Document Fragment View

Matching Fragments

(3) The defendants in their written statement have contended that this petition is not maintainable; that there is no agreement between parties and, therefore, the suit is not maintainable; that the plaintiff is relying on the draft agreement which was never finalised; that on or about 30.6.1978, the plaintiff company got the signatures of the defendants on a draft agreement; that the terms and conditions required to be incorporated as suggested by the defendants were never incorporated by the plaintiff and the agreement was never finalised. That the defendant company were dealing with the plaintiff since 1974 as the defendants had the wholesale license for erstwhile Gurgaon District without any agreement. In 1978 the plaintiff company wanted the defendants to be stockist for them and got their signatures on the draft agreement. The defendants were buying the products of the plaintiff and selling them as license vendor of the Excise Department of the Haryana State in the District of Gurgaon; that the plaintiff company is dishonestly making use of the draft agreement; that this Court has no territorial jurisdiction to try and decide the suit because the draft agreement was got signed somewhere in 1978 for only three years at Murthal, District Sonepat (Haryana) and also because the plaintiff has got its registered office at Murthal, District Sonepat (Haryana) and the office of the defendants and their place of business is at Faridabad (Haryana); that the business transactions between the parties took place only at Murthal and Faridabad and no where; that neither of defendants work for gain or carry on business within the local limits of this Court; that the dispute purported to be referred to the arbitration is a particular claim of 16.10.1982 as such the same is barred by time. Needless to say the claim is independent of the balance of a running account between the parties. On these averments, the defendants pray for dismissal of the suit (petition). Following issues are framed on 22.9.1994: 1. Whether this Court has no jurisdiction to try this petition ? 2. Whether in view of the objections taken in the written statement, disputes could be referred for arbitration ? 3. Whether the disputes to be referred under Section 20 of the Arbitration Act are barred by the limitation ? 4. Relief.

(5) The first limb of the argument by the defendants is the want of territorial jurisdiction to this Court, second is the duration of agreement dated 30.6. 1978, and the third limb is that the agreement dated 30.6.1978 is not the concluded contract but draft agreement only.

(6) I would first consider the question of territorial jurisdiction as it would go to the root. It may be seen that the marketing division of the plaintiff company is at New Delhi and the defendants have placed orders at New Delhi. That Clause 9 (b) of the agreement dated 30.6.1978 specially provides that all orders for the said products shall be placed by the stockist with the Marketing Division/Sales Office of the company and no such order shall constitute any contract or be deemed to be binding on the company unless and until unconditionally accepted by the company in writing ...............Thus it will be seen that under the agreement all purchase orders were required to be placed with the Marketing Division/Sales Office of the plaintiff company which is at New Delhi. Clause 14 of the agreement provides that the respective rights, privileges, duties and obligations of the parties under this Agreement shall be governed and determined by the laws of the State of Haryana and the Republic of India and shall be subject to the jurisdiction of the Courts at Sonepat (Haryana). Thus under Clause 14 the civil court at Sonepat (Haryana) has been conferred with the jurisdiction.

(8) In the instant case, according to Clause 14 of the agreement court at Sonepat has been vested with the territorial jurisdiction. The invoice produced on the record by the defendants is at page 7 of part-III file suggests that all proceedings and actions are subject to court jurisdiction at Sonepat. This invoice by the plaintiff gives the address of the plaintiff that of Murthal (Sonepat). The goods have been supplied at Faridabad (Haryana) which would show that the defendants have been working at Faridabad. It is not the say of the plaintiff that the contract has been executed at New Delhi. It is nowhere averred in the petition that the contract has been executed at Delhi though it may not be relevant for the purpose of deciding the question of jurisdiction under Section 2(c) of the Arbitration Act.

(11) In the decision in the case of Arun Khosla v. Union Bank of India , it has been held by the Single Judge of this Court that the territorial jurisdiction of this Court has to be determined on the basis of claims made. Allegations of wrongful termination of contract, while considering the provisions contained in Section 2(c) of the Arbitration Act, it has been held that territorial jurisdiction of the Court has to be determined on the basis of claims made; and the petition alleging wrongful termination of contract seeking revocation of authority, would be maintainable only at the place where contract was performed and not where it was signed or revoked nor where the appointing authority is stationed. In the instant case, the contract of supplying the beer has been performed at Faridabad, as suggested vide invoice dated 29.9.1982 at page 7 of part-III file, referred to above, Clause 14 of the agreement provides for the territorial jurisdiction of the courts at Sonepat. The invoice also refers to the disputes entertainable by the courts at Sonepat. It is suggested from the invoice itself that the goods were delivered from Sonepat and received by the defendants at Faridabad. Now simply because the correspondence has been addressed with the Marketing Division of the plaintiff company at New Delhi and simply because Clause 9b of the agreement provides for placing of the orders with the Marketing Division of the plaintiff company at New Delhi that would not, in my opinion, confer territorial jurisdiction to the courts where the Marketing Division is situated. Under the circumstances, it will be seen that this court will have no territorial jurisdiction to try and entertain the suit since the contract is not performed within the territorial jurisdiction of this Court. For these reasons, issue No.1 is answered in the affirmative.