Messrs Frick India Ltd. v. Messrs Sharma Cold Storage and Ice Factory
1985-04-10
B.P.JHA, SANDHAWALIA
body1985
DigiLaw.ai
JUDGMENT B.P., Jha, J. This civil revision petition has been flied against an order dated 6-2-1981 passed of the Ist Subordinate Judge. Muzaffarpur, in Money Suit No. 70 or 1979. 2. The question for decision is; "whether the suit is maintainable at Muzaffarpur ?” 2. The answer must be given in the negative. There was an agreement dated 30th October, 1978 (Annexure 3) between the plaintiff and the defendant. The plaintiff is a private Limited company registered under the Indian Companies Act. The defendant is a public company registered under the Indian Companies Act. The agreement was to supply equipment for a cold storage and for erection of a cold storage at Muzaffarpur. In pursuance or the agreement, the defendant despatched machineries and other equipments of the cold storage to the plaintiff. The plaintiff filed a suit for damages on the ground of breach of the agreement in the Court of the 1st Subordinate Judge, Muzaffarpur. As per clause 22 of the agreement, the place of the contract shall be Delhi and the suit shall not be instituted outside Delhi. It is relevant to quote clause 22 of the agreement which runs as follows: "The place of the contract shall be Delhi ; all proceeding including those in the Courts of law, shall not be instituted or commenced outside Delhi. " 3. It appear' that by the aforesaid agreement, the parties agreed that the place of the contract shall be at Delhi and the suit shall be instituted at Delhi. Under the Code of Civil Procedure. the suit can be instituted either at Delhi or at Muzaffarpur. But if the parties agree by the agreement that the dispute between the parties shall be tried in one of such Courts, it is not contrary to public policy. Such an agreement is not contrary to Section 28 of the Contract Act. In this connection the Supreme Court Fin Hakam Singh VS. M/S. Gammon (India) Ltd. held as follows: "But where two courts or more have under the Code of Civil Procedure Jurisdiction to try a suit or proceeding an agreement between the parties that the dispute between them shall be tried in one of such Courts is not contrary to public policy." According to the decision of the Supreme Court, the parties are bound by the agreement.
If it is so, according to the agreement (Annexure 3), the suit, can only legitimately be filed by the parties in the Civil Court at Delhi, and not at Muzaffarpur. 4. Learned counsel for the petitioner contends that clause 22 of the agreement will not apply in respect of the erection of the cold storage. In other words, he contends that the clauses mentioned in the agreement will apply in respect of sale of the goods excluding erection. It is for this reason that the counsel for the petitioner contends that the clauses mentioned in the agreement (Annexure 3) apply in respect of the sale of the goods and not in respect of erection of the building. In this context, it is stated by the learned counsel for the petitioner that clause 22 of the agreement will not apply if a suit is filed for damages in respect of erection of the building. On a perusal of the plaint, it appears that it was a composite suit for non-supply of the machineries as well as for erection of the building. The damages was sought by the plaintiff in respect of both the courts. If it is so, clause 22 of the agreement will apply to the facts of the present case. In my opinion, even if it is a suit for damages in respect of erection of the building clause 22 of the agreement wil1 apply to both the parties. 5. At the top of the agreement, it is stated as follows: 'GENERAL CONDITION OF SALE OF GOODS EXCLUDING ERECTION,” clause 22 of the agreement clearly specifies that the place of contract shall be at Delhi and the suit shall not be instituted outside Delhi. It is, therefore, clear that the suit for the sale of goods as well al for erection of the building will be filed by any party at Delhi and not outside Delhi. 6. Relying on the decision of the Supreme Court in the case of Hakam Singh Vs. M/s. Gammon (India) Ltd.(Supra), I hold that the suit at Muzaffarpur is not maintainable in view of clause 22 of the agreement. In my opinion, The Court below exercised the jurisdiction which was not vested in it by any law. 7. In the result, the civil revision petition is allowed and the order of the Court below dated 6-2-1981 is set aside.
In my opinion, The Court below exercised the jurisdiction which was not vested in it by any law. 7. In the result, the civil revision petition is allowed and the order of the Court below dated 6-2-1981 is set aside. The parties shall bear their own costs. I agree. Application allowed.