Karnataka High Court
M/S Base Corporation Ltd vs M/S Amrutha Power Corporation on 25 September, 2018
Author: Chief Justice
Bench: Dinesh Maheshwari
M.F.A.No.6564/2011
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 25TH DAY OF SEPTEMBER, 2018
BEFORE
HON'BLE MR.JUSTICE DINESH MAHESHWARI, CHIEF JUSTICE
MISCELLANEOUS FIRST APPEAL NO.6564 OF 2011 (CPC)
BETWEEN:
M/S.BASE CORPORATION LTD.,
A COMPANY REGISTERED UNDER
THE INDIAN COMPANIES ACT,
HAVING ITS REGISTERED OFFICE AT
NO.810,
BARTON CENTER,
M.G.ROAD,
BENGALURU-560001
AND ITS CORPORATE OFFICE AT
NO.3, SANGEETHA TOWERS,
80 FEET ROAD,
NEAR CMH HOSPITAL,
INDIRANAGAR 1ST STAGE,
BENGALURU 560038.
REPRESENTED BY
ITS MANAGER HR & FINANCE,
MR.RANJITH S.DOGRA,
MAJOR,
S/O LATE R.S.DOGRA.
... APPELLANT
(BY SRI.K.M.JAGANATH, ADVOCATE)
AND:
1. M/S.AMRUTHA POWER CORPORATION,
MENON CHAMBERS,
RAVIPURAM ROAD,
KOCHI - 682016.
M.F.A.No.6564/2011
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ALSO AT:
NEAR N.S.S.COLLEGE,
N.F.GATE,
TRIPUNITTURA - 682301,
REPRESENTED BY
ALL ITS PARTNERS.
2. MR.INDUCHUDAN P.,
MANAGING PARTNER,
M/S.AMRUTHA POWER CORPORATION,
MENON CHAMBERS,
RAVIPURAM ROAD,
KOCHI-682 016.
...RESPONDENTS
(BY SMT.MAMATHA ROY, ADVOCATE)
---
THIS MFA IS FILED UNDER ORDER 43 RULE 1(a)
OF THE CODE OF CIVIL PROCEDURE, PRAYING TO SET
ASIDE THE ORDER DATED 15.04.2011 PASSED BY THE
XXVI ADDITIONAL CITY CIVIL JUDGE, MAYO HALL UNIT,
AT BENGALURU, [CCH NO.20] IN O.S.NO.15233/2004,
DIRECTING RETURN OF PLAINT TO BE PRESENTED
BEFORE PROPER COURT AND TO RESTORE THE SUIT
TO BE TRIED BY THE SAID COURT.
THIS APPEAL COMING ON FOR HEARING THIS
DAY, THE COURT, DELIVERED THE FOLLOWING:
M.F.A.No.6564/2011
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JUDGMENT
This miscellaneous appeal by the plaintiff is directed against the judgment and order dated 15.04.2011, as passed by the Court of XXVI Additional City Civil Judge, Mayo Hall Unit, Bengaluru in O.S.No.15223/2004, whereby the Trial Court, after finding that the said money recovery suit was not of its territorial jurisdiction, has ordered return of the plaint, for being presented before the proper Court.
The plaintiff/appellant filed the suit aforesaid for money recovery against the defendant No.1 - a partnership firm (having its place of business at Kochi in the State of Kerala) and one of its partners (defendant No. 2). Put in a nutshell, the relevant plaint averments had been that the plaintiff was engaged in the business of supply of batteries with its branches all over the country including the State of Kerala; that the defendant No.1 firm was appointed as the authorised distributor for the plaintiff on the mutually agreed terms and conditions; that the plaintiff had been supplying batteries on demand of the defendants by raising invoices; and that the defendants also availed credit facilities on the condition that M.F.A.No.6564/2011 -4- the outstanding amount beyond a period of 30 days from the date of the invoice would carry interest @ 26% per annum.
It was alleged that on 19.12.2003 and 22.12.2003, the plaintiff supplied batteries worth Rs.2,04,113/- under three invoices to the defendant firm; and for the defendant having failed to make payment, the plaintiff issued a letter dated 24.12.2003 demanding payment against the said invoices as also a sum of Rs.5,056.44 due on an earlier transaction together with interest @ 26% per annum. Since the defendant firm failed to make payment as demanded, the plaintiff filed the suit aforesaid for money recovery.
The defendants in their written statement, inter alia, raised the objection that the Courts at Bengaluru had no jurisdiction to try the suit as no written contract was entered into by the parties at Bengaluru and no business transactions took place at Bengaluru. It was further stated that the defendants' place of business was at Kochi and hence, no cause of action had arisen at Bengaluru. The defendants also denied the claim of the plaintiff and stated that in fact, they had issued a letter dated 22.12.2003 calling upon the plaintiff to settle the accounts.
M.F.A.No.6564/2011-5-
On the pleadings of parties, the Trial Court framed the following issues for determination of the questions involved in the matter:
"1. Does plaintiff prove that the defendants are liable to pay Rs.2,04,113/- towards cost of batteries and Rs.5,056.44 towards earlier balance on account?
2. Whether plaintiff is entitled for 26% interest p.a.?
3. Does defendants proves this court has no jurisdiction to try the suit? (sic)
4. Whether defendant is entitled for adjustment of Rs.1,00,000/- security deposit?
5. Whether plaintiff is entitled for the suit claim?
6. What decree or order?"
Although issue No.3 aforesaid related to the jurisdiction of the Court and looking to the nature of objections, it would have been proper if the said issue was determined at the first with reference to Rule 2 of Order XIV of the Code of Civil Procedure ('CPC'), but the Trial Court proceeded to try all the issues together. Be that as it may, after completion of the evidence and after final arguments, the Trial Court pronounced its impugned judgment on 15.04.2011.
The Trial Court, in the first place, took up issue No.3 relating to jurisdiction for consideration; and, after examining the evidence on record and with reference to the principles M.F.A.No.6564/2011 -6- enunciated in the cited decisions, answered the said issue against the plaintiff, while observing, inter alia, as under:
"14. ...In this case it is an admitted fact that the principle (sic) office of the plaintiff company is situated at Bangalore and it has got branch office at Kochi and transaction between plaintiff and defendant took place at Kochi. Hence, only mentioning of name of importer/ manufacturer/supplier in the invoice is not sufficient to hold that the cause of action arose within the jurisdiction of this Court and only on the ground that principle (sic) office of the plaintiff is situated within the jurisdiction of this Court it cannot be said that this Court has got jurisdiction to try the suit. For the above said reasons, Issue No. 3 is answered in the affirmative."
Even after finding that the suit was not of its territorial jurisdiction, the Trial Court proceeded to return its findings on the other issues too and rejected the claim of the plaintiff for money recovery and for interest @ 26% per annum, as also of the defendants for adjustment. Then, on issue No.5, the Trial Court held that the plaintiff was not entitled to any relief and the plaint was required to be returned for want of territorial jurisdiction of the Court to try the suit. Finally on issue No.6, the Trial Court ordered as under: M.F.A.No.6564/2011 -7-
"23. ISSUE NO.6:- In the result, I proceed to pass the following:-
ORDER Plaint is returned to the plaintiff as this Court has no territorial jurisdiction, to present before the proper Court."
Seeking to question the order aforesaid, it is contended on behalf of the plaintiff/appellant that the Trial Court has erred in law as also on facts, particularly when it has failed to examine the material part of the evidence of the parties, including the documents - Exhibits P12(a), P12(b) and P12(c), which undoubtedly carry the stipulation to the effect that "All disputes are subject to Bangalore Jurisdiction only."
It is contended that the existence of aforesaid clause in the invoices being not a matter of dispute and, for the invoices having been issued from Bengaluru, a part of cause of action arose within the territorial jurisdiction of the Courts at Bengaluru. Hence, according to the learned counsel for the plaintiff-appellant, the suit had rightly been filed in the Trial Court at Bengaluru.
Learned counsel for the appellant has also argued in the alternative that if at all the suit was not of the territorial jurisdiction of the Trial Court at Bengaluru and the plaint was to be returned, the Court ought not to have returned any M.F.A.No.6564/2011 -8- finding on the merits of the case. Learned counsel would submit that the findings on the other issues in the impugned judgment dated 15.04.2011 would cause serious prejudice to the plaintiff, even if the matter is taken up in the other Court; and such findings, in any case, deserve to be set aside.
Learned counsel for the defendants/respondents has duly supported the order impugned and has submitted that the agreement between the parties having been entered into at Kochi and the supplies having also been made at Kochi, not even a part of cause of action had arisen within the territorial jurisdiction of the Courts at Bengaluru and, therefore, the finding on issue No.3 cannot be said to be unjustified. Learned counsel would further submit that even if any stipulation regarding jurisdiction is contained in the invoices, when cause of action had not arisen at Bengaluru, such stipulation, by itself, cannot result in investing the jurisdiction in the Courts at Bengaluru. Learned counsel would also submit that the suit, as filed, is even otherwise entirely baseless and deserves to be dismissed.
Having heard learned counsel for the parties and having examined the record with reference to the law M.F.A.No.6564/2011 -9- applicable, this Court is clearly of the view that the finding of the Trial Court on issue No.3 remains unexceptionable and, therefore, the order returning the plaint calls for no interference but then, the findings on other issues by the Trial Court deserve to be annulled.
So far the question of territorial jurisdiction of the Court to try the present suit is concerned, on the admitted and indisputable fact situation, it is clear that the agreement between the parties and all the transactions thereunder took place only at Kochi in the State of Kerala. The defendant-firm is also said to be situated, and carrying on its business, at Kochi. Even if the registered and corporate offices of the plaintiff-company are situated at Bengaluru, it had been maintaining the branch office at Kochi; the orders for the supplies in question were placed at the Kochi office; and the supplies were also made from the Kochi office only. The Trial Court has also taken note of the testimony of PW1, who had in his cross-examination, inter alia, admitted as under:
"Plaintiff has got office at Kochi and it is registered office but not a head office, but it is a sales office. It is true to suggest that Kochi office is a registered for tax purpose also. It is true to suggest that Defendant no.1 used to place order at M.F.A.No.6564/2011
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Kochi office. It is true to suggest that Kochi office used to supply batteries to the Defendant. It is true to suggest that the Defendant no.1 has dealing with Kochi Office."
Looking to the aforesaid admission by the plaintiff's witness and the nature of dealings between the parties, the observations of the Trial Court appear justified that mere mentioning of the name of importer/manufacturer/supplier in the invoices was not sufficient to hold that the cause of action arose at Bengaluru. The referred invoices Exhibits P12(a), P12(b) and P12(c) also make it clear that they emanated from the branch office of the appellant-company at "Kadavanthara, Kochi - 682 020" and delivery of goods was made at "Ravipuram Road, Cochin, Ernakulam - 682 016". In the given fact situation, it cannot be said that even a part of cause of action had arisen at Bengaluru.
True it is that the invoices carry the stipulation that 'all disputes are subject to Bangalore jurisdiction only' but then, such a clause would have inured to the benefit of the appellant and the suit in question would have been considered triable by the Courts at Bengaluru only if such M.F.A.No.6564/2011
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Courts at Bengaluru were otherwise having territorial jurisdiction to try the suit.
The suit of the present nature, i.e., for money recovery could have been considered triable by the Courts at Bengaluru if the defendant had been carrying on business within the local limits of the jurisdiction of the Courts at Bengaluru or if the cause of action, wholly or in part, had arisen at Bengaluru. Indisputably, the defendant carries on business only at Kochi; and as noticed above, not even a fraction of cause of action had arisen at Bengaluru.
In the given circumstances, the aforesaid stipulation in the invoices regarding jurisdiction is rendered redundant in relation to the suit in question. This is for the simple reason and the elementary principle that the parties, through their agreement, cannot confer jurisdiction in a Court, which is otherwise not having jurisdiction in the matter. Such a stipulation, where parties agree for exclusive jurisdiction of the Court at a particular place, is by itself not invalid and is enforceable provided the Courts at the place of choice of the parties are otherwise having jurisdiction in the matter. On the M.F.A.No.6564/2011
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other hand, if the Court chosen by the parties is having no jurisdiction, such an exclusion clause remains unenforceable.
In the case of Harshad Chiman Lal Modi vs. DLF Universal Ltd. and another: (2005) 7 SCC 791, the clause of plot buyer agreement read that 'the Delhi High Court or courts subordinate to it, alone shall have jurisdiction in all matters arising out of, touching and/or concerning this transaction'. However, in the suit relating to specific performance, the Supreme Court noticed that the property in question was not situated in Delhi and hence, it was held that the Delhi Court had no jurisdiction, though the agreement provided for jurisdiction of the Court at Delhi. In that context, the Supreme Court referred to the observations of the High Court and quoted the same with approval as under:
"27. The High Court considered the submission of the plaintiff that the Delhi Court had jurisdiction to entertain the suit but negatived it. The Court, after referring to various decisions cited at the Bar, concluded:
"From the aforesaid principles laid down by the Supreme Court it is abundantly clear that where the parties to a contract agreed to vest jurisdiction to a particular court although cause of action has arisen within the jurisdiction of different courts, including that particular court, the same cannot be M.F.A.No.6564/2011
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said to be void or to be against the public policy. It was also made clear in the said decision that if however a particular court does not have any jurisdiction to deal with the matter and no part of cause of action has arisen within the jurisdiction of that court, the parties by their consent and mutual agreement cannot vest jurisdiction in the said court. Therefore, a clause vesting jurisdiction on a court which otherwise does not have jurisdiction to decide the matter, would be void as being against the public policy."
28. We are in agreement with the above observations and hold that they lay down correct proposition of law."
The Supreme Court concluded on the matter while observing as under:
"37. In the instant case, the Delhi Court has no jurisdiction since the property is not situate within the jurisdiction of that court. The trial court was, therefore, right in passing an order returning the plaint to the plaintiff for presentation to the proper court. Hence, even though the plaintiff is right in submitting that the defendants had agreed to the jurisdiction of the Delhi Court and in the original written statement, they had admitted that the Delhi Court had jurisdiction and even after the amendment in the written statement, the paragraph relating to jurisdiction had remained as it was i.e. the Delhi Court had jurisdiction, it cannot take away the right of the defendants to challenge the jurisdiction of the court nor can it confer jurisdiction on the Delhi Court, which it did not possess. Since the suit was for specific performance of agreement and possession of immovable property situated outside the jurisdiction of the Delhi Court, the trial court was right in holding that it had no jurisdiction."M.F.A.No.6564/2011
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In view of the above and in view of the fact situation of the present case that not even a fraction of cause of action arose at Bengaluru, this Court is clearly of the view that the Trial Court has not committed any error in deciding issue No.3 against the plaintiff/appellant and in ordering return of the plaint for presentation in the proper Court.
For what has been discussed and held hereinabove, this appeal against the order returning the plaint (being essentially an order under Order VII Rule 10 of the Code of Civil Procedure) deserves to be dismissed.
However, as noticed, in the impugned judgment and order dated 15.04.2011, the Trial Court has chosen to return its findings in relation to other issues concerning the merits of case too. Such findings, in the opinion of this Court, were not required to be returned; particularly when the Court found that the suit was not of its territorial jurisdiction and the plaint was required to be returned. It gets per force reiterated that, in fact, looking to the subject matter and the stand of the parties in this case, the issue relating to jurisdiction ought to have been decided at the first and before determination of other issues.
M.F.A.No.6564/2011
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Be that as it may, for putting the record straight and avoiding any likelihood of prejudice to any of the parties, it appears just and proper that the findings in the impugned judgment and order dated 15.04.2011, in relation to the issue Nos.1, 2 and 4, be set aside and the matter be left open for consideration of the proper Court in accordance with law upon presentation of the plaint by the plaintiff/appellant.
Accordingly, though this appeal is dismissed and the impugned order dated 15.04.2011 directing return of the plaint is affirmed but, the findings on issue Nos.1, 2 and 4, as pronounced by the Trial Court, are annulled; and the matter is kept open for consideration of the competent Court in accordance with law, where the plaintiff/appellant may opt to present its plaint within 15 days from the date of receipt of certified copy of this order.
There shall be no order as to costs.
The record of the Trial Court be returned forthwith for necessary proceedings for returning the plaint and other papers as per rules.
Sd/-
CHIEF JUSTICE rs