Masyc Projects Pvt. Ltd. vs Nilachal Iron and Power Ltd.

M.Y. Eqbal, J.—This application by the defendant-petitioner under Article 226 of the Constitution of India is directed against the order dated 9.08.2007 passed by subordinate judge Ist, Saraikela in Money Suit No. 5 of 2006 whereby he has rejected the application filed by the petitioner purported to be under Order 7 Rule 10 read with Section 151 C.P.C. for return of the plaint on the ground that the Court at Saraikela has no jurisdiction to entertain the suit.

The facts of the case lie in a narrow compass:

The plaintiff-respondent placed purchase order in the year 2003-04 before the petitioner for system design, detailed design, manufacture and supply of complete materials handling system etc. for Sponge Iron plant located at Kandra, Jamshedpur in the State of Jharkhand. An agreement to that effect was executed by and between the petitioner and the respondent wherein clause 15.0 stipulated about the jurisdiction of Kolkata Court in case any dispute arises between the parties. After supply was made the plaintiff filed the aforementioned suit for recovery of Rs. five lakhs from the defendant-petitioner. The petitioner-defendant appeared in the suit and filed application raising question of maintainability of the suit within the territorial jurisdiction of Saraikela Court. According to the petitioner no Court other than Kolkata Court, as per clause 15.0, has jurisdiction to try the suit.

The Subordinate Judge, after hearing the parties, rejected the application holding that Kolkata Court has got no territorial jurisdiction as per agreement between the parties and only two courts, namely, the court at Saraikela and court at New Delhi have jurisdiction to entertain the suit.

Mr. A. Allam, learned Counsel appearing on behalf of the petitioner cissailed the impugned order as being illegal and wholly without jurisdiction. Learned Counsel drawn my attention to clause 15.0 of the agreement and submitted that only the court at Kolkata has jurisdiction to entertain the suit. Learned Counsel, in this connection, relied upon the decisions of the Supreme Court in the cases of Shree Subhlaxmi Fabrics Pvt. Ltd. v. Chand Mal Baradia and Ors. A.I.R (2005) S.C.. 1807 Harshad Chiman Lal Modi v. D.L.F. Universal Ltd. and Anr. A.I.R (2005) SC 6533 New Moga Transport Company v. United India Insurance Company Ltd. and Ors. AIR (2004) SC 2379 and Rita Dutta and Anr. v. Subhendu Dutta AIR (2006) S.C. 188.

The proposition of law has been well settled by a series of decisions of the Supreme Court that where two Courts have jurisdiction under the CPC to try a suit or proceeding then by agreement if the parties give jurisdiction to one of the two courts to decide the suit, that is not against the public policy and it does not, in any way, contravene the provision of Section 28 of the Indian Contract Act. In other words, when two Courts have jurisdiction to entertain a suit, then the parties, with their consent, may limit the jurisdiction to one of the two courts.

In the light of the law settled by the Supreme Court, I will now examine the facts of the instant case. The plaintiff M/s Nilachal Iron and Power Limited is situated at Saraikela having its registered office at Kolkata and the defendant -company, M/s Masyc Projects Private Limited is situated at New Delhi having its registered office in New Delhi. The defendant-petitioner-company sent reply to the plaintiff-company at Saraikela and the entire materials were supplied by the defendant- company to the plaintiff-company at Saraikela. Evidently, therefore, two courts, one at New Delhi where the defendant-company situates and another at Saraikela where the materials were supplied pursuant to the agreement, have jurisdiction to try the suit under the provisions of C.P.C. Neither whole cause of action nor part of cause of action arose within the territorial jurisdiction of the court at Kolkata. Clause 15.0 of the agreement reads as under:

15.0 Jurisdiction

Any dispute pertaining to the transition against the Acceptance of your offer and execution of contract shall be subject to jurisdiction of Kolknta.

From bare reading of the aforesaid clause, it is manifestly clear that the court at Kolkata has not been conferred exclusive jurisdiction and it is also not clear that the Kolkata Court shall alone have jurisdiction to decide the suit. In that view of the matter, when under the C.P.C. Kolkota court has no jurisdiction inasmuch as no cause of action arose there, a party cannot be debarred from filing a suit within the territorial jurisdiction of the court where the entire cause of action arose.

The Court below, therefore, rightly held that when two courts, namely Delhi Court and Saraikela Court have jurisdiction to try the suit between the parties, it is open for them to choose any one of the two competent courts to decide their disputes

The impugned order, therefore, is perfectly in accordance with law and needs no interference. This application is, accordingly, dismissed.