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CASE NO.:

Appeal (civil) 2490 of 2004

PETITIONER:

M/s Hanil Era Textiles Ltd.

RESPONDENT:

M/s Puromatic Filters (P) Ltd.

DATE OF JUDGMENT: 16/04/2004

BENCH:

S. Rajendra Babu & G.P. Mathur

JUDGMENT:

JUDGMENT

(Arising out of Special Leave Petition (Civil) No.5552 of 2002)

G.P. MATHUR,J.

1. Leave granted.

2. This appeal is directed against the judgment and order dated

21.12.2001 of the High Court of Delhi by which the appeal preferred by the

appellant against the order of rejection of the appellant's application under

Order VII Rule 10 CPC passed by the Additional District Judge, Delhi on

28.3.1998 was dismissed.

3. The appellant Hanil Era Textiles Limited, New Era House, Mogul

Lane, Matunga (West), Bombay placed a purchase order bearing

No.CA/32/95 dated 31.5.1995 with M/s Puromatic Filters Pvt. Ltd. 25/100,

Yashwant Nagar, Goregaon (W), Bombay for supply of 136 numbers Coarse

Filters and 136 numbers Fine Filters. The purchase order was in following

terms :

"Dear Sir,

We are pleased to order the Material parts listed below

subject to terms, conditions and instructions, on the reverse hereof

and the attachments, if any hereto. Please acknowledge your

acceptance by returning the duplicate copy duly signed within one

week."

Thirty per cent of the amount was paid as advance. The delivery

instructions contained a clause \026 Deliver the material at NEW ERA

HOUSE/Patalganga Factory. The purchase order mentioned that the same

was subject to the terms and conditions mentioned thereon. Condition

No.17 reads as under :

"17. JURISDICTION

Any legal proceeding arising out of the order shall be

subject to the jurisdiction of the Courts in Mumbai."

According to the respondent, it dispatched the ordered materials to the

appellant through M/s Transport Corporation of India but the price thereof

was not paid. The respondent M/s Puromatic Filters Pvt. Ltd., 12,

D.S.I.D.C. Scheme-II, Okhla Industrial Area, Phase-II, New Delhi,

accordingly filed Suit No.162 of 1997 in the Court of District Judge, Delhi,

for recovery of Rs.3,93,344.80 and pendente lite and future interest at the

rate of 24 per cent per annum from the date of filing of the suit till the date

of realization of the decretal amount. The dispute in the present appeal is

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regarding the territorial jurisdiction of the Court at Delhi to try the suit and

para 8 of the plaint which contains the necessary averment in this regard is

reproduced hereinbelow :

"8. That the cause of action has arisen at Delhi as the ordered

goods were delivered to the defendant through their transporters

M/s Transport Corpn. of India Ltd., the value of goods was to

be paid by the defendant to the plaintiff at Delhi and as such

this Hon'ble Court is having jurisdiction to try and adjudicate

upon the matter in dispute."

4. The appellant (defendant in the suit) moved an application under

Section 20 read with Order VII Rule 10 and Section 151 CPC before the trial

Court praying that the plaint in Suit No.162 of 1997 be returned for

presentation before the Court having territorial jurisdiction in which the suit

should have been instituted. The main plea taken in the application was that

as per Clause 17 of the Local Purchase Order No.CA/32/95 dated 31.5.1995

any legal proceedings arising out of the order shall be subject to the

jurisdiction of the Courts in Bombay and the plaintiff having accepted the

terms and conditions of said Local Purchase Order, it was bound by the said

clause. It was also pleaded that notwithstanding the aforesaid clause 17 of

the purchase order, the contract for supply of coarse filters and fine filters

was entered into between the parties at Bombay and the advance payment of

Rs.1,16,353.44 was made by the defendant to the plaintiff at Bombay. The

respondent (plaintiff) filed a reply on the ground, inter alia, that the

defendant had issued a certificate for removal of excisable goods (Form CT-

3) bearing No.CCEX/KphII/HETL/95/116 dated 13.1.1996 vide which the

defendant sought permission to remove the ordered goods from the factory

premises of the plaintiff at Delhi and as such the Court at Delhi had

territorial jurisdiction to try the suit. The plaintiff also denied that it had

accepted the terms and conditions printed on the back of the purchase order

or is bound by clause 17. It was also submitted that the goods in question

were delivered to the agent of the defendant at Delhi from the factory

premises of the plaintiff at Delhi under certificate in Form CT-3.

5. The learned Additional District Judge, Delhi, held that in absence of

the written statement having been filed by the defendant, he had to decide

the controversy on the basis of the allegations made in the plaint and

especially when the plaintiff had asserted that the goods were delivered to

the defendant at Delhi on the basis of Form CT-3, the Court at Delhi had

territorial jurisdiction to try the suit. The appeal preferred by the appellant

against the said order was dismissed by the High Court on 21.12.2001.

6. There is no dispute that the appellant placed the order for supply of

136 coarse filters and 136 fine filters with the respondent (plaintiff) vide

Purchase Order No.CA/32/95 at Bombay on 31.5.1995 and that an advance

payment of Rs.1,16,353.44 was also made at Bombay. According to the

averments made in the plaint, the appellant (defendant) sent Form CT-3 and

thereafter the plaintiff dispatched the goods from their factory in Delhi

through M/s Transport Corporation of India, as per the directions of the

defendant. Original documents were sent to the branch office of the plaintiff

at 25/100, Yashwant Nagar, Goregaon (W), Bombay but the defendant did

not retire the documents from the branch office of the plaintiff and illegally

and unauthorisedly took the delivery of the goods from Transport

Corporation of India. These averments show that the offer to purchase the

goods was made by the defendant at Bombay and the same was accepted by

the plaintiff's branch office at Bombay. The advance payment was also

made by the defendant at Bombay. Thus, a part of cause of action accrued

at Bombay. According to the plaintiff, the goods were dispatched from

Delhi through M/s Transport Corporation of India Ltd. after receipt of Form

CT-3, which was sent by the defendant. In this manner, the plaintiff claims

that a part of cause of action accrued in Delhi.

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7. The effect of Clause 17 of the Purchase Order which mentions \026 any

legal proceedings arising out of the order shall be subject to the jurisdiction

of the Courts in Mumbai, has to be examined in the aforesaid background.

Under sub-sections (a) and (b) of Section 20, the place of residence of the

defendant or where he carries on business or works for gain is determinative

of the local limits of jurisdiction of the Court in which the suit is to be

instituted. Sub-section (c) of Section 20 provides that the suit shall be

instituted in a Court within the local limits of whose jurisdiction the cause of

action, wholly or in part, accrues. As shown above, in the present case, a

part of cause of action had accrued in both the places, viz., Delhi and

Bombay. In Hakam Singh v. Gammon (India) Ltd. 1971 (1) SCC 286, it

was held that it is not open to the parties 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 a 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. It was also held that such an agreement does not

contravene Section 28 of the Contract Act.

8. The same question was examined in considerable detail in A.B.C.

Laminart Pvt. Ltd. v. A.P. Agencies AIR 1989 SC 1239 (headnote D) and it

was held as under :

"When the Court has to decide the question of

jurisdiction pursuant to an ouster clause it is necessary to

construe the ousting expression or clause properly. Often

the stipulation is that the contract shall be deemed to have

been made at a particular place. This would provide the

connecting factor for jurisdiction to the Courts of that

place in the matter of any dispute on or arising out of that

contract. It would not, however, ipso facto take away

jurisdiction of other Courts. Where 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 'expressio

unius est exclusio alterius'\026 expression of one is the

exclusion of another \026 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."

This view has been reiterated in Angile Insulations v. Davy Ashmore

India Ltd. 1995 (4) SCC 153.

9. Clause 17 says - any legal proceedings arising out of the order shall be

subject to the jurisdiction of the Courts in Mumbai. The clause is no doubt

not qualified by the words like "alone", "only" or "exclusively".

Therefore, what is to be seen is whether in the facts and circumstances of the

present case, it can be inferred that the jurisdiction of all other Courts except

Courts in Mumbai is excluded. Having regard to the fact that the order was

placed by the defendant at Bombay, the said order was accepted by the

branch office of the plaintiff at Bombay, the advance payment was made by

the defendant at Bombay, and as per the plaintiffs' case the final payment

was to be made at Bombay, there was a clear intention to confine the

jurisdiction of the Courts in Bombay to the exclusion of all other Courts.

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The Court of Additional District Judge, Delhi had, therefore, no territorial

jurisdiction to try the suit.

10. In the result, the appeal succeeds and is hereby allowed. The order

dated 28.3.1997 of the Additional District Judge, Delhi as affirmed by the

order dated 21.12.2001 by the Delhi High Court is set aside. The plaint

filed by the respondent herein is ordered to be returned for presentation

before the competent Court at Bombay. No costs.