ROYALEX FASHIONS (INDIA) PVT. LTD. v. RANJAN APPARELS
2004-08-18
P.K.TRIPATHY
body2004
DigiLaw.ai
JUDGMENT : P.K. Tripathy, J. - Opposite Party No. 1 in Arbitration Misc. Case No. 336 of 2000 of the Court of District Judge, Khurda at Bhubaneswar has filed this Civil Revision challenging to the order passed on 18.4.2001. For the sake of convenience, parties are referred to here as per their status in the said Arbitration Misc. Case. Impugned order is a composite order passed by learned District Judge in rejecting the application filed by the Opp. Party No. 1 under Order 14, Rule 2(2)(b) read with Order 7, Rule 11 (d) of the Code of Civil Procedure, 1908 (in short the 'Code') and allowing the application for amendment under Order 6, Rule 17, read with Order 1, Rule 10(2) of the Code to add the Opp. Party No. 2. 2. It is the admitted position on record that on the basis of a contract entered into between the petitioner and the Opp. Party No. 1 that the petitioner worked as a consignee agent for marketing of the goods of the Opp. Party No. 1 Company. The said Opp. Party unilaterally terminated the agreement and appointed the Opp. Party No. 2 as its consignee agent. With that allegation, petitioner instituted application u/s 9 of the Arbitration Act vide Arbitration Misc. Case No. 336 of 2000. Petitioner filed application under Order 6, Rule 17 read with Order 1, Rule 10 of the Code to implead the Opp. Party No. 2. Opp. Party No. 1 filed application under Order 14, Rule 2 read with Order 7, Rule 11 of the Code to take up the issue of non-maintainability of the Arbitration Misc. Case at Bhubaneswar on the ground of want of jurisdiction in view of clear stipulation in the agreement between the parties concerning jurisdiction of the Courts situated at Bangalore in the State of Karnataka. 3. While allowing the application for amendment and addition of Opp. Party No. 2 as a party to the Arbitration Misc. Case, learned District Judge, rejected the application of the Opp. Party No. 1 following the ratio in the cases of M/s. Patel Roadways Limited, Bombay Vs. M/s. Prasad Trading Company, and Ajanta Enterprisers Vs. Hoechst Pharmaceutical Ltd. and Others, . 4. Opp. Party No. 1 revision petitioner argued that ratio in the case of Hakam Sing Vs.
Case, learned District Judge, rejected the application of the Opp. Party No. 1 following the ratio in the cases of M/s. Patel Roadways Limited, Bombay Vs. M/s. Prasad Trading Company, and Ajanta Enterprisers Vs. Hoechst Pharmaceutical Ltd. and Others, . 4. Opp. Party No. 1 revision petitioner argued that ratio in the case of Hakam Sing Vs. Gammon (India) Ltd., provides the guideline that when two Courts have concurrent jurisdiction to entertain the dispute then exclusion of the jurisdiction of one Court by agreement of the parties is not in contravention of Section 28 of the Contract Act and therefore such agreement cannot be rendered invalid. It also further argued that in a distinguishable fact the Supreme Court in the case of M/s. Patel Roadways Limited (supra) found the Court at Bombay to have no jurisdiction and that precedent is not applicable to the facts and circumstances of the present case, it also argued that view of the Apex Court in Hakam Singh (supra) was not only accepted as a settled principle in the above noted case of M/s. Patel Roadways Limited (supra) but also various other cases in the Apex Court including the cases of M/s. Angile Insulations Vs. M/s. Davy Ashmore India Ltd. and another, and Shriram City Union Finance Corporation Ltd., v. Rama Mishra AIR 2002 SC 2402 . In these reported decisions the Apex Court reiterated to confer the jurisdiction on the Court as stipulated in the agreement between the parties. It also argued that such settled view of the Apex Court has been followed by this Court in the case of Dilip Kumar Ray v. Tata Finance Ltd. AIR 2002 Ori 29 . Accordingly, Opp. Party No. 1 (Revision Petitioner) argued to set aside the order of the District Judge in rejecting its application under Order 14, Rule 2 and Order 7, Rule 11 of the Code. There has been no argument and it could not have been relating to the order in respect of amendment of the application and addition of Opp. Party No. 2 as a party to the proceeding. 5. Petitioner in the aforesaid Arbitration Misc. Case (Opp. Party No. 1 in this Civil Revision) advanced argument supporting the impugned order, 6.
There has been no argument and it could not have been relating to the order in respect of amendment of the application and addition of Opp. Party No. 2 as a party to the proceeding. 5. Petitioner in the aforesaid Arbitration Misc. Case (Opp. Party No. 1 in this Civil Revision) advanced argument supporting the impugned order, 6. In Hakam Singh (supra) the apex Court held that: "......It is not open to the parties by agreement to confer by their agreement jurisdiction on a Court which it does not possess under the Code. But 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 one of such Courts is not contrary to public policy. Such an agreement does not contravene Section 28 of the Contract Act." (Quoted from Paragraph 3 of the judgment). In furtherence of the above quoted principle of law, their Lordships held that': "6. Since an application for filing an award in respect of a dispute arising out of the terms of the agreement could be filed in the Courts in the City of Bombay, both because of the terms of Clause 13 of the agreement and because the respondents had their Head Office where they carry on business at Bombay, the agreement between the parties that the Courts in Bombay alone shall have jurisdiction to try the proceeding relating to arbitration was binding between them." 7. In the case of M/s. Patel Roadways Limited (supra) while referring to and accepting the ratio in the case of Hakam Singh, the Apex Court on the given facts and circumstances of that case held that: "......Where the corporation has a sub-ordinate office in the place where the cause of action arises, it cannot be heard to say that it cannot be sued there because it does not carry on business at that place....." (Quoted from Paragraph 13). 8. Ratio in the other noted decisions supports the contention of the Opp. Party No. 1 (Revision Petitioner). 9. On perusal of the impugned order, this Court finds that learned District Judge has not discussed the facts involved in the case to find if it is a case of similar nature as in the case of M/s. Patel Roadways Limited (supra). He has simply followed the principle and rejected the application.
Party No. 1 (Revision Petitioner). 9. On perusal of the impugned order, this Court finds that learned District Judge has not discussed the facts involved in the case to find if it is a case of similar nature as in the case of M/s. Patel Roadways Limited (supra). He has simply followed the principle and rejected the application. At any time, it is the well settled principle of law that a ratio is to be followed on the basis of facts and circumstances which are similar or akin. That aspect can be properly considered if fact involved in the case is also taken into consideration while applying the interpretation of law/ratio from a given case. Since, learned District Judge did not follow that principle and mechanically followed the ratio from the case of M/s. Patel Roadways (supra) and the case of M/s. Ajanta Enterprisers (supra), therefore, this Court finds that learned District Judge has failed to properly exercise the jurisdiction vested in him while considering the application of the Opp. Party No. 1. 10. Thus, while setting aside that part of the impugned order, learned District Judge is directed to consider that application afresh in accordance with law on which this Court expresses no opinion so far as the contention of the parties under Order 7, Rule 11 (d) is concerned. Keeping in view the nature of the dispute, learned District Judge is to do well to provide opportunity of hearing to both the parties and dispose of the application within a period of six weeks from the date of receipt of a copy of this order. To facilitate early disposal of the application while directing appearance of the parties before the Court below on 30.8.2004, the revision petitioner is directed to produce a certified copy of this order in that Court on that date. In view of the above order, parties to the proceeding shall not be entitled to fresh or further notice from the Court of the District. Judge and non-appearance on 30.8.2004 be regarded as default in appearance. 11. The impugned order rejecting the application under Order 14, Rule 2 read with Order 7, Rule 11, CPC is accordingly set aside, the Civil Revision is allowed and the said application is remanded for fresh consideration in the manner indicated above. Final Result : Allowed