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Cites 4 docs
Hakam Singh vs M/S. Gammon (India) Ltd on 8 January, 1971
Rajasthan State Electricity ... vs M/S. Universal Petro Chemicals ... on 12 January, 2009
A.B.C. Laminart Pvt. Ltd. & Anr vs A.P. Agencies, Salem on 13 March, 1989
Section 28 in The Indian Contract Act, 1872
Citedby 1 docs
M/S Victoria Motors Pvt. Ltd. vs M/S Rai Automotive Systems on 6 August, 2014

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Delhi High Court
M/S. Polyblends (India) (Pvt.) ... vs M/S. Videocon Industries Ltd. on 13 July, 2010
Author: S.Ravindra Bhat
*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                                                           Date of decision: 13.07.2010

+                      I.A. Nos. 5985/2005 and 11606/2007 in CS(OS) 1228/2005


       M/S. POLYBLENDS (INDIA) (PVT.) LTD.                                             ..... Plaintiff

                                Through : Sh. H.C. Sukhija and Sh. Sudhir Sukhija, Advocates.

                       versus

       M/S. VIDEOCON INDUSTRIES LTD.                   CA+                             ..... Defendant

                                Through : Sh. Rajneesh Sharma, Advocate.

       CORAM:
       MR. JUSTICE S. RAVINDRA BHAT

1.     Whether the Reporters of local papers                   Yes.
       may be allowed to see the judgment?

2.     To be referred to Reporter or not?                      Yes.

3.     Whether the judgment should be                          Yes.
       reported in the Digest?

MR. JUSTICE S.RAVINDRA BHAT, J. (OPEN COURT)

I.A. Nos. 5985/2005 (for summons for judgment) & 11606/2007 [Under Order 37 Rule 3(5)]

%
1.     The plaintiff has applied for summons for judgment in its summary suit; the defendant

has, within the time specified, filed I.A. No. 11606/2006, seeking leave to contest the

proceedings. The defendant urges, as a preliminary question, that this Court does not have

territorial jurisdiction to entertain and try the present proceedings.

2.     The facts briefly are that the plaintiff claims a sum of Rs. 62,13,190/- towards the

supplies made to the defendant, of polyblends. It is contended that according to the arrangement

between the parties initially, the mode of payment agreed upon was that the defendant used to

issue irrevocable Letters of Credit in favor of the plaintiff. The goods used to be dispatched by

I.A. Nos. 5985/2005 & 11606/2007                                                                  Page 1
 the defendant against acceptance of commercial hundies which were accepted on the concerned

due dates. The plaintiff also urges that according to the terms and conditions mutually agreed

between the parties, the defendant was enjoying 30 days' time period for payment without

interest and that in the event of default, 24% interest was payable. It is further urged that the

defendant sometimes used to furnish Demand Draft for the materials. The suit urges that during

2004-05, the defendant started obtaining supply of plaintiff's materials against invoices. The

details of such invoices have been mentioned in para 11 of the suit. The plaintiff alleges that as

against three invoices dated 30.09.2004, 05.10.2004 and 17.10.2004, through which supplies

were made, the defendant returned the goods for which the credit was given to them. The

plaintiff also claims that necessary C-Forms were sought for to the extent of Rs.49,16,421.59/-.

3.     The plaintiff urges in para 14 of the suit that the defendant had been issuing declarations

in Form-C under various Sales Tax enactments for supplies obtained by them during 2004-05, to

the extent of Rs. 60,43,165.23/-. It is alleged that the defendant did not further issue C-Forms.

The plaintiff claims that the outstanding debit balance in its books of accounts is to the extent of

Rs. 49,16,421.59/- as the true amount. The suit also adverts to issuance of legal notice dated

02.04.2005 and claims in addition to the said amount, interest working-out to Rs. 12,96,768/-.

Thus the plaintiff claims a sum of Rs. 62,13,189.59/- as money decree in this summary

proceeding.

4.     The defendant has, in its leave to defend application urged that the Court does not possess

territorial jurisdiction to entertain and try the suit. On the merits, it is urged that the goods

supplied by the plaintiff were not of acceptable standard and quality according to the terms

agreed upon. The defendant relies upon certain letters said to have been written to the plaintiff

contemporaneously and at the relevant time.



I.A. Nos. 5985/2005 & 11606/2007                                                             Page 2
 5.     The plaintiff has produced copies of Purchase Orders placed by the defendant, as well as

the bills dispatched to it on or after the time the goods were dispatched. It is urged by the

defendant that according to Clauses 10 and 21 of the Purchase Order which initiated the

agreement or arrangement between the parties and was accepted by the plaintiff categorically

points to the information that only Aurangabad Courts would have jurisdiction. Clauses 10 and

21 of the Purchase Order in question which are not disputed by the plaintiff and which have been

produced on the record read as follows:




6.     It is urged that in view of the judgments of the Supreme Court reported as Hakam Singh

V. Gammon (India) Ltd. 1971 (1) SCC 286; A.B.C. Laminart (P) Ltd. v. A.P. Agencies 1989 (2)

SCC 163 and Rajasthan State Electricity Board v. Universal Petrol Chemicals Limited (2009) 3

SCC 107 and a joint reading of clauses 10 and 21 operate as an ouster condition clothing the

Aurangabad Court with exclusive jurisdiction to entertain and try the disputes of the present kind

to the exclusion of all other Court which might otherwise possess jurisdiction. The defendant

does not deny that this Court possesses jurisdiction under Section 20 of the CPC since a part of

the cause of action did arise here.

7.     The plaintiff in response to the defendant's argument contends that there is no agreement

I.A. Nos. 5985/2005 & 11606/2007                                                           Page 3
 to oust the jurisdiction of this Court or any other Court which would otherwise possess

competence to entertain and try such suits. The plaintiff submits that as part of the procedure for

supply of goods, the defendant used to issue Purchase Orders which were accepted by it (the

plaintiff); thereafter the goods would be dispatched to the transporter and at the same point of

time or immediately thereafter, the bill for the goods supplied would be issued to the defendant.

The plaintiff relies upon a condition in the invoice which is to the following effect:


       "By Clause 13 of the agreement it was expressly stipulated between the parties
       that the contract shall be deemed to have been entered into by the parties
       concerned in the city of Bombay. In any event the respondents have their

principal office in Bombay and they were liable in respect of a cause of action arising under the terms of the tender to be sued in the Courts of Bombay. 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 on 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."

8. The plaintiff highlights the above clause or condition in the invoice to submit that there was no material at the relevant time in the agreement to oust the jurisdiction of such of the Courts who had the competence to adjudicate them. It is urged that the three decisions of the Supreme Court relied upon, have application to the facts of this case because there was no plea of lack of agreement put up in this case.

9. In Hakam Singh v. Gammon (India) Ltd. 1971 (1) SCC 286, the Supreme Court held as follows:

I.A. Nos. 5985/2005 & 11606/2007                                                             Page 4
        "XXXXXX                       XXXXXX                        XXXXXX

13. Notwithstanding the place where the work under this contract is to be executed, it is mutually understood and agreed by and between the parties hereto that this contract shall be deemed to have been entered into by the parties concerned in the city of Bombay and the court of law in the city of Bombay alone shall have jurisdiction to adjudicate thereon.

XXXXXX XXXXXX XXXXXX"

10. In A.B.C. Laminart (P) Ltd. v. A.P. Agencies 1989 (2) SCC 163, the Supreme Court held as follows:

"XXXXXX XXXXXX XXXXXX

21. From the foregoing decisions it can be reasonably deduced that where such an ouster clause occurs, it is pertinent to see whether there is ouster of jurisdiction of other courts. When 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 exclusion 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 other from its operation may in such cases be inferred. It has therefore to be properly construed.

XXXXXX XXXXXX XXXXXX"

11. The above holdings were endorsed in the latest judgment Rajasthan State Electricity Board v. Universal Petrol Chemicals Limited (2009) 3 SCC 107 (supra). In the present case, the defendant seeks to persuade the Court to deduce an ouster clause by contending that a joint reading of clauses 10 and 21 leads to the conclusion that this Court does not have jurisdiction. The above extract in Hakam Singh v. Gammon (India) Ltd. clarifies that it is open to the parties to adopt a device to deem one of the places which might otherwise possess jurisdiction as the place where the contract was entered into. In the present case, the Purchase Order which initiated I.A. Nos. 5985/2005 & 11606/2007 Page 5 the contract-making process and was accepted by the defendant, leading to the dispatch of the goods is almost similar, if not entirely identical, to the one the Supreme Court had to deal with in Hakam Singh (supra). The condition deems that the contract was formalized in Aurangabad. As far as the plaintiff's reliance upon the conditions spelt-out in the invoices is concerned, it is a matter of record - not disputed and as previously recorded by this Court's order that the practice followed by the parties was that the defendant would issue a Purchase Order upon the plaintiff and the latter would then supply the goods thereafter or simultaneously issue receipt. The offer was accepted by the plaintiff through supply of goods itself. The plaintiff has not contended to any material indicating that the defendant's condition for placing the Purchase Order was specifically disagreed vis-à-vis the jurisdiction of the Aurangabad Court.

12. The plaintiff had, during the course of hearing, urged that the defendant is not a resident of Aurangabad, as its registered office is at Village Chitegaon, Aurangabad, Taluqa Paithan, District Aurangabad (Maharashtra) and that in the circumstances, the Court at Aurangabad would not have jurisdiction at all. It is urged that the defendant's contention that the civil claims beyond Rs. 1 lakhs cannot be entertained or tried by the Civil Judge (Junior Division) would not lead to the inference that the Court at Aurangabad would possess jurisdiction.

13. This argument, in the opinion of the Court, is not tenable. The defendant asserts that its registered office is at 14 K.M. Stone, Paithan Road, Village Chitegaon, Aurangabad, Taluqa Paithan, District Aurangabad, Maharashtra. Having regard to this fact, the Court is of the opinion that the plaintiff's objection as to the Aurangabad Court's jurisdiction cannot be accepted. In view of the above conclusions, it is held that this Court does not have territorial jurisdiction to entertain and try the suit. I.A. Nos.5985/2005 (for summons for judgment) & 11606/2007 [Under Order 37 Rule 3(5)] are accordingly disposed of.

I.A. Nos. 5985/2005 & 11606/2007                                                              Page 6
 CS (OS) 1228/2005

In view of the orders made today in I.A. Nos. 5985/2005 and 11606/2007, it is held that this Court does not have jurisdiction as far as the present suit is concerned. The plaint and the documents file and the applications are accordingly directed to be returned to the respective parties. The parties are directed to be present before the Principal Civil Court at Aurangabad on 16.08.2010, for further proceedings/trial before the appropriate Court. The suit and all pending applications are disposed of in the above terms. In the circumstances, there shall be no order as to costs.

Order dasti.


                                                                         S. RAVINDRA BHAT
                                                                                   (JUDGE)

        JULY 13, 2010
        'ajk'




I.A. Nos. 5985/2005 & 11606/2007                                                          Page 7