Delhi District Court
M/S South India Krishna Oil And Fats ... vs Geeta Rani Bajaj And Ors on 3 February, 2025
DLSE010054942022
THE COURT OF DISTRICT JUDGE-03
SOUTH-EAST DISTRICT, SAKET COURTS, NEW DELHI
(PRESIDED OVER BY: SACHIN MITTAL)
CS DJ No. 187/24
In the matter of :
M/S South India Krishna Oil and Fats Private Limited,
A Private Limited Company
registered under the Companies Act, 1956,
Having registered office at:
Unit No. 101, 102A, 1st floor,
Realtech Copia Corporate Suites,
Plot No. 9, Jasola District Centre,
New Delhi-110025.
Through its AR,
Mr. Ramneesh Kumar Aggarwal. ... Plaintiff
VERSUS
1. Geeta Rani Bajaj
Proprietor of M/s Geetha Traders,
16-2-147/4/C/4, Anand Nagar, Malakpet,
Hyderabad-500036, Telangana.
2. Rajesh Bajaj,
16-2-147/4/C/4, Anand Nagar, Malakpet,
Hyderabad-500036, Telangana. ... Defendants
Date of Institution : 08.06.2022
Date on which arguments concluded : 26.11.2024
Date of Judgment : 03.02.2025
Result : Dismissed
CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 1 of 36
PRIVATE LIMITED
V. Digitally signed
GEETA RANI BAJAJ AND ANR. by SACHIN
SACHIN MITTAL
MITTAL Date:
2025.02.07
17:24:45 +0530
JUDGMENT
1. Vide this Judgment, I shall decide the preliminary issue, "Whether this Court has territorial jurisdiction to try this suit?" . PLAINTIFF'S CASE:
2. The suit of the plaintiff is based upon the following main allegations/averments as stated in the plaint:
(a) The plaintiff, M/s South India Krishna Oil and Fats Private Limited, a company registered under the Companies Act, 1956, has its registered office at Unit No. 101, 102A, 1 st Floor, Realtech Copia Corporate Suites, Plot no.9, Jasola District Centre, New Delhi-110025;
(b) The plaintiff company is engaged in the business of refining and sale of vegetable and other oils with manufacturing facility at Nellore, Andhra Pradesh;
(c) The defendant no.1, Ms. Geeta Rani Bajaj, the sole proprietor of M/s Geetha Traders, approached the plaintiff company for purchasing vegetable oil and other goods from it on credit basis.
The defendant no.2, Mr. Rajesh Bajaj is the husband of the defendant no.1, and he has played a vital role in committing fraud against the plaintiff company;
(d) The plaintiff company as a precondition for selling the goods to the defendant no.1 on credit basis had required her to furnish a bank guarantee;
(e) In the month of June, 2019, the defendant no.1 and 2 furnished a bank guarantee dated 27.06.2019 for an amount of Rs. 1,50,00,000/-, valid from 27.06.2019 upto 27.06.2021, issued by the defendant no.3, the Allahabad Bank (now merged into the Indian Bank). The said bank guarantee was forwarded by the CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 2 of 36 PRIVATE LIMITED V. Digitally signed GEETA RANI BAJAJ AND ANR. SACHIN by SACHIN MITTAL MITTAL Date: 2025.02.07 17:26:24 +0530 defendant no.2 from the email ID, [email protected] to the plaintiff company on 03.07.2019;
(f) The plaintiff company believing the representation/assurance of the defendant no.1 and on the strength of the aforesaid bank guarantee started supplying the goods to the defendant no.1 on credit basis from time to time. The plaintiff company was maintaining a running account of transactions with the defendant no.1;
(g) The plaintiff company, vide email dated 23.08.2019 and email dated 28.08.2019, addressed to the zonal office and branch office respectively of the defendant no.3, the Indian Bank (erstwhile Allahabad Bank) requested them to confirm the issuance of the aforesaid bank guarantee provided by the defendant no.1 and 2. On 29.08.2019, the plaintiff was shocked to receive an email from the branch office of the defendant no.3, which was to the effect that the said bank guarantee was not issued by the defendant no.3;
(h) On 25.09.2019, the plaintiff company, vide a legal notice sent through its lawyer to the defendant no.1 with CC to the defendant no.3, required the defedant no.1 to pay an outstanding amount of Rs. 1,07,84,735/- alongwith interest at the rate of 8% per annum within 7 days;
(i) The defendant no.1 through a reply dated 07.10.2019 issued by her lawyer, while acknowledging the business relationship with the plaintiff company and also admitting the outstanding amount of Rs. 1,07,35,228/-, requested for grant of some time. The defendant no.1, however, denied to have furnished the aforesaid bank guarantee. It was also stated in the said reply that the defendant no.1 is a household lady and that it is her husband i.e. the defendant no.2, who is carrying on business in the name of M/s Geetha Trades;
CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 3 of 36 PRIVATE LIMITED Digitally signed
V. by SACHIN
GEETA RANI BAJAJ AND ANR. SACHIN MITTAL
MITTAL Date:
2025.02.07
17:26:30 +0530
(j) Thereafter, the defendant no.1 made a payment of Rs. 20,000/-,
thereby reducing the outstanding amount to Rs. 1,07,64,735 as on 22.09.2020;
(k) The defendant no.1 and 2 have hatched a criminal conspiracy with the defendant no.3 and its official, the Chief Manager/ Branch Manager i.e. the defendant no.4, for the purpose of defrauding the plaintiff company by way of furnishing a forged bank guarantee;
(l) The plaintiff company lodged a police complaint on 30.11.2019 before the SHO, Police Station Sarita Vihar, New Delhi against the defendant no.1, 2, 4 and unknown employees of the defendant no.3. Upon the police failing to register an FIR, the plaintiff company filed a petition under Section 156(3) Cr.P.C, whereupon, the Ld. MM, Saket Courts, vide Order dated 18.02.2021, ordered to register an FIR. Consequently, an FIR dated 03.04.2021 for offences under Section 420/468/471/34 of the IPC against the defendant no.1, 2, 4 and unknown employees of the defendant no.3, was registered;
(m) The plaintiff company addressed letters dated 28.03.2020 & 15.12.2020 and RTI applications dated 02.11.2020 & 18.12.2020 to the defendant no.3 (Indian Bank through its branch office) and 5 (Indian Bank through its corporate office) for the purpose of inquiring about the status of investigation into the issuance of a forged bank guarantee and also requiring them to clear the outstanding dues of the plaintiff company against the defendant no.1. The defendant no.5 replied these letters and RTI applications through replies/letters dated 31.10.2020, 07.12.2020 and 25.01.2021;
(n) As on 31.05.2022, the plaintiff company is entitled to recover a sum of Rs. 1,30,53,326/-, which includes a sum of Rs. 1,07,64,735/- as principal amount and a sum of Rs.
CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 4 of 36 PRIVATE LIMITED V. Digitally signed by SACHIN GEETA RANI BAJAJ AND ANR. SACHIN MITTAL MITTAL Date: 2025.02.07 17:24:51 +0530
14,51,813.76/- (calculated at the rate of 8% per annum from 24.09.2020 to 31.05.2022) as an interest amount alongwith pendente-lite and future interest at the rate of 8% per annum and costs of the suit from the defendant no.1 to 5 jointly and severally.
(o) The cause of action arose when the defendant no.1 approached the plaintiff company for purchasing the goods on credit basis; it arose when the plaintiff company required the defendant no.1 to furnish a bank guarantee; it arose in June, 2019, when the defendant no.1 and 2 furnished a bank guarantee issued by the defendant no.3; it arose as and when, the goods were supplied to the defendant no.1; it arose on 23.08.2019 and 28.08.2019, when the plaintiff company sent emails to the defendant no.3 for confirming the bank guarantee; it arose on 29.08.2019, when, the defendant no.3 replied that the said bank guarantee was not issued by it; it arose on 25.09.2019, when the plaintiff company got a legal notice issued to the defendant no.1 with CC to the defendant no.3; it arose on 07.10.2019, when the defendnat no.1 replied to the said legal notice; it arose on 30.11.2019, when a police complaint was lodged by the plaintiff company; it arose on 18.02.2021, when, an FIR was ordered to be registered by Ld. MM, Saket Courts; it arose on 03.04.2021, when the FIR was registered; it arose on 28.03.2020, 15.12.2020, 02.11.2020 & 18.12.2020, when the plaintiff company addressed letters and RTI applications to the defendant no.3 and 5; and it arose on 31.10.2020, 07.12.2020 & 25.01.2021, when the defendant no.3 and 5 responded to the letters and RTI applications of the plaintiff company;
(p) The suit has been filed within the limitation period.
(q) The bank guarantee was issued to the plaintiff company at its Jasola office (New Delhi); the letters/correspondence/emails CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 5 of 36 PRIVATE LIMITED Digitally signed V. by SACHIN GEETA RANI BAJAJ AND ANR. SACHIN MITTAL MITTAL Date:
2025.02.07 17:26:37 +0530 with the defendant no.1 to 5 were sent from and received at the Jasola office, which is also a registered office of the plaintiff company; the entire records including the ledger account of the defendant no.1 are maintained at Jasola office; the payments from the defendant no.1 were received at Jasola office; the FIR against the defendants has been registered with PS Sarita Vihar. Thus, this Court has the territorial jurisdiction;
(r) The claim amount being less than Rs. 2 Crores, this Court has the pecuniary jurisdiction;
(s) The present suit relates to a 'Commercial Dispute' as defined under the Commercial Courts Act, 2015;
(t) The plaintiff had applied for the pre-institution mediation, however, the same as per the report of DLSA was treated as 'no starter';
(u) The plaintiff company is seeking the recovery of a sum of Rs.
1,30,53,326/- alongwith pendente-lite and future interest at the rate of 8% per annum and costs of the suit from the defendant no.1 to 5 jointly and severally.
DEFENDANTS' DEFENCE:
3. The defence of the defendant no.1 and 2 as pleaded in their common written statement can be summarized as under:
(a) The defendants never received an intimation of mediation and, therefore, there is non-compliance with the procedure of pre-
institution mediation and settlement under Section 12A of the Commercial Court Act, 2015;
(b) The invoices issued by the plaintiff company itself under clause 3 state "dispute if any will be subject to Andhra Pradesh jurisdiction". The addresses of all the defendants are not situated within Delhi. No cause of action has arisen in Delhi as all the meetings, transactions, negotiations, supply and payments have CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 6 of 36 PRIVATE LIMITED V. Digitally signed GEETA RANI BAJAJ AND ANR. SACHIN by SACHIN MITTAL MITTAL Date: 2025.02.07 17:24:57 +0530 taken place in Andhra Pradesh. Therefore, as per Section 20 of the CPC, this Court lacks the territorial jurisdiction;
(c) The defendant no.1 as a proprietor of M/s Geetha Traders is engaged in the business of marketing and selling of edible oils;
(d) The defendant no.1 had business transactions with the plaintiff company having its office and supply unit at Survey no. 275, 279, 280 & 281, Epuru Bit-1, Pantapalam, Nellore, Andhra Pradesh;
(e) It was the plaintiff company only, which had given a proposal to the defendants that their business can be expanded, if they purchase the goods from plaintiff company on credit basis. The plaintiff company required the defendants to furnish a bank guarantee. The defendants showed incapacity to arrange the bank guarantee for purchasing the goods on credit basis. The plaintiff company through its Manager, Mr. Ayyappa Raju and employee, Mr. Ratna Rao, had offered to the defendant no.1 that they would arrange a bank guarantee. For this purpose, the said Mr. Ayyappa Raju and Mr. Ratna Rao, obtained the signatures of the defendant no.1 on an application form and some blank documents. Then, Mr. Ratna Rao, got a bank guarantee made;
(f) The defendant no.1 was surprised to come to know that the said bank guarantee was not original and that the same was forged by the plaintiff company in collusion with its aforesaid manager and employee;
(g) It is denied that the defendant no.1 and 2 have hatched any conspiracy for the purpose of defrauding the plaintiff company.
(h) It is denied that the ledger of running account as filed with the plaint contains true and correct transaction entries with the defendants;
CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 7 of 36 PRIVATE LIMITED V. Digitally signed GEETA RANI BAJAJ AND ANR. SACHIN by SACHIN MITTAL MITTAL Date: 2025.02.07 17:26:43 +0530 (i) It is denied that the cause of action for filing this suit arose in
favour of the plaintiff company and against the answering defendants on various dates as alleged in the plaint;
(j) It is denied that the plaintiff company is entitled to the recovery of claim amount alongwith interest and costs, as prayed for. THE MISCELLANEOUS/INTERLOCUTORY APPLICATIONS:
4. The present suit was initially filed as a commercial suit before the designated Commercial Court.
5. The defendant no.1 and 2 alongwith their common written statements had also filed : (i) an application under Order VIII Rule 1 CPC for condonation of delay in filing the written statement;
(ii) an application under Order VII Rule 11 CPC (treated as an application under Order VII Rule 10 CPC) for rejection/return of the plaint on the ground of lack of territorial jurisdiction; and (iii) an application under Order I Rule 10 CPC for deletion of the defendant no.2 from the suit. The Ld. Commercial Court, vide common Order dated 03.03.2023, dismissed all these applications of the defendant no.1 and 2.
6. The right of the defendant no.3 to 5 to file the written statement was closed and they were proceeded with ex-parte, vide Order dated 13.01.2023, passed by the Ld. Commercial Court.
7. The defendant no.3 to 5, then, filed: (i) a written statement; (ii) an application under Order VIII Rule 1 CPC for condonation of delay in filing the written statement; (iii) an application under Order IX Rule 7 CPC for setting aside of ex-parte proceedings; and (iv) an application under Order VII Rule 11 CPC for rejection of the plaint. The Ld. Commercial Court took up the application under Order VII Rule 11 CPC for adjudication first. The Ld. Commercial Court, vide Order dated 10.05.2023, allowed the said application under Order VII Rule 11 CPC and rejected the plaint qua CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 8 of 36 PRIVATE LIMITED Digitally signed V. SACHIN by SACHIN MITTAL GEETA RANI BAJAJ AND ANR. MITTAL 17:25:02 Date: 2025.02.07 +0530 the defendant no.3 to 5 with a cost of Rs. 50,000/- upon the plaintiff company.
8. The plaintiff had filed an application under Order XI Rule 1(5) CPC (as amended by the Commercial Courts, 2015) for permission to file copies of invoices as additional documents. The Ld. Commercial Court, vide Order dated 05.06.2023, allowed the said application.
9. The plaintiff, then, filed an application under Order VIII Rule 10 CPC read with Order XII Rule 6 CPC therein seeking Judgment on admission. The Ld. Commercial Court, vide Order dated 19.09.2023, with the consent of both the parties, reviewed the Order dated 03.03.2023 and condoned the delay in filing of written statement by the defendant no.1 and 2. Their written statement, accordingly, was taken on record. The Ld. Commercial Court, vide Order dated 22.09.2023, dismissed the application of the plaintiff company under Order VIII Rule 10 CPC read with Order XII Rule 6 CPC.
FRAMING OF THE PRELIMINARY ISSUE:
10. On 14.12.2023, the Ld. Commercial Court, framed a preliminary issue: "Whether this Court has territorial jurisdiction to try this suit?". It was also decided that this issue will be adjudicated without any evidence.
TRANSFER OF THE SUIT TO THIS COURT:
11. The Ld. Commercial Court, vide Order dated 16.02.2024, held that this suit does not involve 'commercial dispute' within the meaning of Section 2(1) of the Commercial Courts Act, 2015. Accordingly, the present suit, was transferred from the Ld. Commercial Court and assigned to this Court, vide Order dated 16.02.2024, passed by the Ld. Principal District and Sessions Judge, South-East District, Saket Courts, New Delhi.CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 9 of 36
PRIVATE LIMITED V. Digitally signed GEETA RANI BAJAJ AND ANR. by SACHIN SACHIN MITTAL MITTAL Date:
2025.02.07 17:26:49 +0530 PRELIMINARY WHETHER THIS COURT ISSUE: HAS TERRITORIAL JURISDICTION TO TRY THIS SUIT?
12. I have heard Sh. Mukul Chandra, Ld. Counsel for the plaintiff and Sh. Ashwini Kumar, Ld. Counsel for the defendant no.1 and 2. I have carefully perused the judicial record and written submissions filed on behalf of the parties as well. SUBMISSION BY LD. COUNSEL FOR THE PLAINTIFF:
13. Ld. Counsel for the plaintiff submitted that the plaintiff while delivering the goods to the defendant no.1 had also raised invoices for the price of goods, which contained the address of registered office of the plaintiff company, which is situated within Delhi. He submitted that certain payments against the invoices were received through bank transfer/NEFT/RTGS in the bank account of plaintiff company, which is maintained with the HSBC Bank Limited at Delhi. He submitted that the forged bank guarantee sent by the defendant no.1 and 2 through email was addressed to the registered office of the plaintiff company, which is in Delhi. He submitted that the plaintiff company sent the emails to the erstwhile Allahabad Bank for confirmation on the bank guarantee from Delhi and that the email response by the bank that the said bank guarantee was not issued by it was received by the plaintiff company in its Delhi office. He submitted that the plaintiff company sent the legal notice to the defendant no.1 from Delhi and that the reply from the defendant no.1 to the said legal notice was also received at Delhi. He submitted that the FIR against the defendants has been lodged at Delhi. On the basis of these submissions, Ld. Counsel, argued that substantial part of cause of action has arisen in Delhi.
14. Ld. Counsel further submitted that there is no dispute between the plaintiff and the defendants so far the invoices and outstanding liability of the defendants are concerned. Ld. Counsel submitted that the defendants upon receiving the invoices never CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 10 of 36 PRIVATE LIMITED Digitally signed V. by SACHIN GEETA RANI BAJAJ AND ANR. SACHIN MITTAL MITTAL Date:
2025.02.07 17:25:06 +0530 raised any dispute with respect to the same. He submitted that the defendants in their reply to plaintiff's legal notice and in their common written statement filed in the present suit have rather admitted their liability. He further submitted that in the absence of any dispute between the parties, the clause 3 of the invoice, which reads as "dispute if any will be subject to Andhra Pradesh jurisdiction" will not get attracted. In this regard, Ld. Counsel has relied upon the Judgment of the Supreme Court in Major (Retd.) Inder Singh Rekhi v. Delhi Development Authority, 1988 AIR 1007 and the Judgment of the Bombay High Court in PVR Limited v. Proetus Ventures LLP and Ors., MANU/MH/2165/2023.
15. Ld. Counsel for the purpose of justifying the territorial jurisdiction of this Court over the present suit has also relied upon the principle 'debtor seeks the creditor' and Section 49 of the Contract Act, 1872. He submitted that there was no agreement between the parties with regard to the place of payment and, therefore, it was the responsibility of the defendants to approach the plaintiff and to make the payment at its place, which is in Delhi. He submitted that as per Section 49 of the Contract Act also it was the responsibility of the defendant to contact the plaintiff for fixing the place for performance of the contract regarding the payment of price of goods sold. Ld. Counsel has relied upon the Judgments of the Delhi High Court in M/s Auto Movers v. Lumnious Power Technologies Pvt. Ltd., C.M. (M) No. 604/2020 and Satyapal v. Slick Auto Accessories Pvt. Ltd.
and Ors., RSA No. 40/2013, in support of his plea regarding the principle of 'debtor seeks the creditor'.
16. Ld. Counsel further submitted that as some payments were made by the defendants in plaintiff's bank account, which is maintained in Delhi, therefore, this Court has jurisdiction to try the present suit. He relied upon the Judgment of the Supreme Court in ABC Laminart Pvt. Ltd. and Ors. v. AP Agencies, Salem, CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 11 of 36 PRIVATE LIMITED Digitally signed by SACHIN V. SACHIN MITTAL GEETA RANI BAJAJ AND ANR.
MITTAL Date:
2025.02.07 17:26:56 +0530 MANU/SC/0001/1989 and the Judgment of the Delhi High Court in M/s Harit Polytech Pvt. Ltd. v. M/s Colt Cables Pvt. Ltd., FAO No. 48/2016, in support of his contention that a part of cause of action arises where money under a contract is payable or is actually paid.
17. Ld. Counsel submitted that the act of the plaintiff company in raising the invoices containing the jurisdiction clause was a unilateral act and that in the absence of any acceptance of the same by the defendants, there did not arise any binding contract. He submitted that the payments made by the defendants against the invoices cannot be considered to be an act of acceptance of jurisdiction clause in the invoices. Ld. Counsel has relied upon the Judgment of Delhi High Court in Taipack Ltd. and Ors. v. Ram Kishore Nagar Mal, MANU/DE/8199/2007, the Judgment of Bombay High Court in Concrete Additives and Chemicals Pvt. Ltd. vs. S.N. Engineering Services Pvt. Ltd., Arbitration Application (L.) No. 23207 of 2021, the Judgment of Kerala High Court in Sangha Erectors Pvt. Ltd. v. Laxmi Cranes and Trailers Pvt. Ltd., CRP No. 288 of 2019, and the Judgment of Delhi High Court in M/s Hetampuria Tax Fab v. M/s Daksh Enterprises, FAO (COMM) 169/2022, for this proposition.
SUBMISSION BY THE LD. COUNSEL FOR THE DEFENDANTS:
18. Per contra, Ld. Counsel for the defendants submitted that the placement of orders, dispatch of goods, receiving of goods, raising of invoices and payments, all, had taken place in the state of Andhra Pradesh. He submitted that no part of cause of action has taken place in Delhi.
19. Ld. Counsel further submitted that when the payments are made through cheque, demand draft, RTGS, NEFT etc., it cannot be said that the payment has been made at the location of branch with which the payee maintains his bank account, so as to create the jurisdiction of the Court within the local limits of which the said CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 12 of 36 PRIVATE LIMITED V. Digitally signed GEETA RANI BAJAJ AND ANR. SACHIN by SACHIN MITTAL MITTAL Date: 2025.02.07 17:27:03 +0530 branch is located. Ld. Counsel has relied upon the Judgment of the Bombay High Court in PVR Limited (Supra) which has been relied upon by the plaintiff as well.
20. He also submitted that in today's time the emails can be received and sent from any part of the world and, therefore, merely because the email in the present case was received in Delhi, it does not mean that any part of cause of action has arisen in Delhi.
21. Ld. Counsel submitted that the term 'dispute' means all the disputes, and not the dispute related to the invoices only. He submitted that in the present case there is a dispute between the parties regarding the territorial jurisdiction of this Court. He also submitted that on the one hand the case of plaintiff is that there is no dispute between the parties as regard the invoices, on the other hand, it is also the case of the plaintiff that the invoices containing the jurisdiction clause do not constitute a binding contract because there was no acceptance from the side of the defendants.
22. Ld. Counsel also submitted that the principle 'debtor seeks the creditor' can be applied only when the performance of the contract is not specified. He submitted in the present case, the placement of orders, dispatch of goods, receiving of goods, raising of invoices and payments, all, had taken place in the state of Andhra Pradesh. He also submitted that as per the oral agreement between the plaintiff and the defendants, the payments were to be made in Andhra Pradesh only from where the invoices were raised and goods were dispatched by the plaintiff. Ld. Counsel, therefore, submitted that the aforesaid principle is not applicable in the present case.
23. Ld. Counsel then submitted that the invoices containing the jurisdiction clause as raised by the plaintiff were accepted by the defendants and in furtherance thereof a part payment of Rs. 20,000/-
was also made to the plaintiff. Basis this, Ld. Counsel argued that the CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 13 of 36 PRIVATE LIMITED V. Digitally signed GEETA RANI BAJAJ AND ANR. SACHIN by SACHIN MITTAL MITTAL Date: 2025.02.07 17:25:10 +0530 invoices containing jurisdiction clause constituted a legally binding contract between the plaintiff and the defendants.
24. Ld. Counsel has placed heavy reliance upon the Judgment of the High Court of Calcutta in Shridhar Vyapar Pvt. Ltd. v. Gammon India Ltd., MANU/WB/0313/2019, contending that in a similar facts situation, the jurisdiction clause in the invoice was upheld and the payments made through RTGS/NEFT at a different place were ignored.
THE LAW REGARDING JURISDICTION:
25. The jurisdiction of a Court may be classified into several categories. The important categories are (i) territorial or local jurisdiction; (ii) pecuniary jurisdiction; and (iii) jurisdiction over the subject-matter. So far as territorial and pecuniary jurisdictions are concerned, objection to such jurisdiction has to be taken at the earliest possible opportunity and in any case at or before settlement of issues. The law is well settled on the point that if such objection is not taken at the earliest, it cannot be allowed to be taken at a subsequent stage. Jurisdiction as to subject-matter, however, is totally distinct and stands on a different footing. Where a court has no jurisdiction over the subject-matter of the suit by reason of any limitation imposed by statute, charter or commission, it cannot take up the cause or matter. An order passed by a court having no jurisdiction is a nullity.
26. It is a settled law that neither consent, nor waiver, nor acquiescence can confer jurisdiction upon a Court, otherwise incompetent to try the suit. It is well settled and needs no authority that "where a court takes upon itself to exercise a jurisdiction it does not possess, its decision amounts to nothing". A decree passed by a court having no jurisdiction is non est and its invalidity can be set up whenever it is sought to be enforced as a foundation for a right, even CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 14 of 36 PRIVATE LIMITED V. Digitally signed GEETA RANI BAJAJ AND ANR. by SACHIN SACHIN MITTAL MITTAL Date:
2025.02.07 17:27:10 +0530 at the stage of execution or in collateral proceedings. A decree passed by a court without jurisdiction is a coram non judice1.
27. In the present case, the issue is regarding the territorial jurisdiction. In this regard, the Sections 15 to 20 of the CPC deal with the place of suing. Section 15 provides that the suit shall be instituted in the Court of the lowest grade competent to try it. Section 16 and 6 clauses therein provides that the suit pertaining to an immovable property or for the recovery of movable property under distraint or attachment shall be filed in the Court within whose jurisdiction the property is situate. Section 17 deals with the situation where an immovable property is situated within the jurisdiction of different Courts. Section 18 provides for place of institution of suit where local limits of jurisdiction of Courts are uncertain. Section 19 deals with suit for compensation for wrongs to person or movables. Section 20 is the residuary provision and relevant herein. The said Section is reproduced herein under:
"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 a 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 1 The reliance for the law regarding jurisdiction, as explained herein above, is placed upon the judgments, Kiran Singh v. Chaman Paswan, AIR 1954 SC 340, Hakam Singh (1971) 1 SCC 286, Globe Transport Corpn. v. Triveni Engg. Works (1983) 4 SCC 707, A.B.C. Laminart (P) Ltd. v. A.P. Agencies (1989) 2 SCC 163, Patel Roadways Ltd. v. Prasad Trading Co. (1991) 4 SCC 270, R.S.D.V. Finance Co. (P) Ltd. v. Shree Vallabh Glass Works Ltd. (1993) 2 SCC 130, Angile Insulations v. Davy Ashmore India Ltd. (1995) 4 SCC 153, Shriram City Union Finance Corpn. Ltd. v. Rama Mishra (2002) 9 SCC 613 and New Moga Transport Co. v. United India Insurance Co. Ltd. (2004) 4 SCC 677 and Harshad Chiman Lal Modi v. DLF Universal Ltd. & Anr., (2005) 7 SCC 791.CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 15 of 36
PRIVATE LIMITED V. Digitally signed GEETA RANI BAJAJ AND ANR. SACHIN by SACHIN MITTAL MITTAL Date: 2025.02.07 17:25:14 +0530
(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 works for gain, as aforesaid, acquiesce in such institution; or
(c)The cause of action, wholly or in part, arises. Explanation2 -- A corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place."
28. The clauses (a), (b) and (c) of Section 20 CPC, thus, provides the jurisdiction of the Court on two basis i.e. either on the basis of defendant's place of residence/business/work, or on the basis of accrual of cause of action. While the clause (a) deals with the situation where the sole defendant or all the defendants resides, or carries on business, or personally works for gain within the jurisdiction of one Court; the clause (b) deals with a situation where out of more than one defendants in a suit, one or some of the defendants resides, or carries on business, or personally works for gain within the jurisdiction of one Court, and others within the 2 The Hon'ble Supreme Court in Patel Roadways Ltd., Bombay v. Prasad Trading Company and Ors., (1991) 4 SCC 270 and in New Moga Transport Company through its proprietor Krishan Lal Jhanwar v. United India Insurance Company Ltd. and Ors., (2004) 4 SCC 677 had an occasion to interpret the explanation to Section 20 CPC. The Hon'ble Supreme Court held that the word "or" in the explanation has been used as a disjunctive. It was held that where a company has a sole or principal office, it shall be deemed to carry on business at the place of that office. However, when a company apart from sole or principal office also has a subordinate office at a place different from the place of sole or principal office, and the cause of action arises at the place of subordinate office, such company shall be deemed to carry on business at the place of its subordinate office, and not at the place of its sole or principal office.
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jurisdiction of another Court. In a situation covered by the clause (b), either the leave of the Court is required or the acquiescence of defendant(s) not residing or carrying on business or working for gain, is required. The clause (a) and (b) provide that a suit can be instituted in a Court within the local limits of whose jurisdiction, the defendant(s) resides, or carries on business, or personally works for gain. The clause (c) provides that a suit can be instituted in a Court within whose jurisdiction the cause of action, wholly or in part, has arisen.
29. In the present case, indubitably, the place of residence or business or work of the defendant is not within the territorial jurisdiction of this Court. The clause (a) of Section 20 CPC, therefore, has no application. Now, in the present case, first, it needs to be examined whether any part of the cause of action, as contemplated under clause (c), has arisen within the jurisdiction of this Court.
30. The Hon'ble Supreme Court in A.B.C. Laminart (P) Ltd. v. A.P. Agencies3 explained the meaning of the term 'cause of action' as under:
"12. A cause of action means every fact, which, if traversed, it would be necessary for the plaintiff to prove in order to support his right to a judgment of the Court. In other words, it is a bundle of facts which taken with the law applicable to them gives the plaintiff a fight to relief against the defendant. It must include some act done by the defendant since in the absence of such an act no cause of action can possibly accrue. It is not limited to the actual infringement of the fight sued on but includes all the material facts on which it is founded. It does not comprise evidence necessary to prove such facts, but every fact necessary for the plaintiff to prove to enable him to obtain a decree. Everything which if not proved would give the defendant a fight to immediate judgment must 3 (1989) 2 SCC 163.CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 17 of 36
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be part of the cause of action. But it has no relation whatever to the defence which may be set up by the defendant nor does it depend upon the character of the relief prayed for by the plaintiff."
31. The Hon'ble Supreme Court in Rajasthan High Court Advocates' Association v. Union of India 4 defined the 'cause of action' as under:
"The expression cause of action has acquired a judicially settled meaning. In the restricted sense cause of action means the circumstances forming the infraction of the right or the immediate occasion for the action. In the wider sense it means the necessary conditions for the maintenance of the suit, including not only the infraction of the right, but the infraction coupled with the right itself. Compendiously the expression means every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the Court. Every fact which is necessary to be proved, as distinguished from every piece of evidence which is necessary to prove each fact, comprises in cause of action. It has to be left to be determined in each individual case as to where the cause of action arises."
32. The 'cause of action', thus, means the 'cause of action for which the suit was brought'. 'Cause of action' is a cause which gives occasion for and forms the foundation of the suit. A cause of action means every fact, which, if traversed, it would be necessary for the plaintiff to prove in order to support his right to a Judgment of the Court. In other words, it is a bundle of facts, which taken with law applicable to them gives the plaintiff a right to relief against the defendant. It must include some act done by the defendant since in the absence of such an act no cause of action can possibly accrued. It 4 AIR 2001 SC 416.
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is not limited to the actual infringement of the right sued on but includes all material facts on which it is founded.
33. It has also to be kept in mind that not all the facts pleaded in the plaint constitute the 'cause of action'. It is only the material, integral and essential facts as pleaded, which form part of the 'cause of action'. Irrelevant facts, which have no relation to the lis, do not constitute 'cause of action'5.
34. It would also be apposite here to deal with the law regarding the validity of jurisdiction clause, which excludes the jurisdiction of one Court and confers exclusive jurisdiction upon another Court.
35. As per Section 10 of the Contract Act, 1872, one of the essentials of a valid contract is that the consideration and the object should be lawful. As per Section 23, every agreement of which the object or consideration is not lawful is void. Section 23 mentions the circumstances when the consideration, or object of an agreement is not lawful. One such circumstance is when the consideration or object of an agreement is opposed to public policy. An agreement, which ousts the jurisdiction of a Court is considered to be opposed to public policy. Such an agreement has also been expressly declared to be void under Section 28 of the Contract Act, 1872. Section 28 states that an agreement absolutely restraining a party from enforcing his right through a Court of law or an agreement which places a limit as to the time within which a right can be enforced, is void. The said Section, however, recognizes an exception with respect to the agreement to refer the past or future dispute between the parties to the arbitration. It is important to note here that it is only that agreement, which absolutely restricts any party from enforcing his rights by the usual 5 Reliance in this regard is placed upon the Judgments of the Hon'ble Supreme Court in Kusum Ingots & Alloys Ltd. v. Union of India and Anr., (2004) 6 SCC 254 and in Alchemist Ltd. and Anr. v. State Bank of Sikkim and Ors., (2007) 11 SCC 335.
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legal proceedings in the ordinary Courts, which is void under Section 28(a)6 of the Contract Act, 1872. It means that when two Courts have jurisdiction, the parties by an agreement may agree that one such Court will not have jurisdiction and that the other Court will have the exclusive jurisdiction to adjudicate the dispute between them. However, the parties by an agreement cannot confer jurisdiction upon a Court, which otherwise does not have the jurisdiction to adjudicate the dispute. In this regard, the Hon'ble Supreme Court in A.B.C Laminart (Supra) has observed as under:
"16. 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 Courts. 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. In other words, 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. If on the other hand the jurisdiction they agreed to submit to would not otherwise be proper jurisdiction to decide disputes arising out of the contract it must be declared void being against public policy..."
ANALYSIS AND DISCUSSION OVER THE PRESENT CASE:
36. Now, coming to the present case, in view of the rival contentions made by the Ld. Counsels and taking into consideration 6
28. Agreements in restraint of legal proceedings, void.-- Every agreement,--
(a) by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights; or CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 20 of 36 PRIVATE LIMITED Digitally signed V. by SACHIN GEETA RANI BAJAJ AND ANR.
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2025.02.07 17:25:42 +0530 the law as explained herein above, this Court can be said to have territorial jurisdiction only if it is established, firstly, that the jurisdiction clause conferring the jurisdiction upon Courts at Andhra Pradesh in the invoices issued by the plaintiff is invalid; and secondly, that any part of cause of action has arisen within the jurisdiction of this Court. In case, either of the aforesaid two aspects is not established, this Court will not have territorial jurisdiction to decide the present suit.
WHETHER THE JURISDICTION CLAUSE IN THE PRESENT CASE IS INVALID:
37. The first contention made by the Ld. Counsel for the plaintiff is that the jurisdiction clause in the invoices issued by the plaintiff, in the absence of specific acceptance by the defendants, does not constitute a binding contract between the parties. Ld. Counsel for the defendant, on the other hand, submitted that the fact that the defendant received the delivery of goods under the said invoices and also made the part payments, proves that there had arisen a valid contract between the parties.
38. It, thus, needs to be examined as to when a contract is constituted. As per Section 2(h) the Contract Act, 1872 (hereinafter 'Contract Act'), an agreement enforceable by law is a contract.
Section 2(e) provides that an agreement consists of reciprocal promises forming consideration for each other. As per Section 2(b), a proposal, when accepted, becomes a promise. As per Section 8, a proposal may also be accepted, by performance of the conditions of a proposal, or by the acceptance of the consideration offered with the proposal. Section 9 of the Contract Act provides that a contract can either be implied or express. An express contract can either be oral or in writing. One of the essential ingredients of a valid contract, as per Section 10 of the Contract Act, is free consent. Section 13 defines 'consent' as "Two or more persons are said to consent when they CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 21 of 36 PRIVATE LIMITED Digitally signed V. SACHIN MITTAL by SACHIN GEETA RANI BAJAJ AND ANR.
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2025.02.07 17:27:37 +0530 agree upon the same thing in the same sense." Thus, the essence of a contract is meeting of the wills of the parties. There must be consensus ad idem. The contracting parties must agree to the same thing in the same sense. There must be meeting of the mind of the parties. There is no prescribed format of a contract in writing. A contract in writing, in some cases, may be highly formal in nature as in the case of a standard form of contract, or, in other cases, it may be informally written. A contract in writing may be signed by both parties, or signed by one of the parties, or not signed by any of the parties at all. Such a contract in writing may be incorporated in a single document, or in exchange of letters/emails. A written contract may be nomenclated as contract, or agreement, or receipt, or acknowledgement, or by any other name. A ledger/statement of account/invoice/purchase order furnished/stated by one party to other party and signed/acknowledged by that other party may also constitute contract between the parties. For the purpose of deciding as to whether a particular document constitutes a contract between the parties or not, what is required to be seen is the substance of the document and not the nomenclature.
39. In certain cases, the invoices issued by a party may also constitute a valid contract. The Delhi High Court in M/s Flint Group India Pvt. Ltd. v. M/s Good Morning India Media Pvt. Ltd., C.M. (M) 369/2017, was concerned with the question of maintainability of a summary suit under Order XXXVII CPC on the basis of invoice. The High Court observed as under:
6. A perusal of the invoices filed by the petitioner on which reliance is placed in the plaint would show that the details of the goods which are sought to be sold, the price, the details of the purchaser of the goods and some terms and conditions are clearly stated in the invoices. This court in the case of Bharat Forge Ltd. vs. Onil Gulati(supra) held as follows:-
"11. That an invoice which incorporates the particulars of seller, purchaser, description of goods, weight, quantity, CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 22 of 36 PRIVATE LIMITED V. Digitally signed GEETA RANI BAJAJ AND ANR. SACHIN by SACHIN MITTAL MITTAL 17:25:45 Date: 2025.02.07 +0530 rates and price including sales tax and other dues, accompanied with additional terms as noticed in the present case would be regarded as a written contract on acceptance by the respondent is no longer res integra. Reference may usefully be made to the following judgments:-
(i) ILR (1982) 1 Delhi, 320, Mrs. Sushila Mehta v. Sh. Bansi Lal Arora relevant paras 9,10 and 11
(ii) AIR 1992 Delhi I, Punjab Pen House v. Samarat Bicycle Ltd.
(iii) (1997) 67 DLT 13, Daya Chand Uttam Prakash Jain v. Santosh Devi Sharma.
(iv) 1998 (3) AD (Delhi) 141 : (1998 AIHC 3118), Beacon Electronics v. Sylvania & Laxman Ltd.
(v) (2001) 92 DLT 88, KLG Systel Ltd. v. Fujitsu ICIM Ltd.
(vi) 2004 (76) DJR, 208, Indian Iron & Steel Company Ltd.
v. Nada Brothers and Ors.
xxx
13. In the instant case, as we have noticed the invoices clearly contain the terms of supply and other requisite terms, price for effecting the sale of goods is given. The invoices have been acted upon, accepted and partly paid. In these circumstances, the preliminary objection raised as to the non maintainability of the suit under Order 37 is devoid of merit.
7. Similarly, this court in the case of M/s. KIG Systel Ltd. vs. M/s Fujitsu ICIM Ltd.(supra) held as follows:
"11. The defendant/applicant has also challenged the maintainability of the suit under Order XXXVII of the C.P.C., stating that "there is no debt or liquidated demand in money payable to defendant-Company (sic. read Plaintiff)) and/or based on a written contract". It is no longer res integra that Invoices/Bills are 'written contracts' within the contemplation of this Order. Reference is directed to Messrs. Punjab Pen House vs. Samrat Bicycle Ltd., AIR 1992 Delhi 1, Corporate Voice (Pvt.) Ltd. vs. Uniroll Leather India Ltd., (1995) 60 DLT 321, and Beacon Electronics vs. Sylvania and Laxman Ltd., 1998 (3) Apex Decisions (Delhi) 141. There is, thus, no hesitancy in CM(M) 369/2017 Page 3 holding that the present suit is a suit which should be tried under the summary procedure of Order XXXVII of the C.P.C."CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 23 of 36
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40. The Bombay High Court in Jatin Koticha v. VFC Industries Pvt. Ltd., MANU/MH/1363/2007, held as under:
5. Now it is clear that there is no written contract signed by both the parties relied on by the plaintiff. It is not the requirement of the law that it should be a written contract signed by both the parties. What is necessary is that the suit should be based on a written contract. That, one can find in this case, in the form of invoices which were raised on the defendants along with delivery of the goods in pursuance of each purchase order. The invoices, as stated above, contained the terms and conditions.
There is a clear parole acceptance of the invoice on the part of the defendants. The defendants accepted delivery of the goods along with the invoice without any demur or suggestion that they do not accept any of the terms whether pertaining to the rate, price, quantity etc. It makes no difference therefore that the invoices are not signed by both the parties. I am of view that the invoices must be treated as a written contract and the suit based on such invoices is a suit based on the written contract.
41. Ld. Counsel for the plaintiff has placed reliance upon the Judgments in Concrete Additives (Supra), Taipack (Supra), Sangha Erectors (Supra) and Hetampuria (Supra) for the purpose of contending that the unilateral act of issuing the invoice does not constitute a binding contract.
42. The Bombay High Court in Concrete Additives (Supra) held that arbitration clause in tax invoices does not constitute arbitration agreement contemplated under Section 7 of the Arbitration and Conciliation Act, 1996. This decision is quite understandable because for the purpose of holding a party to be bound by arbitration agreement, a more conscious act to indicate that there was a meeting of mind is required to be proved. The said decision being in the context of an arbitration agreement is not relevant in the present case.
43. In Taipack (Supra) case, the buyer had sent to the seller a purchase order, therein containing a jurisdiction clause and another clause stated that any term/condition in the document of the seller, in CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 24 of 36 PRIVATE LIMITED Digitally signed V. by SACHIN GEETA RANI BAJAJ AND ANR.
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addition to, or in contradiction to those in the purchase order will be inapplicable unless specifically agreed by the purchaser. The seller alongwith delivery of goods also sent an invoice with an arbitration clause printed on the back side of it. The Delhi High Court held it to be an offer at the most, which was not accepted by the buyer. Further, buyer in its purchase order had clearly mentioned the jurisdiction clause conferring jurisdiction upon Courts at Delhi. It was held that in such circumstances, the seller could not have unilaterally decided to refer dispute to arbitration. Further, the buyer after receiving goods was not required to take any step so as to convey acceptance to arbitration clause in invoice. Buyer's act of making payment and signing copy of invoice was held to be not an act of acceptance of such arbitration clause. I am of the view that this Judgment also does not help the case of the plaintiff.
44. In Sangha Erectors (Supra), the defendant/buyer had sent a purchase order, stating therein various conditions, including jurisdiction clause of Courts at Secunderabad, Hyderabad, Telangana, to the plaintiff/supplier. In response, plaintiff/supplier, on its letter- head, sent a reply, therein seeking amendments in some conditions of purchase order. On the said reply letter, the words 'subject to Cochin jurisdiction' were also returned. The Kerala High Court held that in order to constitute a contract, there has to be a consensus ad idem i.e. meeting of mind between the parties. The High Court finally held that there was no consensus as regard jurisdiction clause in the purchase order. This Judgment on the facts of its case is also found to be not relevant here.
45. In Hetampuria (Supra), the question before the Delhi High Court was whether the arbitration clause in invoices and delivery challans constituted arbitration agreement between the parties. The Delhi High Court held that the words 'subject to Delhi Hindustani Mercantile Association Delhi Jurisdiction' do not even CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 25 of 36 PRIVATE LIMITED Digitally signed V. by SACHIN GEETA RANI BAJAJ AND ANR. SACHIN MITTAL Date:
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constitute an arbitration agreement as there was no statement that parties have agreed to refer the dispute to arbitration. Regarding the arbitration clause in delivery challans, the High Court turned down the plea of arbitration agreement for the reason that signature of buyer on the delivery challan was below the certificate about receiving the goods. This Judgment is also not applicable in the present case.
46. In the present case, the undisputed facts are that the defendant/buyer had placed orders upon the plaintiff/seller for purchase of goods verbally. The plaintiff/seller in response supplied the goods to the defendant/buyer along with invoices, which contained jurisdiction clause stating 'dispute if any will be subject to Andhra Pradesh jurisdiction'. The said invoices also contained various other details, like the names of seller and buyer, the order date, the vehicle details, the description and quantity of goods, the prices thereof, and the payment terms. The defendant/buyer not only received the delivery of goods but also made certain part payments. The defendant/buyer did not raise any dispute upon receiving the goods alongwith invoices. It is pertinent to note here that the plaintiff has filed as many as 8 invoices, these are dated 20.08.2019, 21.08.2019, 22.08.2019, 23.08.2019, 3 invoices of 24.08.2019 & 27.08.2019, as per which the defendant had placed 1 purchase order on 30.07.2019, 3 purchase orders on 06.08.2019, 3 purchase orders on 09.08.2019 & 1 purchase order on 16.08.2019. Thus, the defendant received delivery of goods under various invoices of different dates, upon receipt of which, he never raised any dispute with respect to the jurisdiction clause in the invoices. From these facts, it can be said that there was consensus between both the parties regarding all terms of contract of sale. Thus, the invoices containing the jurisdiction clause constitute a valid contract between the parties.
47. The second contention made by the Ld. Counsel for the plaintiff is that the jurisdiction clause in the invoices cannot be CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 26 of 36 Digitally signed PRIVATE LIMITED by SACHIN V. SACHIN MITTAL GEETA RANI BAJAJ AND ANR.
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attracted because there was no 'dispute' between the parties as regard the invoices. The Ld. Counsel has relied upon the Judgments in Major (Retd.) Inder Singh Rekhi (Supra) and PVR Limited (Supra), in this regard.
48. In Major (Retd.) Inder Singh Rekhi (Supra), the question before the Supreme Court was as to when the cause of action arose, whether on the date of completion of work on 02.04.1980, or on the date of submission of bills on 28.02.1983. This question had arisen in an application, filed before the High Court for referring the parties to arbitration in terms of arbitration agreement between the parties. The Supreme Court held that in terms of arbitration agreement, parties could be referred to arbitration only when there had arisen 'dispute' between them. The Supreme Court held that the dispute arose not when the work was completed, but when the assertion of claim by submitting the bills was made, and there was non-payment by the other party. It was in this context that it was held that 'dispute' arises when there is assertion of claim by one party, and denial of the same by the other party. Without any dispute to this proposition in law, I completely fail to understand as to how this Judgment helps the case of the plaintiff. The question of limitation being not in issue in the present case, this Judgment is not relevant here.
49. In PVR Limited, the Bombay High Court ignored the jurisdiction clause conferring jurisdiction upon Courts at Delhi, and justified the territorial jurisdiction of Bombay High Court on the basis that buyer upon receiving from supplier/service provider the invoices containing therein jurisdiction clause, had not raised any dispute. However, in the present case, the fact that plaintiff has filed this suit for recovery of price of goods sold to the defendant under invoices issued by it, proves that there is a dispute with the defendant. The jurisdiction clause in invoices, therefore, gets attracted, which impliedly ousts the jurisdiction of this Court by expressly conferring CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 27 of 36 PRIVATE LIMITED Digitally signed V. by SACHIN GEETA RANI BAJAJ AND ANR. SACHIN MITTAL MITTAL Date:
2025.02.07 17:30:31 +0530 jurisdiction upon Courts at Andhra Pradesh. The Judgment of the Bombay High Court in this case does not have binding value upon this Court. I respectfully disagree with the law regarding 'dispute' in the invoice as explained by the Bombay High Court.
50. This Court is of the considered view that the 'dispute' between seller and buyer arises not only when the demand of seller for payment of price is refused by the buyer, but also when there is no denial or refusal by the buyer and at the same time the price is also not paid. The very fact that the plaintiff has filed this suit seeking recovery of price of goods sold to the defendant proves that there is a dispute between the plaintiff and the defendant. Had there been no 'dispute', there would not have been any occasion for the plaintiff to file this suit. This Court is also of the considered view that the 'dispute' in the present case has arisen out of invoices issued by the plaintiff, which contain jurisdiction clause of conferring jurisdiction upon Courts at Andhra Pradesh.
51. In view of the above discussion, it is held that the jurisdiction clause in the invoices constitutes a valid agreement between the parties and thereby, the jurisdiction of this Court at Delhi is impliedly ousted.
52. Though, the aforesaid finding as stated in paragraph no.51, is sufficient for deciding the preliminary issue of jurisdiction against the plaintiff and in favour of the defendant, now, I shall proceed with the assumption that there is no jurisdiction clause, for the purpose of determining whether any part of cause of action has taken place within the local limits of this Court. WHETHER ANY PART OF CAUSE OF ACTION HAS TAKEN PLACE WITHIN THE LOCAL LIMITS OF THIS COURT:
53. The plaintiff in the plaint has stated that the following parts of cause of action have taken place within the local limits of this Court: the bank guarantee was issued to the plaintiff company at its CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 28 of 36 PRIVATE LIMITED V. Digitally signed by SACHIN GEETA RANI BAJAJ AND ANR.
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Jasola office (New Delhi); the letters/correspondence/emails with the defendant no.1 to 5 were sent from and received at the Jasola office, which is also a registered office of the plaintiff company; the entire records including the ledger account of the defendant no.1 are maintained at Jasola office; the payments from the defendant no.1 were received at Jasola office; the FIR against the defendants has been registered with PS Sarita Vihar. Thus, it has been alleged that this Court has the territorial jurisdiction.
54. The case of plaintiff is that the address of registered office of plaintiff's company at Delhi has been mentioned in the copy of the bank guarantee sent by the defendants. Allegedly, the copy of the said bank guarantee was sent by the defendants through an email to the plaintiff company. I am of the view that a fact cannot be said to have occurred at a particular place merely because the address of the said place has been mentioned in any document. Regarding the assertion that the email with the attachment of bank guarantee was received by the plaintiff company at its registered office in Delhi, it is noted that an email can be sent, received and accessed from any part of the world. If an employee of the plaintiff had opened that email in Kolkata, or for that matter, at any other place in the world, the Court at such place would not have acquired the territorial jurisdiction to try this suit.
55. It has also been alleged in the plaint that the letters/ correspondence/emails with the defendant no.1 to 5 were sent from and received at the registered office of the plaintiff company in Delhi. Further, it has been alleged that the entire records including the ledger account of the defendant no.1 are maintained at the registered office of the plaintiff company in Delhi. Then, it has been alleged that the FIR against the defendants has been registered in Delhi. It is a settled law that sending or receiving of letters/emails etc., does not constitute a part of cause of action and the same is, therefore, not relevant CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 29 of 36 PRIVATE LIMITED Digitally signed by SACHIN V. GEETA RANI BAJAJ AND ANR. SACHIN MITTAL Date:
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within the meaning of Section 20(c) of the CPC. A plaintiff company may have several offices all over the world and it may send and/or receive the letters/correspondence/emails to/from the defendant at any of such several offices. If the sending or receiving of letters/emails can cloth the Court with jurisdiction, then, the plaintiff may arbitrarily create jurisdiction in Courts as per his arbitrary choice. The record of transaction and accounts etc. also may be maintained by a company in any of its several offices, which may be situated in different cities. The Courts at all such places where the record/accounts are maintained will not get jurisdiction merely because of this fact. Further, the plaintiff has only alleged, not proved, that the record/accounts were being maintained at its registered office in Delhi. In today's time, accounts etc. are maintained in e-form on computer and the same can be retrieved from any part of the world. As per the affidavit of plaintiff company's AR with respect to the electronic documents filed with the plaint, these documents, including the account statement etc. were forwarded by him to the plaintiff's Advocate and the print out of the same was taken by the Advocate only and these documents were filed with the plaint. Nevertheless, the maintenance of such record/ accounts does not form part of cause of action. Even the registration of FIR at any particular place is not relevant for the purpose of determining the territorial jurisdiction of a Civil Court.
56. The Ld. Counsel for the plaintiff has also tried to justify the territorial jurisdiction of this Court on the basis that the defendants had made part payments within the local limits of this Court. The said payments were made through RTGS/NEFT in the bank account of the plaintiff company, which happens to be maintained at the branch of HSBC Bank in Delhi. For this, the Ld. Counsel has relied upon the Judgment of the Supreme Court in ABC Laminart (Supra) and Judgments of the Delhi High Court in Harit Polytech (Supra) and in M/s Auto Movers (Supra).
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57. The plaintiff has relied upon the Judgment in ABC Laminart (Supra) for the purpose of contending that in a contract for supply of goods, a part cause of action arises at a place where payment is required to be made. The Supreme Court in this case has held that payment of price is an act of performance of contract and part cause of action arises where contract is required to be performed. There is no dispute to this proposition in law. However, in the present case, the plaintiff company and the defendants have not agreed, expressily or impliedly, that payment would be required to be made at Delhi.
58. In Harit Polytech (Supra), the Delhi High Court had held that Courts at Delhi would have territorial jurisdiction because part cause of action had taken place within its local limits. The High Court ignored the jurisdiction clause confering the jurisdiction upon Courts at Jaipur, while relying upon the Judgment of the Supreme Court in R.S.D.V. Finance Company Pvt. Ltd. v. Shree Vallabh Glass Works Ltd., AIR 1993 SC 2094, on the ground that jurisdiction of Courts at other places was not exluded. However, the three Judges Bench of the Supreme Court in Swastik Gas (P) Ltd. v. Indian Oil Corporation Ltd., (2013) 9 SCC 321 has held that absence of words like 'alone', 'only', 'exclusive', or 'exclusive jurisdiction' is not decisive and does not make any material defence, since the intention of the parties is clear and unambiguous by the incorporation of an exclusionary clause in the agreement. The Supreme Court held that when the parties to an agreement decide to confer jurisdiction upon Courts at particular place, the maxim "expressio unius est exclusio alterius" - expression of one is the exclusion of another, gets applied. The Judgment in Harit Polytech (Supra), therefore, does not help the plaintiff company. In the present case, the fact that place of order, disatch of goods, receiving of goods, raising of invoices, all, had taken place in Andhra Pradesh/Telangana, coupled with the jurisdiction clause confering CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 31 of 36 PRIVATE LIMITED Digitally signed V. by SACHIN GEETA RANI BAJAJ AND ANR. SACHIN MITTAL MITTAL Date:
2025.02.07 17:26:07 +0530 jurisdiction to Courts at Andhra Pradesh imply that parties wanted to oust the jurisdiction of Courts at other places, including that of this Court.
59. The Judgment of the Delhi High Court in M/s Auto Movers (Supra), is an authority on the point that a part cause of action arises at a place where part payments have been made. But, in the present case, as stated earlier, the parties had not agreed, expressely or impliedly, that the payment would be required to be made in Delhi.
60. The Ld. Counsel for the defendants has relied upon the Judgment of the Bombay High Court in PVR Limited (Supra) and the Judgement of the High Court of Calcutta in Shridhar Vyapaar (Supra).
61. The Bombay High Court in PVR Limited (Supra) held that mentioning of bank account detail in the contract/invoice does not mean that payment is to be made at the place where the said bank account is maintainable. The High Court held that the purpose of mentioning the bank account details is only to facilitate the payments. The High Court observed as under:
"22. Second, the Defendants contention that the amounts due under the invoices were payable in Delhi is also equally untenable. The invoices do not either expressly or by implication provide that the moneys are payable in Delhi. The invoices infact set out the modes of payment acceptable to the Plaintiff, i.e., either by account payee cheque, demand draft or NEFT/RTGS. The Plaintiffs bank details set out in the invoices is only to facilitate such electronic payment should the Defendant so chose to make payment by RTGS/NEFT and nothing more. This cannot in any manner be construed to mean that the monies payable under the said invoices were payable in Delhi even by implication. In today's times of electronic transfers payment can be effected from anywhere in the world. Merely because the details of the CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 32 of 36 PRIVATE LIMITED Digitally signed V. by SACHIN GEETA RANI BAJAJ AND ANR. SACHIN MITTAL MITTAL Date:
2025.02.07 17:27:52 +0530 receiving bank are within the jurisdiction of another city, this fact alone would not mean (a) that the amounts are payable in that city and (b) that part of the cause of action had arisen in that city. Additionally, even assuming that the only mode for payment under the said invoices was via RTGS/NEFT, the same would not by itself amount to monies being payable in Delhi under the contract. The details of the Plaintiff's bank are set out only to facilitate the payment by electronic mode and nothing else. This by no stretch of imagination can be construed to mean that the amounts due under the said invoices were payable in Delhi."
62. Shridhar Vyapar (Supra) is the decision on somewhat similar facts. In this case also, like the case at hand, the plaintiff, in derogation of jurisdiction clause regarding jurisdiction of Courts at some other place, had filed a suit in Kolkata. The case of plaintiff was that the Courts at Kolkata had jurisdiction because the defendant had made some payments through RTGS in plaintiff's bank account, which was being maintained in Kolkata. The High Court of Calcutta held that when there is no agreement between the parties regarding the place of payment, and the payment is made through RTGS, the Courts at the place where the payee maintains his bank account would not get the jurisdiction. The High Court held as under:
"9. Paragraph 5 of the plaint refers to certain payments having been made by the defendant. Though it is asserted towards the middle of such paragraph that "In terms of the agreement" the part payments were made to an account of the plaintiff within jurisdiction, the oral agreement pleaded earlier does not refer to the payment at the relevant bank of the plaintiff to have been one of the agreed terms. It is elementary that the accidental or even the regular deposit of cheques or like instruments for encashment at a branch of the plaintiff's choice cannot be made the basis for clothing the Court exercising territorial CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 33 of 36 PRIVATE LIMITED V. GEETA RANI BAJAJ AND ANR.
SACHIN Digitally signed by SACHIN MITTAL MITTAL Date: 2025.02.07 17:28:43 +0530 jurisdiction over such place of choice to entertain a claim.
10. The plaintiff, however, refers to a schedule which is appended to the plaint and shows that all the part payments as indicated in the schedule were received at the plaintiff's relevant bank within jurisdiction. Again, nothing turns on such matter. The defendant made the payments through RTGS. All that the defendant did was to issue instructions to the defendant's banker or bankers to ensure that the money was credited to a particular account of the plaintiff that had been supplied by the plaintiff to the defendant. Since the payment at the relevant branch was not an integral part of the agreement between the parties
- at least, it is not pleaded to be - it would not follow that the location of the bank would be material in the context of the plaintiff's cause of action. If the plaintiff instructed the defendant to make one payment at Kochi, another payment at Kapurthala and a third at Kohima, all three Courts at Kochi, Kapurthala and Kohima would not have had the jurisdiction to entertain the plaintiff's claim on account of balance price of goods sold and delivered.
16. In the present case, no action of the defendant can be traced or linked to any place within the jurisdiction of this Court. The agreement between the parties, which would have involved the defendant, is not said to have been entered into within jurisdiction. The receipt of the goods by the defendant did not happen within jurisdiction. The payments were not released by the defendant from any place within jurisdiction but the part payments were released by RTGS by instructing the defendant's bankers to reach the payment to a particular bank as indicated by the plaintiff. That such chosen bank of the plaintiff is within jurisdiction, would not be material for the purpose of assessing the situs of the cause of action as discussed earlier."CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 34 of 36
PRIVATE LIMITED V. GEETA RANI BAJAJ AND ANR. Digitally signed SACHIN by SACHIN MITTAL MITTAL Date: 2025.02.07 17:26:12 +0530
63. Now, coming to the present case, there is no evidence of the fact that the parties had agreed that the payment would be made in Delhi. In today's time, the money can be deposited and withdrawn in and from the bank account through various modes from any place. When the payments are made through RTGS/NEFT etc. from a place where substantial cause of action has taken place, the Courts at a place where the payee maintains his bank account do not get jurisdiction merely on this count.
64. Lastly, the Ld. Counsel for the plaintiff has relied upon the principle "Debtors seek the Creditors" for the purpose of justifying the jurisdiction of this Court. This principle means that where, under a contract no place of payment is expressly or impliedly specified, the debtor must seeks his creditor and, therefore, a suit for recovery is maintainable at the place where the creditor resides or works for gain, because a part of cause of action arises at that place also within the contemplation of Section 20C of the CPC. Ld. Counsel for the plaintiff relying upon this principle submitted that the defendants were required to make payment at the registered office of the plaintiff company, which is situated within the local limits of this Court.
65. For the applicability of the principle, "Debtors seek the Creditors", it is necessary that there is no agreement, express or implied, regarding the place of payment. However, in the present case, the placement of purchase order, dispatch of goods, delivery/receiving of goods, raising of invoices, forming of contract, and initiation of payment through RTGS/NEFT, all, have taken place in the State of Andhra Pradesh/Telangana. In the absence of express agreement that the payment would be required to be made at registered office of the plaintiff company at Delhi, an implied agreement can be inferred that the parties had agreed that payment would also be made in Andhra Pradesh only where the substantial CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 35 of 36 PRIVATE LIMITED V. Digitally signed by SACHIN GEETA RANI BAJAJ AND ANR. SACHIN MITTAL MITTAL Date:
2025.02.07 17:28:53 +0530 part of cause of action had taken place. In view of this, I am of the considered view that the principle "Debtors seek the Creditors" does not apply in the present case.
CONCLUSION:
66. In view of the above discussion, the preliminary issue, "Whether this Court has territorial jurisdiction to try this suit?" is decided against the plaintiff and in favour of the defendants.
67. The present suit, accordingly, stands dismissed.
68. The decree-sheet be drawn up and the file be consigned to Record Room.
Announced & dictated in the open court on 03.02.2025 (Sachin Mittal) District Judge-03/South-East District, Saket Courts, New Delhi/03.02.2025 Certified that this Judgment contains 36 pages and each page bears my signatures.
(Sachin Mittal) District Judge-03/South-East District Saket Courts, New Delhi/03.02.2025 Digitally signed by SACHIN SACHIN MITTAL MITTAL Date:
2025.02.07 17:26:16 +0530 CS DJ No. 187/24 M/S SOUTH INDIA KRISHNA OIL AND FATS Page 36 of 36 PRIVATE LIMITED V. GEETA RANI BAJAJ AND ANR.