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2010 DIGILAW 986 (MP)

Life Care International v. Mahindra & Mahindra Ltd.

2010-09-28

N.K.MODY

body2010
ORDER N.K. Mody, J. 1. Being aggrieved by the judgment dated 28-4-08 passed by VIII Additional District Judge, Indore in Civil Suit No. 1-B/07 whereby the suit filed by the Appellant was returned to the Appellant with a liberty to file the same before the Court at Mumbai on account of want of jurisdiction, the present appeal has been filed. 2. Short facts of the case are that the Appellant filed a suit against the Respondent alleging that Appellant is a registered Partnership Firm having its business in partnership at Indore. Respondent is a Company registered under the provisions of Indian Companies Act having its Registered Office at Mumbai and is having its Branch Office at Royal Ratan Building-7, MG Road, Indore. It was alleged that Branch of the Respondent is carrying on the business of procuring the vehicles on rent. It was alleged that division of the Respondent which is in the trade taking the vehicles on rent is known as Transport Solution Group. It was alleged that in the transaction which took place between the parties Appellant was to pay a sum of Rs. 26,50,447/- to the Respondent, but instead of that Appellant paid a sum of Rs. 42,20,943.61. It was alleged that Appellant is entitled for refund of Rs. 15,70,496.61, which was paid by the Appellant in excess alongwith interest of Rs. 5,37,050/-. In the suit it was alleged that since transaction took place at Indore and the Branch Office of the Respondent is at Indore, therefore, the Court at Indore is having jurisdiction to hear and decide the suit. 3. The suit was contested by the Respondent on various grounds, including on the ground that the agreement took place between the parties in writing, which is dated 1-4-2000. It was alleged that as per the said agreement it is only the Court at Mumbai having jurisdiction to hear and decide the suit. Other allegations of the plaint were also denied. It was alleged that since the Court at Indore having no jurisdiction to entertain the suit, therefore, the suit be dismissed. It was alleged that as per the said agreement it is only the Court at Mumbai having jurisdiction to hear and decide the suit. Other allegations of the plaint were also denied. It was alleged that since the Court at Indore having no jurisdiction to entertain the suit, therefore, the suit be dismissed. Learned Trial Court framed the issues, recorded the evidence and while deciding the suit came to the conclusion that the Court at Indore is having no territorial jurisdiction to decide the suit, therefore, the same is returned to the Appellant for filing the same before the Competent Court at Mumbai, against which present appeal has been filed. 4. Learned Counsel for the Appellant argued at length and submits that the impugned judgment passed by the learned Court below is illegal, incorrect and deserves to be set aside. It is submitted that undisputedly Registered Office of the Respondent is at Mumbai and the Branch Office is at Indore. It is submitted that the whole transaction which took place under the alleged agreement between the parties is at Indore. It is submitted that in the facts and circumstances of the case, Court at Indore was having jurisdiction to hear and decide the suit. It is submitted that though genuineness of the agreement (Exh. D-4) is not admitted to the Appellant as each of the page of agreement is not containing the signature of the Appellant, then too, as per Article 14 of the said agreement parties agreed that the agreement shall be subject to jurisdiction of Court at Bombay. It is submitted that even if this clause has taken into consideration, then too, it cannot be said that the jurisdiction at Indore was ousted by the parties. It is submitted that even if this clause has taken into consideration, then too, it cannot be said that the jurisdiction at Indore was ousted by the parties. For this contention reliance is placed on a decision in the matter of Patel Roadways Ltd., Bombay v. Tropical Agro Systems Pvt. Ltd., AIR 1992 SC 1514 , wherein in a suit for damages against Corporation and Corporation having subordinate office in place where cause of action arose, Hon'ble Apex Court held that where the Defendant does not have a sole office but has a principal office at one place and also a subordinate office at another place, it is not the Court within whose jurisdiction principal office of the Defendant is situate but the Court within whose jurisdiction it has a subordinate office which alone shall have a jurisdiction in respect of any cause of action arising at any place where it has also a subordinate office. Learned Counsel submits that appeal be allowed and impugned order passed by learned Trial Court be set aside and case be remanded with a direction to decide the suit on merits. 5. Learned Counsel for Respondent submits that right from beginning Appellant has not came with clean hand. It is submitted that in the suit it is no where pleaded that there was an agreement between the parties. It is submitted that as per the agreement parties agreed that in case of any dispute jurisdiction shall be at the Court at Bombay. It is submitted that since the principle office of the Respondent is situated at Bombay and parties also agreed that in case any dispute arises, then it will be the Court at Bombay who shall have jurisdiction, therefore, learned Court below rightly retained the suit to the Appellant for filing the same before appropriate Court. Learned Counsel placed reliance on a decision in the matter of Hakam Singh v. Gammon (India) Ltd., (1971) 1 SCC 286 , wherein Hon'ble Apex Court has held that where two Courts or more have under the Code of Code of Civil Procedure jurisdiction to try a suit or proceeding, an agreement between the parties that the dispute between them shall be treated in one of such Courts is not contrary to public policy. Further reliance is placed on a decision in the matter of A.B.C. Laminart Pvt. Ltd. v. A.P. Agencies, Salem, (1989) 2 SCC 163 , where Hon'ble Apex Court held that where more than one Court has jurisdiction, agreement to submit to one, to the exclusion of others valid. It was further held that even in absence of express exclusionary words in the clause, maxim 'expressio'nnius est exclusio alterius' may be applied in appropriate cases, where the clause only specifies one of the two Courts having jurisdiction without specifically excluding jurisdiction of the other Court, both the Courts have jurisdiction. Further reliance is placed on a decision in the matter of Angile Insulations v. Davy Ashmore India Ltd., (1995) 4 SCC 153 , wherein Hon'ble Apex Court held that where two Courts having jurisdiction consequent upon a part of the cause of action arising therewith, if parties stipulate in the contract to vest jurisdiction in one such Court to try the disputes arising between themselves and if the contract is unambiguous, explicit and clear and is not pleaded to be void and opposed to Section 23 of the Contract Act, then suit would lie in the Court agreed to by the parties and the other Court will have no jurisdiction even though cause of action arose partly within the territorial jurisdiction of that Court. Reliance is also placed on a decision Hanil Era Textiles Ltd. v. Puromatic Filters (P) Ltd., (2004) 4 SCC 671 , wherein Hon'ble Apex Court held that where two or more Courts have jurisdiction under Code of Code of Civil Procedure and agreement restricts place of suing to any one of them, such an agreement is not contrary to public policy and does not contravene under Section 28 of Contract Act, 1872. Lastly reliance is placed on a decision in the matter of New Moga Transport Co. v. United India Insurance Co. Ltd., (2004) 4 SCC 677 , wherein Hon'ble Apex Court has held that import of use of words 'only', 'alone', 'exclusive' in exclusion cause, the intention to exclude a Court's jurisdiction should be reflected in clear, ambiguous, explicit and specific terms. On the strength of aforesaid position of law, learned Counsel submits that the learned Trial Court committed no error in returning the suit to the Appellant to file before Competent Court, hence the appeal be dismissed. On the strength of aforesaid position of law, learned Counsel submits that the learned Trial Court committed no error in returning the suit to the Appellant to file before Competent Court, hence the appeal be dismissed. Section 20 of Code of Code of Civil Procedure reads as under: Section 20. Other suits to be instituted where Defendants reside or cause of action arises.- Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction- (a) the Defendant, or each of the Defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or (b) any of the Defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the Defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or (c) the cause of action, wholly or in part, arises. Explanation: A corporation shall be deemed to carry on business at its sole or 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. The alleged agreement is Exh. D-2. Article 14 of the agreement (Exh. D-2) reads as under: This Agreement shall be subject to the Jurisdiction of Courts at Bombay. 6. In the mater of Hakam Singh (supra), in Clause 13 of the Agreement, which was binding between the parties it was agreed that the Courts in Bombay alone had jurisdiction to advert upon the contract. In the matter of Angile (supra), the agreement between the parties was to the effect that the work order issued subject to the jurisdiction of High Court situate at Bangalore in the State of Karnataka. Therefore , fall within the jurisdiction of above Court only. In the matter of New Moga Transport Co. (supra), the clause relating to the jurisdiction was to the effect that the Court at head office city shall only have the jurisdiction in respect of all claims and matters arising under the consignment at the goods entrusted for transport. Therefore , fall within the jurisdiction of above Court only. In the matter of New Moga Transport Co. (supra), the clause relating to the jurisdiction was to the effect that the Court at head office city shall only have the jurisdiction in respect of all claims and matters arising under the consignment at the goods entrusted for transport. In the matter of Hanil Era Textiles Ltd. (supra), wherein the Hon'ble Apex Court had a occasion to consider the import of word "alone", "only", "exclusive" in ouster clause. It was further held by the Hon'ble Apex Court that when ouster clause is clear, unambiguous and specific, accepted notions of contract would bind parties and unless absence of ad idem can be shown Courts should avoid exercising jurisdiction. In all the cases cited by the learned Counsel for Respondent the judgment is passed by a Division Bench of Hon'ble Apex Court, while in the matter of MA. Patel Roadways Ltd. (supra), cited by the Counsel for Appellant, the judgment has been passed by a Bench consisting of three Hon'ble Judges of the Supreme Court. It also appears that this judgment was not placed before the Hon'ble Supreme Court in the subsequent judgment submitted by the Counsel for Respondent except in the matter of New Moga Transport Co. (supra). Normally, under Clauses (a) to (c) of Section 20 the Plaintiff has a choice of forum and cannot be compelled to go to the place of residence or business of the Defendant and can file a suit at a place where the cause of action arises. If the Defendant desires to be protected from being dragged into a litigation at some place merely because the cause of action arises there it can save itself from such a situation by an exclusion clause. If the Defendant desires to be protected from being dragged into a litigation at some place merely because the cause of action arises there it can save itself from such a situation by an exclusion clause. In the matter of Patel Roadways (supra), wherein contract entered into between the parties was the jurisdiction to decide any dispute between them would be only with the Courts at Bombay and Defendant was having its principal office at Bombay and branch office at other place, the Hon'ble Apex Court has observed that the words "at such place" occurring at the end of the Explanation and the word "or" referred to above which is disjunctive clearly suggest that if the case falls within the latter part of the Explanation, it is not the Court within whose jurisdiction the principal office of the Defendant is situate but the Court within whose jurisdiction it has a subordinate office which alone shall have jurisdiction "in respect of any cause of action arising at any place where it has also a subordinate office". Hon'ble Apex Court has also considered the intention of Legislature and observed that, "we would also like to add that the interpretation sought to be placed by the Appellant on the provision in question renders the explanation totally redundant. If the intention of the Legislature was, as is said on their behalf, that a suit against a corporation could be instituted either at the place of its sole or principal office (where or not the corporation carries on business at that place) or at any other place where the cause of action arises, the provisions of Clauses (a), (b) and (c) together with the first part of the Explanation would have completely achieved the purpose. Indeed the effect would have been wider. The suit could have been instituted at the place of the principal office because of the situation of such office (whether or not any actual business was carried on there). Alternatively, a suit could have been instituted at the place where the cause of action arose under Clause (c) (irrespective of whether the corporation had a subordinate office in such place or not). This was, therefore, not the purpose of the Explanation. The Explanation is really an explanation to Clause (a). Alternatively, a suit could have been instituted at the place where the cause of action arose under Clause (c) (irrespective of whether the corporation had a subordinate office in such place or not). This was, therefore, not the purpose of the Explanation. The Explanation is really an explanation to Clause (a). It is in the nature of a clarification on the scope of Clause (a), viz., as to where the corporation can be said to carry on business. This, it is clarified, will be the place where the principle office is situated (whether or not any business actually is carried on there) or the place where a business is carried on giving rise to a cause of action (even though the principal office of the Corporation is not located there) so long as there is a subordinate office of the Corporation situated at such place. The linking together of the place where the cause of action arises with the place where a subordinate office is located clearly shows that the intention of the Legislature was that, in the case of a Corporation, for the purposes of Clauses (a), the location of the subordinate office, within the local limits of which a cause of action arises, is to be the relevant place for the filing of a suit and not the principal place of business. If the intention was that the location of the sole or principal office as well as the location of the subordinate office (within the limits of which a cause of action arises) are to be deemed to be placed where the corporation is deemed to be carrying on business, the disjunctive "or" will not be there. Instead, the second part of the Explanation would have read "and", in respect of any cause of action arising at any place where it has a subordinate office, also at such place". Law laid down by the Hon'ble Apex Court in the matter of Patel Roadways (supra), has been followed by the Hon'ble Apex Court in the matter of New Moga Transport (supra). 7. Law laid down by the Hon'ble Apex Court in the matter of Patel Roadways (supra), has been followed by the Hon'ble Apex Court in the matter of New Moga Transport (supra). 7. Since there was no ouster clause in the agreement such as words "alone", "only", "exclusive" is used and as per the plaint allegations the transaction has taken place between the parties at Indore, therefore, this Court is of the view that learned Trial Court committed error in returning the suit to the Appellant to file before Competent Court at Mumbai. In view of this appeal filed by the Appellant is allowed and impugned order passed by the Trial Court is set aside and the matter is remanded to the learned Trial Court with a direction to proceed with the case and decide the suit on merits. Parties are directed to remain present before the learned Trial Court on 15-11-2010. No order as to costs.