M/s United Vanaspati Limited Chandigarh and another vs M/s Shri Vardhman Solvex Private Limited, Gohana Road, Panipat

D.V. Sehgal, J.—The plaintiff-respondent filed a suit against the defendant-petitioners which is pending in the Court of the learned Sub Judge 1st Class, Panipat. It is based on the purchase orders which, inter-alia, contained a condition to the following effect:-

The contract shall be deemed to have been entered into at Chandigarh and all proceedings, if any, shall be filed and litigated in the Civil Courts at Chandigarh and nowhere else.

In their written statement the petitioners, on the strength of the above condition in the purchase orders, raised a preliminary objection that the civil Courts at Panipat did not have the jurisdiction to try the suit. On its basis, issue No. 3 was framed to the following effect:-

Whether this Court has no jurisdiction to try the present suit? OPD.

The petitioners bled an application praying that the above issue should be tried as a preliminary issue as it was mainly an issue of law and relates to the jurisdiction of the Court. This application has, however, been dismissed by the learned trial Court vide order dated 9-5-1988. Aggrieved against the same, the petitioners have approached this Court through the present revision petition.

I have heard the learned counsel for the parties. I am of the considered view that the learned trial Court has erred in the exercise of its jurisdiction in not treating issue No. 3 regarding its territorial jurisdiction to entertain the suit as preliminary issue. On a perusal of the record, I find that copies of the purchase orders are already on the record. The petitioner No. 1 had its head office at Chandigarh and it has been impleaded as defendant No. 1 with its address of Chandigarh. Section 20 of the CPC (for short ''the Code''), inter-alia, lays down that a suit can be instituted in a Court within the local limits of whose jurisdiction the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carried on business, or personally works for gain. Explanation thereto lays down that a corporation shall be deemed to carry on business at its sole or principal office in India, or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place. The learned counsel for the petitioners strongly relied on Hakam Sing Vs. Gammon (India) Ltd., , to contend that it was open to the parties by agreement to confer exclusive territorial jurisdiction on a Court which under the Code has the jurisdiction to entertain the suit. It is not necessary for me at this stage to enter into the merits for adjudication of the above issue. It shall be for the trial Court to do so.

It is to be noted that u/s 21 of the Code no objection as to the place of suing is allowed by any Appellate or Revisional Court unless such objection was taken in the Court of first instance at the earliest possible opportunity and in all cases where issue are settled at or before such settlement, and unless there has been a consequent failure of justice. In case issue No. 3 is decided along with the other issues and resultant decree is passed by the trial Court and the petitioners are aggrieved against the same, they shall not be entitled to take an objection in the Appellate Court as to the territorial jurisdiction of the trial Court unless it shows that there has been a consequent failure of justice. Order XIV, rule 2 of the Code, inter-alia, lays down that where issues both of law and fact arise in the same suit and the Court is of the opinion that the case or any part thereof may be disposed of on an issue of law only it may try that issue first if that issue relates to the jurisdiction of the Court, or a bar to the suit created by any law for the time being in force. Issue No. 3 mentioned above relates to the jurisdiction of the Court. It is an issue of law. No doubt certain facts like the conditions contained in the purchase orders have to be adverted to for deciding this issue of law. Issue No. 3 however, does not cease to be an issue of law only, within the meaning of rule 2 ibid when reference to the above fact is to be made by the trial Court.

Consequently, I allow this revision petition, set aside the order dated 9-5-1988 passed by the learned trial Court and direct it to try issue No. 3 as a preliminary issue and decide the same in accordance with law. There shall, however, be no order as to costs.

The parties through their counsel are directed to appear before the learned Trial Court on 11-10-1988 when further proceedings in accordance with law shall be taken.