G.D. Mehta vs Ashok Honda and Another

Rajiv Sahai Endlaw, J.—The issue No. 6 of the issues framed on 24.3.2008 is as under:

Whether this Court has no territorial jurisdiction to entertain the suit? OPD

and was ordered to be treated as preliminary issue. The counsels for the plaintiff, defendant No. 1 & defendant No. 2 have been heard.

The plaintiff has instituted a suit for recovery of money on the basis of an agreement dated 18.1.2003 modified/amended vide letters dated 18.1.2003 & 24.1.2003 between the plaintiff and the defendant No. 1 for distribution of a movie produced by the defendant No. 1, by the plaintiff as distributor. It is the case of the plaintiff that as per the said agreement, upon the plaintiff being unable to recover within six months from the date of the release of the movie, the advance amount of Rupees twenty five lacs paid to the defendant No. 1 as producer, the defendant No. 1 had agreed to refund the said sum of Rupees twenty five lacs to the plaintiff and had undertaken not to telecast the movie on satellite channel/Doordarshan before paying the plaintiff the unrecouped amount of Rupees twenty five lacs paid by the plaintiff to the defendant No. 1. It is the case of the plaintiff that the plaintiff has become entitled to recover the entire sum of Rupees twenty five lacs with interest from the defendant No. 1. The plaintiff further alleges that the defendant No. 1 without paying the said monies to the plaintiff had permitted the defendant No. 2 to telecast the movie. The plaintiff claims to have learnt of the same from the public notice inserted by the Defendant No. 2 in a trade magazine. The plaintiff claims that without refund of the sum of Rupees twenty five lacs with interest to the plaintiff, the defendant No. 1 itself or through the defendant No. 2 is not entitled to telecast the movie. The plaintiff claims that the defendant No. 2 has stepped into the shoes of the defendant No. 1 and is liable to pay the amount to the plaintiff and is bound by the agreement of the defendant No. 1 with the plaintiff.

The suit as originally filed, besides against the defendants No. 1 & 2 aforesaid was also instituted against "MAX Satellite Channel, Division of M/s. Set India Pvt. Ltd.", impleaded as the defendant No. 3. The plaint described the defendant No. 3 as a premium satellite channel, which is a division of the defendant No. 2.

The plaintiff in the plaint invoked the territorial jurisdiction of this Court stating "that this Hon''ble Court has territorial jurisdiction to entertain and try this matter as the Agreement was executed for Delhi, the distribution rights were acquired for Delhi etc., the movie has been announced to be shown on the satellite channel in Delhi, the money payable to the plaintiff was to be paid at Delhi, and the defendant No. 3 which is a division of defendant No. 2 has an office at Delhi and thus works for gain within the jurisdiction of this Hon''ble Court."

It is worth mentioning that the plaintiff alongwith the plaint had filed an application for interim relief and vide exparte order dated 14.5.2004, it was ordered that in case the defendant No. 3 proceeds to telecast the movie, payment for telecasting the film shall not be made to any of the other defendants till next date. The order sheet does not disclose the aforesaid exparte order to have been continued confirmed or modified or vacated thereafter. The plaintiff however alongwith IA. No. 4003/2003 filed a letter dated 21.5.2004 of the defendant No. 2 to the plaintiff informing the plaintiff that the defendant No. 2 had paid the entire consideration for the movie to the person from whom the defendant No. 2 had acquired rights therein.

The defendant No. 2 in its affidavit dated 26.8.2004 filed before the court stated that there was no entity as described as the defendant No. 3 in the plaint. It was further stated in the affidavit that MAX is the name of the television channel which is broadcast in various countries including in India and is owned by a broadcaster based in Singapore. It was further stated that the defendant No. 2 was in no way connected with broadcast of the television channel MAX or any other television channel and the defendant No. 2 was in the business of acquiring telecast rights for various audio visual programmes such as feature films, events etc. It is also worth mentioning that the defendant No. 3 was ordered to be proceeded exparte on 27.3.2006. However, subsequently vide order dated 24.5.2007, the name of the defendant No. 3 was ordered to be struck off from the array of the defendants. This fact has been mentioned because the plaintiff has in the plaint given the addresses of the defendants No. 1 & 2 of Mumbai only and though the address given of defendant No. 3 was also of Mumbai, but a Delhi address of defendant No. 3 was also given and in para 3 of the plaint also, it was emphasized that the defendant No. 3 had an office in New Delhi.

Both the defendants No. 1 & 2 in their respective written statements took the plea that the agreement between the plaintiff and the defendant No. 1 on the basis whereof the suit was filed, in Clause 23 thereof provided as under:

It is agreed between the parties hereto that any dispute and or differences under this agreement shall be referred to the respective association of the Producer and the Distributor for Arbitration or otherwise in the appropriate courts in Mumbai shall have the jurisdiction to entertain and try any suit or matter in dispute between us relating to this agreement.

It was pleaded that the plaintiff having agreed to the jurisdiction of the court at Mumbai, the suit filed in this Court ought to be dismissed. It was further pleaded that the agreement between the plaintiff and the defendant No. 1 had been executed in Mumbai and the public notice in the trade magazine had been issued by the defendant No. 2 and has been published in Mumbai and the telecast of the film had been done from Singapore and thus no part of cause of action arose within the territorial jurisdiction of this Court. It was further pleaded that the offices of the defendants No. 1 & 2 were in Mumbai. It was denied that the money was payable to the plaintiff at Delhi or that the defendant No. 3 was a division of the defendant No. 2.

The plaintiff in its replication to both the written statements, did not deny that the agreements were executed at Mumbai. It was however pleaded that the Public notice was for all India including Delhi and it was averred that the movie was beamed in Delhi and thus, the cause of action had accrued at Delhi. It was thus denied that no part of cause of action had arisen at Delhi. However, the agreement for jurisdiction of courts at Mumbai was not disputed.

The preliminary issue as to territorial jurisdiction has to be decided in the aforesaid state of pleadings and documents.

The counsel for the plaintiff has not disputed the agreement between the plaintiff and the defendant No. 1 providing for the jurisdiction of the courts in Mumbai for entertaining or trying any suit or dispute between the plaintiff and defendant No. 1 relating to the agreement. It was put to the counsels for the defendants whether, in the absence the words like "alone", "only", "exclusive" in the jurisdiction clause, the requirement of ouster of jurisdiction of any other court could be inferred. The counsels for the defendants have in this regard relied upon Hanil Era Textiles Ltd. Vs. Puromatic Filters (P) Ltd., where the Apex Court relying upon the earlier judgment in A.B.C. Laminart Pvt. Ltd. and Another Vs. A.P. Agencies, Salem, and M/s. Angile Insulations Vs. M/s. Davy Ashmore India Ltd. and another, , held that it is necessary to construe the ousting expression or clause properly. The courts are to see whether there is ouster of jurisdiction of other courts. Where the clause is clear, unambiguous, specific accepted notions of contract would bind the parties and unless absence of ad-idem can be shown, the other courts should avoid exercising jurisdiction. It was further held that even without the words like "alone", "only" or "exclusive" in the ouster clause, the principle that expression of one is the exclusion of another may be applied. It was further held that when certain jurisdiction is specified in a contract, an intention to exclude all others from this operation may be inferred.

In the present case, there is no dispute that the courts at Mumbai have jurisdiction (the plaintiff admits the agreement to have been executed there). The agreement is between the producer of a movie and a distributor of a movie who are regularly engaged in similar transactions. The plaintiff even though resident of Delhi, went to Mumbai to execute the agreement and also agreed to make the payments to the defendant No. 1 by cheque/demand draft on a bank in Mumbai (per Clause 13 of the agreement) and also as aforesaid consciously agreed not only to the arbitration of association of producer and distributor, but also to the jurisdiction of courts at Mumbai to entertain and try any suit or matter in between himself and the defendant No. 1. The defendant No. 1 admittedly was at Mumbai only and there is no averment that the defendant No. 1 has any office or presence at Delhi. The dispute subject matter of suit squarely relates to the agreements between the plaintiff and defendant No. 1, the reliefs claimed of recovery of money and of restraining defendants from telecasting the movie are based on the rights of plaintiff under the agreement. The agreement in the present case is not a standard form of contract and no inequality in the bargaining position has been alleged. The plaintiff and the defendant No. 1 being professionals in a specific trade and being men of commerce, having consciously agreed to provide for the jurisdiction of the courts at Mumbai and the defendant No. 1 also having taken care to insist for payment by a cheque/demand draft on a bank at Mumbai, in my view, there is a clear unambiguous and specific contract by which the parties ought to be held to be bound and I find that the parties had agreed to exclude the jurisdiction of all other courts except Mumbai and had clearly shown intention to confine the jurisdiction of the courts to Mumbai to the exclusion of all other courts, even if the courts at Delhi have jurisdiction, as claimed by the plaintiff.

As noted above, the suit as framed was sought to be brought within the territorial jurisdiction of this Court for the reason of the defendant No. 3, which was stated to be a division of the defendant No. 2, having an office at Delhi. However, with the deletion of the defendant No. 3 as aforesaid and which order has attained finality, the said basis for invoking the territorial jurisdiction of this Court has also disappeared.

The plaintiff himself has as aforesaid pleaded that the defendant No. 2 is an assignee of the defendant No. 1 and has stepped into the shoes of the defendant No. 1 and is bound by the agreement of the defendant No. 1 and the plaintiff. The plaintiff has sought to recover monies from the defendant No. 2 also on the said premise. If that is to be so, even if the plaintiff was entitled to invoke the territorial jurisdiction of this Court against the defendant No. 2 for the reasons alleged, the principles aforesaid would apply and the plaintiff having agreed to the jurisdiction of the court at Mumbai, would not be entitled to invoke the jurisdiction of this Court against the defendant No. 2 also, even if entitled to.

I, therefore, hold that this Court has no territorial jurisdiction to entertain the suit and decide the issue No. 6 in favour of the defendants and against the plaintiff.

The outcome of the decision of the issue No. 6 is that the plaint is liable to be returned to the plaintiff Under Order 7 Rule 10 of CPC for presentation in the court of appropriate jurisdiction, if so deemed fit by the plaintiff. The plaint is accordingly ordered to be returned to the plaintiff.