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2005 DIGILAW 1171 (DEL)

Caprihans India Limited v. R. T. Packaging Limited

2005-12-19

BADAR DURREZ AHMED

body2005
JUDGMENT Badar Durrez Ahmed, J. (Oral) 1. This is an application filed on behalf of the defendant under Order 7 Rule 10 of the Code of Civil Procedure, 1908 read with Section 151 thereof for return of the plaint to the plaintiff on the ground that this court does not have the territorial jurisdiction to entertain and try the present suit. This prayer has been made on the basis of clause No. 13 which forms part of the Purchase Orders under which the plaintiff is said to have supplied the goods to the defendant. The said clause 13 reads as under:- "13. All contracts and orders are deemed to be entered into at Faridabad, and in case of any dispute or difference, the court at Faridabad alone has jurisdiction. (Underlining added) 2. The learned counsel for the defendant / applicant has drawn my attention to various paragraphs of the plaint to indicate that upon a reading of the plaint itself and the documents filed alongwith the plaint, it would become clear that this court does not have territorial jurisdiction entertain the present suit in terms of the said clause 13. He pointed out that in paragraph 5 the plaintiff has stated that the defendant company approached the plaintiff for supply of goods (Micron Rigid PVC clear Film, etc.) and the defendant company by Purchase Order Nos. RTPUI/DHR/097 dated 13.11.2000, RTPUIlDHR/119 dated 20.12.2000, RTPUIlDHR/137 dated 06.02.2001, RTPUIlDHRJ154 dated 16.03.2001, RTPUIlDHR/155 dated 16.03.2001, RTPUIlDHR/276 dated 22.10.2001 placed the orders with the plaintiff company for the supply of the• said goods on credit basis. The purchase orders are annexed with the plaint as Annexures A-I to A-6. Paragraph 6 of the plaint discloses that the plaintiff supplied the goods to the defendant on credit basis under various invoices / bills as detailed therein against the said purchase orders. Paragraph 6 of the plaint also contains the statement that the defendant company had duly acknowledged the receipt of the goods supplied by the plaintiff and copies of the delivery challans / invoices of the plaintiff company were also annexed to the plaint as Annexures A-7 to A-14. Thereafter, the plaint discloses averments to the effect that the plaintiff company on various occasions called upon the defendant orally as well as by written correspondence for making the payment of the outstanding principal amount of Rs. Thereafter, the plaint discloses averments to the effect that the plaintiff company on various occasions called upon the defendant orally as well as by written correspondence for making the payment of the outstanding principal amount of Rs. 26,79,720/- alongwith interest thereon in respect of the goods said to have been supplied by the plaintiff to the defendant in terms of the said purchase orders. But, the defendant failed to do so. This; in effect, is the entirety of the disputes between the plaintiff and the defendant. 3. The learned counsel for the defendant / applicant drew my attention to one of the purchase orders and, in particular to Annexure-6 which is at page 7 of the documents file. The said purchase order clearly indicates the materials / goods that were required to be supplied by the plaintiff to the defendant. The said purchase order comprises of the details of the goods sought to be purchased by the defendant. The reverse of the purchase order contains the terms and conditions of the order. On the front page, it is indicated:" Please supply the following subject to terms and conditions mentioned on the order and general terms and conditions mentioned overleaf. " The printing overleaf is headed as "TERMS AND CONDITIONS OF THIS ORDER" and clause 13 of these terms and conditions is what has been reproduced earlier and which forms the subject matter of the present application. The learned counsel for the applicant states that both Delhi and Faridabad would normally have had jurisdiction to entertain this suit. However, because of the specific ouster contained in the said clause 13, only the courts at Faridabad would have jurisdiction to entertain this suit. In support of his submissions, he relied upon the decision of A.B.C. Laminart Pvt. Ltd. & Anr v. A.P. Agencies, Salem: (1989) 2 SCC 163 . He also relied upon the decision of a Division Bench of this court which has been reported in the form of short notes in 17 (1980) DLT 531 (S.N.) entitled as Mohanwi Corporation (P) Ltd v. D.N. Sinha and Another to show that the objection as regards the place of suing should be taken at the earliest possible opportunity. He also referred to a decision of the Supreme Court in the case of Harshad Chiman Lal Modi v. DLF Universal & Anr: 2005 VIII AD SC 226 for the same proposition. He also referred to a decision of the Supreme Court in the case of Harshad Chiman Lal Modi v. DLF Universal & Anr: 2005 VIII AD SC 226 for the same proposition. In particular he referred to paragraph 30 of the said decision which reads as under:- "30. We are unable to uphold the contention. The jurisdiction of a court may be classified into several categories. The important categories are (i) Territorial or local jurisdiction; (ii) Pecuniary jurisdiction; and (iii) Jurisdiction over the subject matter. So far as territorial and pecuniary jurisdictions are concerned, objection to such jurisdiction has to be taken at the earliest possible opportunity and in any case at or before settlement of issues. The law is well settled on the point that if such objection is not taken at the earliest, it cannot be allowed to be taken at a subsequent stage. Jurisdiction as to subject matter, however, is totally distinct and stands on a different footing. Where a court has no jurisdiction over the subject matter of the suit by reason of any limitation imposed by statute, charter or commission, it cannot take up the cause or matter. An order passed by a court having no jurisdiction is nullity." The aforesaid paragraph was referred to by the learned counsel for the defendant / applicant for submitting that the question of jurisdiction should be raised at the earliest and it is because of this that he has filed this application under Order VII Rule 10 for return of the plaint as this court does not have jurisdiction and the same should be returned to the plaintiff to be instituted in the appropriate court, i.e., the courts at Faridabad. 4. The learned counsel for the plaintiff, however, contended that this application cannot be allowed at this stage and the question of jurisdiction can only be decided after evidence is led on this question. He placed strong reliance on the decision of a learned single Judge of this court in the case of M/s Condor Power Products Pvt. Ltd v. Sandeep Rohtagi: 111 (2004) DLT 121: 2004 (74) DRJ 391 . Referring to the said decision he pointed out that the clause contained therein was as under:- "3. He placed strong reliance on the decision of a learned single Judge of this court in the case of M/s Condor Power Products Pvt. Ltd v. Sandeep Rohtagi: 111 (2004) DLT 121: 2004 (74) DRJ 391 . Referring to the said decision he pointed out that the clause contained therein was as under:- "3. All contracts and orders are deemed to be entered into at Faridabad (Haryana) and .any action arising therefrom shall be subject to the jurisdiction Courts of Faridabad only or Arbitrators appointed by the both sides". 5. He submitted that the said decision was rendered in a revision application which was directed against the order dated 13.05.2000 whereby the defendant / revisionist's application under Order 7 Rule 10, CPC had been rejected. He contended that this decision would squarely apply to the facts of the present case and, accordingly, since the question of jurisdiction would be a subject matter of evidence, this plaint cannot be returned at this stage on the ground of lack of territorial jurisdiction. He also submitted that although in the plaint he has not made any averment with regard to the rejection of the terms and conditions contained in the purchase order, in the reply to this application he has specifically taken the point that the said terms and conditions were not agreed to by the plaintiff and, therefore, it would become a matter of trial. Consequently, according to him, this application cannot be allowed at this stage. 6. The question of conferring jurisdiction on a particular court by agreement of the parties is now no longer debatable. It is quite well-settled that jurisdiction can be conferred by agreement of the parties on a court which otherwise would have jurisdiction to entertain the matter. It is also equally well-settled that if such jurisdiction is conferred on a particular court to the exclusion of others, then such an ouster clause would not be opposed to public policy and only that court would have jurisdiction to entertain the matter. In Hakam Singh v. M/s Gammon (India) Ltd: 1971 (3) SCR 314 , the Supreme Court had clearly observed as under:- "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. In Hakam Singh v. M/s Gammon (India) Ltd: 1971 (3) SCR 314 , the Supreme Court had clearly observed as under:- "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 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. Such an agreement does not contravene s. 28 of the Contract Act." This was further confirmed by a more recent decision in the case of A.B.C. Laminart (supra) wherein in paragraph 18, it is stated as under:- "Thus it is now a settled principle 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 there within, 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 clearly, unambiguous and explicit and not vague it is not hit by Ss. 23 and 28 of the Contract Act. This cannot be understood as parties contracting against the Statute. Mercantile law and practice permit such agreements." In the said decision, it was further concluded as under:" “....where such an ouster clause occurs, it is pertinent to see whether there is ouster of jurisdictiop of other courts. Where 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 'expression 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. 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. 7. A similar view was also taken by a Division Bench of this court in the case of A.K. Surekha and Others v. The Pradeshiya Investment Corporation" of V.P. Ltd: 2003 (69) DRJ 98 . I also had an occasion to consider a similar clause in Mr Mahesh Chand Gupta v. Assistant Collector, Sadar Bazar, Delhi & Anr: AIR 2004 Delhi 101 : 2003 (71) DRJ 409 as well as in Apparel Export Promotion Council v. Shri Prabhati Patni, Proprietor Comfort Furnishers & Anr in IA No. 4652/2001 & OMP 34/2000 decided on 01.12.2005. In the latter decision, I had concluded as follows: "Upon consideration of all the aforesaid decisions, the position becomes clear that where two or more competent courts have jurisdiction to entertain a matter, if the parties by contract agree to fix jurisdiction in only one of them, then such a contract or agreement would have to be held to be valid. The consequences thereof would be that the court on which the jurisdiction was conferred by agreement would be the only court entitled to exercise such jurisdiction. It is, in fact, not so much a question of conferment of jurisdiction but one of election or exclusion of jurisdiction. Where two or more courts have jurisdiction because part of cause of action may have arisen there within, parties may contract to exclude jurisdiction and elect to restrict it to one or more of the courts." 8. In view of these clear principles, it becomes apparent that if the said clause 13 is to apply, then the courts at Faridabad would have jurisdiction to entertain the present suit. However, the plaintiff has strongly relied upon the decision of a learned single Judge of this court in Condor Power Products (supra). That decision, if one were to examine it in detail, would be inapplicable to the facts and circumstances which obtain in the present case. That would be apparent if one were to read paragraph 4 of the said decision which reads as under:" 4. That decision, if one were to examine it in detail, would be inapplicable to the facts and circumstances which obtain in the present case. That would be apparent if one were to read paragraph 4 of the said decision which reads as under:" 4. The case of the plaintiff is that this term was never agreed upon and that on the contrary, in the Receipts issued by the plaintiff to the defendant / revisionist there is an opposing clause to the effect that only Courts at Delhi shall possess jurisdiction. There is palpable controversy on this vexed question which can be effectively and appropriately determined only after an opportunity is afforded to the parties to prove their cases." 9. Upon a reading of the aforesaid extract, it becomes clear that in the receipts issued by the plaintiff to the defendant for the supply of the goods, there was an opposing clause to the effect that only the courts at Delhi shall possess jurisdiction. Therefore, in that case, there was a controversy as to which clause would apply' "the clause in the purchase order restricting jurisdiction to the courts at Faridabad' or the clause in the receipts restricting the jurisdiction in the courts at Delhi. It is in that context that the decision in the case of Condor Power Project (supra) must be understood. In the facts of the present case, we find that there is no such controversy in the present case. The purchase order alone contains the clause of jurisdiction which restricts the jurisdiction to the courts at Faridabad. Secondly, it is the plaintiff's averment in the plaint that the goods were supplied against the purchase order and it is suing on the basis of supply of goods which, in turn, is founded upon the purchase orders placed by the defendants. There is no contrary clause with regard to jurisdiction which is sought to be imposed by the defendants. Although the plaintiff in its reply to this application has made an attempt to show that there are some sort of disputes with regard to the clauses and conditions, in my view, that is a mere after thought as the same does not find place in the plaint and, the entire case of the plaintiff rests on the plaint. Although the plaintiff in its reply to this application has made an attempt to show that there are some sort of disputes with regard to the clauses and conditions, in my view, that is a mere after thought as the same does not find place in the plaint and, the entire case of the plaintiff rests on the plaint. Even if all the averments made therein are taken to be correct and true, the conclusion is only one that the courts at Faridabad alone would have jurisdiction to entertain the present suit. Accordingly, the application of he defendant is allowed. The plaint is directed to be returned to the plaintiff to be filed at the appropriate court in Faridabad. This application as well as the suit stand disposed of.