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Tarsema Textile Traders and anr. Vs. Tarlok Singh Sadhu Singh - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtPunjab and Haryana High Court
Decided On
Case NumberCivil Revn. No. 2 of 1962
Judge
Reported inAIR1962P& H470
ActsCode of Civil Procedure (CPC), 1908 - Sections 21 and 115
AppellantTarsema Textile Traders and anr.
RespondentTarlok Singh Sadhu Singh
Cases ReferredIn Ratti Ram v. Kundan Lal
Excerpt:
.....cited, i am unable to hold that any failure of justice consequent upon the institution of the suit at amritsar has been made out. this section in unequivocal terms lays down that no objection as to the place of suing shall be allowed by any appellate or revisional court unless such objection was taken in the court of first instance at the earliest possible opportunity and such settlement, and unless there has been a consequent failure of justice. it is quite correct that in the instant case, an objection was raised at the earliest possible opportunity but the additional factor which is also basic and essential namely, existence of a consequent failure of justice does not appear to me to have been established on the existing record. shri manchanda, however, argues that the long..........a further preliminary objection is also contained in the written statement according to which the suit at amritsar is liable to be stayed because the defendants have only filed a suit for accounts and for the recovery of certain sum as commission at bombay. in paragraph 3 of the written statement, it has been pleaded that prior to the commencement of the sole selling agency agreement dated 22-1-1958, the parties had mutual dealings with each other. in paragraph 4, it has been averred that the plaintiffs have interpolated the agreement by adding the word 'amritsar' which did not exist in clause 12 of the original agreement.the amendment in the agreement on 1-4-1958 has been admitted, but without giving any further details it has been pleaded that the terms and conditions of the amended.....
Judgment:
ORDER

(1) This is a revision preferred by the defendants from the order of the learned Subordinate Judge, 1st Class, Amritsar repelling the defendant's objection to the jurisdiction of the Court below and holding that a part of the cause of action arose in Amritsar with the result that the Court below is empowered to entertain and try the suit.

(2) According to the plaint, Tarlok Singh, the plaintiff, claims to be the sole proprietor of the business undertaking known and styled as Messrs. Virdi Industries and carries on the business of manufacture and sale of shuttles of different sizes. Defendant No. 1, Tarsema Textile Traders, is a firm of merchants carrying on business of sale and purchase of shuttles and Shri Chaman Lal Gupta, defendant No. 2, is the Managing partner of the said concern. The defendants began to purchase goods (shuttles) from the plaintiff as from 17-9-1957 which were being supplied from Amritsar and account of which was regularly maintained in the plaintiff's books of account. During the course of dealings by means of an indent dated 22-1-1958, defendant No. 1 through defendant No. 2 offered to act as plaintiff's agents for the sale of shuttles manufactured by the plaintiff for the entire Bombay State excluding the municipal limits of Sholapyt with effect from 1-1-1958 on certain terms. The prices in respect of this business were to be F. O. R. Bombay.

The agency agreement was to be for one year and it was further agreed that the disputes between the parties would be settled at Bombay and Amritsar. Subsequent to this agreement, another amending agreement is alleged to have been arrived at between the parties on 1-4-1958 which effected slight changes in clauses 7 and 8 of the original agreement. According to the terms and conditions of the agreement as modified the business was to be terminated by the end of that year and thereafter the defendant was being supplied goods on the rates mutually settled. The amounts of goods purchases were being debited to the defendant's accounts and the amounts received and the price of the goods returned was being credited. From 17-9-1957 to 31-3-1960; about Rs. 40,000/- were debited and about Rs. 35,600/- credited with the result that the balance of Rs. 4,358.24nP. remained due to the plaintiff. The account was gone into somewhere in November, 1959m and after comparison was found to be correct. The money due to the plaintiff, according to the plaint is for the price of the goods supplied after crediting the amount of commission earned by the defendant on account of the goods sold directly in the agency territory by the plaintiff. It is on these allegations that the suit for the recovery of a sum of Rs. 4,783.24 nP. was instituted in January, 1961. In clause 9 of the plaint, it has been stated that since the orders were placed at Amritsar, the goods were supplied from Amritsar where the contract was made the original agreement was also accepted at Amritsar, the amount was payable at Amritsar and it was also agreed that Amritsar Courts would have the jurisdiction to try the suit, the Courts at Amritsar have thus jurisdiction to entertain and try the suit.

(3) In the written statement, a preliminary objection has been raised assailing the jurisdiction of the Court of Amritsar to try the suit on the ground that no cause of action has accrued within its jurisdiction nor do the defendants carry on the business at Amritsar. It has also been pleaded that there is a specific agreement between the parties that all disputes relating to the agency agreement are entertainable at Bombay alone. A further preliminary objection is also contained in the written statement according to which the suit at Amritsar is liable to be stayed because the defendants have only filed a suit for accounts and for the recovery of certain sum as commission at Bombay. In paragraph 3 of the written statement, it has been pleaded that prior to the commencement of the sole selling agency agreement dated 22-1-1958, the parties had mutual dealings with each other. In paragraph 4, it has been averred that the plaintiffs have interpolated the agreement by adding the word 'Amritsar' which did not exist in clause 12 of the original agreement.

The amendment in the agreement on 1-4-1958 has been admitted, but without giving any further details it has been pleaded that the terms and conditions of the amended agreement may be ascertained from the original agreement itself. In paragraph 6, it has been pleaded that the defendants were carrying on the business of sole selling agency at Bombay and the goods were sent to the defendant on sale and return basis. The accounts stated in the plaint have not been admitted to be correct and indeed certain items have been mentioned which according to the defendant's plea have not been credited by the plaintiff. According to the written statement, after the rendition of account the defendant hopes to be entitled to recover more than Rs. 3,000/- from the plaintiff. Averments in paragraph 9 of the plaint relating to cause of action having arisen at Amritsar have been specifically denied in the written statement.

(4) The trial Court after recording evidence on the preliminary issue has observed that the goods in question were admittedly sent from Amritsar to Bombay on the orders received from the defendants at Amritsar. The Court has also observed that the prior to the agreement Exhibit P. 1 there were admittedly sale transactions between the parties on the basis of sale and purchase and those transactions have also been include in the present suit. The Court on facts came to the conclusion that the goods were dispatched from Amritsar and the rates agreed were F. O. R. Amritsar with the result that the delivery has to be presumed to have taken place at Amritsar. After considering the authorities cited before it, the Court below observed that the present was not a suit for accounts against commission agents and that railway freight and bank charges were to be paid by the defendants. the plaintiff having based his claim against the defendants as seller and not as principal. The Court below concluded that a part of the cause of action actually arose in Amritsar and that it had, therefore, jurisdiction to try the suit.

(5) On revision, Shri D. R. Manchanda has with his usual thoroughness taken me through the pleadings and the evidence and has very eloquently submitted that the present is a case of a principal and commission agents and therefore the suit against the commission agents can only be instituted at the place where the commission agency business is carried on. In the instant case, such business is carried on at Bombay. In the course of arguments, the counsel has made a grievance of the lower Court's observations that the question whether the relationship between the parties was that of a seller and a purchaser or that of a principal and commission agents is not to be decided at this stage and that the Court had only to ascertain whether or not any part of the cause of action arose at Amritsar, irrespective of the relationship between the parties. For this view, the Court below relied on a decision by Harnam Singh, J., in Parma Nand Ganesh Parshad v. Firm Jawahar Singh Tara Singh, AIR 1952 Punj 381. The learned counsel for the petitioner has, however, submitted that it was incumbent on the Court below to determine the precise relationship between the parties because on this decision depends the question of jurisdiction of the Court below. If the defendant is a commission agent of the plaintiff, then according to Shri Manchanda, the suit can only be instituted in the Courts at Bombay and not at Amritsar. In support of this contention, the counsel has referred me to the following decided cases:

Nandlal Pannalal v. Kishanlala Chaturbhuj, AIR 1928 Bom 548, Tika Ram v. Daulat Ram, AIR 1924 All 530, Amar Nath Shadi Lal 223, Parthasarathy Gupta v. Calcutta Glass and Silicate Works, (1936) Ltd., AIR 1949 Mad 145, Gappulal Chandanlal v. Kanderwal Brothers, Metal Deptt., (S) AIR 1955 Madh-B 96 and Jai Narain v. Nathmal, AIR 1953 Ajmer 29.

(6) The counsel then contended that erroneous assumption of jurisdiction is liable to be interfered with on revision by this Court and in support of this contention reference has been made to the following reported decisions:--

Nasiruddin v. Hakim Muhammad, AIR 1936 Par 119, Phul Chand Ram v. Naurangi Lal, AIR 1937 Pat 647, Ganesh Lal v. Narain Lal, AIR 1958 Pat 486, National Petroleum Co., Ltd., Bombay v. Meghraj Ramkaranji, AIR 1937 Nag 334 and Chaube Jagdish Prasad v. Ganga Prasad Chaturvedi, AIR 1959 SC 492. Another decision on which Shri Manchanda placed reliance is also of a Single Ram Ram Dhan v. Firm Benarsi Das Puran Chand, AIR 1923 Lah 565.

(7) Shri K. L. Kapur on behalf of the respondent has tried to meet the petitioner's argument by submitting that on the evidence on the record, the relationship between the parties is definitely that of seller and purchaser and not of principal and commission agent. The counsel has referred me to the pleadings of the parties and to Exhibits P.81 and P.89 from which an attempt has been made to show that the defendant had merely purchased goods from the plaintiff and that he did not act as a commission agent. Reference has also been made to Exhibit P. 2 by means of which the agreement Exhibit P. 1 was amended. Emphasis has also been laid on the contention that Chaman Lal, defendant No. 2, who appeared in the witness box as D.W. 1 no where stated that there was any interpolation in the agreement. In the end the counsel submitted that by virtue of section 21 of the Code of Civil Procedure, this Court should not and indeed cannot entertain the objection as to the place of suing in the absence of consequent failure of justice and the counsel has laid considerable stress on the argument that on behalf of the petitioner, no attempt has been made to point out any consequent failure of justice resulting from the trial being held at Amritsar. The counsel has in this connection drawn my attention to the fact that a commission has been issued to Bombay where the defendants are entitled to lead their entire evidence.

(8) After considering the arguments urged at the bar and devoting my most earnest attention to the able address of the counsel, in the light of the various decisions cited, I am unable to hold that any failure of justice consequent upon the institution of the suit at Amritsar has been made out. True it is that if a subordinate Court by an erroneous decision whether on facts or on law assumes jurisdiction which it does not possess, this Court would be entitled on revision under section 115, Code of Civil Procedure, to review and to scrutinise it and set right the error, and this of the petitioner lay down, but while considering the question on revision, this Court cannot ignore the provisions of section 21, Code of Civil Procedure. This section in unequivocal terms lays down that no objection as to the place of suing shall be allowed by any Appellate or revisional Court unless such objection was taken in the Court of first instance at the earliest possible opportunity and such settlement, and unless there has been a consequent failure of justice. It is quite correct that in the instant case, an objection was raised at the earliest possible opportunity but the additional factor which is also basic and essential namely, existence of a consequent failure of justice does not appear to me to have been established on the existing record.

Shri Manchanda, however, argues that the long distance between Amritsar and Bombay by itself should be held to give rise to a consequent failure of justice and he has tried to get some support for this argument from the decision of Tek Chand, J., in Firm Ramditta Mal Sant Lal v. Firm Seth Joth Ram Kidar Nath, AIR 1940 Lah 171. The argument based on section 21 of the Code was disposed of in the reported case in the following words:--

'It is not doubt true that under section 21, Civil Procedure Code, an objection as to the place of suing cannot prevail in an appellate or revisional Court unless such objection had been taken in the Court of first instance at the earliest possible opportunity and there has been a consequent failure of justice. In this case nothing substantial has so far been done; only the issue of jurisdiction has been decided, and as the defendants do not deny that they were commission agents and are the accounting party, a preliminary decree followed as a matter of course. The real trial of the suit is to begin now when accounts are to be taken. As the contract was to be performed at Karachi and the business done in pursuance of this contract was done at Karachi with third parties, the proper place where the accounts can be taken is Karachi. It is therefore, in the interests of justice that the accounts be taken at Karachi. It will be highly inconvenient for the parties to have the trial at Toba Tek Singh, in the Lyallpur District. I therefore hold that S. 21 Civil P. C., is no bar to the Senior Subordinate Judge reversing the preliminary decree passed by the Court of first instance, in the peculiar circumstances of this case.

The counsel has also attempted to get some support for his contention from the decision in Sita Ram Ram Dhan's case, AIR 1923 Lah 565 where a learned Single Judge of the Lahore High Court after accepting the revision sent the case to the Court below for determining whether the place of delivery was an essential part of the contract and also whether the payment of the price at Jagraon was also one of the terms agreed upon. I do not think the reported decision is of much assistance because in the present case the Court below has come to a finding that the goods were despatched from Amritsar and the price was also to be paid there. A similar question to the one which arises in the case in hand also came up for consideration before Bhide, J., in Firm Kanshi Ram Roshan Lal v. Mohkam Chand Chela Ram, AIR 1934 Lah 233 where the controversy was between Courts at Karachi and Courts at Lyallpur. While dealing with the argument based on distance, the learned Judge spoke thus:--

'The learned Senior Subordinate Judge has remarked that owing to the distance between Sargodha and Peshawar it may be presumed that there has been a failure of justice; but this fact alone can hardly be considered to be sufficient to prove the alleged prejudice. In Ratti Ram v. Kundan Lal, AIR 1914 Lah 385 where a suit which was really triable at Karachi, had been tried at Lyallpur, it was held that there had been no prejudice and the decree passed by the Court at Lyallpur was upheld. In the present instance moreover a commission was issued for the examination of defendants' witnesses at Peshawar and the learned Counsel for the defendants was unable to show how the defendants have been prejudiced in the trial of this case. In view of the provisions of section 21, Civil Procedure Code, there was in my opinion, no justification for the order passed by the learned Senior Subordinate Judge as there is nothing to show that there had been any failure of justice.'

In the instant case also, a commission has already been issued to Bombay for recording the defendant's evidence and those proceedings were only stayed by me pending the disposal of this revision petition. A commission having actually been issued to Bombay, I fail to see how any consequent failure of justice can possibly be considered to result from the institution of the suit at Amritsar. I may here also observe that on behalf of the petitioner, no serious attempt has been made to point out to any material which would persuade me to hold any such failure of justice. The decision by a Division Bench of the Punjab Chief Court consisting of Johnstone and Shadi Lal JJ., in 87 Pun Re 1914: (AIR 1914 Lah 385) on which Bhide, J., placed reliance in Kanshi Ram's case, AIR 1934 Lah 233 also supports the respondent's contention. There too, the two possible forums were at Karachi and at Lyallpur. I may here reproduce the actual words of Shadi Lal, J., who had prepared the judgment of the Court:--

'Our conclusion, therefore is that though the Lyallpur Court had not the jurisdiction to hear the suit, the objection as to the place of suing cannot be allowed because there has been no consequent failure of justice.'

(9) Before concluding, it may be observed that it is undoubtedly a fundamental principle well established that on order passed by a Court without jurisdiction is a nullity and its invalidity can be set up at any stage of the proceedings and perhaps also in collateral proceedings. A defect of jurisdiction whether in respect of the subject-matter of the action or whether it is pecuniary or territorial strike at the very authority of the Court and such a defect cannot be cured even by the consent of the parties. These are the general principles governing the matter but the objection relating to territorial jurisdiction is taken out of the general principle by virtue of the enactment of section 21, Code of Civil Procedure the purport of which I have already reproduced a little earlier. According to this provision, an objection relating to the place of suing cannot be allowed by a revisional Court unless inter alia there has been a consequent failure of justice. The policy of the Legislature would thus seem to me to be that objections to territorial jurisdiction are treated as technical and not open to consideration by the revisional Courts.

(10) For the foregoing reasons, I do not think it is open to me in the circumstances of this case to entertain the objection to the territorial jurisdiction of the Amritsar Court with the result that this petition ails and is hereby dismissed. In the peculiar circumstances, I will leave the parties to their own costs in this Court.

(11) Revision dismissed.


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