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2010 DIGILAW 281 (ORI)

Zydus Pharmaceuticals v. B. Raja Ram Patra

2010-04-16

R.N.BISWAL

body2010
JUDGMENT R.N. BISWAL, J. — The petitioner has challenged the order dated 27.04.2009 passed by the learned Civil Judge (Senior Divi¬sion), 1st Court, Cuttack in C.S. No.127 of 2006, wherein he rejected the petition filed under Order-14, Rule-2 (2) (a) read with Section 21 of C.P.C., by the petitioner. 2. Opp.party as plaintiff filed the aforesaid suit against the defendant claiming Rs.70,86,338.54/- with interest. As per his case, he was dealing in electronic goods at Visakhapatnam. Cadila Health Care Ltd., a private company which was manufactur¬ing and marketing pharmaceuticals, cosmetic and other products, appointed the plaintiff as their Clearing and Forwarding Agent for the State of Orissa by opening their office at Cuttack. An agreement was executed between the parties to that effect on 01.02.1999. Accordingly, the plaintiff started its establishment at Cuttack by taking a godown-cum-office on rent and appointing two employees. Subsequently, the aforesaid company bifurcated its business by forming another sister concern company in the name and style of Zydus Pharmaceuticals Limited. Cadila Healthcare Ltd., dealt in manufacturing of the aforesaid products while Zydus Pharmaceuticals Ltd. (defendant) marketed the same. 3. Plaintiff invested a huge amount of money to fulfil the requirements of the defendant-company. He shifted his busi¬ness from Visakhapatnam to Cuttack, took a godown-cum-office on rent, furnished the office with Computer, Printer, Air conditioner, Fax, Telephone line etc. to carry out the business as Clearing and Forwarding Agent. He invested more than a sum of Rs.1,50,685.00/-. Besides the said investment, as per the re¬quirement of the Cadila Health Care Limited, the plaintiff dis¬patched a demand draft of Rs.7,50,000.00/- in its favour towards security deposit which was subsequently refunded along with interest with direction to deposit a sum of Rs.7,86,813.00/- with Zydus Pharmaceuticals Limited. Accordingly, he deposited the said amount on 30.03.2001, but unfortunately, without any valid rea¬son, and without cancelling the agency of the plaintiff, the defendant company stopped supply of its product to the plaintiff with effect from 18.12.2002 and directed him to hand over the entire stock available with him to one M/s. Essar Associates of Jaunliapati, Cuttack, a newly appointed Clearing and Forwarding Agent of the defendant. So, the plaintiff filed the aforesaid suit with prayer as mentioned earlier. On being noticed defendant appeared in the suit and filed written statement. So, the plaintiff filed the aforesaid suit with prayer as mentioned earlier. On being noticed defendant appeared in the suit and filed written statement. It also filed a petition under Order-14, Rule-2 (2) (a) read with Section 21 of C.P.C., to hear on the point of jurisdiction as preliminary issue and pass necessary orders thereon. As per the petition, in paragraph-4 of the plaint it is averred that :- “4. That as the business of the Plaintiff comes under the business of Zydus Pharmaceuticals Limited, without executing any agreement with the Plaintiff, Zydus Pharmaceuticals Limited continued its business with the Plaintiff on the footing of the agreement continuing with Cadila Healthcare Limited without renewing the agreement which was valid for one year only.” Such statement of the plaintiff clearly and unambiguously proved that although there was no agreement between the plaintiff and the defendant-company, yet the plaintiff continued the business with the defendant-company on the footing of the agreement with Cadila Healthcare Limited without renewing the same. In clause 8.2 of the agreement dated 1.2.1999, it has been provided as follows :- “8.2- This agreement is concluded at Ahamadabad and Courts at Ahamadabad alone shall have jurisdiction to try any dispute/difference arising or connected with this agreement”. As per this clause, the plaintiff ought to have filed the suit at Ahamadabad only and nowhere else. 4. After hearing the said petition, the trial Court rejected it on the ground that jurisdiction of the Court being a mixed question of law and fact, it can not be decided as preliminary issue. Being aggrieved with the said order, defendant (hereinafter called the petitioner) has filed the present writ petition. 5. Learned counsel appearing for the petitioner submitted that as found from paragraph-4 of the plaint, opp.party admitted that he continued his business with the petitioner-company on the basis of the agreement dated 1.2.1999 executed between him and Cadila Healthcare Limited. As per the agreement, any dispute between the parties was to be decided by a competent Court at Ahamadabad. 5. Learned counsel appearing for the petitioner submitted that as found from paragraph-4 of the plaint, opp.party admitted that he continued his business with the petitioner-company on the basis of the agreement dated 1.2.1999 executed between him and Cadila Healthcare Limited. As per the agreement, any dispute between the parties was to be decided by a competent Court at Ahamadabad. Since the petitioner-company is a sister concern of the Cadila Healthcare Limited and the opposite party continued his business with the petitioner-company on the basis of agree¬ment entered into between Cadila Health Care Limited and himself, the trial Court should have allowed the petition under Order-14, Rule-2 (2) (a) read with Section 21 of C.P.C. It committed a gross error of law leading to miscarriage of justice in holding that the point of jurisdiction was a mixed question of law and fact. 6. On the contrary, learned counsel for the opposite party contended that since the agreement between the opposite party and Cadila Health Care Limited was valid for one year only, the agreement lost its force on 31.1.2000, and, as such, the opposite party is not bound by that agreement. So, the trial Court rightly rejected the petition. He further submitted that opp.party was representing the petitioner-company before Sales Tax Authorities for sales tax assessment at Cuttack. The petitioner-company is carrying on its business at Cuttack. So, the learned Civil Judge (Senior Division), 1st Court Cuttack has jurisdiction to hear the suit. Opp.party would face much hardship and financial loss if he would be asked to file the suit at Ahamadabad. Because of this, the writ petition deserved to be quashed. In support of his submission, he relied on the decision, Orissa Stevedores (P) v. Hindustan Fertilizer Corporation Ltd. and others, 1986 (I) OLR-337, where this Court held that : “........even though the agreement between the parties choosing a particular Court out of the several Courts having jurisdiction operates as estoppel between the parties, it does not really oust the jurisdiction of the Court and cannot be construed to deprive a Court to exercise the jurisdiction which the law of the land has conferred upon it. Ordinarily the Court whose jurisdiction has been ousted by agreement between the parties would have due regard to the stipulation in the agree¬ment. Ordinarily the Court whose jurisdiction has been ousted by agreement between the parties would have due regard to the stipulation in the agree¬ment. It can still exercise jurisdiction if it is satisfied that the said stipulation is oppressive, harsh, inequitable or unfair or that for the ends of justice, the Court in its discretion thinks it appropriate to exercise jurisdiction.” In the decision of Shri Janaki Ballav Patnaik v. Bennet Coleman and Co., Ltd., and others 1988 (II) OLR 143, this Court held that if an issue relating to jurisdiction of a Court is an issue of law only, which can be decided on the admitted plead¬ings of the parties de hors fact, the issue can be decided as a preliminary issue. In the present case, in his pleading, opposite party averred that it continued to work as Clearing and Forward¬ing Agent under Zydus Pharmaceuticals Limited on the basis of agreement dated 1.2.1999 entered into between himself and Cadila Healthcare Limited. Admittedly, the said agreement was valid for one year only. Whether the clause containing jurisdiction of Court would amount to admission or not is to be decided. Evidence is not required to be led in this regard. The issue of jurisdic¬tion is to be decided on point of law only. The finding of the trial Court that the point of jurisdiction involves facts and law is not correct. However, the opp.party may raise the point that the stipulation in the agreement is oppressive, harsh, inequita¬ble or unfair by citing the decision, Orissa Stevedores (supra) before the trial Court. 7. In the result, the writ petition is allowed and the impugned order dated 27.04.2009 passed by the learned Civil Judge (Senior Division), 1st Court, Cuttack in C.S. No.127 of 2006 is set aside and the trial Court is directed to hear on the point of jurisdiction as preliminary issue. No cost. Petition allowed.