GILL RICE AND GENERAL MILLS vs SAGGU AGRICULTURAL INDUSTRIES

THIS case is concluded against the complainant on the preliminary question of territorial jurisdiction by the decision of the Supreme Court in Barreilly Development Authority and Anr. v. Ajaipal Singh & Ors., (1989) 2 SCC 116. It, therefore, suffices to notice the facts relevant only to this issue and in their barest outline. The complainant M/s. Gill Rice and General Mills on their own showing had applied to the opposite-party-2 (The National Small Industries Corporation Ltd., Ludhiana) on 9.8.1991 for obtaining Rice Shelling Plant under Hire Purchase Scheme and that application was accepted by the opposite-party-2 on 9.7.1992. The opposite-party-2 placed order for the supply of the said machinery with opposite-party-1 (M/s. Saggu Agricultural Industries, Moga) on 27.7.1991 and also sent an agreement bond to be completed by the complainant on 7.8.1992. The opposite-party-1 despatched the above said machinery on 20.8.1992 and issued the bill in favour of opposite-party-2 on the same day. It is alleged that opposite-party-1 assured to stand guarantee for the machinery against any manufacturing defect or defects arising out of bad workmanship or faulty materials for two years from the date of supply. According to the complainant, the opposite-party-1 did not supply the machinery as per specification and therefore, the same was not working properly. Its case is that opposite-party-2 was repeatedly requested to ask opposite-party-1 to supply them the new plant but the opposite-parties did not pay any heed to their protestation. Grievance of the complainant is that opposite-party-1 had deliberately neglected to replace/repair the plant and thus caused huge financial losses to them. The complainant claimed that a direction be issued to the opposite-parties to replace Par Boiled Plant and Drier and further to pay damages of Rs. 12 lacs with interest @ 18% p.a. from the date of the collapse of the machinery.

ON notices being issued, the opposite-party-2 took a firm preliminary objection that this Commission had no jurisdiction to try this complaint and on merits controverted the allegations of the complainant. It was pleaded that Clauses 2(i), 2(ii)(b) and (c) of the agreement dated 10.9.1992 (Annex.C-14) executed by the complainant with opposite-party-2 made the following provision : - "2. The Hirer hereby covenants with the owner as follows : - (i) Before execution of these presents, the Hirer has thoroughly satisfied himself about the quality, specification, suitability, fitness etc. of the above property selected by him and shall not at any time thereafter make any complaint to the owner in that behalf. xx xx xx (ii) (b) Shall not claim from the owner any compensation for repair of the property nor claim any damage or loss which he may have to suffer whether directly or indirectly on account of damage of the property. (c) Shall continue to pay installment of hire rent here-in reserved terms of these presents notwithstanding any damage to the property; or the property being out of order owing to any case or circumstance, what-so-ever."

The opposite-party-1 while controvert the allegations of the complainant, raised a preliminary objection that the machinery was supplied to the complainant according to the specification as supplied by the opposite party-2 and the bill was cleared by the latter after its full satisfaction and that the complainant had no private of contract with the opposite-party 1.

Mr. Bahadur Singh, the learned Counsel for opposiit-party-2 has strenuously pressed the preliminary objection. In his argument based on principle and precedent, it is contended that the alleged machinery having been purchased through opposite-party-2, the parties themselves elected Delhi jurisdiction to the exclusion of all others. In support of this assertion, the learned Counsel has referred us to Clause 9 of the Memorandum of Agreement (Annex.C-14) where it is unequivocally stated as under : - "In the event of any dispute or difference arising between the parties relating to the construction, meaning and fact or performance or any other matter under these presents, the Court at Delhi alone shall have exclusive jurisdiction."

IT is contended that the complainant is bound by all the terms of the agreement (Annex.C-14) especially since the complainant has relied upon the said document. Mr. Bahadur Singh has placed reliance on Barreilly Development and Anr''s case (supra). IT is submitted that the said case pertained to an application for a dwelling unit advertised by the Barrenly Development Authority on the basis of the terms and conditions contained in the brochure therefore. IT was held therein that the applicants were bound by the terms and conditions of the contract and could not wriggle out of the same. Mr. Bahadur Singh has also contended that the complainant was well aware of clause 9 of the agreement and in law the territorial jurisdiction may be confined to one place out of the two or more having concurrent jurisdiction. IT is also pointed out that the financing scheme of opposite-party-2 being open to the applicants all over the country, it was well-nigh impossible for the Industrial Corporation to defend litigation farflung places within the whole country and it was entitled to limit the jurisdiction to Delhi which undoubtedly had the primary and in any case the concurrent jurisdiction for all disputes arising in the context. Mr. A.S. Virk, the learned Counsel for the complainant on the other hand has submitted that this Commission has the jurisdiction to entertain and try the complaint. This is just a bald submission of the learned Counsel and it has not been supported by any principle or precedent. There is merit in the impeccable submis-sion of Mr. Bahadur Singh. It is not disputed that the memorandum of agreement entered into by the complainant and opposite-party-2 is the very sheet-anchor of his case. It has been clearly displayed in the agreement that all the disputes shall be subject to Delhi jurisdiction and Mr. A.S. Virk could hardly controvert this factual and legal position. Once that is so, the ratio of the case aforesaid is attracted to cover the present case on all fours. An identical question was raised in Shimla Development Authority, Kasumpati Shimla-9 v. Shri Yash Pal Dass and Anil Mittal of Ambala Cant. 1992 CPC 344 and it was held that Section 11 of the Consumer Protection Act, 1986 permits the restriction of the territorial jurisdiction to one out of the two or more District Forums having concurrent jurisdiction for the trial of the consumer dispute by an express agreement of the parties.

FOLLOWING the aforesaid decision, it has to be held that the complainant would be bound by the terms and conditions of the agreement (Annex.C-14) to which admittedly they are a party. Consequently, it is held that the Forums in Delhi alone would have territorial jurisdiction in the present complaint and the complainant, if so advised can resort only to the same. The preliminary objection raised by the opposite-party-2 is therefore, upheld and the complaint is disposed of in the terms aforesaid. Complaint disposed of.