Y.P.DAS vs SHIMLA DEVELOPMENT AUTHORITY

THIS is a Revision Petition against the order of the Consumer Disputes Redressal Commission, Haryana at Chandigarh by which the appeal filed by the present respondent against the order of the District consumer Disputes Redressal Forum, Ambala City was accepted.

THE relevant facts leading to the present Revision Petition are that the respondent (hereinafter referred to as the Opposite Party) had advertised a self-financing scheme for construction of a residential complex in Kasumti Zone in Shimla. It may be mentioned here that the registered office of the opposite party, which is a corporate body, is in Shimla. The Revision Petitioners (hereinafter referred to as Complainants) had applied for one Type ''C'' flat on 25th March, 1986 for allotment under the said scheme and also deposited a sum of Rs. 16,425/- as earnest money with the Punjab National Bank, Ambala City which acted as an agent of the opposite party for receiving the said amount. The application was made on the prescribed form. Thereafter the complainants were duly registered under the said scheme. They paid the stipulated instalments. The last instalment was paid on 5th December, 1988. According to the initial promise made by the opposite party, the allotment of flat and its possession was to be handed over by the Opposite Party to the complainants by the end of year 1988. However, the Opposite Party failed to fulfil its promise and did not hand over the possession of the flat to the complainants resulting in the filing of a complaint by the complainants in the District Consumer Disputes Redressal Forum, Ambala City on 1st January, 1991 seeking relief of interest on their deposits and for issuing a direction to the Opposite Party for the completion of the flats in some specified time. Rs. 5,000/- as compensation was also prayed for. On notice being issued to the Opposite Party, they filed a detailed reply inter alia taking a preliminary objection to territorial jurisdiction of the District Forum, Ambala City. It was pleaded that in the relevant brochure announcing the conditions of the scheme, it was clearly specified in condition No. 11 (v) as under :- "All disputes shall be subject to Shimla jurisdiction"

THE District Forum, formulated the following preliminary question for its decision :- "Whether this Forum has got no territorial jurisdiction to try and hear this complaint ?"

AFTER discussing the various cases cited before it and arguments advanced by both the parties, the District Forum held that the Forum had territorial jurisdiction to entertain and try the complaint. It remarked that the Act is a beneficial legislation, recently enacted for safeguarding the interests of the Consumers and is not to be shackled with intricacies and technicalities of Civil Procedure Code. According to it, proceedings under the Act are primarily simple and summary in their nature. Consequently, it was held that the provisions of the Civil Procedure Code regarding the jurisdiction of the Forum would not be applicable and instead Section 11 of the Consumer Protection Act, 1986 would be effective in deciding the above section. As part of cause of action had arisen in Ambala City inasmuch as the complainants paid the earnest money to the Opposite Party for the allotment of flat in Ambala through the Bank, which admittedly acted as agent of the Opposite Party, therefore, in view of Section 11(2)(c) of the Act, the District Forum, Ambala City had jurisdiction to entertain and decide the complaint in hand. The preliminary question relating to territorial jurisdiction was accordingly decided in favour of the complainants. Feeling aggrieved of that order, the Opposite Party filed First Appeal No. 28 of 1991 before the Consumer Disputes Redressal Commission, Haryana at Chandigarh. The State Commission held that sub-section (2) of Section 11 was virtually identical (with inevitable terminological changes) with Section 20 of the Civil Procedure Code. It was held that the territorial jurisdiction under Section 20 of the C.P.C. could be confined by agreement of the parties to one of the Courts having jurisdiction in the cause. It was observed that : "It is well established that where there are two or more competent courts which can entertain a suit on a contract consequent upon a part of the cause of action having arisen within the jurisdiction of each of those courts, the parties to the concerned transaction can contract to vest jurisdiction in one of such courts to try disputes which might arise as between themselves and that such an agreement is not hit by Section 2 of the Contract Act as being opposed to public policy."

Relying upon ''Bareilly Development Authority and another v. Ajai Pal Singh and other, (1989)2 SCC 116 S.C.,'' it was held that the complainant were bound by the terms and conditions contained in the brochure for allotment of a dwelling unit and therefore, they could not wriggle out of the same.

IN the light of the above observations, the State Commission held that the District Forum, Ambala had no territorial jurisdiction in the present case and the claimants, if so advised can have resort only to the District Forum, Shimla for relief and redress. Consequently the appeal was accepted in the above terms.

NOT being satisfied with the order passed by the State Commission, Haryana at Chandigarh, the Complainants have filed this Revision Petition. Before we proceed further, we may mention here that the complainant - petitioners did not dispute the observations of the State Commission that the complainants were bound by the terms and conditions as contained in the brochure and it would amount to a concluded contract between the parties. The Counsel for the Complainants, however, placed the following points before use : (1) That the term in the contract about the territorial jurisdiction does not exclude the jurisdiction of the District Forum, Ambala City constituted under the Act. (2) That, in any case, the term was unconscionable as bargaining power of the parties is unequal. The opposite party is economically strong while the consumer belongs to a weaker section.

WE have considered the above points and we are in agreement with the arguments advanced before us by the Counsel for the petitioner-complainants. It may be noticed here that the respondents'' Counsel placed reliance before us only on the Bareilly Development Authority''s case (supra). In that case the question of territorial jurisdiction of the Court was not in question. The dispute was in respect of certain other terms contained in the brochure. The Supreme Court held that the parties were bound by the terms and conditions contained in the brochure which contained the terms of the contract entered into by the parties. It has already been noticed that the petitioner-complainants do not dispute this fact.

THE first point raised by the Counsel for the complainants is that the clause in a contract restricting the territorial jurisdiction to one of the Courts having jurisdiction is to be strictly construed. He argued that if the clause relating to territorial jurisdiction is unambiguous and explicitly excludes the jurisdiction of other courts except one, having jurisdiction in the matter then there is no escape from such a clause, but when the clause does not expressly excluded the jurisdiction of other courts which might have territorial jurisdiction in the matter, then such clause cannot bar a person from filing a case in a court which has jurisdiction. This argument has force. We need not dwell upon this point in detail because it has been discussed at length by the Supreme Court in the case titled "A.B.C. Laminart Pvt. Ltd. and another v. A.P. Agencies, Salem, AIR 1988 Supreme Court 1239". In that case the ouster clause read as follows : "Any dispute arising out of this sale shall be subject to Kaira jurisdiction." Disputes having arisen out of the contract, the Plaintiff filed a suit in the court of Subordinate Judge, Salem for a sum claiming to be the balance of the advance remaining in the hands of the Defendant. The Trial Court, inter alia, framed issue No. 2 as follows : "Has the court no jurisdiction to entertain or try this suit ?"

The court treating it as a preliminary issue found that it had no jurisdiction to entertain the suit in view of the ouster clause and accordingly it returned the plaint for presentation in the proper court. The Plaintiff appealed therefrom to the High Court of Madras which allowed the appeal, setting aside the judgment of the Trial Court with a direction to take the plaint on file and dispose of the suit on merits on other issues. The Defendant went in appeal to the Supreme Court. After holding that when the court has to decide the question of jurisdiction pursuant to an ouster clause it is necessary to construe the ousting expression or clause properly, the Court further remarked : "Coming to Clause 11 we already found that this clause was included in the general terms and conditions of sale and the order of confirmation No. 68/59 dated 2.10.1974 with the general terms and conditions was sent from Udyognagar, Mohmadabad, Gujarat to the respondent''s address at 12, Suryamangalam Road Salem, Tamil Nadu. The statement made in the Special Leave Petition that Udyognagar, Mohmadabad, Gujarat is within the jurisdiction of the Civil Court of Kaira has not been controverted. We have already seen that making of the contract was a part of the cause of action and a suit on a contract therefore could be filed at the place where it was made. Thus, Kaira Court would even otherwise have had jurisdiction. The bobbins of metallic yarn were delivered at the address of the respondent at Salem which, therefore, would provide the connecting factor for Court at Salem to have jurisdiction. If out of the two jurisdictions on was excluded by Clause 11, it would not absolutely oust the jurisdiction of the Court and, therefore, would not be void against public policy and would not vitiate Sections 23 and 28 of the Contract Act. The question then is whether it can be construed to have excluded the jurisdiction of the Court at Salem. In the clause ''any dispute arising out of this sale shall be subject to Kaira jurisdiction'' ex-facie we do not find exclusive words like ''exclusive'', ''alone'', ''only'' and the like. Can the maxim ''expressio unius est exclusio alterius'' be applied under the facts and circumstances of the case ? The order of confirmation is of no assistance. The other general terms and conditions are also not indicative of exclusion of other jurisdictions. Under the facts and circumstances of the case we hold that while connecting factor with Kaira jurisdiction was ensured by fixing the situs of the contract within Kaira, other jurisdictions having connecting factors were not clearly, unambiguously and explicitly excluded. That being the position it could not be said that the jurisdiction of the Court at Salem which Court otherwise had jurisdiction under law through connecting factor of delivery of goods there at was expressly excluded. We accordingly find no error or infirmity in the impugned judgment of the High Court." The above observations cover the present controversy between the parties. In the present case, the clause is neither clear nor unambiguous. It does not specifically exclude the jurisdiction of any other court having jurisdiction in the matter.

In the light of the above observations, we hold that the ouster clause contained in the brochure issued by the opposite party does not exclude the jurisdiction of the District Forum at Ambala. Consequently, we accept the present Revision Petition, set aside the impugned order of the State Commission and remand the case of the District Forum for disposal on merits. Mr. Y. Krishan, Member:- The facts of the case have been set out fully in the majority order and therefore, do not require restatement.

THE important question is whether jurisdiction in this case would exclusively vest in the Court at Shimla and whether the jurisdiction of the Ambala Court is excluded or not.

AS pointed out in AIR 1989 S.C. 1239 the jurisdiction of a Court of law in the matter of contract depends on the situs of the contract and the cause of action arising through ''connecting factors''. Thus in a contract, a suit for breach may be filed either at the place where the contract is made or where it is to be performed. In this case the situs of the contract is Shimla inasmuch as the registration of the respondent for the allotment of the flat could have only been at Shimla. In any case the acceptance of the application of the respondent for a flat under the scheme could have only been communicated from Shimla and as such there is no room for doubt that the situs of the contract is Shimla. Again since the contract was to be performed at Shimla only, it is only in Shimla that the breach of the contract could occur. As observed by the Hon''ble Supreme Court in the judgment cited above, "If the contract is performed at the place where it is made, the suit on the contract is to be filed there and nowhere else".

TO ensure that the question of jurisdiction was beyond controversy or dispute it was further provided in the contract that "All disputes shall be subject to Shimla jurisdiction".

THE judgment of the Hon''ble Supreme Court cited above explains that, "Even without such words (''alone'', ''only'', ''exclusive'' and the like in an ouster clause) in appropriate cases the maxim ''expressio unius est exclusio alterius'' - expression of one is the exclusion of another - may be applied .. mention of one thing may imply exclusion of another. When certain jurisdiction is specified in a contract, an intention to exclude all others from its operation may in such cases be inferred". This is, however, a matter of construction. In construing the exclusion clause, we have to see whether there are any ''connecting factors'' which would confer jurisdiction on the Court at Ambala.

IN the case of "A.B.C. Laminart Pvt. Ltd. and Anr. v. A.P. Agencies, Salem, AIR 1988 S.C. 1239" the Hon''ble Supreme Court held that, Salem was the place of delivery of the goods - "bobins metallic yarn" - under the contract and hence there was a ''connecting factor'' so far as Salem Court is concerned. The contract was made at Udyog Nagar, Mohammadabad which, therefore, was the situs of the contract and consequently the clause in the agreement laying down that any dispute arising out of sale shall be subject of kaira jurisdiction was only a ''connecting factor'' which gave territorial jurisdiction to the Court at Kaira. But this ouster clause did not exclude other ''connecting factor'' like the place where the performance or breach of contract took place. Consequently, it was held that the Court of Salem also had jurisdiction in that case as delivery was at Salem.

IN the case under consideration there are no such ''connecting factors'' enabling jurisdiction being conferred on the Ambala''s Court : the situs of contract, the performance of the contract and its breach were all in Shimla. Another question that needs to be considered is whether the payment of earnest money at Ambala provides the ''connecting factor'' vesting the Ambala Court with jurisdiction. What was paid at Ambala was the earnest money deposit. Earnest money is not a part of the consideration paid in a contract even though earnest money may subsequently be adjusted against the payment due under a contract. It may be mentioned that there is no information in the paper-book whether the payments, other than the earnest money deposit, under the contract were made at Ambala City.

IT may be noted that in Explanation III to Section 7 of Act 7 of 1888, which has now been omitted from the C.P.C., it is laid down inter alia that in suits arising out of contract, the cause of action arises within the meaning of this section at "the place wherein the performance of the contract, any money to which the suit relates was expressly or impliedly payable." The important words are ''money payable'' under the contract. In this case the money obviously was payable at Shimla irrespective of the fact that it might have been deposited anywhere else for remittance to Shimla. 12. In view of what has been stated above, I uphold the order passed by the State Commission and dismiss the Revision Petition. There is no order as to costs.