Director Nssl Private Limited vs Sushil Kumar Sharma

This petition under Article 227 of the Constitution of India has been filed against the order dated 22/02/2019 passed in Civil Suit No. 1B/18 by the

7th Additional District Judge, Durg whereby the application filed by the petitioner under Order 7 Rule 11 of the CPC has been rejected on the ground

that as the transaction took place at Bhilai, the Court at Durg had the jurisdiction to try the suit.

The facts leading to the adjudication of the present petition, in brief, are that the petitioner - company issued three purchase orders in favour of the

respondent/plaintiff for supply of PATTERNS AND CORE BOX T/W, SWCH BODY, SWCH DISC, SWCH COVER, SWCH HINGE etc. and

pursuant thereto, the respondent supplied certain material to the petitioner. However, as the material supplied by the respondent was not as per the

specifications and that it was not supplied within the stipulated time as agreed upon, the same were rejected by the petitioner-company. The

respondent - company thus filed a Civil Suit bearing registration No. 1B/18 for recovery of Rs. 10,14,900/- in the Court of 7th Additional District

Judge, Durg. Subsequently, the petitioner raised an objection by way of filing an application under Order VII Rule 11 of the CPC with the averment

that looking to the terms and conditions of the purchase order, the suit is not maintainable in the Court at Durg. The said application has however been

rejected by the Court below vide order impugned herein. Hence, this petition.

Counsel for the petitioner submits that the purchase order issued by the petitioner which was accepted by the respondent contains a specific clause

that in case of any dispute, the same shall be subject to the jurisdiction of the court at Nagpur (Maharashtra) and being so the Court at Durg will be

denuded of the jurisdiction to try a case relating to the dispute, if any. He further submits that it is a settled legal position that in case two or more

courts are competent to try any suit with respect to the territorial jurisdiction, it is the only court as has been chosen by way of agreement will have the

jurisdiction to try the suit. Reliance has been placed on the decisions of Apex Court in the matters of S. Manuel Raj & Co. v. J. Manilal & Co., AIR

1963 GUJ 148, Hakam Sinvh v. M/s Gammon reported in (1971) 1 SCC 286, Swastik Gases Pvt. Ltd. v. Indian Oil Corporation, reported in (2013) 9

SCC 32, Wollaque Ventilation & Conditioning Pvt. Ltd. v. Sterling Tools Ltd, 2011 SCC Online Del 893, (2011) 177 DLT 731, A.B.C. Laminart v.

A.P. Agencies, (1989) 2 SCC 163, Rajasthan State Electricity Board v. Universal Petrol, (2009) 2 SCC 107, Hanil Era Textiles v. Puromatic Filters,

(2004) 4 SCC 671, Groupe Chimique Tunisien v. Southern Petrochemicals Industrices, (2006) 5 SCC 275 and Zuberi Engineering v. M/s MP Tar

(WPC No. 312/2016, decided on 17/05/2017).

On the other hand, counsel for the respondent supports the impugned order and submits that there was no specific document or agreement signed

by the parties with respect to the issue of jurisdiction to approach the Court by way of civil suit and further that since all the dealings including

manufacturing etc. have been carried out at Bhilai, which comes within the territorial jurisdiction at Durg (Chhattisgarh), learned Court below was

justified in rejecting the application filed by the petitioner under Order VII Rule 11 of the CPC. He further submits that the petitioner/defendant had

accepted all the bills and finished materials sent by the respondent/plaintiff but had not made the payment thereof. The entire transaction of the

work/business was initiated and finalized at Bhilai, Durg. Even in challan bills it has clearly been mentioned in bold letters as “ Subject to Durg

Jurisdictionâ€. The petitioner/defendant had accepted the vehicle and challan bills along with finished material which was supplied by the plaintiff as

per the purchase order, but he has not released the payment pertaining thereto. According to the counsel for the respondent, the respondent/Plaintiff

contacted the petitioner/defendant through telephone, e-mails but when all that remained un-responded to, he sent a legal notice to the petitioner on

28/09/2017 but neither any reply was submitted by the petitioner nor the payment proceedings could be initiated. Thus, after waiting for a quite long

time, the respondent/plaintiff filed a money suit on 04/01/2018 for recovery of the amount due, which comes to Rs. 10,14,900/-. According to him, in

order to evade the payment due upon the petitioner, he deliberately and with mala fide intention filed an application under Order VII Rule 11 of the

CPC which has rightly been dismissed by the Court below. The argument advanced by learned counsel for the respondent in nutshell is that the

petition may be dismissed with exemplary cost being devoid of any substance.

Heard counsel for the parties and perused the document annexed with the petition minutely.

Having thus seen the material on record it becomes crystal clear that the purchase order stipulates that any dispute concerning the purchase order

shall be subject to the jurisdiction of the Court at Nagpur (Maharashtra) India only, and acting thereupon the transaction between the parties moved

ahead. Record however does not, in specific terms, spell out as to where the jurisdiction to raise the dispute was agreed upon by the parties. Never-

the-less, perusal of the judicial pronouncements referred to above in the preceding paragraphs in particular that of Hakam Singh v. Gammon reported

in (1971) 1 SCC 286 goes to show that when there is choice of forum, it is certainly open to the parties to agree on an exclusive forum for settlement

of disputes. In Hakam Singh (supra) it is further observed that such an agreement must be clearly spelled out either by express words or by necessary

implication, and ouster of jurisdiction of Courts cannot be lightly assumed or presumed. If it is merely a unilateral affirmation or statement made by one

of the parties, as long as it is not shown that the statement has been accepted by the other party as a term or condition of the agreement, it cannot be

held that there is an agreement to confer exclusive jurisdiction on any Court. Particular caution is necessary in regard to such a clause contained in a

printed form, as in this case. It is further observed by the Apex Court that where the printed form is signed by both the parties or where a form printed

by one party is signed by the other party and forwarded by the latter to the former and the printed form contains in clear words conferring exclusive

jurisdiction on a Court at any particular place or ousting jurisdiction of the Court at any other place, it may not be difficult to hold that the parties have

agreed on such a term. Even in such cases, it cannot always be said that everything which is printed may be deemed to form part of the contract. A

glance of the verdicts discussed here-in-above, by and large, suggests that the conditions stipulated in the purchase order have to be treated in its

entirety and read as a whole in letter and spirit. It can however be presumed that once the plaintiff relies upon the purchase condition by entering into

the transaction of materials referred to above for the purpose of instituting the suit, it is bound by the terms in respect of jurisdiction as well. When the

clause is clear, unambiguous and specific, accepted notions of the contract would bind the parties and unless the absence of ad idem is shown, the

other court should avoid exercising jurisdiction. Furthermore, sections 19 and 20 of the CPC clearly lay down that such a suit can be instituted in the

Court within whose jurisdiction the wrong was done or in the Court within whose jurisdiction the defendant resides or carries on business, or

personally works for gain.

While deciding almost an identical case, Delhi High Court in the matter of Wollaque Ventiliation (supra) has held as under:-

“ That no doubt, the copies of the bills raised by the appellants also contain a jurisdiction clause by stating “All disputes are subject to Delhi

Jurisdictionâ€. However, this condition is again subject to the acceptance of the purchase order. Therefore, once, the appellant agreed to supply the

goods in terms of the purchase order placed by the respondent which provides that jurisdiction in case of dispute would be that of the Faridabad

Courts only, mere mention of the term ' subject to Delhi Jurisdiction' in their invoices will not annul the terms and conditions contained in the purchase

order which is the basis of accepting the purchase order by the appellant.

In any even when both Delhi and Faridabad courts are competent, the appellant who agreed to supply the goods to the respondent after accepting

the terms and conditions of the purchase order which excludes the jurisdiction of Delhi Court, cannot have any grievance. Thus, the observation made

by the learned ADJ in having accepted the application moved by the respondent under Order VII Rule 10 CPC does not suffer from any infirmity.

The said order is, therefore, maintained.

In view of the aforesaid factual and legal discussion, keeping in mind the interest of justice, and with an object to avoid any undue hardship to either

of the parties, this Court is not inclined to dismiss the suit as prayed for in the present petition. It however appears to be just and proper and also in the

interest of justice if the plaint is returned to the plaintiff to be presented before the court having jurisdiction to try the suit as is provided under Order

VII Rule 10 and 10-A of the Code of Civil Procedure. Order accordingly.

With the aforesaid observations, writ petition is disposed of.