Sasa Musa Sugar Works Pvt. Ltd v. Chunilal Chororia
1974-05-20
B.N.SARMA
body1974
DigiLaw.ai
Judgement This Rule has been obtained by the defendant against the order made by the Assistant District Judge, Cachar, in Money Suit No. 23/72, by which he has decided a preliminary objection raised in the suit, namely, whether his Court has got the jurisdicdiction to try the suit, in favour of the plaintiff. The plaintiff-opposite party filed the suit for a decree of Rs. 22,500/- against the defendant petitioner as damages for breach of a contract for sale of 750 bags of sugar inclusive of an amount of Rs. 7,500/- paid as advance. The plaintiff alleged in the plaint that the sugar was to be delivered to the plaintiff at Silchar and so the cause of action in the suit arose at Silchar. 2. The defendant by filing a verified petition raised a preliminary objection as to the jurisdiction of the Court at Silchar. It was alleged in the petition that in terms of clause 3 (b) of the contract all suits arising out of any dispute in respect of the transaction covered by the contract would be subject to the jurisdiction only in the District Court at Saran (Bihar) and as such the Court at Silchar has got no jurisdiction to try the suit. The defendants filed the copies of three sale contracts covering 750 bags of sugar, as Annexures A, B and C to the petition. It appears from the record that the plaintiff did not challenge the genuineness of these documents by filing any counter affidavit. On hearing arguments advanced on behalf of the parties, the learned Assistant District Judge rejected the contention of defendant with the following observation:- "The plaintiff has sued the defendant whose office is at Calcutta and with whom the plaintiff made a contract for purchase of sugar. As such the parties cannot by an agreement take away the jurisdiction of this Court to Bihar. I find that the Court at Saran cannot have any jurisdiction to try this suit. As such I find that there is no force in the contention of the learned Advocate for the defendant. Accordingly the prayer of the defendant is rejected." 3. Mr.
I find that the Court at Saran cannot have any jurisdiction to try this suit. As such I find that there is no force in the contention of the learned Advocate for the defendant. Accordingly the prayer of the defendant is rejected." 3. Mr. S. K. Senapati the learned counsel for the opposite party, took a preliminary objection that as the petitioner has not yet filed its written statement in the suit, it cannot be allowed to take the plea that the Court at Silchar has got no jurisdiction to try the suit, at this stage. According to him the defendant can take such a plea in the written statement and when so taken, the Court may decide such an issue as a preliminary issue and not at any earlier stage. This contention is not well founded. Under Section 21 of the Civil P. C. such an objection is to be taken in the Court of first instance at the earliest possible opportunity. There is nothing in the Code that such objection cannot be taken at any stage before filing of the written statement. If it is held by the Court that it has no jurisdiction, there will be no necessity to file any written statement setting out the case of the defendant. Be that as it may, the plaintiff-opposite party did not raise any such objection in the Court below. He cannot, therefore, be allowed to take such an objection at this stage after the order of the Court below went in his favour. 4. There can be no dispute that the parties cannot by agreement confer jurisdiction on a Court not possessed by it under the Code. But when under the Code more than one Court has jurisdiction to try a suit it is a settled law that an agreement between the parties that the suit should be instituted in one of these Courts is not contrary to public policy and does not contravene Section 28 of the Contract Act. If any authority is needed on this proposition reference may be made to the decisions in Hakam Singh v. Gammon (India) Ltd., AIR 1971 SC 740 ; Continental Drug Co. Ltd. v. Chemoids Industries Ltd., AIR 1955 Cal 161 and Musaji Lukman Ji v. Durga Dass, AIR 1946 Lah 57 (FB).
If any authority is needed on this proposition reference may be made to the decisions in Hakam Singh v. Gammon (India) Ltd., AIR 1971 SC 740 ; Continental Drug Co. Ltd. v. Chemoids Industries Ltd., AIR 1955 Cal 161 and Musaji Lukman Ji v. Durga Dass, AIR 1946 Lah 57 (FB). The only question for determination, therefore, is whether the District Court at Saran has got any jurisdiction to try the suit under the Code. 5. Clause (a) of Section 20 of the C. P. C. provides, inter alia, that every suit (subject to the limitations contained in the Sections 15, 19) shall be instituted in a Court within the local limits of whose jurisdiction the defendant carries on business or personally works for gain; and clause (c) provides for institution of a suit where the cause of action wholly or in part arises. Explanation II under this section further lays down that a Corporation shall be deemed to carry on business at its sole and principal office in India or in respect of any cause of action arising at any place where it has also a subordinate office, at such place. As held by the Supreme Court in AIR 1971 SC 740 the word corporation in explanation II includes not only statutory corporation but also a Company registered under the Indian Companies Act. 6. In the instant case there is no dispute that the defendant Company has got its head office at Calcutta and that the contracts were concluded at Calcutta. There is also no dispute that the defendant Company has got its factory at Sasa Musa in the district of Saran in Bihar, wherefrom the contracted sugar was to be despatched. The contracts embodied in the documents at Annexures A. B and C to the objection petition filed by the defendant-petitioner provided, inter alia, that the consignments of sugar would be despatched F. O. R. Sasa Musa factory, Railway siding. The terms F. O. R. and F. O. B. are used to convey similar meaning. F. O. B. means "free on Board" and F. O. R. means "free on Rail". According to the Strouds judicial dictionary the expression F. O. B. means that the seller is to put the goods on board at his own expense, but on account of, andthence forward at the risk and as property of the purchaser.
F. O. B. means "free on Board" and F. O. R. means "free on Rail". According to the Strouds judicial dictionary the expression F. O. B. means that the seller is to put the goods on board at his own expense, but on account of, andthence forward at the risk and as property of the purchaser. The expression F. O. R. also conveys a similar meaning except that the goods are put on rail and not on board. Under Section 39 of the Sale of Goods Act where in pursuance of a contract of sale, the seller is authorised or required to send the goods to the buyer, delivery of the goods to a carrier whether named by the buyer or not, for the purpose of transmission to the buyer, is prima facie deemed to be delivery of goods to the buyer. When there is such a contract, the cause of action for a suit for breach of the contract arises at the place where the goods are to be delivered to the common carrier for transmission to the buyer and no cause of action arises at the place where the goods are to be ultimately despatched. This view finds support from the decision in Matanhella Brothers v. M/s. Shri Mahabir Industries Pvt. Ltd., AIR 1970 Pat 91 . This being the position cause of action in the present suit arose at Sasa Musa where the goods were to be delivered F. O. R. to the common carrier and at Calcutta where the contracts were concluded and no part of the cause of action arose at Silchar. Even if any part of the cause of action is held to have arisen at Silchar, it would not so to debar the parties from entering into an agreement as contained in clause 3 (b) of the conditions at Annexures A, B and C, as the Court at Saran also has got the jurisdiction to try the suit under the Code. 7. It was contended by Mr. Senapati that as admitted by the petitioner himself in his petition, it had to cancel the contracts under some circumstances beyond its control. When the contract was cancelled, it was submitted the conditions appurtenant thereto also stood cancelled. There is no force in this contention. The suit admittedly is for damages for breach of the contracts. It is therefore based on the contracts.
When the contract was cancelled, it was submitted the conditions appurtenant thereto also stood cancelled. There is no force in this contention. The suit admittedly is for damages for breach of the contracts. It is therefore based on the contracts. Clause 3 (b) of the conditions provided that all suits arising out of any dispute in respect of the transactions covered by the sale will be subject to jurisdiction only in the district of Saran, Bihar. As the contract is not opposed to any public policy, as held by different High Courts as well as the Supreme Court, the defendant cannot avoid this condition. 8. As a result of the foregoing discussion it is seen that the learned Assistant District Judge, Cachar, committed an error in law in deciding that he has jurisdiction to try the suit. The impugned order must, therefore, be set aside and I do accordingly. As held in the case of Continental Drug Co. v. Chemoid Industries Ltd., AIR 1955 Cal 161 where the suit is not filed in the Court as agreed to by the parties, the proper method of enforcing the agreement is to return the plaint for presentation to the proper Court. In respectful agreement with this decision I direct the learned Assistant District Judge to return the plaint to the plaintiff-opposite party for presentation to the proper Court. The revision petition is allowed and the Rule is made absolute. In the circumstances of the case I however leave the parties to bear their own costs. Revision allowed.