C. Rudra vs France Indian Pharmaceuticals Ltd.

Satyabrata Sinha, J.—This appeal is directed against the judgment and order dated May 12, 1999, whereby and where under the learned trial Judge directed the return of plaint in terms of Order 7 Rule 10 of the Code of Civil Procedure. The basic fact of matter is not in dispute. The Petitioner was appointed as a trainee Medical Representative by the Respondent on or about September 20, 1968, in relation whereto the parties entered into an agreement, the relevant clauses whereof are:

a) After confirmation, your services may be terminated at any time without assigning any reason by giving you a month''s notice in writing. You shall give one month''s notice in writing to the Management in case you desire to leave our service. In default of such notice from you, one month''s salary shall be forfeited or you may liable to be sued for damages.

b) In case of any dispute arising from this appointment only the Court of Bombay will have jurisdiction.

The services of the Appellant were confirmed on May 16, 1969. The letter of confirmation contained the following clause:

You will be governed by the existing rules of employment and such of the rules that may be in operation from time to time and in particular Clause Nos. 9, 12, 13, and 14 of your appointment letter.

The Appellant thereafter was promoted as Area Manager with head quarters at Guwahati by an order dated May 18, 1974, wherein, inter alia, it was stated:

The territory to be worked by you will be Assam, Tripura, Manipur and the adjacent areas with Headquarters at Gauhati. However you will liable to be transferred from one territory to another any time during your service. Your salary will be Rs. 6507-(Rupees Six hundred fifty only) per month. In addition to this salary, you will be allowed conveyance expenses incurred by you at the rate of Rs. 13/- per working day while at Headquarters whenever you are on tour outside Headquarters you will be paid Rs. 28/- per day to cover all expenses.

All other terms and conditions of your service remains the same as per our appointment and confirmation letter issued to you your duties and responsibilities are as per enclosed position Description.

He was thereafter promoted as Regional Manager for Western Region with headquarters at Bombay by an order dated June 8, 1984 the said letter of promotion inter alia, contained the following clause:

Your services may be terminated any time without assigning any reason by giving you two months notice in writing. You shall give two months notice in writing to the Management in case you desire to leave our service. In default of such notice from you, two months salary shall be forfeited or you may be liable to be sued for damages.

All other terms and conditions of your service will remain unaltered.

On or about September 20, 1984, his promotion was cancelled by the Company and he was asked to continue to work in the capacity as Area Manager at Calcutta on the same terms and conditions of his employment with the Company as Area Manager With headquarters at Gauhati. The relevant clauses of the said letter are:

Your services may be terminated at any time without assigning any reason by giving any reason by giving you two months notice in writing. You shall give two months notice in writing to the Management in case you desire to leave our service. In default of such notice from you, two months salary shall be forfeited or you may be liable to be used for damages.

All other terms and conditions of your service will remain unaltered.

Again he was promoted as Regional Manager with headquarters at Patna and except salary, allowances and conveyance expenses, all other terms and conditions of his service allegedly remained unaltered.

His services, however, were terminated upon giving two months salary in lieu of notice by a letter dated October 11, 1994. The said letter was addressed at Calcutta as he was posted at Calcutta at that point of time, the contents whereof, inter alia, are:

We regret to inform you that as per the terms of your appointment, your services are hereby terminated with effect from the close of working hours today i.e. 11th October, 1994.

We are required to give you two months notice for terminating your services. However, in lieu of notice, we shall pay you two months salary.

Please hand over Company''s property that you are having in your possession to our C and F Agent, Mr. S.K. Ghosh, Calcutta. Please also submit your pending reports and statement of Expenses upto date. On receipt of the above, we shall arrange to settle your account.

Questioning the said order the Appellant filed a suit being Title Suit No. 859/95, in the City Civil Court at Calcutta on March 18, 1995, against the Company for declaration and permanent injunction. In the said suit the Appellant also filed an application for temporary injunction. However, by an order dated April 30, 1996, the said suit was dismissed, on the ground that a suit for Specific Performance of contract of service was not maintainable, presumbly, in view of Section 14(1)(b) of the Specific Relief Act 1963 but an opportunity was granted to the Petitioner to file a suit for damages. The Appellant thereafter filed Money Suit No. 13 of 1996, on or about July 25, 1996, in the Court of learned Assistant District Judge at Alipur against the Respondent herein, inter alia, for a decree for a sum of Rs. 96,296.40 paise being the arrears of outstainding dues as also for a decree for a decree for sum of Rs. 44,16,407.00 being compensation by way of damages for wrongful dismissal from service.

On January 2, 1997, the Respondent filed a written statement wherein, inter alia, it was averred:

a) With reference to paragraphs 7 and 8 of the plaint, the Defendant denies and disputes all the statements and/or allegations made therein, and states that the Plaintiff was handed over a letter of dismissal from service on October 11, 1994, and the same, on being refused to be accepted by the Plaintiff, was sent to the Plaintiff on Octover 11, 1994, by Registered A/D Post;

b) With reference to paragraph 11 of the Plaint, the Defendant denies that the desire or dismissal was offered to the Plaintiff at the head office of the Company at Bombay, after prolonged discussions and investigations on the August 18, 20, 22, 27, 1994, when the Plaintiff was present. The said notice of dismissal was offered to the Plaintiff on October 11, 1994, in the presence of witnesses, but the Plaintiff refused to accept the same and left the office. Hence, the said notice was sent by Registered Post to his residential address where it was duly accepted by the Plaintiff. There is no question of the Plaintiff visiting the office on October 26, 1994, and the Defendant asking him not to resume his duties on that day, as the Plaintiff had been already intimated about his removal from service much earlier, i.e. on October 11, 1994;

c) With reference to paragraph 20 of the Plaint, the Defendant states and submits that this Learned Court has no jurisdiction to here, entertain and decide the instant suit. The Registered Office of the Defendant Company is situated at Mumbai, the order of removal of the Plaintiff was also tendered to the Plaintiff at Mumbai, and, moreover, the employment of the Plaintiff was being governed and administred from the office of the Defendant Company at Mumbai. All transactions and correspondence between the Plaintiff and the Defendant have been carried out at Mumbai. The order of dismissal has also been passed and issued there, and moreover, the contract between the Plaintiff and the Defendant has also been performed and executed at Mumbai. As per the terms of employment between the Plaintiff and the Defendant, only the Courts in Bombay were to have jurisdiction in case of any dispute arising out of his employment and no other Court;

The Defendant states and submits that this Learned Court had no jurisdiction to decide the instant suit, and the same, being bad for want of jurisdiction deserves to be dismissed with costs of the preliminary stage itself.

One of the issues which was formed was ''Has this Court territorial jurisdiction to try the suit?'' Both the parties, however, appear to have proceeded on merit of the matter and they filed applications for discovery for documents. On May 29, 1997, July 11, 1997, July 25, 1997, August 13, 1997, the Plaintiff was examined-in Chief and cross-examined in-part. On January 12, 1998, the Respondent filed on application for grant of leave to amend the written statement. For the first time it was disclosed when the services of Plaintiff had been determined because of his lack of efficiency and/or on the ground of other acts of omissions and commissions.

The cross-examination of the Appellant continued on February 11, 1998, April 2, 1998, May 5, 1998, June 18, 1998, June 25, 1998, July 23, 1998, September 2, 1998, October 30, 1998, November 19, 1998, January 7, 1999, only on February 22, 1999, the Respondent company filed an application, inter alia, for decision on the question of territorial jurisdiction of the Court as preliminary issue, inter alia, alleging:

The Defendants have prayed for trial of the said issue with regard to the territorial jurisdiction as preliminary issues. The Plaintiff did not turn up to oppose to same. However, I find that the trial of the said issue with regard to the territorial jurisdiction of this Court is required to be heard at first and as such I am inclined to fix a date of hearing the said issue with regard to the territorial jurisdiction of this Court for hearing. Therefore, I am inclined to fix a date for hearing of the said issue with regard to the territorial jurisdiction of this Court.

On behalf of the Defendant-Respondent one witness was examined on March 9, 1999. On April 20, 1999, however, the learned trial Judge heard both parties on issue No. 2 where after the impugned order dated May 12, 1999, has been passed.

The learned Counsel appearing on behalf of the Appellant inter alia, submitted that the impugned order of termination is ex-facie bad in law. In support of the said contention, relience has been placed on MP. Mathai v. Federal Bank Limited 1982 F.J.R. 495.

According to the learned Counsel, the learned Trial Judge erred in so far as he failed to take into consideration in its proper perspective the effect of the word ''This appointment only''. The said words, contends the learned Counsel, must be held to confine the matter relating to exclusion of jurisdiction clause only to the said letter of appointment and not in respect of the subsequent appointment. It was submitted that in the earlier suit filed by the Plaintiff, no objection as regard territorial jurisdiction of Courts at Calcutta had been taken. According to the learned Counsel having regard to the decisions of this Court in Atin Bose v. Heavy Engineering Corporation Limited 1983 Cal. 376 and Naresh Chandra Das v. Gopal Chandra Das 1991 Cal. 237, it would appear that the question could not have been decided as a preliminary issue.

Supporting the impugned order Mr. P.K. Das the learned senior Counsel appearing of behalf of the Respondent with Mr. P.P. Banerjee, on the other hand, submits that having regard to the decision of the Apex Court, in A.B.C. Laminart Pvt. Ltd. and Another Vs. A.P. Agencies, Salem, there cannot be any doubt whatsoever, that Bombay Court alone had jurisdiction to try the suit. Reliance has also been placed on Pritpal Singhal Vs. State of Delhi, and Joginder Tuli Vs. S.L. Bhatia and Another,

The learned Counsel contends that in view of the provision of Order 7 Rule 10 of the CPC the term as regard lack of territorial jurisdiction can be determined at any stage of the suit and in support of the said contention strong reliance has been placed in Prabhakar Bhat v. Vishwambhar Panditm S.L.R. 8 Bom. 313, Randgaru Lal and Ors. v. Uday Narayan and Ors. AIR 1957 Pat. 324, Brijmohanlal Rathi v. Amin Chand Pyarelal 1976 (1) C.L.J. 586, Trustees for Improvement of Calcutta v. Bahadur Khan and Ors. 1984 Cal. 412 and Lala Dhanpat Rai Vs. Sri Prem Sunder Bhargava and Others

This Court at this stage is not concerned with the merit of the suit. The only question which would arise for consideration is as to whether the learned trial Judge was correct in passing the impugned order. There cannot be any doubt whetsoever, that where two or more Courts have jurisdiction to try a suit, it is permissible for the parties to enter into an agreement to exclude the jurisdiction of one and confer jurisdiction, solely on the other Court. In A.B.C. Laminant Private Limited v. A.P. Agency (Supra) has been held:

The jurisdiction of the Court in matter of a contract will depend on the situs of the contract and the cause of action arsing through connecting factors.

As regard, the construction of such ouster clause, which has been held to be not against public policy, the law is stated in following terms:

When the clause is clear unambiguous and specific accepted notions of contract would being the parties and unless the absence of adidern 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 ''expressiounius 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 others from its operation may in such cases be inferred. It has therefore to be properly construed.

What would be the import of the word ''only'' after the word Appointment, appears to have led the parties to some confusion.

Clause 12 of the agreement may lead to two different interpretations or constructions i.e.

(A) that the said clause applies to the ''said appointment only'', and (B) only the Bombay High Court will have the jurisdiction in relation to the said appointment''. The said clause therefore is vague being capable of two interpretations. The word only was significant having regard to the decision of the Apex Court in A.B.C. Liminant (Supra) but one cannot while construing the said provision forget that by reason of the said clause the jurisdiction of this Court was excluded. Such exclusionary clause requires strict interpretation keeping in view the decision of the Apex Court in A.B.C. Laminant (Supra). The exclusion clauses as is well known should be construed keeping in view the statute as also the attending circumstances With that end in view the conduct of the parties having regard to the subsequent event may also be taken note of, viz, whereas in the letter of confirmation they had expressly referred to Clause 12, they did not do so while issuing the subsequent letters of promotion which amounted to fresh appointment.

When the Appellant''s services were confirmed, some of the conditions laid down in the initial offer of appointment dated September 20, 1968, including Clause 12 of the agreement were incorporated by reference.

But as noticed hereinbefore, the said clause was not incorporated by reference when the Appellant was first promoted as Area Manager by an order dated May 18, 1974, and Regional Manager by an order dated June 8, 1974, and again on December 6, 1984.

Was the exclusion clause as contained in Clause 12 of the agreement a condition of service? The answer to the question must be rendered in negative. A contract of services is concluded when the offer of the employer is accepted by the employee. Conditions of service may very from time to time. In fact the conditions of service of the Plaintiff is this case have been varied when the Appellant was promoted to higher posts. Incorporation by reference as is well known has a limited role to play. Incorporation by reference normally should not be read into a later contract, which is an independent one, unless such a conclusion is inevitable, particularly, in relation to an exclusion clause having regard to the underlying principles of Sections 20 and 21 of the Code of Civil Procedure. The Court in a case of this nature must proceed on the basis that when a part of cause of action has arisen within a jurisdiction of a particular Court, the exclusion clause may not be given effect to unless the intention of the parties is absolutely clear, unequivocal and unambiguous.

It is one thing to say that the Courts have no jurisdiction as for example where the lis does not pertain to a civil dispute within a meaning of Section 9 of the CPC or where the jurisdiction of the Civil Court is expressly or by necessary implication barred by reason of any statute, but it is another thing to say that although the Civil Court has jurisdiction to try the suit, it does not have the territorial jurisdiction therefor. As regard the later one, the Courts have categorically laid down the law to the effect that unless and until such a question is raised at the first instance, the same would not be allowed to be urged at a later stage unless it is held that there has been a consequent failure of justice. The underlying principles of Section 21, in a case of this nature, may have to be imported also in Section 20. The fact that the Defendants-Respondents have an office within the jurisdiction of the trial Court is not in: dispute. The Courts at Calcutta had the territorial jurisdiction to try the suit as a part of cause of action had arisen within its jurisdiction, not only because the letter of termination had been received at Calcutta but also as the Defendant-Respondent has an office at Calcutta and the Plaintiff was also posted at Calcutta.

In State of Punjab and Ors. v. Amar Singh Harika AIR 1966 1313, the Apex Court has held:

If the appointing authority passed an order of dismissal, but does not communicate it to the officer concerned, the oretically it is possible that unlike in the case of a judicial order pronounced in Court, the authority may change its mind and decide to modify its order. It may be that in some cases, the authority may feel that the ends of justice would be met by demoting. the officer concerned rather than dismissing him. An order of dismissal passed by the appropriate authority and kept with itself, cannot be said to take effect unless the officer concerned knows about the said order and it is otherwise communicated to all the parties concerned. If it is held that the mere passing of the order of dismissal has the effect of terminating the services of the officer concerned, various complications may arise.

it is, therefore, clear beyond any shadow of doubt that the parties had arrived at a concluded contract if the parties have arrived at a concluded contract the question of revocation thereof and/or communication of such.revocation to the Petitioner at its Calcutta Address would undoubtedly constitute cause of action within the meaning of Code of Civil Procedure.

In Mussummat Chand. Kour v. Pratap Singh 15 IA 156, it was field:

.... the cause of action has no relation whatever to the defence which may be set up by the Defendant, nor does it depend upon the character of the relief prayed for by the Plaintiff. It refers entirely to the ground set forth in the plaint as the cause of action, or, in order words, to the media upon which the Plaintiff asks the Court to arrive at a conclusion in his favour.

The Supreme Court in Oil and Natural Gas Commission Vs. Utpal Kumar Basu and Others, held that the question as to whether the Court has a territorial jurisdiction to entertain a writ petition, must be arrived at on the basis of averments made in the petition, the truth or otherwise whereof being immaterial.

However, it goes without, saying that statements made in the plaint alone may not serve the purpose.

The Supreme Court in Oil and Natural Gas Commission''s (Supra) case held that all necessary facts must from an integral part of the cause of action. It observed:

So also the mere fact that it sent fax messages from Calcutta and received a reply thereto at Calcutta would not constitute an integral part of the cause of action. Besides the fax massage of 15-1-1993, cannot be construed as conveying rejection of the officer as that fact occurred on 27-1-1993.

In the instant case, a concluded contract was arrived at. Admittedly the offer of services of the Petitioner were terminated and the said decision was conveyed to the Petitioner at Calcutta, as a result whereof he suffered civil consequences.

In Union of India (UOI) and Others Vs. Hindustan Aluminium Corporation Limited and Another, it was stated in the writ petition that the aluminium control order which was although issued at Delhi, the same having affected the business of Hindal Co. at Calcutta; a part of. action arose in Calcutta.

However, the Hindustan Aluminium Corporation''s (Supra) case, has also been distinguished in Everest Coal Co. Pvt. Ltd. Vs. Coal Controller and Others, in the following terms:

For the purpose of accrual of action for filing a writ petition, it is also necessary to make a distinction between actual or apprehended injury in the writ Petitioner and indirect effect or remote consequences on him. Obviously, for giving rise to cause of action for maintaining the writ peptition what is material is whether or not within the territorial limits of the said High Court, there has been proximate or direct effect upon the Petitioner. Indirect or remote result of the impugned acts of the respondnets must be pleaded for establishing that cause of action, either whole or in part has arisen within the territotial limits of a particular High Court.

The suit was, thus, maintainable within the local limits of Civil Courts at Calcutta both under Sections 20(b) and 20(c) of Code of Civil Procedure. Apart from the fact that the ouster clause with regard to the jurisdiction of one Court does not constitute a condition of service and, thus, Clause 12 of the agreement aforementioned is not attracted in the instant case, Having regard to the fact situation obtaining in the present case, we are of the opinion that the Defendant-Respondent must be held to have waived its right. As noticed hereinbefore it did not raise any objection when the suit was filed by the Appellant in the City Civil Court. It was contested on merit, inter alia, on the ground that such a suit was. not maintainable in view of the provisions of Section 14(1)(b) of the Specific Relief Act, 1963.

In Sri Biswa Ranjan Banerjee v. Union of India 2000(1) S.L.R. 791 a Division Bench of this Court observed:

In Graphite India Ltd. and Anr. v. Durgapur Projects Ltd. and Ors., reported in 1999 (7) SCG 645, the Apex Court has held that even a mandatory provision which is in the interest of the party can be waived by the party itself but if it is in public interest it cannot be waived. There is no element of public interest involved in this case.

New India Assurance Co. Ltd. Vs. Rula and Others, it has been held that even a statutory right of the insurer u/s 64-V.B. of the Insurance Act may be waived.

Although a plea with regard to lack of territorial jurisdiction had been taken in the written statement, the parties adduced their evidences on merit of the matter and an application for determining the said issue as a preliminary issue had been filed only after the Plaintiff was examined and cross-examined on various dates.

Even after the filing of the said application, the Plaintiff had been cross-examined on several dates.

Even the Defendant/Respondent examined its own witness and thereafter filed an application for determining the said issue as a preliminary issue.

The jurisdiction of the Court in terms of Order 7 Rule 10 of the CPC may be exercised at any stage of the suit, but that does not mean that such jurisdiction shall be. exercised despite the fact that the Defendant had waived his right.

It is not a case where the learned Trial Judge had no jurisdiction at all; but in the instant case although a part of cause of action had arisen within the jurisdiction and the learned trial Judge Clause 12 of the agreement was sought to be invoked. Clause 12, according to the agreement had no application in the instant case and in any event lost its effecasy when the Plaintiff-Appellant was promoted not once but twice. Promotion as is well known amounts to a fresh appointment. Even while granting promotion, the conditions of service were laid down afresh. Promotion is a fresh appointment and, thus, in the letter of Promotion subject to variance of the terms and conditions of service, it has been stated that other terms and conditions of service shall remain the same and, thus, Clause 12 of the agreement dated September 28, 1968 having not been specifically mentioned in the letters of appointment dated June 8, 1984 and December 6, 1984, the ouster of the jurisdiction clause cannot be said to be applicable in the instant case.

In view of our findings aforementioned, it is not necessary to advert to various decisions relied on by the learned Counsel for the parties. However, we may place on record our dissatisfaction as regard the manner in which the learned trial Judge had considered the entire matter. It is not a case where the question of jurisdiction was required to be decided only upon taking oral evidence. The Question of jurisdiction could be determind at the thresold. In the instant case the question which arese for consideration before the learned trial Judge could have been determined on the averments made in the plaint vis-a-vis Clause 12 of the agreement. The facts in relation to be said issue are admitted The only question which was required to be determind was as to whether on the face of the said admitted fact, the Court had jurisdiction or not, thus, such a question was not necessary to be decided only upon adduction of evidence. In any event, it was a fit case where the doctrine of forum/convenient should have been taken recourse to. It was not a case where the Court loses its jurisdiction in view of the amendment made in the plaint at a subsequent stage as was the case in Joginder Tuli v. S.L. Bhatia and Anr. (Supra).

For the reasons aforementioned the impugned order cannot be sustained which is set aside accordingly. The Appeal is allowed. The learned Trial Judge is hereby directed to dispose of the suit on merits. In the facts and circumstances of this case, the Respondent shall also bear the costs of this Appeal. Counsel''s fee is assessed at 100 G. Ms. (S.B. Sinha., J.)

Hrishikesh Benerji, J.

I agree.

Appeal allowed.