court having jurisdiction cannot be ousted since under Clause (c) of Section 20 of CPC, the Civil Court has got jurisdiction to try the suit.
7. In support of his submissions, he has relied upon the following judgments:
1) 1996(3) KAR.L.J. 422
MIS. INSTRUMENTS INCORPORATED.
BANGALORE Vs. MIS. INDUSTRIAL CABLES (INDIA) LIMITED, RAJPURA. PUNJAB AND ANOTHER
2) A1R1969SC1239 ABC LAMINART PVT. LTD. AND ANOTHER Vs. AP AGENCIES SALEM
3) AIR 1988 KERALA 36
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UNITED INDIA INS CO. LTD.. Vs. ASSOCIATED TRANSPORT CORPN. PVT.
LTD AND ANOTHER
4) AIR1991KERALA41
THE SOUTH EASTERN ROADWAYS Vs. THE
UNITED INDIA INSURANCE CO. LTD.
AIR 1992 SC 1514
5) PATEL ROADWAYS LIMITED Vs. PRASAD TRADING COMPANY
6) AIR 1985 CALCUTTA 74 SREENIVAS PULVERISING INDUSTRIES Vs. JAI GLASS & CHEMICALS PVT. LTD.
7) AIR 2008 SC 685
LAXMAN PRASAD Vs. PRODIGY
ELECTRONICS LTD. & ANR.
8) AIR196OSC13O9
STATE OF MADRAS Vs. C.P. AGENCIES
9) AIR1954SC236
CHATTURBHUJ VITHALDAS JASAN I Vs.
MORESHWAR PARASHRAM AND OTHERS
10) 2010 (2) KCCR 1194
THE CHAIRMAN, THE INSTITUTION OF
ENGINEERS (INDIA), BANGALORE AND
OTHERS
11) AIR1997SC639
U.N,R. RAO Vs. M.SHANMUGAVEL
12) AIR2004SC 2432
M/s. HANIL ERA TEXTILES LTD., Vs. M/S. PUROMATIC FILTERS (P) LTD.
13) A1R2004SC2154 NEW MOGA TRANSPORT COMPANY Vs. UNITED INDIA INSURANCE CO. LTD. AND ANOTHER
14) AIR2006SC 1828 MAYAR (H.K.) LTD. & ORS. Vs. OWNERS & PARTIES, VESSEL M.V. FORTUNE EXPESS AND ORS.
-11-8. Having heard the learned advocates appearing for parties, following point would arise for my cons ideration:
(a) Whether the trial court by order dated 0802.2010 has failed to exercise jurisdiction or exercised its jurisdiction not vested in it and acted illegally or with material irregularity calling for exercise of revisional jurisdiction by this Court?
(b) What order?
9. The issue in this revision petition lies in a narro w compass which relates to exercise of jurisdicti on by holding issue No.5 in the negative and consequently holding that suit filed by plaintiff in O.S. No.22/2009 is triab le by the Court of Civil Judge (Sr.Dn.) and JMFC at Hospet.
BRIEF FACTS OF THE CASE:
10. Plaintiff herein has instituted a suit O.S. No.2 2/2009 on the file of Prl. Civil Judge (Sr.Dn.) and JMF C, Hospet, seeking recovery of money in a sum of Rs.3,12,96,560=75 together with interest contending that plaintiff had supplied iron ore and defendants had not paid the amounts in respe ct of bills raised by him towards said supply. It is also contende d that cheques issued by the defendants have been returned un-encashed and hence, a criminal case has been filed under the provisions of Negotiable Instruments Act and thus, suit for reco very of money came to be filed at Hospet Civil Court. Defendants before the trial court flied their detailed written statement denyin g the averments made in the plaint and inter alia plea rega rding ouster of jurisdiction namely that the Pri. Civil Judge (Sr.Dn .) and JMFC Court, Hospet had no territorial jurisdiction to try the suit was also raised. On the basis of pleadings, issues came to be framed by the trial court on 22.01.2009 and it was also ordered by an order dated 22.12.2009 that issue No.5 is to be treated as a preliminary issue. Issue No.5 reads as unde r:
Issue no.5: Whether the defendants prove that, this court has no territorial junsdiction to entertain the suit and suit is not maintainable?
11. Plaintiff got himself examined as PW- I and got marked Ex.P-1 to Ex.P-1098. The said witness was also cross-exa mined in extenso. Defendant did not lead its oral evidence, but got marked Ex.D-1 to Ex.D-62 through PW-1 in the cross examination. Trial court, on considering the pleadings and evidence of parties, by its order dated 08.02.2010 held issue No.5 in the negative by holding that Civil Court at Hospe t has jurisdiction to try the suit, It is this order, which is ques tioned in the present Civil Revision Petition.
12. The contention of defendant that parties to the lis had entered into an agreement, to get the disputes resolved at Ahmedabad Court as per Clauses 19(j) and 20 of the purc hase
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orders (Ex.P-1 to Ex.P-80) and these two clauses being exclusion clauses, the Court at Hospet does not have jurisdiction and as such, it prayed that issue No.5 is to be held in the affirmative and not in the negative. In the background of the contentions raised by the parties, it would be necessary to extract relevant provision of law governing jurisdiction namely Section 20 of CPC and the two clauses which have been pressed into service by the learned advocates appearing for defendant.
They read as under:
SECTION 20 CPC:
20. Other suits to be instituted where defendants reside or cause of action arises.
Subject to the limitations aforesaid, every suit shall be instituted in Court within the local limits of whose jurisdiction-
(a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or
(b) any of the defendants, where there are more than one, at the time of the commencement of the suit actually and voluntarily resides, or carries on business. or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or
(c) the cause of action, wholly or in part, arises. * ] omitted by Act No. 104 of 1976 '[Explanation].-A corporation shall be deemed to carry on business at its sole or principal office in [lndia] or, in 14 respect of any cause of action arising at any place where it has also a subordinate office, at such place.
CLAUSE 19(J) & 20:-
CLAUSE 19(J) "It is agreed that dispute arising in respect of this order shall be decided by competent court at Ahmedabad and shall be subject to jurisdiction of Ahmedabad Courts only."
CLAUSE 20: "It is agreed that dispute arising in respect of this order shall be decided by competent court at Ahmedabad and shall be subject to jurisdiction of Ahmedabad Courts only."
These two clauses are found on the reverse side of purchase orders which came to marked as Exhibit P.1 to P.18.
It is these two clauses which has been pressed into servi ce to contend all disputes between the parties are to be resol ved by courts at Ahmedabad and Hospet court does not have jurisdiction to try the suit as agreed between the parti es.
13. At this juncture, it would be of benefit to extract the law laid down by the Hon'ble Apex Court as also othe r High Courts including this Court, which are as under:
(a) In the case of ABC LAMINART PVT. LTD. AND ANOTHER Vs. AP AGENCIES SALEM reported in AIR 1989 SC 1239 [Paras 7, 18]:-
PARA 7: The first question to be decided, therefore, is whether Clause 11 as aforesaid formed part of the agreement. Mr. Javali submits that Ext. B-i is an order of confirmation No.68/59 dated 2.10.1974 from the Sales 4-
- 15 - Executive for the first appellant to the respondent
acknowledging the receipt of their order and registering the same subject to the terms and conditions t overleaV. The general terms and conditions printed overleaf included the aforesaid Clause 11. We are unable to agree. Admittedly the parties have transacted the business on inter alia basis of Clause 11. There is. therefore, no escape from the conclusion that Clause 11 formed part of the agreement and the parties would be bound by it so long as they would be bound by the contract itself. It is not open to the respondent to deny existence of Clause 11. The submission of Mr. Javali has, therefore, to be rejected.
PARA 18: In Hakam Sinqh v. M/s. Gammon (India) Ltd. [1971] 3 S.C.R. 3 14 where the appellant agreed to do certain construction work or the respondent who had its principal place of business at Bombay on the terms and conditions of a written tender. Clause 12 of the tender provided for arbitration in case of dispute. Clause 13 provided that notwithstanding the place where the work under the contract was to be executed the contract shall be deemed to have been entered into by the parties at Bombay, and the Court in Bombay alone shall have jurisdiction to adjudicate upon. On dispute arising between the parties the appellant submitted a petition to the Court at Varanasi for an order under section 20 of the Arbitration Act, 1940 that the agreement be filed and an order of reference be made to an arbitrator or arbitrators appointed by the Court. The respondent contended that in view of the Clause 13 of the arbitration agreement only the Courts at Bombay had jurisdiction. The Trial Court also held that the entire cause of action had arisen at Varanasi and the parties could not by agreement confer jurisdiction on the Courts at
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Bombay which they did not otherwise possess. The High Court in revision held that the Courts at Bombay had jurisdiction under the general law and hence could entertain the petition and that in view of Clause 13 of the arbitration agreement the petition could not be entertained at Varanasi and directed the petition to be returned for presentation to the proper Court. On appeal therefrom one of the questions that fell for consideration of this Court was whether the Courts at Bombay alone had jurisdiction over the dispute. It was held that the Code of Civil Procedure in its entirety applied to proceedings under the Arbitration Act by virtue of section 41 of that Act. The jurisdiction of the Court under the Arbitration Act to entertain a proceeding for filing an award was accordingly governed by the provisions of the Code of Civil Procedure. By the terms of section 20(a) of the Code of Civil Procedure read with explanation 11 thereto the respondent company which had its principal place of business at Bombay was liable to be sued at Bombay. It was held that it was not open to the parties to agreement to confer by their agreement jurisdiction on a Court, which did not possess under the Code. But where two Courts or more have under the Code of Civil Procedure jurisdiction to try the suit or proceeding an agreement between the parties that the dispute between them shall be tried in one of such Courts was not contrary to public policy and such an agreement did not contravene section 28 of the Contract Act. Though this case arose out of an arbitration agreement there is no reason why the same rule should not apply to other agreements in so far as jurisdiction is concerned. Without referring to this decision a Division Bench of the Madras High Court in Nanak Chand v. T.T. Elect Supply Co., A.I.R. 1975 Madras 11103 observed that competency of a Court to try an action goes to the root of
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the matter and when such competency is not found, it has no jurisdiction at all to try the case.
But objection based on jurisdiction is a matter which parties coul d waive and it is in this sense if such jurisdiction is exercis ed by Courts it does not go to the core of it so as to make the resultant judgment a nullity. Thus it is now a settled principle that where there may be two or more competent Courts which can entertain a suit consequent upon a part of the cause of action having arisen there within if the parties to the con , tract agreed to vest jurisdiction in one such court to try the dispute which might arise as between themselves the agr eement would be valid.
If such a contract is clear, unambiguous and explicit and not vague it is not hit by sections 23 and 28 of the Contract Act.
This can not be understood as parties contracting against the Statute. Mercantile Law and Pra ctice permit such agreements.
(b) In the case of M/s. SHRIRAM CITY UNION FINANCE CORPORATION LTD., Vs. RAMA MIS HRA reported in AIR 2002 SC 2402 [Para 9] "9. In the present case the impugned ord er of the High Court and the order passed by the app ellate Court arises out of the order passed by the Civil Judge, Bhubaneshwar, We have to keep in mind there is difference between the inherent lack of jurisdiction of any Court on account of some statute and the other where parties through agreement bind them selves to have their dispute decided by any one of the court having jurisdiction. Thus, the question is not whether Orissa Courts have the jurisdiction to decide respondenf s suit but whether the respondent t could have invoked the jurisdiction of that Court in view of the aforesaid Cl.34, A
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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 atone. 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 Cl.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."
(c) In the case of NEW MOGA TRANSPORT COMPANY Vs. UNITED INDIA INSURANCE CO. LTD. AND ANOTHER reported in AIR 2004 SC 2154 [Paras 10, 16, 19]
10. On a plain reading of the Explanation to Section 20 CPC it is clear that Explanation consists of two parts, (i) before the word 'or" appearing between the words "office in India" and the word "in respect of' and the other thereafter. The Explanation applies to a defendant which is a Corporation which term would include even a company. The first part of the Explanation applies only to such Corporation which has its sole or principal office at a particular place. In that event, the Court within whose jurisdiction the sole or principal office of the company is situate will also -19- .
have jurisdiction inasmuch as even if the defendant may not actually be carrying on business at that place, it will be deemed to carry on business at that place because of the fiction created by the Explanation. The latter part of the Explanation takes care ofacasewherethedefendantdoesnothaveasoleofflcebut has a principal office at one place and has also a subordinate office at another place. The expression "at such place"
appearing in the Explanation and the word "or" which is disjunctive dearly suggest that if the case falls within the latter part of the Explanation it is not the Court within whose jurisdiction the principal office of the defendant is situate but the Court within whose jurisdiction it has a subordinate office which alone have the jurisdiction "in respect of any cause of action arising at any place where it has also a subordinate office".
16. Had it only been indicated in the consignment note the Court at Head Office city had jurisdiction then in the absence of a precise indication of the place what would have the consequence, we are not presently concerned, more particularly, when the consignment note itself had indicated that Court at Udaipur alone had jurisdiction.
19. Theintentionofthepartiescanbeculledoutfromuse of the expressions "only", "alone", "exclusive" and the like with reference to a particular Court But the intention to exclude a CourVs jurisdiction should be reflected in clear, unambiguous, explicit and specific terms. In such case only the accepted notions of contract would bind the parties. The first Appellate Court was justified in holding that it is only the Court at Udaipur which had jurisdiction to try the suit. The High Court did not keep the relevant aspects in view while reversing the judgment of the trial Court. Accordingly, we set aside the judgment of the High Court and restore that of the first Appellate Court. The Court at
- 20 -
Barnala shall return the plaint to the plaintiff No.1 (respondent No.1) with appropriate endorsement under its seal which shall present it within a period of four weeks from the date of such endorsement of return before the proper Court at Udaipur. If it is so done, the question of limitation shall not be raised and the suit shall be decided on its own merits in accordance with law. The appeal is allowed. No costs.
(d) In the case of M/S. CONSOLIDATED AGENCIES Vs. M/S. GUJARAT CARBON AND INDUSTRIES LTD. AND ANOTHER reported in AIR 2002 MADRAS 396 [Para 10] 10.1. In this regard, we are obliged to extract Clause (xvi) of the agreement dated 1.10.1985 as well as Clause 22 of the agreement dated 1.4.1993:
Clause (xvi) of the agreement dated 1.10.1985:
"In the event of any dispute in respect of this agreement our decision will be final and binding and jurisdiction will be at Vadodara/ Gujarat."
Clause (22) of the agreement dated 1.4.1993:
"In the event of any dispute in respect of this agreement our decision will be final and binding and jurisdiction will be at Baroda, Gujarat."
Therefore, whether the plaintiff relies either on agreement dated 1.1 0.1985 or 1,4.1993, both the agreements provide that, in the event of any dispute in respect of the said agreements, the same shall be decided by the Courts having jurisdiction either at Vadodara or Baroda, Gujarat.
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
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S within the jurisdiction of each of these Courts, parties to the concerned transaction can contract to vest jurisdiction in one of the Courts to by 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 held in NANAK CHAND case, referred supra, or with the view expressed in MIs.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.
10.3. It is true the Apex Court in A.B.C.LAMINART PVT. LTD. case, referred supra, held 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 if under the law several Courts would have jurisdiction and the parties have agreed to submit to one of these jurisdictions and not to other or others of them, it cannot be said that there is total ouster of jurisdiction. However, the Apex Court in A.B.C.LAMINART PVT LTD. case itself, after discussing the issue in detail has laid down that when the clause is clear, unambiguous and specific, -22- a accepted notions of contract would bind the parties and unless the absence of ad Idem can be shown, the other Courts should avoid exercising jurisdiction, and that when certain jurisdicti on is specified in a contract, an intention to exclude all others from its operation may in such cases be inferred. AppIng the said ratio laid down in A.B.C. LAMINART PVT. LTD. case, referred supra, we are unable to agree with the contention of the plaintifflappellant herein that merely because the clause relating to the jurisdiction of the Courts to decide the dispute arising under either of the contract dated 1.10.1985 or 1.4.1993 does not contain the exclusionary words like exclusive, alon e, only and the like, the jurisdiction of this Court is not exclu ded or ousted. Our construction in this regard is supported by the decision of the Apex Court in ANGILE INSULATION S case, referred supra, as relied upon by the learned counsel for the first defendant! first respondent herein, wherein, the Apex Cou rt, after referring the A.B.C.LAMINART PVT. LTD. case, referred supra, held that, where there may be two or more competent Cou rts which can entertain a suit consequent upon a part of the cause of action having arisen therewith, if the parties to the cont ract agreed to vest jurisdiction in one such Court to try the dispute which might arise as between themselves, the agreemen t would be valid.
10.4. In the instant case, even if the petitioner relies upon either of the agreements dated 1.10.1985 or 1.4.1993, it is beyo nd doubt that parties to the said agreements have unambigu ously, clearly and explicitly arrived at a consensus that any disp ute under the respective agreements shall be tried only befo re the Court having a definite jurisdiction mentioned in the said agreements, namely at Vadodara or Baroda, respectively.
- 23 10.5. If that be so, finding that the other submissions on merits have no relevance to the issue raised for our cons ideration, we are satisfied that the learned Single Judge, rightly , by order dated 29.3.2001 in Application No.3713 of 1998, revoke d the leave granted on 2.2.1998 in Application No.304 of 1998 to file the above suit, and in which event, the plaintiff/appellant herein shall not have recourse either under Section 20 of the Code of Civil Procedure or under Clause 12 of the Letters Pate nt."
(e) In the case of M/s. INSTRUMENTS INC ORPORATED BANGALORE Vs. M/s. INDUSTRiAL CABLES (INDIA ) LTD.
RAJAPUR reported in 1996 (3) KAR.L.J. 422, [Paras 31, 32]
31. The relevant Clause 14 of Ex. P5 purchase order herein is in para materia with the said clause which was the subject of consideration of the Supreme Court in A.B.C . Laminart Pvt. Ltd. v. A. P. Agencies, Salen, It has been laid .
down by the Supreme Court that such a clause which does not find the exclusive words like 'exclusive', 'alone', 'only' and the like does not oust the jurisdiction of any other competent Civil Courts so entertain the suit and try the dispute between the parties.
Therefore, it was to be concluded in the instant case also that the condition in clause 14 in Ex, PS does not take away the jurisdiction of the Civil Court at Bangalore to entertain and try the plaintiff's suit.
32. The proposition that the cause of action for a suit on a contract cannot arise at the place where the offer was made, is enunciated by this Court in its decision in Republic Medico Surgical Co. v. Union of India, 1979-2 Kar U 410 (sup ra) on which reliance was placed by the trial Court. It is not the case herein that the plaintiff has based his cause of action merely on his Ex. P2 quotation dated 3-7-1980 which was an offer to the
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defendant. As has been stated above the plaintiffs suit was brought after complete contract between the parties came into existence at Rajpura and after the plaintiff performed his part of the contract at Bangalore. As such the conclusion of the learned Trial Judge that cause of action for the plaintiff's suit has not arisen at Bangalore and that it has no jurisdiction to entertain the suit is unsustainable and the same is liable to be set aside.
(f) In the case of UNITED INDIA INSURANCE COMPANY LTD. & ANOTHER V/S. ASSOCiATED TRANSPORT CORPORATION reported in AIR 1988 KERALA 36 Para 5 "5. Where the consignment note contained printed words "subject to Bombay jurisdiction alone" and apart from existence of these printed notes, the carrier has no case that there was meeting of minds between the consignor and the carrier or there was specific agreement in that behalf and the consignment note was signed only by employee of the carrier and was handed over to the consignor but there was nothing to indicate that there was an agreement between the parties to confer exclusive jurisdiction of the Bombay Court, it was held, that printed words by themselves and without anything more would not be sufficient to constitute an agreement to oust jurisdiction of all Courts other than the Court specified."
14. From a perusal of the above judgments and when read in conjunction with Section 20 CPC, the following aspects emerge :
(I) In a case where forums more than one are available, and jurisdiction of a Court is invoked by one of the parties seeking relief, then exclusion clause or exclusive jurisdiction of the Court chosen by the V 25 -
parties is pressed into service, then determinative factor in such circumstances would be true and corre ct interpretation of such exclusion clause in the cont ract which excludes the jurisdiction.
(II) Whether parties under a contract have agre ed for exclusion of a jurisdiction of a Court and vesti ng jurisdiction in the court having jurisdiction and of their choice on the basis of forum of convenience it shall be presumed that parties have agreed to vest the said court with such jurisdiction of having thought over on this aspect and other factors relating to non-exclu sive jurisdiction of the Court of their choice and thus , it cannot be held that agreed alternative forum does not have jurisdiction.
(Ill) A party to contract cannot normally be prevented from approaching the court having jurisdiction to try the suit. However, when parties to the contract have agreed to get their disputes adjudicated from any one of the courts having jurisdiction by including a claus e in the agreement and agreeing for disputes bein g resolved by such court by way of Forum convenien ce and excluding the jurisdiction of other court it cann ot be held as without jurisdiction or Forum of non-
convenience.
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(IV) The burden of establishing that the forum chosen is a forum of non-convenience or the proceedings therein are oppressive or vexatious, or not agreed-upon would be on the party so contending to state so and prove it.
15. The Hon'ble Supreme Court in the case of Laxman prasad's Case referred to supra while examining Section 20 CPC has held that Section 20 CPC has been designed to secure that justice as nearly as possible and defendant should not be put to travel and expend on travelling long distances in order to defend himself and in this background, the exclusion clause came to he considered, analysed and adjudicated in the said judgment.
16. In NEW MOGA TRANSPORT COMPANYs case referred to supra, Hon'ble Supreme Court while interpreting Section 20 CPC and examining its application, both pre-amendment era and post-amendment era, opined that when forum of litigation is chosen by the parties when the jurisdiction of courts would be at two places and if the parties choose one of the forums on the doctrine of forum of corivertierLce, the exclusion clause would surface for being pressed into service and the Court to which the parties have agreed to, vest the said court with jurisdiction for adjudication of their disputes cannot be held either to be
- 27 opposed to public policy or to hold that such choice of the forum would nut be permissible.
17. As noted hereinabove, from reading of clause (c) of Section 20 CPC, it would emerge that parties would be at liberty to choose a Forum/court to which the jurisdiction vests when two courts would have jurisdiction. In a situation where parties try to vest a jurisdiction with a court which either does not have jurisdiction to try the suit or where no part of cause of action has arisen, then the principle "consent does not confer jurisdiction" would come into play and even if parties choose to vest the jurisdiction with a court which it does not have, then such court would not have jurisdiction to try the suit.
18. One another aspect which came to be canvassed by the learned Senior Counsel appearing for defendant is with regard to concluded contract in so far as Clause 19(j) and 20 of the purchase order. At the cost of repetition, these two clauses which are extracted hereinabove are also extracted hereinbelow to analyse and understand the true scope and intent of the said two clauses:
CLAUSE 19(J) : "It is agreed that dispute arising in respect of this order shall be decided by competent court at Ahmedabad and shall be subject to jurisdiction of Ahmedabad Courts only."
CLAUSE 20: "It is agreed that dispute arising in respect of this order shall be decided by competent court at Ahmedabad and shall be subject to jurisdiction of Ahmedabad Courts only."
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19. It is the contention of learned Senior Counsel that part of the cause of action has arisen at Gujarath namely Ahmedabad and as such, at the time of issuance of purc hase order, defendant had imposed a specific condition in the purchase order that if there were to be any disputes between the parties, it is the Civil Court at Ahmedabad which will have jurisdiction and no other courts.
20. Per contra, learned counsel, Sri K.L.Patil, learned counsel appearing for the plaintiffs has vehemently conten ded that entire cause of action for the suit arose within the jurisdiction of Hospet and discussions were held at Hospe t by the officials of defendant; goods were supplied at Hospet;
bills were raised at Hospet; delivery was made at Hospet and as such, the cause of action for the suit, as pleaded in paragraphs 11 and 12 arose in Hospet only and no part of cause of action arose at Ahmedabad.
21. Learned Senior Counsel for the defendant, as observed hereinabove, has fairly admitted and accepted that part of cause of action arose at Hospet. In view of the said submission, the exercise this Court will have to undertake now is to see whether the Civil Court at Hospet would have jurisdiction to try the suit in question or as contended by virtue of exclusion
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clause, as found in Clause 19(j,) and 20, the Civil Court at Hospet is excluded from trying the suit.
22. The source of such a contention, even according to the learned Senior Counsel, would emerge from these two clauses. He would contend that purchase orders preceded supply of goods. Per contra, Sri K.L.Patil contends that there are instances to show that goods were despatched even before purchase orders could be received.
23. In view of these rival contentions, it will now boil down to the fact as to whether exclusion clauses mentioned in Ex.P-1 to Ex.P-18 would oust the jurisdiction of Civil Court at Hospet and vest with the jurisdiction to the Court at Ahmedabad to try the suit.
24. At this juncture, it would be of relevance to extract the judgments relied upon by the respective advocates for the parties in this regard:
(I) JUDGMENT in the case of NEW MOGA TRANSPORT COMPANY Vs. UNITED INDIA INSURANCE CO. LTD. AND ANOTHER REPORTED IN AIR 2004 SC 2154 [Para (19)1:
"19. The intention of the parties can be culled out from use of the expressions "only', aIone", exclusive" and the like with reference to a particular Court. But the intention to exclude a Couits jurisdiction should be reflected in clear, unambiguous,
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explicit and specific terms. In such case only the accepted notions of contract would bind the parties. The first Appellate Court was justified in holding that it is only the Court at Udaipur which had jurisdiction to try the suit. The High Court did not keep the relevant aspects in view while reversing the judgment of the trial Court. Accordingly, we set aside the judgment of the High Court and restore that of the first Appellate Court. The Court at Barnala shall return the plaint to the plaintiff No.1 (responde nt No.1) with appropriate endorsement under its seal which shall present it within a period of four weeks from the date of such endorsement of return before the proper Court at Udaipur.
If it is so done, the question of limitation shall not be raised and the suit shall be decided on its own merits in accordance with law.
The appeal is allowed. No costs."
In the said case consignment note provided a clause whic h reads as under: "The court at the head office city shall only be the jurisdiction " The acceptance of the consignment note by the plaintiff/defendant was not in dispute in the said case. It was agreed by the parties therein that the consignm ent note has been signed and accepted by both the parties. The only issue that arose was with regard to the use of the word "head office"
not specifying as to where the head office was. Such technical plea raised was not accepted by the Hon'ble Apex Court and accordingly it was held that parties had agreed to the forum for which the dispute is to be referred and as such, held that the court at Udaipur alone had jurisdiction and not the Civil Court at Barnala.
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(II) JUDGMENT IN THE CASE OF MIs, HANIL ERA TEXTILES LTD.. Vs. MIS PUROMATIC FILTERS (P) LTD. REPORTED IN AIR 2004 SC 2432 PARA 7 "7. The effect of Clause 17 of the Purchase Order which mentions any legal proceedings arising out of the order shall be subject to the jurisdiction of the Courts in Mumbai, has to be examined in the aforesaid background. Under sub-sections (a> and (b) of Section 20, the place of residence of the defendant or where he carries on business or works for gain is determinative of the local limits of jurisdiction of the Court in which the suit is to be instituted. Sub-section (c) of Section 20 provides that the suit shall be instituted in a Court within the local limits of whose jurisdiction the cause of action, wholly or in part, accrues. As shown above, in the present case, a part of cause of action had accrued in both the places, viz., Delhi and Bombay. In Hakam Singh v. Gammon (India) Ltd. 1971 (1) SCC 286, it was held that it is not open to the parties to confer by their agreement jurisdiction on a Court which it does not possess under the Code.
But where two Courts or more have under the Code of Civil Procedure jurisdiction to try a suit or a proceeding, an agreement between the parties that the dispute between them shall be tried in one of such Courts is not contrary to public policy. It was also held that such an agreement does not contravene Section 28 of the Contract Act.
In the said case, part of cause of action arose at both the places, namely Delhi and Bombay, wherein the exclusion clause in the agreement between the parties conferring jurisdiction in the Court of Bombay was held to be not opposed to public policy. By examining the facts therein it was found that
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purchase orders which contain the terms and cond itions came to be accepted and acknowledged and as such in the said background, it was found that purchase order was placed by the defendant at Bombay, accepted by the branch office at Bombay, advance payment was made by the defendant at Bombay and final payment was also to be made at Bombay and thus, parties consciously entered into a contract to confer Mumbai Court with jurisdiction to adjudicate the dispute.
(III) JUDGMENT in the case of GHATGE ANPATIL (TRANSPORT) LTD. Vs. M/S. MADHUSUDHAN RAMKUMAR reported in AIR 1977 BOMBAY 299 [Para 18]:
"A person who signs a document which contains contractual terms is normally bound by them even though he has not read them and even though he is ignorant of their precise legal effect. It is only when the document is not signed but is merely delivered to him that the question would arise whether the terms of the contract were adequately brought to his notice. In this case, at the cost of repetition it may be mentioned that the consignor has affixed his signature in English below this Forwarding Note. The contents of the Forwarding Note are in English and the consignor has also signed in English. It cannot therefore even be argued for a moment that the consigno r could not have understood what was printed above his signature in this Forwarding Note.' -33- a, In the said case, the plaintiff placed an order for sarees with a dealer at Belgaum and the dealer entrusted the supply of sarees ordered by the plaintiff to the defendant transport company at their Belgaum Office under a "Goods Forwarding Note". The defendant Company had its registered office at Koihapur and carried on the business at Kolhapur also. In the said "Goods Forwarding Note", the words "Subject to Kohlapur Jurisdiction" were prominently printed at the top of the note and it was in English. Since goods were not received within 3 or 4 days at Pimpri (within jurisdiction of the court at Poona) plaintiff instituted a suit at Poona for immediate delivery of goods or to pay the price of sarees with interest. The defendant objected to jurisdiction of Poona court trying the suit and a plea was put forward that jurisdiction was vested with the Court at Kolhapur.
On examination of record, it was found this GC forwarding note was not only duly signed by plaintiff, but it was also accepted by him and in this background, it was held that court had jurisdiction. In fact it has been held therein that when document is not signed but merely delivered, question would arise as to whether terms of contract were adequately brought to notice of other party.
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(IV) Judgment in the case of RAJASTHAN STATE ELECTRICITY BOARD Vs. UNIVERSAL PETROL CHEMICALS LIMITED reported in (2009) 3 SCC 107 [Para 20, 22]:-
"20. There is no dispute with regard to the fact that the parties entered into various agreements which are referred to above. The said agreements admittedly also contained forum selection clauses between the parties whereby and whereunder the parties agreed that the said contracts and agreements, in relation to any dispute or difference would be subject to the jurisdiction of courts at Jaipur in Rajasthan. Therefore, the issues which we are required to address here is whether the ouster clause in the agreement between the parties will also be applicable in ascertaining the competent court for making an application for reference under section 20 of the Act. As per Section 41(1) of the act the provisions of the Code of Civil Procedure, 1908, (for short the Code") shall apply to all proceedings before 11 the Court, and to all appeals, under the Act.
22. There are number of decisions of this Court wherein it was held that where there may be two or more competent courts which can entertain a suit consequent upon a part of the cause of action having arisen therein, if the parties to the contract agree to vest jurisdiction in one such court to try the dispute which might arise as between themselves, such agreement would be valid and binding."
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In the said case, it was found that pursuant to two purchase orders dated 23.09.1985 and 02,12.1987, agreements came to be entered into between the parties dated 16.10.1985 and 16.12.1987 respectively incorporating terms of purchase order in the agreements which provided for resolution of disputes through arbitration and it was also agreed that the Court of Jaipur (Rajasthan) shall alone have jurisdiction to entertain or try any disputes or differences which may arise between the purchaser and supplier therein. In this background, it came to be held by their Lordships that exclusion clause was specific and the parties having agreed upon to vest the jurisdiction with one of the courts which had the jurisdiction to try the suit cannot be held either to opposed to public policy or that the parties had not agreed to such a contract and it was also held that parties with their open eyes entered into agreements and said purchase order and agreements categorically provided that all disputes arising beiween the parties out of the agreements would be adjudicated within the jurisdiction of courts at Jaipur in Rajasthan.
(V) JUDGMENT in the case of M/S. INSTRUMENTS INCORPORATED. BANGALORE Vs. MIS. INDUSTRIAL CABLES (INDIA) LIMITED, RAJPURA, PUNJAB AND ANOTHER reported in 1996 (3) KAR.L.J. 422 [Para 31-32]:
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"31. The relevant Clause 14 of Ex. P5 purchase order herein is in para materia with the said clause which was the subject of consideration of the Supreme Court in A.B.C. Laminart Put. Ltd. v. A. P. Agencies, Salen, It has been laid down by the Supreme Court that such a clause which does not find the exclusive words like 'exclusive', 'alone'. 'only' and the like does not oust the jurisdiction of any other competent Civil Courts so entertain the suit and try the dispute between the parties. Therefore, it was to be concluded in the instance case also that the condition in clause 14 in Ex, P5 does not take away the jurisdiction of the Civil Court at Bangalore to entertain and try the plaintiffs suit.
32. The proposition that the cause of action for a suit on a contract cannot arise at the place where the offer was made, is enunciated by this Court in its decision in Republic Medico Surgica! Co. v. Union of India, 1979-2 Kar U 410 (supra) on which repliance was placed by the trial Court. It is not the case herein that the plaintiff has based his cause of action merely on his Ex. P2 quotation dated 3-7-1980 which was an offer to the defendant. As has been stated above the plaintiff's suit was brought after complete contract between the parties came into exis- tence at Rajpura and after the plaintiff performed his part of the contract at Bangalore. As such the conclusion of the learned Trial Judge that cause of action for the plainiiffs suit has not arisen at Bangalore and that it has no jurisdiction to entertain the suit is unsustainable and the same is liable to be set aside."
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In this case, it was found that though there was an exclusion clause excluding one of the courts which had jurisdiction to try the suit and it was agreed upon that the Court which had jurisdiction, would try the suit was pressed into service and it was held that the suit filed at Bangalore Court had jurisdiction by examining the facts of the said case and it was concluded that parties to the us had infact not agreed to said exclusion clause.
REASONS:
25. Where there may be two or more courts competent to entertain a suit consequent upon cause of action arising and if parties to the contract agree to vest the jurisdiction in any one of the courts, such agreement between the parties should be precise, specific and the parties should be at ad idem. As otherwise, the exclusion clause would not come into play. In this background, when the exclusion clause pressed into service by the learned Senior Counsel for defendant, is examined namely Ex.P-1 to Ex.P-18 as also pleadings of parties and evidence, documents produced by plaintiff as well as defendant, it would clearly go to show that such a contention would recede to the background for following reasons:
(a) Admittedly, the purchase order, Ex.P-1, is raised on 25.05.2006. Immediately thereafter, the plaintiff has brought to 38 the notice of the defendant that it would not agree to certain terms and conditions proposed by the defendant in its purchase order. Immediately, thereafter, a discussion has taken place at Hospet between plaintiff and defendant/Company's Director and Hospet Representative Sri Harsh Maheshwari and Sri Ashok Jam, at Hospet itself wherein, an assurance has been given by these two persons that clarification sought for by plaintiff will be discussed at Ahmedabad office and same would be clarified.
Infact, it is followed by a letter from defendant itself dated 25,05.2006 which came to be marked as Ex.P1038 wherein defendant has assured the plaintiff that 'the purchase order' are "normally" in a standard format and defendant was requested to despatch of goods. Plaintiff has entered into witness box and explained in his evidence dated 05.01.2010 as to what transpired during May 2006 immediately on receipt of Ex.P- 1 namely, about the discussion that took place between defendants representative Sri Harsh Maheshwari and Sri Ashok Jam with the plaintiff in the office of the plaintiff.
(b) It is also stated in the evidence of plaintiff of even date that even prior to issuance of purchase order, goods have been supplied by plaintiff to defendant. In fact, witness, PW-1, when being cross examined was confronted with bills raised by the plaintiff which came to be marked as Ex.D-1 to Ex.D-62 and as -39- seen from Ex.D-3 to 8, 10, 12,15,18,19 to 25, 27,29,30,32,33,37,38,40,...etc., the goods have been supplied even prior to issuance of the purchase orders corresponding to these invoices namely Ex.P-819,82 1,823, 825,827,829,835,839 etc. This would clearly go to show that there was no meeting of minds between the parties with regard to exclusion clause namely, to exclude jurisdiction of Civil Court at Hospet and to vest the jurisdiction for resolution of disputes exclusively with Civil Court at Ahmedabad. The evidence read in its entirety would clearly go to show that parties to the lis were not at ad idem in so far as these two clauses are concerned.
(c) This view is also fortified from the fact that the defendant in order to have a smooth and efficient working of the contract had established its branch office at Hospet. One of its Directors was at Hospet The branch office was headed by an official of the defendant. All discussions with regard to the due execution of the contract namely supply of iron ore between the plaintiff and the defendant were being discussed at Hospet and the officials at Hospet were laisoning with their head office at Ahmedabad from Hospet and on their instructions were interacting with the officials of the plaintiffs at Hospet. The goods have been despatched by defendant through railway rakes and also by road transport from Hospet. These undisputed facts
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would clearly got to show that the parties had not agreed to vest the civil Court at Ahmedabad to try disputes if any between parties as a forum of convenience.
26. Yet another factor which also requires to be noticed by this Court is, the invoices raised by defendant, Ex.D-1 to 62 which came to be confronted to PW- 1 in the cross examination would go to show that plaintiff had informed the defendant through the said invoices that jurisdiction to try disputes if any would be vested with Hospet Courts. Though Sri Jayavital Rao Kolar would hasten to add that in the purchase orders at Ex.P- 1 to Ex.P- 18, it had been made amply clear that any other clauses mentioned by the plaintiff regarding vesting of jurisdiction of Court other than Ahmedabad Court would not have any effect would be of no consequences either way, in as much as, defendants have admitted that part of cause of action arose within the jurisdiction of Hospet court and this Court having opined, as discussed hereinabove, that parties were not at adidem in so far as exclusion clause by virtue of overwhelming evidence tendered by PW-1 the claim and counter claim raised by the respective advocates in this regard recedes to background. The trial court on examination of the entire material produced before it and on appreciation of evidence tendered by the plaintiff through its proprietor as PW- 1, which
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evidence, admittedly has remained unrebutted since the defendant or its representative have not entered witness box to rebut that no such discussion was held with the plaintiff during May 2006 immediately after Ex.P- 1 came to bc issued, trial court has rightly answered preliminary issue No.5 in the negative and held that Civil Court at Hospet has got jurisdiction.
The said finding does not suffer from either excessive exercise of jurisdiction nor it suffers from any material irregularity calling for interference in exercise of revisional jurisdiction of this Court.
27. In view of the above, revision petition is dismissed.
Order passed by the Pri. Civil Judge (Sr.Dn) & JMFC., Hospet, in O.S.No.22/2009 dated 08.02.2010 is hereby affirmed. No order as to costs.
sail JUDGE RKK