Punjab-Haryana High Court
Janta Khadi Gram Udyog Vikas Samiti vs The Haryana Khadi And Village ... on 21 August, 1997
Equivalent citations: (1997)117PLR737
JUDGMENT G.C. Garg, J.
1. Plaintiff-petitioner filed a suit for declaration to the effect that notice dated 27.11.1995 issued by defendant No.2 for recovery of Rs. 51,076/- from it was illegal and not binding upon its rights, with a consequential relief of permanent injunction. Defendants put in appearance and raised a contention that the civil Court at Karnal had no jurisdiction to try the suit in terms of the agreement entered into between the parties. According to the defendants, the court at Ambala had the exclusive jurisdiction to try the controversy raised in the suit between the parties. Trial Court framed as many as six issues including issue No.2 which, is to the following effect:
"Whether the civil court at Karnal has no jurisdiction into the matter? OPD."
2. During the course of hearing of the suit, it seems that the trial Court suo motto decided to treat issue No.2 as preliminary issue and consequently directed the parties to address arguments in this behalf. On a consideration of the matter, the trial Court came to the conclusion that the Court at Karnal had no jurisdiction to entertain and try the suit in' view of specific provision in the agreement executed between the parties and consequently the trial Court returned the plaint, by his order dated 4.10.1997. Aggrieved by the said order the plaintiff has filed the present revision.
3. Upon notice of motion, the defendants have put in appearance.
4. Learned counsel for the petitioner submitted that the head office of the defendants is situated at Panchkula but the branch office of the defendants is also functioning at Karnal and even the agreement between the parties were also entered into and executed at Karnal and therefore, the court at Karnal has the jurisdiction to try the suit and the finding returned by the trial Court under issue No.2 aforesaid is erroneous and deserves to be set aside. Learned counsel in support of his, submission placed strong reliance on Patel Roadways Limited, Bombay v. Prasad Trading Company, A.I.R. 1992 S.C. 1514.
5. Admittedly, the agreement between the parties was arrived at and executed at Karnal and a branch/legal office of the defendant-Board is also situated at Karnal. A similar legal office of the defendant-Board is functioning at Ambala also. The head office of the defendant-Board is situated at Panchkula. Thus, in view of the provisions of Section 20 of the Code of Civil Procedure read along with its Explanations, as a matter of fact, the civil Courts at the above places, namely Karnal, Ambala and Panchkula have jurisdiction to try the suit. But in the instant case, there is a specific provision in the shape of instruction No.11 in the agreement dated 21.6.1986 executed between the parties whereby the parties agreed to refer all kinds of disputes between them to the jurisdiction of civil Courts at Ambala alone and as a matter of fact, it is this provision, or in other words, the execution clause in the agreement which is the bone of contention between the parties in this revision. As noticed above, the trial Court by its impugned order has held that the Court at Karnal have no jurisdiction to try the suit, by accepting the objection of the defendants raised in that behalf and answering the issue in their favour. At this stage the observations of the trial Court made in the impugned order in this regard deserve to be noticed thus :
"The plaintiff has not denied execution of the two contracts, their terms and conditions mentioned therein in his replication filed against written statement. The agreements were executed at Karnal, the defendants have their legal office at Karnal and as well as at Ambala, and Head Office at Panchkula, suit could be filed either at Panchkula or at Karnal and by their agreements the parties have not taken out jurisdiction of civil Court absolutely. The agreements in question confining the filing of suits either at Chandigarh or Ambala are quite legal and valid, hence this issue is decided in favour of defendants and against the plaintiff."
From the observations of the trial Court as noticed above, all that can be gathered is that the trial Court came to the conclusion solely on the basis and having regard to the aforesaid exclusion clause in the agreement in question. It is in the above situation to be seen whether the Courts at Ambala in whose jurisdiction the head office of the defendant-Board is situated, has the jurisdiction to try the suit.
6. In exactly the same circumstances, the provisions of Section 20 as relevant herein, came under a close scrutiny before the apex Court in Patel Roadways Limited v. Tropical Agro and Systems Pvt. Ltd., A.I.R. 1992 S.C. 1514 and in order to appreciate the question involved the facts of the reported case need to be. noticed at this stage. In that case, the plaintiff company who was a dealer in cardamom entrusted a consignment of goods to the defendant-company at its subordinate office at Bodinayakanur in Tamil Nadu to be delivered at Delhi. After the goods had been transported by the transporter and kept in a godown at Delhi the same got destroyed and damaged in a fire as a result whereof the consignee refused to take delivery. The plaintiff company instituted a suit in the Court of Subordinate Judge at Periakulam within whose jurisdiction the subordinate office of the defendant where the goods were entrusted for transport is situate, for damages alleging negligence and carelessness on the part of the staff of the defendant. The defendant-company took a plea in its defence that in the contract entered into between them the parties had agreed that jurisdiction to decide any dispute between them would be only with the Courts at Bombay and consequently the Courts in Madras where the suit had been instituted, had no jurisdiction. Trial Court repelled the plea of the defendant and the challenge to the order of the trial Court having failed before the High Court, the matter came to the considered by the Supreme Court. In the circumstances the question that fell for consideration before the Supreme Court was, "whether in view of the relevant clause in the contract between the parties the Courts at Bombay alone had jurisdiction and the jurisdiction of the Courts at Madras where the suit was instituted, was barred." It was urged on behalf of the defendant-company before the Supreme Court that apart from the Courts within whose territorial jurisdiction the goods were delivered for transport, the Courts at Bombay also had jurisdiction to entertain a suit arising out of the contract between the parties in view of the Explanation to Section 20 of the Code, inasmuch as the principle office of the defendant was situated at Bombay. It was also urged that since courts at two places namely Madras and Bombay had jurisdiction in the matter, the jurisdiction of the courts in Madras was ousted by the clause in the contract whereunder the parties had agreed that jurisdiction to decide any dispute under the contract would be only in the courts at Bombay and consequently the courts at the place where the suit was instituted, had no jurisdiction to entertain the same. On a minute consideration of the matter, the Supreme Court held that the courts at Bombay did not at all have the jurisdiction and consequently the agreement between the parties conferring exclusive jurisdiction on Courts at Bombay is of no avail. For coming to this conclusion the Supreme Court noticed that Clauses (a) and (b) of Section 20 of the Code inter alia, refer to a Court within the local limits of whose jurisdiction the defendant "carries on business". Clause (c) refers, to a Court within the local limits of whose jurisdiction the cause of action wholly or in part arises. Since it was not the stand of the defendant that the cause of action wholly or in part arose in Bombay, Clause (c) ibid was found to be not attracted to the facts of that case. All that was urged with the aid of the explanation to Section 20 of the Code on behalf of the defendant-company, was that since the defendant-company had its principal office in Bombay it shall be deemed to carry on business at Bombay and consequently the Court at Bombay will also have jurisdiction. In the above situation the Supreme Court observed thus :
"On a plain reading of the Explanation to S. 20 of the Code we find an apparent fallacy in the aforesaid argument. The Explanation is in two parts, one before the words "office in India" and the words "in respect of and the other thereafter. The Explanation applies to a defendant which is a Corporation which term, as seen above, would include even a company such as the appellant in the instant case. The first part of the Explanation applies to such a corporation which has its sole or principal office at a particular place. In that event the courts within whose jurisdiction the sole or principal office of the defendant is situate will also have jurisdiction inasmuch as even if the defendant may not be actually carrying on business at that place, it will "be deemed to carry on business" at that place because of the fiction created by the Explanation. The latter part of the Explanation takes care of a case where the defendant does not have a sole office but has a principal office at one place and also a subordinate office at another place. The words "at such place" occurring at the end of the Explanation and the word "or" referred to above which is disjunctive clearly suggest that if the case falls within the latter part of the Explanation, it is not the Court within whose jurisdiction the principal office of the defendant is situate but the Court within whose jurisdiction it has a subordinate office which alone shall have jurisdiction "in respect of any cause of action arising at any place where it has also a subordinate office."
7. In the instant case, as noticed above, the trial Court on an objection being raised by the defendants, held that the civil Courts at Karnal have no jurisdiction to try the suit, and has thus returned the plaint. There is no dispute between the parties about the fact that the agreement in question was entered into and executed at karnal where a branch office of the defendant is also situate. Admittedly, the head office of the defendants is situated at Panchkula which previously fell within the local limits of Ambala Courts. It would thus be seen that present is not the case where the defendant-Board has its sole or principal office at a particular place. If it had been so, the courts at Ambala would also have the jurisdiction inasmuch even if the defendant may hot have been actually carrying on business at that place, it will have to be deemed to carry on the business. The situation in the present case however, is that the defendant herein does not have a sole office and it has a principal office at one place and has also a subordinate office at another, i.e. at Panchkula/Ambala and Karnal respectively and in these circumstances, in view of an authoraritative and unequivocal judicial pronouncement of the apex Court in M/s. Patel Roadways Limited's case (supra) the latter part of the Explanation to Section 20 of the Code would apply. Once it is so concluded. I have no hesitation to hold further that since the defendant has its principal office at one place and it has its subordinate office at Karnal where the parties entered into an agreement and the agreement was executed between them, it (defendant) will be deemed to carry on the business at Karnal and it is the court at Karnal alone which has jurisdiction to try the suit and the courts at Ambala do not at all have jurisdiction in the matter, and the parties by a mutual agreement cannot confer exclusive jurisdiction on courts situated, at a particular place which otherwise has no jurisdiction, Before parting with the order, it must be observed that the judgment of the Supreme Court in M/s Patel Roadways Limited's case (supra) is the complete answer to the controversy raised in this revision.
8. In the result, the revision is allowed and the impugned order is set aside. The parties through their counsel are directed to appear before the trial Court on 15.9.1997. The trial Court shall now dispose of the suit in accordance with law.