Calcutta High Court
Ashok Kumar Sahoo (Huf) And Anr. vs Hindustan Paper Corpn. Ltd. (Hpcl) And ... on 8 September, 2005
Equivalent citations: AIR2006CAL39, AIR 2006 CALCUTTA 39, 2006 (2) AKAR (NOC) 192 (CAL) (2006) 2 ICC 450, (2006) 2 ICC 450
Author: Jayant Kumar Biswas
Bench: Jayant Kumar Biswas
ORDER Jayant Kumar Biswas, J.
1. This writ petition has been taken out questioning the validity of a decision of the Nagaon Paper Mill (in Assam) of the first respondent (a Government of India Enterprise), dated June 21, 2005, levying liquidated damages according to terms of contract, and directing recovery of Rs. 11.2.68 lakhs by way of adjustment from the credit account of a Rahul Enterprise, a proprietorship firm of the first, petitioner and an associate of the second petitioner, Counsel for the respondents have taken the point that this Court has no jurisdiction to entertain it.
2. For the purpose of invoking jurisdiction of this Court statements have been made in paras 45 and 46 of the writ petition, and they are : 45. "That the Office of the Respondent Nos. 1 to 5 (sic 4) are located within the aforesaid jurisdiction of this Hon'ble Court. The respondent Nos. 6 and (sic 5 to) 7 are the employees of the respondent No. 1. The contract in question in respect of both the petitioners, were executed on behalf of the petitioners at, 40 Strand Road, Kolkata-700001, within the aforesaid jurisdiction of this Hon'ble Court. Moreover all the communications of the respondents including the impugned notice dated 21-6-2005 were addressed to and received by the petitioners by post, at their said office at 40, Strand Road, Kolkata-700001. Therefore the part of cause of action has arisen within the aforesaid jurisdiction of this Hon'ble Court." 46. "That the records of the case are located partly in the office of the respondent No. 1, at Kolkata within the aforesaid jurisdiction of this Hon'ble Court and partly in the office of the respondent No. 6 and (sic 5 to) 7 Nawgaon Paper Mill Unit of the respondent No. 1, at Assam outside the aforesaid jurisdiction of this Hon'ble Court." Since in course of hearing dispute arose regarding the facts connected with execution of the contract concerned, I gave opportunity to the respondents to file an opposition, it has been filed.
3. I find that though the petitioners have their place of business within the territorial jurisdiction of this Court, the contract concerned was actually executed outside such jurisdiction. I further find that the contract contained a forum selection clause, and that the parties agreed to get all legal disputes, arising between them, settled by the Civil Court at Morigaon, Assam. Therefore, by referring to the place of execution of the contract, it cannot be said that a part of the cause of action in connection with the impugned decision has arisen within the territorial jurisdiction of this Court.
4. It has been argued that payments in connection with the contract were to be made by the respondents at the business place of the petitioners, and that since such place is within the territorial jurisdiction of this Court, in view of the decisions in Soniram Jeetmul v. R.D. Tata and Co. Ltd. reported at , State of Punjab v. A.K. Daha reported at and State of Orissa v. Goenka Investment and Mining Industries Pvt. Ltd. reported at , explaining the proposition : the debtor must seek the creditor, this Court has jurisdiction to entertain the writ petition.
5. Counsel for the respondents has pointed out that the contract, Clause 19, specifically provided that all payments were to be made through bank situated in the State of Assam. I think, he is correct in saying that when the mode of payment was specifically mentioned in the contract, there is no scope or reason to apply the proposition the debtor must seek the creditor. Here the parties agreed that all payments would be made by the respondents concerned through bank in Assam. Therefore, there is no scope now to say that the respondents were liable to pay the amount in question to the first petitioner at its business place which is within the territorical jurisdiction of this Court.
6. It has then been argued that the impugned decision dated June 21, 2005 was received by the petitioners at their business place, which is within the territorial jurisdiction of this Court. Counsel for the respondents, I find, rightly points out that communication of the decision actually took place in Assam, By referring to the facts that works connected with the contract were to be executed in Assam, and that records connected with the accounts were maintained by the paper Will in question located also in Assam, he says that, in any case, balance of convenience and inconvenience is against permitting the petitioners to invoke the writ jurisdiction of this Court, even if it is held that for mentioning the petitioners address in the impugned decision, a part of the cause of action has arisen here.
7. I think counsel for the respondents is right in his submission. It seems to me that here the balance of convenience and inconvenience is overwhelmingly in favour of asking the petitioners to approach the Courts and forums which have territorial jurisdiction over the place where the paper mill is situated. In my view, there is no reason to ignore the forum selection clause incorporated by the parties in the contract. True it is that for such clause, of course, one should not be shown the doors by the writ Court, when its jurisdiction to entertain a case is not in dispute and the situation warrants exercise of writ powers, though the issue originates in a contract. But when the parties seriously debate the question of territorial jurisdiction of the writ Court, to my mind, the forum selection clause assumes importance, and it should be consider a guiding factor, while considering the question of forum convenience.
8. The most debated question in the case is whether the writ petition should be entertained on the ground that head office of the first respondent is located within the territorial jurisdiction of this Court. On the strength of the Division Bench decisions of this Court in Pottery Mazdoor Panchayet v. Union of India reported at (1989) 1 Cal LJ 324 and Bharat Cocking Coal Ltd. v. Jharia Talkies and Cold Storage Pvt. Ltd. reported in (1992) 2 Cal LT 357, it has been argued that the petitioners are entitled to invoke the writ jurisdiction of this Court, though the decision was given by the first respondent's paper mill situated in the State of Assam.
9. Counsel for the respondents has referred me to a Single Bench decision of this Court in re : Calpro Food Pvt. Ltd. reported at (1996) 100 Cal WN 322. He has further pointed out that in the writ petition it has not been stated how the head office of the corporation is involved or what order is to be made against the head office. He has also drawn my attention to the fact that the petitioners notice dated June 28, 2005 was not addressed to the head office, and that copy thereof was also not served on the authorities sitting in the head office of the corporation.
10. It seems to me that counsel for the respondents is again right in saying that mere location of the head office of a corporation within the territorial jurisdiction does not empower a High Court to entertain a writ petition against such corporation. In the Division Bench decisions cited to me it was found that the relief sought was to be given by the head office of the public sector company. In this case, there is nothing to show that the amount mentioned in the impugned decision was to be paid by the head office of the first respondent or that the decision was taken by any authority sitting in its head office. It seems to me that the head office authorities of the first respondent have been involved just for the purpose of invoking the writ jurisdiction of this Court, and for no other purpose. Hence I am unable to accept the contention that the petitioners are entitled to invoke the writ jurisdiction of this Court, since head office of the first respondent is located within the territorial jurisdiction of this Court.
11. For these reasons I hold that the petitioners should not be permitted to invoke the writ jurisdiction of this Court for challenging the decision taken by the paper mill of the corporation situated in the State of Assam. The writ petition is accordingly dismissed. There shall be no order for costs in it.
12. All parties shall act on the signed and the certified xerox copy of this dictated order on the usual undertaking.