Delhi District Court
Fenner India Ltd vs M/S The American Transport Corp on 23 February, 2013
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IN THE COURT OF SH. DIG VINAY SINGH
ADDL. DISTRICT JUDGE-04 : CENTRAL : DELHI
Date of institution : 01.02.1999
Arguments heard : 18.02.2013
Announced on : 23.02.2013
In re :
Suit no. 343/10
Fenner India Ltd.
Hansalya, 15, Barakhamba Road,
New Delhi - 110001. ... Plaintiff
Versus
M/s The American Transport Corp.
Opposite Pili Kothi,
Naya Bazar,
Delhi - 110006. ... Defendant
JUDGMENT
1. This is a suit for recovery of Rs.4,35,609/-. Certain admitted facts are that the plaintiff company booked certain consignments with the defendant transporter. Details of those consignments is mentioned in Para 6 of the plaint. The consignee of the goods was 'self', i.e. the plaintiff. The goods were to be delivered at Agra. The corresponding invoices are in the name of M/s Pee Bee Sales Corporation, Belaganj, Agra, U.P. But at the time when the consignment was sent/booked through defendant, the name of the consignee was mentioned as 'self'. The goods consigned were worth Rs.3,72,377/-. The goods were consigned during the period 3.6.1998 to 6.7.1998. These facts are not Suit no. 343/10 Pg... 1 of 12 r -2- disputed.
2. The claim of the plaintiff is that at the time of consignment of goods, necessary bills, invoices and other documents were sent to Vijaya Bank, Agra and those documents could have been released against payment of Rs.3,72,377/- by M/s Pee Bee Sales Corporation, Agra. Since payment was not made, the documents including the original good receipts were delivered back to the plaintiff by the bank. The defendant was directed to deliver the goods only after surrender of the goods receipt (GRs). When the documents were returned to the plaintiff by the bank, the plaintiff requested the defendant to rebook the goods to Delhi for delivery to the plaintiff. The defendant failed to deliver the goods to the plaintiff. Plaintiff claims that the defendant misappropriated the goods in connivance with M/s Pee Bee Sales Corporation Limited. It is claimed that the defendant, on being asked, took up a false plea that the goods had already been delivered to M/s Pee Bee Sales Corporation, Agra on oral instructions of Sh. R. K. Sharma, an employee of the plaintiff company. It is claimed that there was no question of delivery of goods to anyone else other than the consignee and that too without surrender of GRs, and original GRs are with the plaintiff. Thus, the defendant is claimed to be liable to pay the amount of goods i.e. Rs.3,72,377/- along with interest. A notice dated 30.11.1998 was also sent to the defendant. Plaintiff has claimed interest @ 24% per annum amounting to Rs. 52,132.70. Plaintiff also claims damages of Rs.11,000/- from the defendant and notice charges of Rs.1100/-. Total of all these amounts comes to Rs.4,35,609/-, that is the suit amount.
Suit no. 343/10 Pg... 2 of 12 r -3-
3. The defendant contested the suit on the ground that this court has no territorial jurisdiction and that M/s Pee Bee Sales Corporation, was a necessary party in the suit as goods were delivered to it under instructions of plaintiff's employee. Plaint is claimed to be not signed, verified and instituted by a duly authorised person. Goods are claimed to have delivered to M/s Pee Bee Sales Corporation under instructions of the officers of the plaintiff company. It is claimed that even the plaintiff admits delivery of goods to M/s Pee Bee Sales Corporation in their letter dated 15.1.1999, as also the letter dated 23.12.1998 in which the plaintiff claimed the value of goods from M/s Pee Bee Sales Corporation. It is also claimed that the plaintiff cannot claim the suit amount from the defendant as the value of goods has been debited by the plaintiff in the account of M/s Pee Bee Sales Corporation. It is claimed that dispute regarding payment of amount between the plaintiff and M/s Pee Bee Sales Corporation arose and in order to escape its liability, the plaintiff has filed the present suit. Defendant denies that the goods were to be delivered only upon surrender of original GRs. It is claimed that there was no such mandatory provisions and as per trade and custom of trade, the regular customers used to take delivery of goods even without producing the original GRs to avoid any loss to the customer which may arise on account of shortage in supply of goods or on account of demurrage charges. Defendant had been carrying goods of the plaintiff company for last few years and had been delivering goods to M/s Pee Bee Sales Corporation who is claimed to be the sole authorised dealer of the plaintiff company, on the oral instructions of the officers of the plaintiff company without obtaining original GRs. It is claimed to be a regular Suit no. 343/10 Pg... 3 of 12 r -4- practice. Defendant claims that oral instructions were received from R. K. Saxena and S. K. Khanna officers of the plaintiff company to deliver goods to M/s Pee Bee Sales Corporation without production of original GRs. It is also claimed that M/s Pee Bee Sales Corporation acknowledged delivery of goods to the plaintiff company and it had also settled the account with the plaintiff, therefore, there was no question of rebooking the goods to the plaintiff. Defendant admits having received legal notice dated 30.11.1998, which was replied vide reply dated 11.12.1998.
4. In replication, the plaintiff reiterated the averments of the plaint and denied that there was any oral instruction given to the defendant for delivery of goods without GRs or that it was a practice between the parties.
5. It may be mentioned here that the defendant had filed a suit in Agra Court which was dismissed on 29.10.2009 and appeal against the said judgment was also dismissed on 5.8.2010. There was another suit filed by M/s Pee Bee Sales Corporation in Agra which also was dismissed on 10.06.2006.
6. From the pleadings of parties, following six issues were framed on 29.1.1999. Thereafter on 26.02.2001, additional following three issues were framed in the suit. Thus, there are nine issues to be decided in the present suit :-
"1. Whether the goods was misappropriated by the defendant? OPP.
Suit no. 343/10 Pg... 4 of 12 r -5-
2. Whether the plaintiff is entitled for the relief claimed?
OPP.
3. Whether the suit was not signed, verified and filed by a competent person? OPD.
4. Whether the suit is bad for misjoinder of the necessary parties as claimed by defendant? OPD.
5. Whether the suit is liable to be stayed under Sec. 10 of the CPC? OPD.
6. Whether this court has no jurisdiction to entertain the present suit? OPD.
Issues framed on 26.2.2001 :-
7. Whether the defendant delivered the goods without surrender of original G.R.s? OPD.
8. Whether the defendant had delivered the goods on the instructions of the appropriation of the plaintiff company and there was such practices between the plaintiff and the defendant? OPD.
9. Whether the plaintiff has debited M/s Pee Bee Sales Corporation in respect of the goods in question and has also received the Sales Tax Form "C" from them in respect of the same. If so it's effect? OPD.
7. In support of its case, plaintiff examined Sh. Sanjay Khanna as PW1 who deposed in lines of the averments contained in the plaint and replication.
This witness exhibited certificate of incorporation of plaintiff company as Suit no. 343/10 Pg... 5 of 12 r -6- Ex.PW1/1; power of attorney in favour of PW1 signed by Sh.C.Nagasubramanian as Ex.PW1/2; General Attorney in favour of Sh.C.Nagasubramanian as Ex.PW1/3, the original goods receipts as Ex.PW1/4 to 1/16; letter dated 27.10.1998 as Ex.PW1/17, legal notice dated 30.11.1998 as Ex.PW1/18, reminder dated 7.10.1998 as Ex.PW1/19; memo of bank Ex.PW1/20; two bilties Ex.PW1/21 & 22 respectively.
8. On the other hand, the defendant examined Sh.Paramjeet Singh the attorney of the defendant as DW1. Deposition of DW1 is also in lines of the averments contained in his written statement. He exhibited copy of plaint filed by the defendant against the plaintiff and M/s Pee Bee Sales Corporation in Agra as Ex.DW1/1; copy of written statement of M/s Pee Bee Sales Corporation in that suit as Ex.DW1/2; delivery receipt showing delivery of goods in Delivery Register as Ex.DW1/3; a letter dated 21.10.1998 sent by the defendant to M/s Pee Bee Sales Corporation as Ex.DW1/4; another letter sent of the plaintiff and M/s Pee Bee Sales Corporation dated 25.10.1998 as Ex.DW1/5; postal receipts Ex.DW1/6 to 7; AD card Ex.DW1/8; reply of the defendant to the plaintiff dated 5.11.1998 Ex.DW1/9; another letter by the defendant to the plaintiff Ex.DW1/10; its AD Card Ex.DW1/11; reply to the notice of plaintiff Ex. DW1/12 and; its postal receipts Ex.DW1/13.
9. Defendant also examined DW2 Vidit Bansal who was an accountant in M/s Pee Bee Sales Corporation to support his case.
10. Issue wise findings are as follows :-
Suit no. 343/10 Pg... 6 of 12 r -7-
11. Issue no. 6 - framed on 29.04.1999 is taken up first.
Issue no.6 Whether this court has no jurisdiction to entertain the present suit?
OPD.
It would be important to first decide issue no. 6, as in case this court comes to a conclusion that this court has no jurisdiction, the plaint will have to be returned and in such circumstances, it would not be appropriate for this court to give findings on other issues.
12. It is an admitted fact by both the sides that goods were booked from Delhi and goods were to be delivered at Agra. Thereby meaning that cause of action arose partly at Delhi and partly at Agra. Perusal of Ex.PW1/4 to 1/16, the original goods receipts executed between the plaintiff and the defendant, would reveal that they contain a clause on the top of these receipts that all disputes are subject to Agra jurisdiction only.
13. In such circumstances, when the parties agreed to confer exclusive jurisdiction upon the courts at Agra, the courts at Delhi lacks jurisdiction. It is not a case where Agra Courts had no jurisdiction at all and still jurisdiction was conferred upon it. Admittedly, part of cause of action arose within the jurisdiction of Agra and therefore, this exclusion clause is valid and enforceable.
14. Even if some part of cause of action arose in Delhi, still this court has no territorial jurisdiction to entertain the present suit. It is no more res Integra that where two or more courts have territorial jurisdiction to try a Suit no. 343/10 Pg... 7 of 12 r -8- suit, the parties can enter into a contract excluding jurisdiction of other courts and conferring jurisdiction on any one of those courts. It is equally settled that parties by their contract cannot create jurisdiction in a court which does not have jurisdiction at all.
15. In Mayar (H. K.) Ltd. v. Owners and Parties, Vessel M. V. Fortune Express AIR 2006 SUPREME COURT 1828 = 2006 AIR SCW 863, it is held that, "When the Court has to decide the question of jurisdiction pursuant to an ouster clause, it is necessary to construe the ousting expression or clause properly to see whether there is ouster of jurisdiction of other Courts. When the clause is clear, unambiguous and specific accepted notions of contract would bind the parties and unless the absence of ad idem can be shown, the other Courts should avoid exercising jurisdiction. As regards construction of the ouster clause when words like 'alone', 'only', 'exclusive' and the like have been used, there may be no difficulty. Even without such words in appropriate cases, the maxim 'expressio unius est exclusio alterius' - expression of one is the exclusion of another - may be applied. What is an appropriate case shall depend on the facts of the case. In such a case, mention of one thing may imply exclusion of another. When certain jurisdiction is specified in a contract, an intention to exclude all others from its operation may in such cases be inferred. It has, therefore, to be properly construed." (Para 16)
16. In New Moga Transport Co. v. United India Insurance Co. Ltd. AIR Suit no. 343/10 Pg... 8 of 12 r -9- 2004 SUPREME COURT 2154, also there was an agreement between the parties that Court at Udaipur shall have exclusive jurisdiction. It was so mentioned on the consignment note executed between the parties. Hon'ble Supreme Court held as follows :-
"14. By a long series of decisions it has been held that where two Courts or more have under the CPC jurisdiction to try a suit or proceeding an agreement between the parties that the dispute between them shall be tried in any one of such Courts is not contrary to public policy and in no way contravenes Section 28 of the Indian Contract Act, 1872. Therefore, if on the facts of a given case more than one Court has jurisdiction, parties by their consent may limit the jurisdiction to one of the two Courts. But by an agreement parties cannot confer jurisdiction to a Court which otherwise does not have jurisdiction to deal with a matter, (See Hakam Singh v. M/s. Gammon (India) Ltd., (AIR 1971 SC 740) and M/s. Shriram City Union Finance Corporation Ltd. v. Rama Mishra, (AIR 2002 SC 2402))."
"17. As was observed by this Court in Shriram's case (supra) referring to Hakam Singh's case (supra) (AIR 1971 SC 740) an agreement affecting jurisdiction of Courts is not valid. It is open to the parties to choose any one of the two competent Courts to decide the disputes. Once the parties bound themselves as such it is not open for them to choose a different jurisdiction."
"19. The intention of the parties can be culled out from use of Suit no. 343/10 Pg... 9 of 12 r
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the expressions "only", "alone", "exclusive" and the like with reference to a particular Court. But the intention to exclude a Court's jurisdiction should be reflected in clear, unambiguous, explicit and specific terms. In such case only the accepted notions of contract would bind to parties. The first appellate Court was justified in holding that it is only the Court at Udaipur which had jurisdiction to try the suit. The High Court did not keep the relevant aspects in view while reversing the judgment of the trial Court........"
17. In the case of A.B.C. Laminart Pvt Ltd and another vs. A.P. Agencies Salem AIR 1989 SC 1239 Supreme Court held that where there may be two or more competent Courts which can entertain a suit consequent upon a part of the cause of action having arisen therewithin, if the parties to the contract agreed to vest jurisdiction in one such Court to try the dispute which might arise as between themselves the agreement would be valid. If such a contract is clear, unambiguous and explicit and not vague it is not hit by Sec. 23 and 28 of the Contract Act. This cannot be understood as parties contracting against the Statute. Mercantile Law and practice permit such agreements. (Para 18) It was also held that Under Sec. 23 of the Contract Act the consideration or object of an agreement is lawful, unless it is opposed to public policy. Every agreement of which the object or consideration is unlawful is void. Hence there can be no doubt that an agreement to oust absolutely the jurisdiction of the Court will be unlawful and void being against the public policy. However, such will be the result only if it can be shown that the jurisdiction to which the parties have agreed to submit Suit no. 343/10 Pg... 10 of 12 r
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had nothing to do with the contract. If on the other hand it s found that the jurisdiction agreed would also be a proper jurisdiction in the matter of the contract it could not be said that it ousted the jurisdiction of the Court. 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 being 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. S. 28 also leads to the same conclusion. The principle of Private International Law that the parties should be bound by the jurisdiction clause to which they have agreed unless there is some reason to contrary is being applied to municipal contracts. (Paras 9, 10, 16)
18. In the present case, some part of cause of action indeed took place within the jurisdiction of Agra and, therefore, the agreement is perfectly valid conferring jurisdiction in Agra Courts, to the exclusion of other Courts.
19. The plaintiff and the defendant specifically agreed that the Court of Agra will have exclusive jurisdiction. The jurisdiction of the Courts of Delhi stood specifically excluded by the agreement. Hon'ble Supreme Court has held that such agreements are valid agreements. It is not a case where no cause of action having arisen in Agra, the parties conferred jurisdiction in the Courts of Agra.
Suit no. 343/10 Pg... 11 of 12 r
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20. Thus plaint ought to be returned to the plaintiff to be presented at the appropriate court of Agra.
21. Issue no. 6 is decided against the plaintiff and in favour of the defendant.
22. In view of the finding of this issue, I need not give findings on other issues as this court has been held to be not having territorial jurisdiction. Accordingly, the plaint be returned to the plaintiff to be presented in Court of appropriate jurisdiction in Agra.
Announced in the open court on Dig Vinay Singh
23rd day February, 2013. ADJ-04 (Central)
Delhi.
Suit no. 343/10 Pg... 12 of 12 r