R.K. Maheshwari vs Nagarjun Construction Co. Ltd.

Abhay M. Naik, J.

This petition has been preferred against the order dated 22.3.2005 contained in Annx.P/1 returning thereby the plaint for want of jurisdiction under Order 7 Rule 10 of the Code of Civil Procedure.

It is settled law that the objection about jurisdiction for the purpose of Order 7 Rule 10 of the CPC is required to be decided on the basis of averments contained in the plaint and the documents annexed thereto. Copy of plaint is on record as Annx.P/4 which reveals that a suit for recovery of Rs.3,37,292/- has been instituted by the plaintiff in the Court at Bhopal against the defendant/respondent with the averments that the plaintiff was required to perform the work of Multi-Plas, Aluminium quoting in the house situated at (sic) Raisen @ 269/ - per sq. meter. Plaintiff made a proposal to the defendant on 23.6.1995 which was accepted and the work order was given to the plaintiff on 23.6.1995 for performing the work for quoting of 2500 sq. feet area. According to the agreed rates, the total cost came to be Rs.6,72,500/- which was inclusive of cost of the material. 80% of the amount was payable at the time of supply of material and the balance was payable on completion of work. The work order was accepted by the plaintiff. Out of the total amount, a sum of Rs.3,94,917/- was paid. The defendant owed the balance money to the tune of Rs. 2,19,949=75 ps. After issuing a notice, the plaintiff has instituted the suit for recovery of sum of Rs.3,37,292/- which is inclusive of interest etc.

The defendant submitted an application under Order 7 Rule 10 of the Code of Civil Procedure, contending thereby that Clause No. 10 of the work order confined the jurisdiction to Hyderabad only. Accordingly, it was contended that the Court at Bhopal had no jurisdiction and plaint may be returned to the plaintiff for being filed in the Competent Court. A reply was submitted by the plaintiff that Clause No. 10 was not accepted by it, and hence, the Court at Bhopal has jurisdiction.

After hearing the arguments, learned trial Judge allowed the application under Order 7 Rule 10 of the CPC and directed for return of the plaint for being presented before the Court having competent jurisdiction. This order is under challenge in the present writ petition.

Shri R.D. Hundikar, learned counsel for the petitioner submitted that the work order was delivered to the plaintiff at Bhopal and the payment was also made from time to time by the defendant to the plaintiff at Bhopal. Accordingly, he has contended that the Court at Bhopal has jurisdiction and the learned trial Court has acted with an illegality in directing for the return of plaint.

Shri Naman Nagrath, learned counsel appearing for the respondent strongly contended that the work order contained in Annx.P/2, contains a specific stipulation that the order is subject to Hyderabad jurisdiction only. It is further contended by him that the parties are within their rights to confine the jurisdiction of the Court in case, if, the dispute arises to a particular Court. Since the plaintiff has accepted the work order, he would be bound by the clause of jurisdiction and the Court at Bhopal is precluded from exercising the jurisdiction. Learned counsel for the respondent also referred to the documents contained in Annx.R/1 and R/2, wherein the plaintiff has acknowledged categorically that the work has been performed by him as per the terms and conditions of the work order. Accordingly, it has been contended by the learned counsel, Shri Naman Nagrath, that the impugned order does not call for any interference.

Considered the submissions and perused the record.

It is a settled law that the parties to the agreement may agree that a Court at a particular place shall alone have jurisdiction to decide the dispute.

The Hon''ble Supreme Court of India in the case of M/s. Angile Insulations Vs. M/s. Davy Ashmore India Ltd. and another, has held:

where there may be two or more competent courts which can entertain a suit consequent upon a part of the cause of action having arisen therewith, if the parties to the contract agreed to vest jurisdiction in one such court to try the dispute which might arise as between themselves, the agreement would be valid.

It is equally well settled that "it is not open to the parties to confer by their agreement jurisdiction on a Court which it does not possess under the Code. But, where two Courts or more have under the CPC jurisdiction to try a suit or proceeding an agreement between the parties that the dispute between them shall be tried in one of such Courts is not contrary to public policy. Reference may be made to the case of Hakam Sing Vs. Gammon (India) Ltd., ).

On the aforesaid parameters, the contentions of the learned counsel for the parties are to be examined.

It may be seen that the plaintiff in paragraph 9 of the plaint expressly and emphatically pleaded that the work order was given to it by the defendant at Bhopal. It has been further pleaded in the same paragraph that the defendant has made various payments to the plaintiff from time to time at Bhopal. On the other hand, the defendant has nowhere pleaded in the application under Order 7 Rule 10 of the CPC that the work order was given to the plaintiff at Hyderabad. For clarity, the relevant paragraphs of the said application are reproduced below:

As per the pleadings of the plaintiff as set aside in various paragraphs of the plaint, it is explicitly clear that the suit is based on the purchase order/work order dated 23.6.1995 issued by the defendant. Apart from other pleadings, the plaintiff has categorically admitted this aspect in para 2 of the plaint and has accepted the purchase order dated 23.6.1995.

Clause-10 of the terms and conditions as contained in the purchase order dated 23.6.1995 reads as under:

This order is subject to Hyderabad jurisdiction only.

From a bare perusal of the above quoted clause of the purchase order, which the plaintiff has categorically accepted in his plaint, it is clear that any dispute arising out of the purchase order dated 23.6.1995 can be tried only in the Court at Hyderabad. Clause-10 is clear, unambiguous and having been accepted by the plaintiff, would bind the parties.

Clause -10 is qualified by word "only" and the jurisdiction of all other Courts, except the Court at Hyderabad is excluded. It is a settled position of law that there may be two or more competent Courts which can entertain a suit, but if the parties to the contract have agreed to vest jurisdiction in one such Court to try the dispute which might arise between the contracting parties, then only the Courts that has been agreed upon by the parties shall have jurisdiction to try the dispute, and no other Court.

In view of the fact that the agreement dated 23.6.1995, which has been categorically accepted by the plaintiff in his plaint, contains Clause no.10 which is explicit that the parties have agreed to vest jurisdiction of the Court situated within the territorial limits of City of Hyderabad, this suit filed by the plaintiff is not maintainable at Bhopal.

Consequently, since the contracting parties have limited the jurisdiction only to the Court at Hyderabad, this Hon''ble Court has no jurisdiction to try the suit and thus the plaint deserves to be returned to the plaintiff for being presented before the Court having territorial jurisdiction which this suit should have been instituted.

Averments of the plaint are duly verified, contrary to this, there is even no whisper in the application under Order 7 Rule 10 of the CPC that the work order was given to the plaintiff at Hyderabad.

Shri Naman Nagrath, learned counsel for the respondent contended that the plaintiff has clearly admitted at the end of paragraph 2 of the plaint that he accepted the work order. Similarly, he drew attention to Clause-10 of the work order which contains the specific following stipulation :

Clause -10: This order is subject to Hyderabad jurisdiction only." 12. Relying upon the Supreme Court decision in Hanil Era Textiles Ltd. Vs. Puromatic Filters (P) Ltd., Shri Nagrath, learned counsel appearing for the respondent, contended that the jurisdiction at other places stood excluded and Court at Hyderabad alone is competent to entertain the suit. In the case of M/s Hanil Era Textiles Ltd. (supra), it has been held that :

Sub-section (c) of Section 20 provides that the suit shall be instituted in a Court within the local limits of whose jurisdiction the cause of action, wholly or in part, accrues. As shown above, in the present case, a part of cause of action had accrued in both the places, viz. Delhi and Bombay. In Hakam Sing Vs. Gammon (India) Ltd., , it was held that it is not open to the parties to confer by their agreement jurisdiction on a Court which it does not possess under the Code. But where two Courts or more have under the CPC jurisdiction to try a suit or a proceedings, an agreement between the parties that the dispute between them shall be tried in one of such Courts is not contrary to public policy. It was also held that such an agreement does not contravene Section 28 of the Contract Act.

It is true that the work order/purchase order contained in Annx.P/2 does contain a stipulation confining thereby the jurisdiction to Hyderabad only. However, the stipulation may be invoked only in case, if, the said order is admitted to have been delivered to the plaintiff at Hyderabad. From a perusal of the order, it is clear that firstly, it does not contain the signature of the plaintiff. Secondly, there is nothing on record to infer that the work order was delivered to the plaintiff at Hyderabad. No such pleadings or averments are on record in any form whatsoever. There is no affidavit on record on behalf of the defendant/respondent that the work order was handed over to the plaintiff at Hyderabad. Thus, before the learned trial Judge, there was absolutely no proven material on record to infer that the work order was delivered to the plaintiff at Hyderabad. In the case of present nature, cause of action may arise at a place:

(1) where the contract is entered into;

(2) where the act is performed pursuant to the contract

(3) where the payment is made or is liable to be made.

In view of the aforesaid, cause of action could be stated to have arisen at Hyderabad, if, the work order had been delivered to the plaintiff at Hyderabad, or there would have been any stipulation in the work order that payment would be made at Hyderabad. In view of the specific pleadings contained in paragraph 9 of the plaint that the work order was given to the plaintiff at Bhopal and the payment was settled to be made at Bhopal, it cannot be held at the present juncture that the work order contained in Annx.P/2 was delivered to the plaintiff at Hyderabad. Moreover, there is no mention in the work order that the contract between the plaintiff and defendant was entered into at Hyderabad. Since the defendant/respondent did not make a mention in the application under Order 7 Rule 10 of the CPC that the work order contained in Annx.P/2 was delivered to the plaintiff at Hyderabad, it was not expected of the plaintiff to refute it and contend repeatedly that the work order was delivered to him at Bhopal.

Shri Naman Nagrath, learned counsel for the respondent, drew attention of this Court to Section 7 and 8 of the Indian Contract Act, 1872 which read as under:

Acceptance must be absolute - In order to convert a proposal into a promise, the acceptance must -

(1) be absolute and unqualified;

(2) be expressed in some usual and reasonable manner, unless the proposal prescribes the manner in which it is to be accepted. If the proposal prescribes a manner in which it is to be accepted, and the acceptance is not made in such manner, the proposer may, within a reasonable time after the acceptance is communicated to him, insist that his proposal shall be accepted in the prescribed manner, and not otherwise; but, if he fails to do so he accepts the acceptance. 8. Acceptance by performing conditions, or receiving consideration-Performance of the conditions of a proposal, or the acceptance of any consideration for a reciprocal promise which may be offered with a proposal, is an acceptance of the proposal.

Shri Nagrath, learned counsel, contended that the plaintiff/ petitioner having accepted the work order and performed the act accordingly, it is to be held that the work order is accepted by the plaintiff in toto which includes the stipulation of confining jurisdiction to Hyderabad alone. It is true that the plaintiff has admitted to have performed the work according to the terms and conditions of the work order. However, it is for the defendant to establish that the work order was delivered to the plaintiff at Hyderabad. The probability that the book containing the blank work orders would have been brought to Bhopal and the work order would have been delivered to the plaintiff at Bhopal, cannot be ruled out at present juncture. All such aspects are to be established during trial of the suit and no assistance from Sections 7 and 8 of the Indian Contract Act, is available to the defendant at the present stage.

The Supreme Court in the case of Hakam Singh (Supra) has clearly held that the parties by agreement cannot confer jurisdiction on a Court which otherwise does not possess for want of cause of action accruing within its territory. Since on the basis of material on record, it cannot be infered that the work order was delivered to the plaintiff at Hyderabad, it cannot be said at the present juncture that the parties confine jurisdiction to Hyderabad alone. Unless the plaintiff admits that the work order was received by him at Hyderabad and/or the payment was settled to be made at Hyderabad, or unless the defendant establishes that the contract was entered into at Hyderabad, it was not open for the plaintiff and defendant to confer jurisdiction on the courts at Hyderabad alone by way of agreement.

Thus, the objection raised by the defendant/respondent about jurisdiction is premature in the sense that it is yet to be established by adducing evidence in due manner that the contract was entered into at Hyderabad and the parties to the suit agreed to limit the jurisdiction to Hyderabad alone. The plea of jurisdiction in the facts and circumstances of the case involves disputed questions of facts and in the absence of admission on the part of the plaintiff that the contract was entered into at Hyderabad, the learned trial Judge is not justified in holding at the present juncture that the Court at Bhopal has no jurisdiction. Accordingly, the impugned order contained in Annx.P/1 is not sustainable in law and is, hereby, set aside. The suit is at the preliminary stage and the written statement is yet to be filed by the defendant/respondent. The defendant shall have an opportunity to raise an objection about the jurisdiction by taking an appropriate plea and the trial Court shall, thereafter, decide the question of jurisdiction in accordance with law.

In the result, petition stands disposed of accordingly.