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Judgment
The defendant is the appellant who is a common carrier. The appeal has arisen out of the judgment of the learned Single Judge in C.S.No.640
of 1993, dated 7.6.1999. One M/s Ameteep Machine Tools Private Limited entrusted to the defendant/appellant herein a consignment of TUX 63
ton Blanking Line Press in good condition at Faridabad for carriage by road from Faridabad to Madras, the consignment was insured by its owner
who the first plaintiff with the second plaintiff. Enroute, at Gramanapalli village near Hyderabad in Andhra Pradesh on 21.3.1990 the vehicle met
with accident, as a result of which the consignment was damaged. A surveyor appointed'' by the second plaintiff visited the spot on 30.3.1990 and
on 31.3.1990 and made a detailed examination of the consignment at the spot. He had submitted a report on 2.4.1990 with regard to his spot
findings. The damaged consignment was sent to first plaintiff''s destination. A second survey was conducted by the same surveyor along with the
foreign technicians of the manufacturer of the machines on 5.4.1990 at the first plaintiffs premises. The surveyor submitted interim report on
12.4.1990 and final report on 21.7.1990. The first plaintiff preferred claim with the second plaintiff for payment of Rs.10,48,096.40 as damages.
The second plaintiff indemnified the first plaintiff . Now both the plaintiffs have come forward with the claim against the defendant for recovery of
Rs.10,48,096.46 with interest at 21% p.a. According to the plaintiff, the cause of action arose at Madras where the defendant is carrying on
business and where the consignment was to be delivered.
The defendant filed written statement raising preliminary objection that this Court has no territorial jurisdiction to entertain the suit. According to
him, the goods were to be carried from Faridabad to Cholavaram village in Chengai Anna District, which is within the jurisdiction of the Sub-court
at Tiruvallur. The first plaintiff and the defendant have agreed that if any dispute arises, the same has to be resolved in the courts at Bombay only.
The defendant further contends that he had no office at Cholavaram and therefore this Court has no jurisdiction to entertain the suit.
The question of jurisdiction was taken up as a preliminary issue by the learned single Judge. After referring to various judgments and on
consideration of the facts, the learned Single Judge has held that though the consignment was to be delivered at the first plaintiff premises at
Cholavaram, which lies within the jurisdiction at Thiruvallur, the consignment was actually delivered to the first plaintiff at his office in Jhaver Plaza,
2nd floor, 1 A, Nungambakkam High Road, Madras-34, and thus part of cause of action had arose at Madras. Learned single Judge pointed out
that the defendant has not established that the subrogation agreement was entered into either at Bombay or at Cholavaram and accordingly held
that this court has jurisdiction to entertain the suit. Aggrieved by the order passed by the learned single Judge, the defendant/carrier has come
forward with the instant appeal.
The main contention of the appellant was that the first plaintiff has entered into an agreement with the defendant/appellant herein what is
popularly known as the Goods Consignment Note Agreement. In the Goods Consignment Note the appellant had agreed to vest jurisdiction with
the courts at Bombay and therefore the courts at Madras have no jurisdiction.
It would be useful to refer to some of the authorities in this regard.
In Prakash Roadlines P. Ltd.. v. United India Insurance Co., Ltd.& another, 1984 (II) ACC 141 it was held that where the goods were
entrusted to common carrier governed by the statute, the relationship between the consignor and the common carrier does not arise out of
contractual relationship stipulation in goods consignment note giving exclusive jurisdiction to one court, has no binding effect. Ruling u/s 20 of
C.P.C. giving exclusive jurisdiction to one court by contract between the parties is not applicable.
In another decision reported in the case of Globe transport Corporation v. Triveni Engineering Works and another, 1984 A.C.J. 465, wherein
the ""Apex Court held that the goods were entrusted by the consignor to the appellant for carriage at Baroda and under the consignment note
issued by the appellant, the goods were to be carried to Naini. It appears that the truck in which the goods were to be carried, met with an
accident as a result of which the goods were damaged. A suit was filed for damages by the consignor in the court of the Civil Judge, Allahabad,
which had jurisdiction over Naini, being a place where the goods were to be delivered and in fact were delivered by the first respondent. Clause
17 of the GCN provided that the Courts in Jaipur city shall have jurisdiction in respect of all claims and matters arising under the consignment or
the goods entrusted for transportation. It was contended by the carrier that the courts at Jaipur city alone had jurisdiction. In that case, their
Lordships of the Apex Court have held as under:
It is now settled law that it is not competent to the parties by agreement to invest a court with jurisdiction which it does not otherwise possess but if
there are more than one forums where a suit can be filed, it is open to the parties to select a particular forum and exclude the other forums in regard
to claims which one party may have against the other under a contract. Clause 17 of the contract of carriage could therefore, validly confer
exclusive jurisdiction on the Court in Jaipur City only if it could be shown that the court in Jaipur City would have jurisdiction to entertain the suit
filed by the respondents against the appellant. It is true and there we agree with the respondents that no part of the cause of action in the present
case arose in the City of Jaipur, and therefore, the jurisdiction of the court in Jaipur City could not be invoked on the ground that the cause of
action or a part thereof has arisen in Jaipur. But the jurisdiction of a court whether u/s 19 or section 20 of the C.P.C. can also be invoked on the
ground that the defendant resides or carries on business or personally works for gain within the jurisdiction of the court and here it could not be
disputed that the appellant does carry on business in the City of Jaipur and if that be so there can be no doubt that the Court in Jaipur City would
have jurisdiction to entertain the suit filed by the respondents against the appellant. In that event, clause 17 of the contract of carriage conferring
exclusive jurisdiction on the court in Jaipur city and excluding the jurisdiction of other courts would be valid and effective. Their Lordships have
held that the defendant carrier was carrying on business in the City of Jaipur and therefore by virtue of Section 20 of C.P.C. the Courts at Jaipur
had jurisdiction.
In another decision reported in the case of Patel Roadways P. Ltd., v. Republic Forge Co., Ltd., 1986 ACJ 390 the Andhra Pradesh High
Court held in a case where the goods were entrusted to a common carrier, (who happened to be the appellant herein) at Bangalore to be
transported to Hyderabad, but lost in transit and the suit for damages was filed by the consignee at Hyderabad and an objection was taken that
consignment note postulated that any dispute would be subject to the adjudication of courts at Bombay and the courts at Hyderabad had no
jurisdiction to entertain the suit. It was held that no part of the cause of action had arisen at Bombay and even if there is such an agreement,
jurisdiction cannot be conferred on the courts at Bombay.
In another decision reported in the case of M/s. Patel Roadways P. Ltd., Bombay-3 v. M/s. Tropical Agrosystems P. Ltd., Rep. By Power
Agent M/s. The Oriental Insurance Company Ltd.. and others, 1990 (II) MLJ 204, wherein the appellant herein was the petitioner) where the
consignor sent some pesticides packets from Madras to New Delhi and the consignment was found damaged on the way, in a suit for damages
filed before the City Civil Court, Madras, the carrier raised an objection that the agreement between the parties to confer jurisdiction upon a court
at Bombay has to be given effect to. It was held by V. Ratnam, J. (as his Lordship then was), in a case of tort, agreement between the parties
cannot confer jurisdiction in a court which had no jurisdiction. Learned Judge has observed as follows:
Reading the Explanation along with section 20(a) CPC a corporation shall be deemed to carry on business at its sole or principal office in India or
with reference to a cause of action arising at place, where it has subordinate office, it shall be deemed to carry on business at such a place.
Applying this interpretation, it follows that by reason of the application of the latter part of the explanation, the petitioner is deemed to carry on
business at Madras where the subordinate office of the petitioner is located and where the cause of action had also arisen by the entrustment of the
goods by the first respondent to the petitioner for carriage to Delhi. Thus, it is obvious that only the City Civil Court at Madras has jurisdiction to
entertain the suit and not any other court. The Court at Bombay where the head office of the petitioner is situate did not have any jurisdiction at all
u/s 20, CPC by an agreement between the parties, they cannot confer jurisdiction upon a Court at Bombay, for, it is well settled that it is not open
to the parties by agreement to invest a court with jurisdiction which it does not otherwise possess but that if there are more courts than one having
jurisdiction to entertain a suit u/s 20, C.P.C. it is open to the parties to agree to have a particular forum to the exclusion of other forum as regards
the claims which one person may have against the other.
In another case reported in Prakash Roadlines Pvt. Ltd. Vs. P. Muthuswamy Gounder and Co., under identical circumstances where the
goods were entrusted to a common carrier at Karur for being carried to Calcutta to be delivered to the consignee there, the goods having not been
delivered to the consignee, in a suit instituted before the Court at Karur, the carrier took an objection that his head office is at Bangalore, the GCN
agreement confers jurisdiction only where the head office is situate, it was held as under:
..that the court at Bangalore did not have any jurisdiction at all with reference to Section 20, C.P.C. and by mere agreement between the parties,
such jurisdiction cannot be conferred upon the Courts at Bangalore. It is indeed well settled that it is not open to the parties by agreement to invest
the Court with jurisdiction, which does not otherwise possess, but that if there are more courts than one having jurisdiction to entertain a suit under
S. 20, .C.P.C. it is open to the parties to agree to have a particular forum to the exclusion of the other forum as regards the claims which one party
may have against the other. In this case there has been an attempt to confer jurisdiction on the Court at Bangalore, which it did not otherwise have,
having regard to the provisions of Section 20 (a) and (c) read with Explanation.
In a recent decision reported in the case of Patel Roadways Ltd. v. Prasad Trading Company and others, 1992 (I) ACC 532 while
considering the territorial jurisdiction in a case in which the appellant is involved as common carrier, the question came up before the Apex Court
regarding the goods to be entrusted to the common carrier at Madras for transporting to Delhi. In that case a dealer in cardamom entrusted a
consignment of 850 kgs of cardamom to the carrier at its subordinate office at Bodinayakanur in Tamil Nadu to be delivered at Delhi. The goods
got destroyed and damaged in a fire accident at the godown of the carrier at Delhi. The consignor instituted a suit in a court of Subordinate Judge
of the Periyakulam within whose jurisdiction the goods were entrusted- for transport carrier. The common carrier raised an objection that by virtue
of the agreement between the parties, the court at Bombay only have jurisdiction to decide the dispute. Their Lordships of the Apex Court after
referring to the earlier decision reported in Globe transport Corporation v. Triveni Engineering Works and another, 1984 ACJ 465 pointed out
that the courts at Bombay did not at all have any jurisdiction and consequently the agreement between the parties conferring exclusive jurisdiction
and courts at Bombay have no avail. In fact. Their Lordships have culled out the provisions of Section 20 of C.P.C. which recites as under:
Section 20, C.P.C. Other suits to be instituted where defendants reside or cause of action arises,:- Subject to the limitations aforesaid, every suit
shall be instituted in a Court within the local limits of whose jurisdiction-
(a) 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 carries on business, or personally works for gain; or
(b) any or the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries
on business, or personally works for gain, provided that in such case either the leave of the Court is given or the defendants who do not reside, or
carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or
(c) the cause of action, wholly or part, arises.
Their Lordships have observed:
Clauses (a) and (b) of Section 20 inter alia, refers to a court within the local limits whose jurisdiction the defendant, inter alia ""carries on business''.
Clause (c) on the other refers to a court within the local limits of whose jurisdiction the cause of action wholly arises. It has not been urged before
us on behalf of the appellant that the cause of action wholly or in part arose in Bombay. Consequently, clause (c) is not attracted to the facts of
these cases. What has been urged with the aid of the Explanation to Section 20 of Code is that since the appellant has its principal office in
Bombay it shall be deemed to carry on business at Bombay and consequently the courts at Bombay will also have jurisdiction. On a plain reading
of the Explanation of Section 20 of C.P.C. we find an apparent fallacy in the aforesaid argument. The Explanations is in two parts, one before the
word ''or'' occurring between the words ''office in India'' and the words ''in respect of'' and the other thereafter. The explanation applies to a
defendant which is a corporation which seen above, would include even a company such as the appellant in the instant case. The first part of the
explanation applies only to such a corporation which has its sole or principal office at a particular place. In that event the courts within whose
jurisdiction the sole or principal office of the defendant is situate will also have jurisdiction inasmuch as even if the defendant may not be actually
carrying on business at that places, it will be deemed to carry on business'' at that place because of the fiction created by the Explanation. Latter
part of the Explanation takes care of a case where the defendant does not have a sole office but has a principal office at one place and has also a
subordinate office at another place. The words ""at such place'' occurring at the end of the Explanation and the word ''or'' referred to above which
is disjunctive clearly suggest that if the case falls within later part of the Explanation it is not the court within whose jurisdiction the principal of the
defendant is situate but the court within whose jurisdiction it has a subordinate office which alone shall have jurisdiction in respect of any cause of
action arising at any where it has also a subordinate office.
It would be thus evident that for a tortuous liability the clause in 20 C.P.C. conferring jurisdiction on a particular court would be of no
consequence. We agree that the learned single Judge has rightly held that the Courts at Bombay would have no jurisdiction.
The next question is whether this Court would have jurisdiction or whether the subordinate court at Tiruvallur would have jurisdiction. It is
admitted that the goods were to be carried from Faridabad to Cholavaram, Chengai Anna District. Cholavaram comes within the jurisdiction of
Subordinate Court, Tiruvallur. Enroute the goods got damaged at Gramanapalli village near Hyderabad. According to the appellant, the goods
were delivered at Cholavaram and therefore the only subordinate court at Tiruvallur had jurisdiction to entertain the suit, as no part of cause of
action has arisen within the jurisdiction of this Court. A reference to the copies contained in the typed set would go to show that the goods were to
be delivered at Cholavaram village, Ponneri Taluk, Chengleput District, Tamil Nadu. The learned single Judge has held that though the goods were
to be delivered at Cholavalarm, but in fact the goods were delivered at the first plaintiff office at Jhavar Plaza, 2nd Floor, Nungambakkam, High
Road, Madras. Page 13 of the typed set contains the preliminary report of the surveyor which is to the effect that the consignment was first
inspected at the site of accident and again it was inspected when the consignment reached Madras on 5.4.1990. Page 23 of the typed-set contain
a letter by the consignor, first plaintiff to the appellant/carrier. The letter dated 8.5.1990 wherein it has been stated that
We have taken delivery of the consignment on 7th April, 90 at our factory and we have taken a open delivery certificate from the driver Mr.
G.John.
Though the first plaintiff''s letterhead carries that its office is situate at Jhaver Plaza, 2nd Floor, Nungambakkam High Road, Madras-34, it is
evident that the delivery of the consignment was made at the factory and not at the office address given in the letter head of the fist plaintiff.
Admittedly, the machinery weighed 63 tons, it cannot be said that it would have been delivered at the second floor of the complex and it is not the
case the machinery was kept in the open space around the said building or anywhere near the building. We feel, the learned single Judge has
incorrectly held that the delivery was effected at Jhaver Plaza. Thus it would appear that no pan of cause of action regarding the consignment and
delivery took place within the jurisdiction of this Court.
We should not lose sight of the subrogation agreement. The learned single Judge has considered this aspect and held that the defendant has not
proved that the subrogation agreement took place either at Cholaravarm or at Bombay -otherwise meaning that the subrogation was at Madras. A
reference to pages 55 to 65 contain in the typed set viz., letter of subrogation would show that the letter of subrogation was executed at Madras.
The last portion of the agreement reads thus:
In witness whereof we have executed this document and have set our hands and seal hereunto at Madras this 25th day of 1991.
In a decision reported in the case of A.Abdul Kareem v. National Insurance Company Limited, Coimbatore, 1983 (II) M.L.J. 240, wherein
S.Mohan, J. (as His Lordship then was) has answered it as follows:
The question of jurisdiction arises in this revision in the following manner. A contract was entered into between the revision petitioner and a third
party (insured) that the goods delivered at Kothagiri (Nilgiris District) will have to be transported to Cochin. But it is so happened, owing to
torrential rains, that the tea forming the subject-matter of the contract got damaged. Thereafter the National Insurance Company got itself
subrogated to the rights of the insured and filed the suit at Coimbatore. Admittedly, subrogation look place at Coimbatore. So the question arose
whether the suit ought to have been filed at the place where the contract was entered into or at the place where the damages took place, both of
them being in Nilgiris District. In contra-distinction it was contended that Coimbatore Court had jurisdiction. The Court below has answered the
same in the affirmative. In seeking to revise its order what is, urged before me is that the suit in essence is one for damages caused to movable
property which will fall u/s 19 of the CPC and therefore, notwithstanding the subrogation the Coimbatore Court will have no jurisdiction. I am
totally unable to agree. u/s 20(c) if part of the cause of action arose for filing of the suit, that Court could have jurisdiction. In this case, admittedly
subrogation took place at Coimbatore. It should also be noted in this connection that it will be open to the defendant-revision petitioner to contend
that there is no valid subrogation in the eye of law. In such an event, even if it is found that the petitioner had caused damage, in so far as there is no
valid subrogation in the eye of law, the suit is liable to be dismissed. Therefore, looked at from this point of view, undoubtedly, the subrogation has
a great bearing and that being a part of cause of action which has arisen in Coimbatore, I hold that the order of the Apex Court below is correct. I
find support for this view In A.A.Co., v. Union of India. 1959 (63) C.W.N. 806. The case is on all fours to the one on hand because by
assignment of railway receipts, the claims thereunder were transferred in favour of the Insurance Company and the letter of subrogation showed
that the Insurance Company was subrogated to all the rights of the consignor. Accordingly, it was held that the place where the right of subrogation
took place would provide, the necessary cause of action u/s 20(c).
Though the appellants head office is at Bombay, no part of cause of action has arisen at Bombay and therefore the courts, at Bombay would
have no jurisdiction. The plaintiff has branch office at Madras, but no part of cause of action has arisen at Madras. The goods were delivered at
Cholavaram and not at Madras, but the subrogation took place at Madras. Therefore the courts in the place where the subrogation took place
have jurisdiction to entertain the suit.
In that view of the matter, we hold that this Court has jurisdiction to entertain the matter and accordingly we dismiss this appeal.
In the result, the appeal is dismissed. Consequently, CMP.No.15707 of 1999 is also dismissed.