Calcutta High Court
G.M., Ongc, Sibsagar, Assam And Ors. vs Raj Engg. Corporation on 1 October, 1986
Equivalent citations: AIR1987CAL165, AIR 1987 CALCUTTA 165, (1987) 1 CAL HN 37
ORDER Sankar Bhattacharyya, J.
1. This revisional application raises a short but important question for determination.
2. Pursuant to a tender issued by the Joint Director (Stores and Purchases), Oil & Natural Gas Commission ('ONGC' for short), Shibsagar (Assam), the opposite party submitted a quotation for supply of certain materials. The quotation was accepted and an order was placed for supply of 50mm H. P. Valves.
3. Alleging that the above materials were duly supplied but the petitioners, who are all officers of the ONGC, neither returned the materials nor paid the price thereof, the opposite party instituted a suit being Title Suit. No. 254 of 1979 in the 3rd Court of the learned Munsif at Howrah, for certain declarations and recovery of the price of the materials supplied.
4. The suit was contested by the petitioners by filing a written statement alleging, inter alia, that the court had no territorial jurisdiction to try the suit. Several issues were raised of which, Issue No. 3 was whether the court had jurisdiction to try the suit.
5. The learned Munsif took up the said issue for preliminary hearing as it touched the jurisdiction of the court and upon consideration of the evidence, arrived at the finding that as the cause of action arose in Shibsagar and also the petitioners carry on Business in Shibsagar, only the Shibsagar court and not the Howrah court had jurisdiction to try the suit. In that view of the matter, the learned Munsif passed an order for return of the plaint to the filing lawyer for presentation to the proper court.
6. Aggrieved thereby, the opposite party took an appeal to the learned District Judge, Howrah, which was registered as Title Appeal No. 75 of 1983. The appeal was heard by a learned Subordinate Judge, who held that in view of the agreement to the effect that all disputes between the parties relating to the contract will be tried by the Howrah Court only the Howrah Court had jurisdiction to try the suit and the learned Munsif was, therefore, wrong in holding that the suit could be tried only by the Shibsagar Court. The learned Subordinate Judge, therefore, allowed the appeal and set aside the order passed by the learned Munsif. Against this decision, the petitioners moved this court in revision and obtained the present Rule.
7. In assailing the impugned judgment and decree Mr. Bhattacharjee, learned Advocate for the petitioners has urged only two points which are as under.
i) An appeal did not tie against the order passed by the learned Munsif; and
ii) The alleged agreement between the parties, which is disputed, cannot confer jurisdiction on the Howrah Court which is not possessed by it under the Civil P.C. ('Code' for short), nor can it take away jurisdiction from the Shibsagar court which it possesses under Section 20 of the Code.
8. The first point, quite understandably, was not seriously pressed by Mr. Bhattacharjee. Order 43, Rule 1(a) of the Code clearly and unmistakably provides that an appeal shall lie from an order under Rule 10 of Order VII returning a plaint to be presented to the proper court (except where the procedure specified in Rule 10A of Order VII has been followed).
9. Since, indisputably, the procedure specified in Rule 10A of Order VII was not followed in this case, the order passed by the learned Munsif directing the plaint to be returned for presentation to the proper court, was clearly appealable and the appeal was rightly entertained. There is, therefore, no substance in the first point urged by Mr. Bhattacharjee and it fails.
10. The second point consists of two parts -- (i) whether there is any agreement between the parties conferring jurisdiction on the Howrah Court to decide all disputes arising out of the contract, and (ii) if so, whether such agreement can take away the jurisdiction of the Shibsagar Court which it possesses under Section 20 of the Code or confer jurisdiction on the Howrah Court which it does not otherwise possess under the Code.
11. In holding that there is the existence of such an agreement between the parties the learned Subordinate Judge appears to have relied upon the quotation submitted by the opposite party (vide Ext. 2) and the order for supply of the materials (vide Ext. A).
12. The quotation (Ext. 2) starts with the words "All disputes in Howrah jurisdiction". The expression, though not happy, nevertheless conveys the sense that all disputes between the parties relating to the contract shall be decided by the Howrah Court.
13. It should be noted that the quotation is nothing more than a unilateral offer which must be accepted before it may ripen into a contract. According to the learned Subordinate Judge, all the terms and conditions of the quotation were accepted in their entirety in the order for supply of the materials (Ext. A). What, however, I find on a scrutiny of Ext. A is that by this document only the terms of the quotation relating to the specifications of the materials to be supplied, the prices of the materials, the mode of delivery, inspection of the materials, payment etc. were accepted. Ext. A is completely silent about the place of suing. Moreover, Clause 18(b) of Ext. A reads as follows : --
"Special instructions:
(a).......
(b) Terms and conditions of your quotation/tender not incorporated in the supply order do not form part and parcel of the contract and will not be applicable in case of this order."
14. It will thus appear that the term in the quotation as regards the place of suing was not at all accepted in the order for supply of the materials (Ext. A). The finding of the learned Subordinate Judge about the existence of an agreement with respect to the place of suing is clearly based on a misreading of the evidence and overlooking of a material evidence and is therefore, liable to interference in revision. Accordingly, disagreeing with the learned Subordinate Judge, I hold that there is no agreement between the parties to the effect that all disputes arising between them out of the contract shall be tried by the Howrah Court.
15. The findings of the learned Munsif that the cause of action for the suit arose in Shibsagar and that defendant/petitioners both reside as well as carry on business in Shibsagar have not been reversed by the learned Subordinate Judge. Therefore, according to the provisions of Section 20 of the Code, the suit could be instituted only in the Shibsagar Court and the Howrah Court, as rightly held by the learned Munsif, had no jurisdiction to entertain the suit.
16. The question involved in the second part of point No. (ii) is no longer res integra and has been set at rest by a catena of judicial pronouncements. In this context, I may refer only to the decision of the Supreme Court in Hakam Singh v. Gammon (India) Ltd. where Their Lordships have held that it is not open to the parties by agreement 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 Civil P.C. jurisdiction to try a suit or 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 and such an agreement does not contravene Section 28 of the Contract Act.
17. It appears, therefore, that the choice as to the place of suing is exercisable only where under the Code two or more courts have jurisdiction to try a suit or proceeding. In such a case, the parties may agree that the dispute between them shall be tried by only one of such courts. Where, however, there is not more than one court having jurisdiction under the Code to try a suit the parties cannot, by agreement take away the jurisdiction of that court and confer it upon some other court.
18. As pointed out already, and also it is not disputed, that under Section 20 of the Code only the Shibsagar Court had jurisdiction to try the suit in question. In such a situation, even if there had been any agreement between the parties that all disputes between them arising out of the contract, would be tried only by the Howrah Court such an agreement would have been bad in law and unenforceable. I, therefore, hold concurring with the learned Munsif, that the Howrah Court had no jurisdiction to try the suit.
19. The question that arises next is whether the objection of the petitioners as to the place of suing can be entertained in revision. In the case of Pathumma v. Kuntalan Kutty, , a suit for partition was filed in the court of the Munsif at Parappanangadi in the year 1938 and a preliminary decree for partition was passed on Feb. 18, 1940 after which the parties took no further interest in the matter for more than two decades. In the meantime, the High Court of Kerala passed an order dated Dec. 22, 1956 re-defining the territorial limits of the courts of Munsifs functioning in the district of Calicut, of which the court of Munsif at Parappanangadi was one. According to that order, the territory in which the disputed property was situated, came under the territorial jurisdiction of the Munsifs Court at Manjery and it was in that court that an application praying for a final decree was made in Jan. 1966. Immediately an objection was taken by one of the defendants that the Manjery court had no territorial jurisdiction to hear the application and that the matter should have been agitated in the court of the Munsif at Parappanangadi. The objection, however was overruled by the Manjery Court which proceeded to partition the property by metes and bounds and ultimately passed the final decree in that behalf on July 9, 1968.
20. An appeal was filed against the final decree by the said defendant in the court of the District Judge before whom the objection as to jurisdiction of the Manjery Court was again taken but was repelled with the result that the final decree was confirmed.
21. The third round of litigation in regard to the question of jurisdiction took place in the High Court of Kerala wherein a learned Single Judge upheld the objection and ruled that it was only the Parappanangadi court that had the territorial jurisdiction to entertain the application praying for final decree and that the assumption of such jurisdiction by the Manjery court was not justified. The objection being upheld, the final decree was set aside and there was, thus no occasion for the High Court to decide the other points arising in the appeal. In dealing with the appeal against the decision of the learned single Judge of the Kerala High Court by Special Leave the Supreme Court, referring to Section 21(1) of the Code, observed that in order that an objection as to the place of suing may be entertained by an appellate or revisional court, the fulfilment of the following three conditions is essential.
i) The objection was taken in the court of first instance;
ii) It was taken at the earliest possible opportunity and in cases where issues are settled, at or before such settlement;
iii) There has been a consequent failure of justice.
It was further held that all the three conditions must co-exist.
22. According to the Supreme Court, although conditions Nos. 1 and 2 were fully satisfied, there was no material on record to show that there had been a failure of justice as a result of the trial being held by the Manjery Court. The Supreme Court, therefore, set aside the judgment of the High Court and remanded back the appeal to be heard on merits.
23. The above decision has been followed by a Division Bench of this court in Savani Transport (P) Ltd. v. Gangadhar Ghosh, . In the case under reference the plaintiff, who was the respondent in the first appeal, sued the defendant for compensation in respect of the goods consigned. There was an agreement between the consignor and the consignee that if any claim arose in respect of the consignment, the suit shall be instituted in Bombay. The suit, however, was decreed by the City Civil Court. Calcutta. The objection relating to the place of suing was taken but it was turned down. The submission on behalf of the appellant before the Division Bench was that the decree by the City Civil Court ought to be set aside on the ground of want of jurisdiction.
24. The Division Bench held the agreement to be binding between the parties and further held that according to the agreement the suit ought to have been instituted in the Bombay Court. It was also found that the first and second conditions as laid down by the Supreme Court in Pathumma's case (supra) were fulfilled, but since there was nothing on record to show that there had been a failure of justice as a result of the suit being tried by the City Civil Court, Calcutta, the Division Bench refused to interfere with the judgment and the decree passed by the City Civil Court on that ground, although it allowed the appeal in part on a different ground. It would thus appear that in both the cases under reference the trials were concluded by the wrong courts notwithstanding objection being raised as to the place of suing.
25. In the case before us the objection as to the place of suing was taken in the written statement, that is, at the earliest possible opportunity and also before the issues were settled. The first and second conditions were, therefore, fulfilled. Since, however there was no trial and the plaint was returned for presentation to the proper court, the question of fulfilment of the third condition that is, failure of justice as a result of the trial being held by a wrong court cannot arise. In such a situation the third condition laid down by the Supreme Court cap never co-exist and the question naturally arises whether this court, as a court of revision can entertain the objection, as to the territorial jurisdiction of the Howrah Court.
26. In my considered opinion the court of revision should interfere in such a case for otherwise, the very object of Section 20 of the Code would be frustrated and the plaintiff would receive encouragement to circumvent the section by instituting his suit in the court of his choice in contravention of the said Section.
27. It should be borne in mind that once a trial is held by a court otherwise competent to try it, it becomes difficult for the defendant to prove failure of justice as a result of the trial being held by a wrong court only on the technical ground that the court had no jurisdiction to try the suit. In my opinion, therefore, it would be a travesty of justice if the plaintiff be allowed to create such a favourable situation and then to take advantage of it by throwing the burden upon the defendant to establish failure of justice. The key note of the decision in Pathumma's case (supra) is that where a trial has been held by a court overruling the defendant's objection as to the place of suing, the judgment should not be set aside merely on such a technical ground unless there has been a failure of justice as a results of the trial being held by a wrong court.
28. The position, to my mind, cannot be the same where there has been no trial at all and the plaint has been returned without trial for want of jurisdiction. In such a case, it will be sufficient only if the first two conditions laid down by the Supreme Court in Pathumma's case are fulfilled for the simple reason that the third condition cannot arise in such a situation. To repel the objection as to the place of suing in such a case, would be to ignore the spirit of the decision of the Supreme Court in the said case.
29. For the foregoing reasons. I hold that the learned Subordinate Judge acted illegally and with material irregularity in reversing the order of the learned Munsif directing the plaint to be returned to the filing lawyer for presentation to the proper court. The order cannot, therefore, be sustained and is liable to be set aside.
30. In the result the Rule is made absolute and the impugned judgment and decree passed by the learned Subordinate Judge are set aside.
31. There will be no order as to costs.
32. Let the records be sent down immediately to the court of the learned Munsif.