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Maganlal Devji Mewawala and ors. Vs. Satya NaraIn and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtAllahabad High Court
Decided On
Case NumberF.A.F.O. No. 215 of 1978
Judge
Reported inAIR1978All455
ActsCode of Civil Procedure (CPC) , 1908 - Sections 20
AppellantMaganlal Devji Mewawala and ors.
RespondentSatya NaraIn and ors.
Advocates:R.N. Singh, Adv.
DispositionAppeal allowed
Excerpt:
.....20 of code of civil procedure, 1908 - two courts had territorial jurisdiction to try a case - parties to the suit may enter into an agreement that court at one place will have exclusive jurisdiction to try the suit. - - the defendants failed to comply with the terms of the contract and eventually refused to send the goods. in that case it was clearly stipulated that the defendants agreed to carry the goods on the terms given on the back of the receipt and the reverse of the receipt did contain a term to the effect that 'all the disputes shall be settled in the court atagra only. the object of printing such words like 'subject to madras jurisdiction' in the contract is to exclude the jurisdiction of other courts and to give sole jurisdiction to one court. we are not satisfied that..........the foot of which was noted;'all offers are without engagement unless otherwise stated. subject to hamburg jurisdiction.' the terms of the contract were all incorporated in the earlier part of the letter-pad which was signed by the representatives of both the parties under the terms of the contract, the defendants were to supply certain quantities of carpets and rugs of certain size as contemplated in the contract. the defendants failed to comply with the terms of the contract and eventually refused to send the goods. under the terms of the contract the goods were to be delivered at hamburg and the payment was to be made through some bank at hamburg. in these circumstances the plaintiffs were obliged to file a suit against the defendants.4. the claim was resisted by the defendants. we.....
Judgment:

R.B. Misra, J.

1. The present appeal is directed against the order of the Additional District Judge, Gyanpur, district Varanasi, dated 10thApril, 1978, disposing of the preliminary issue that the court at Gyanpur had no territorial jurisdiction to try the suit.

2. The facts leading to this appeal are as follows:

3. Plaintiff-appellants Nos. 1 and 2 carried on business in partnership in the name as 'Rekha Warenhandels G. m. b. H & Co., K. G 2, Hamburg. West Germany.' Defendant respondent No. 1 carried on business of manufacturing Indian hand-knitted woollen carpets and rugs in the name and style of M/s. Satya Narain Lal & Sons, Bhadohi, district Varanasi. The plaintiffs entered into a contract through one Sri M. P. Ramchandran on 9th of Jan. 1973 with the defendants for the purchase of Indian hand-knitted woollen carpets and rugs. The details and particulars of the contract are given in para 3 of the plaint. The terms of the contract were incorporated in a letter-pad at the foot of which was noted;

'All offers are without engagement unless otherwise stated. Subject to Hamburg jurisdiction.' The terms of the contract were all incorporated in the earlier part of the letter-pad which was signed by the representatives of both the parties under the terms of the contract, the defendants were to supply certain quantities of carpets and rugs of certain size as contemplated in the contract. The defendants failed to comply with the terms of the contract and eventually refused to send the goods. Under the terms of the contract the goods were to be delivered at Hamburg and the payment was to be made through some bank at Hamburg. In these circumstances the plaintiffs were obliged to file a suit against the defendants.

4. The claim was resisted by the defendants. We are not concerned for the present with the other pleas taken by the defendants. We are only concerned with the plea of the defendants that the Court in India had no jurisdiction to try the suit. The learned Additional District Judge tried this preliminary issue and came to the conclusion that only the court at Hamburg in Germany had jurisdiction to try the suit and the court in Indiahad no jurisdiction to try the same. On this view he directed the return of the plaint for presentation to the proper court. The plaintiffs, being aggrieved by the order of the learned Additional District Judge, have filed, the present appeal.

5. The only point for consideration in this appeal is whether the court in India has jurisdiction to try the suit. The jurisdiction of the court is dealt with by Section 20 C. P. C. S. 20, in so far as material for the purposes of this case, reads :

'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 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, 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 in part arises.'

Obviously, in view of Clauses (a) and (b) of Section 20, the defendants actually and voluntarily resided at the time of the suit or carried on business at Gyanpur. Therefore, the suit could be filed in the court at Gyanpur. But, in view of Clause (c) of Section 20, a part of cause of action may be said to have arisen at Hamburg inasmuch as the contract was for the supply of the goods at Hamburg and payment was also to be made through some bank at Hamburg. If the cause of action is one which had partly arisen in one court and partly in another, both courts could have jurisdiction to try the suit. Therefore, in this view of the matter, even if it is accepted that the court at Hamburg could also try the suit, as it could be tried by the court of India, it shall be open to the parties to enter into such a contract whereby the court at one place might be chosen asthe forum of the suit. If the note at the foot-note of the letter-pad is taken to be a part of the contract between the parties, the court at Hamburg certainly had the jurisdiction and the suit could be filed there. Therefore, the real question for consideration is whether the endorsement made at the foot of the letter pad was in the contemplation of the parties of the suit.

6. Counsel for the appellants contends that it was never in contemplation of the parties that the Courts at Hamburg will have the jurisdiction, while Sri G. P. Bhargava, appearing for the respondents, contends that that was in contemplation of the parties and the agreement entered into between the parties was subject to the general condition that only the courts at Hamburg will have jurisdiction to try the suit. Both the parties have cited cases in support of their contentions.

7. It may be at the very outset pointed out that there is no dispute on the proposition that if two courts have territorial jurisdiction to try a particular case, it is open to the parties to enter into an agreement that the court at one place will have exclusive jurisdiction to try that suit. If authority be needed, reference can be had to Hakam Singh v. Gammon (India) Ltd. : [1971]3SCR314 wherein dealing with this question the Supreme Court observed: (At p. 741)

'It is not open to the parties by agreement 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 Civil P. C. 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. Such an agreement does not contravene Section 28 of the Contract Act.' With this legal position it is evident that it was open to the parties to have entered into an agreement that the courts at Hamburg alone will have jurisdiction. The only question is whether the parties had any such contemplation in their minds and whether the note at the foot-note of the letter-pad was contemplated to be a term of the agreement between the parties.

8. Sri R. N. Singh appearing for the appellants referred to Patel Bros. v. Vadilal Kashidas Ltd. : AIR1959Mad227 . In that case the plaintiff a firm, carrying on business at Madras entered into a contract at Bombay for the purchase of one bale of cotton cloth with the defendants, a limited liability company carrying on business at Bombay. According to the plaintiffs, delivery was to be made at Madras. The defendants contested the claim and one of the objections was that the Madras court had no jurisdiction over the subject-matter of the suit. Beyond filing the contract, no other evidence was led in the case. The bill issued by the defendant to the plaintiff evidenced the contract. At the top of the bill words 'subject to Bombay jurisdiction' were mentioned and underlined. There was nothing to indicate in the contract itself that the delivery was to be made at Bombay. The document stated that 'the goods were to be despatched to Madras and specific mention was also made to No. 7, Godown Street, Madras.' There was no evidence as to how the price was to be realised by the plaintiffs. Nor was there any evidence to show as to when the properties in the goods were intended to pass to the buyer. The averments in the plaint seemed to suggest that the delivery was intended to be at Madras. In these circumstances it was held that the mere printing of the words 'subject to Bombay jurisdiction' in Ex. P. I could not amount to a contract that both the parties agreed to have Bombay as the venue for the settlement of disputes. The mere recital on the top of the bill could not be incorporated as a term of the contract. Ouster of jurisdiction of a court to which a person is entitled to resort to under the Civil Procedure Code or any other statute, cannot be a matter of assumption or presumption but one to be proved by express words contained in the contract or at least by necessary or inevitable implication. In C. Satyanarayana v. K. Lakshmi Narasimhan : AIR1968AP330 dealing with this point the court observed:

'The real question in such cases is whether the parties agreed as a part of the transaction that any dispute arising out of the transaction wouldbe heard and decided by a particular Court. No single party can impose any term of the contract upon the other, unless it is agreed to by the other party. Merely because the defendants have written a letter on the top of which 'subject to Madras jurisdiction' is printed, it cannot become a part of the contract unless it is expressly agreed to by the plaintiff.'

9. In Deputy Commr., Kheri v. Dr. Ram Kumar (AIR 1941 Oudh 254) the plaintiff of that (case) claimed interest, but he did not base his claim on some contract or usage. He said that under the practice of his shop, he charged interest at 1 per cent. It was held that his practice does not amount to usage. The mere writing on the bills that interest at 1 per cent, will be charged cannot amount to a contract.

10. Sri G. P. Bhargava, on the other hand, referred to a recent un-reported decision of this Court in Sri Tulasi Ram v. Jeet Goods Carrier Branch (F. A. F. O. No. 381 of 1973 decided on 11-11-1976): (AIR 1977 NOC 189 (All)). In that case at the top of the Bilti the following condition was printed:

'All subject to Agra jurisdiction.' It was also printed on the face of the receipt that 'all goods are carried under the Jeet Goods Carrier (Regd.) conditions of carriage are given on reverse.'

On the back of the Bilti condition No. 15 was to the following effect?

'All the disputes shall be settled in the court at Agra only.'

The argument advanced in that case was that, since the Bilti did not contain the signature of the plaintiff, the terms printed on the back of it would not be binding on him and secondly that it was not open to the parties even by agreement to confer jurisdiction on a court which it did not possess under the Code of Civil Procedure. Both the contentions were repelled, but the facts of that case were materially different from the facts of the present case. In that case it was clearly stipulated that the defendants agreed to carry the goods on the terms given on the back of the receipt and the reverse of the receipt did contain a term to the effect that 'all the disputes shall be settled in the court atAgra only.' In this view of the matter it cannot be argued that that part cannot form the agreement between the parties. But, in the present case, all the terms of the agreement between the parties have been incorporated in a letter-pad at the foot of which is printed 'subject to Hamburg jurisdiction' and have been signed by both the parties. There is no such stipulation between the parties that the terms of the agreement will be subject to what is printed at the foot of the letter-pad. Under this circumstance we feel difficulty in accepting that what is contained in the printed note at the foot of the letter pad was really in the contemplation of the parties.

11. The next reliance was placed by Sri G. P. Bhargava on the case T. Motandas & Co. v. L. Hakumat Rai. In that case a firm of Jammu placed an order with the firm at Bombay for supply of ten boxes of beer and signed the order form in which there was a clause 'we agree to the conditions printed on reverse.' Condition No. 5 at the back of this document was 'all disputes to be settled in Bombay Courts.' The above case is identical to the unreported decision of the Allahabad High Court in the case of Tulasi Ram v. Jeet Goods Carrier Branch, (AIR 1977 NOC 189 (All) (supra) as in that case also there was a clear stipulation that the conditions printed on the reverse were part of the conditions of the agreement between the parties. Therefore, that case is also distinguishable from the facts of the present case.

12. Learned counsel for the opposite parties also placed reliance on the case of S. Manuel Raj and Co. v. J. Manilal and Co. : AIR1963Guj148 . It was observed by a learned single Judge in that case that when one of the parties to a contract signs an order form printed by the other party containing the words 'subject to Madras Jurisdiction' and sends the order form to the other party, it must be assumed that that party agreed that Madras is the place for the settlement of disputes. It is not open to a person who signs an order form of the opposite party containing the printed words to say that the printed words are not part of the contract. To take the view that the words did not form part ofthe contract would be to upset the commercial practice of India. The object of printing such words like 'subject to Madras Jurisdiction' in the contract is to exclude the jurisdiction of other courts and to give sole jurisdiction to one Court. It appears that the learned Judge has taken expediency more into consideration than the fact whether the term was really in contemplation of the parties.

13. Learned counsel lastly relied on the case of Smt. Mukul Datta Gupta v. Indian Airlines Corporation : AIR1962Cal311 . In that case in the office of the Indian Air Lines Corporation a board was affixed at the door in which the conditions of the carriage were written in bold letters. In the ticket issued to the passenger itself it was stated that the ticket was issued subject to the conditions of carriage. The conditions of carriage were printed inside the cover page of the ticket though in very small letters. In these , circumstances it was held that the Corporation did take steps to bring it to the notice of the passengers that the tickets were being issued subject to certain conditions of carriage. The farts of that case are also materially different from the facts of the present case. In the instant case in addition there are two other considerations which weighed with us:

(i) Even if the suit is filed at Hamburg., the plaintiffs will have a decree which cannot be executed in India and, therefore, the decree would be altogether a dead letter.

(ii) The plaintiffs could have never contemplated such a situation, nor is it to the benefit of the defendants that the case should be fought at Hamburg. For all these reasons, we are of the definite view that the parties never contemplated as a part of the contract that the court at Hamburg alone will have jurisdiction to try the suit. In this view of the matter the order of the court below cannot be sustained.

14. The appeal is, therefore, allowed. The order of the court below is set aside. The case is sent back to the court below for deciding the suit on merits. However, there will be no order as to costs.

15. An oral request was made for a certificate of fitness for filing anappeal to the Supreme Court against our order passed in this appeal. We are not satisfied that the question involved in the case is of such importance which deserves to be decided by the Supreme Court. We, therefore, decline to certify the case. The prayer is rejected.


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