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Simac Group (India) Pvt. Ltd. Vs. Verb Deutsche Seereederai - Court Judgment

LegalCrystal Citation
SubjectContract
CourtGujarat High Court
Decided On
Judge
Reported in(1982)1GLR268
AppellantSimac Group (India) Pvt. Ltd.
RespondentVerb Deutsche Seereederai
Cases ReferredMichael Golodetz and Ors. v. Serajuddin
Excerpt:
.....civil procedure code which deal with return of the plaint for presentation to the proper court clearly proceed on the assumption that the court to which the plaint is to be presented after return would be the court in india. it will be futile to return the plaint in a case like the one on hand, because such a plaint with the court fees paid in indian currency will not be entertained by the court in west germany, where the law pertaining to court fees obviously would be of a different nature and texture, if at all court fees are levied in that country. by the stringent availability of foreign exchange are too well-known to be stated......to one of the two and this agreement, therefore, cannot be said to be hit by section 28 of the indian contract act, which prohibits any contract in restraint of legal proceedings. it cannot be denied that ordinarily it is open to the contracting parties to restrict the jurisdiction of the court to one of two or more courts, which would otherwise have jurisdiction and that ordinarily such an agreement will not be treated as the one referred to in section 28 of the indian contract act, but the facts and circumstances of some may the a picture different from the one which would ordinarily arise.6. the supreme court had an occasion to examine the question of contract in the case of michael golodetz and ors. v. serajuddin & co. : [1964]1scr19 in the light of reference to arbitration and.....
Judgment:

N.H. Bhatt, J.

1. This is an Appeal from Order brought to this court by the original plaintiffs Nos. 1 and 3 of the Special Civil Suit No. 81 of 1972, being aggrieved by the order dated 20-7-77 passed by the learned Civil Judge (SD) Jamnagar, ordering the return of the plaint to the plaintiffs for presentation to the proper court.

2. The appellant No. 1 Simac Group (India) Pvt. Ltd. incorporated under the Companies Act and having its office at Bombay is the plaintiff No. 1 in the suit. This company is manufacturing knitting machines. This company bad entered into an agreement with the plaintiff No. 2 to sell some of those machines. The plaintiff No. 2, is a company at Mohrenstrassee in Berlin in the German Democratic Republic. The plaintiff no. 3 is the Insurance Company, having its office at Bombay, now undertaken by the United India General Insurance Company, the State concern. The defendant No. 1, who is the respondent No. 1 herein, is Verb Deutsche Seereederai, which is a company having its principal office in Germany and they are doing the business of Marine transport. They have their agent at Bombay and they are Marine Transport Co. Pvt. Ltd., the defendant No. 2 in the suit. The plaintiff No. 1 had to transmit their goods to their purchaser, the plaintiff No. 2 and, therefore, a contract was entered into between the plaintiff No. 1 on one hand and the defendant No. 2, acting as the agent of the defendant No. 1 on the other, pursuant to which the cargo was delivered to the defendants Nos. 1 and 2 at Bedi Bandar in Jamnagar District on 18-8-71 and the defendant No. 2 had issued in favour of the plaintiff No. 1 a bill of lading dated 18-8-71, undertaking to deliver the goods to the plaintiff No. 2 at Roastock in Germany. The goods when handed over to the defendant No. 2 at Bedi Port in Jamnagar were reported to be in good order and condition, when shipped. The goods were carried by the defendant No. 1 by their vessel called 'FREUND-SCHAFT', and they had reached Roastock on or before 11-10-71 and were ultimately delivered to the plaintiff No. 2 on or before 29-11-71, but when delivered, they were found to be considerably damaged and were not marketable. The plaintiffs, therefore, alleged that the defendant No. 1 had failed to discharge its duty in respect of the handling of the goods in transit and they, therefore, alleged that the defendant No. 1 was liable to make good the loss, estimated at the amount claimed in the suit.

3. Both the defendants filed written statement, Ex. 17, and inter alia contended that as per the special contract between the parties contained in Clauses (4) and (39) of the Bill of Lading, only court that was agreed upon as having jurisdiction was the court at Roastock and not the Jamnagar Court.

4. A preliminary issue was raised in respect of the jurisdiction of the court and the learned Judge held that as per the contract between the parties, the jurisdiction was restricted to that Roastock court, with the result that the learned Judge ordered the return of the plaint under Order 7 Rule 10(i) of the Civil Procedure Code. It is this order that has occasioned the present Appeal from Order.

5. Clause (4) and Clause (39) of the contract are required to be reproduced from the judgment of the learned trial Judge. They are as follow:

4. The contract evidence by this Bill of Lading shall be governed by the law of the land where the carrier has his principle place of business and disputes determined at the place (or at the option of the carrier at the port of destination) according to that law to the exclusion of the jurisdiction of the courts of any other country.

39. Findings in accepting this Bill of Lading the supper consignee and/or owners of the goods and the holder of this bill of lading expressly accept and agree to all its stipulation, exception and conditions whether within-printed, stamped or incorporated as fully as if they were all signed by such shipper consignee owner or holder.

It was not controverted before me that the court at Jamnagar would have jurisdiction, because the cause of action in the form of delivery of goods consigned had taken place at Bedi Port in Jamnagar District. As the defendant No. 1 was doing business in West Germany, the court in that country also would have jurisdiction. It was alleged that out of the two courts having jurisdiction, the parties as per their contract restricted jurisdiction to one of the two and this agreement, therefore, cannot be said to be hit by Section 28 of the Indian Contract Act, which prohibits any contract in restraint of legal proceedings. It cannot be denied that ordinarily it is open to the contracting parties to restrict the jurisdiction of the court to one of two or more courts, which would otherwise have jurisdiction and that ordinarily such an agreement will not be treated as the one referred to in Section 28 of the Indian Contract Act, but the facts and circumstances of some may the a picture different from the one which would ordinarily arise.

6. The Supreme Court had an occasion to examine the question of contract in the case of Michael Golodetz and Ors. v. Serajuddin & Co. : [1964]1SCR19 in the light of reference to arbitration and Section 34 of the Act, which deals with staying of the suit. In a contract of reference, the exclusion of the civil court's jurisdiction is sought, because the domestic forum is entrusted with the jurisdiction. The Supreme Court in this connection has inter alia observed as follows:

A clause in a commercial transaction between merchants residing in different countries to go to arbitration is an integral part of the transaction, on the faith of which the contract is entered into, but that does not preclude the court having territorial jurisdiction from entertaining a suit at the instance of one of the parties to the contract even in breach of the covenant for arbitration.... The court ordinarily require the parties to resort for resolving disputes arising under a contract to the Tribunal contemplated by them at the time of the contract. That is not because the court regards itself bound to abdicate its jurisdiction in respect of disputes within its cognizance: It merely seeks to promote the sanctity of contracts, and for that purpose stays the suit. The jurisdiction of the court to try the suit remains undisputed, but the discretion of the court is on grounds of equity interposed. The court is, therefore, not obliged to grant stay merely because the parties have even under a commercial contract agreed to submit their dispute in a matter to an arbitration tribunal in a foreign country. It is for the court, having regard to all the circumstances, to arrive at a conclusion whether sufficient reasons are made out for refusing to grant stay. Whether the circumstances in a given case make out sufficient reasons for refusing to stay a suit is essentially a question of fact.

7. The Division Bench of this court had to examine the law laid down by the Supreme Court in the above case in cases of disputes of the nature arising in this case. While disposing of the Letters Patent Appeal No. 21 of 1977, on 18-3-1977, the Division Beach, consisting of the then Acting Chief Justice J. B. Mehta and D.A. Desai, J. (as he then was) has held as follows:

It would be grossly unjust drive the plaintiff merely on the score of the choice of forum to file a suit at Hyderabad as it would be precipitating injustice to him and the insurance company would be able to succeed on such a dishonest technical ground. Therefore, the discretion as per the settled legal position should have been exercised even if the question had to be examined from the aspect of choice of forum.

In my view, the court's power, therefore, to relieve the party of this contractual obligation should be beyond the pale of any controversy.

8. The question then arises is as to what should be done in the case on hand. To me it appears that provisions of the Civil Procedure Code which deal with return of the plaint for presentation to the proper court clearly proceed on the assumption that the court to which the plaint is to be presented after return would be the court in India. It will be futile to return the plaint in a case like the one on hand, because such a plaint with the court fees paid in Indian currency will not be entertained by the court in West Germany, where the law pertaining to court fees obviously would be of a different nature and texture, if at all court fees are levied in that country. In the facts and circumstances of the case on hand, the plaintiffs, that is, the plaintiff Nos. 1 and 3 in particular, have not specifically set out in their plaint as to why and what possible hardship they would be required to undergo, if the litigation is to be fought by the plaintiff No. 3, now a nationalised insurance company of India, in West Germany. The plaintiff No. 2 obviously would not be interested now in carrying the battle because it appears that the insurance company has indemnified the said plaintiff No. 2, who is now not here before this court us the appellant and is, therefore, impleaded as the respondent No. 3. To ask the Indian plaintiff and the Indian insurance company to fight a litigation in respect of a contract entered into in India in a foreign country itself envisages considerable hardship of foreign exchange and also of fighting its cause on the foreign land against the foreign company.

9. Mr. Nanavati in this connection very vehemently contended that as against non-pleading of any hardship by the plaintiff, the defendants had in their written statement pleaded in paragraph 7 (d) the possible hardships which the defendant No. 1 would be required to undergo, if it has to fight litigation in India, but when the defendant No. 1 has its accredited agent, the defendant No. 2, in the form of a limited company, who has to look after its affairs and enter into contracts on its behalf in India, the hardship, if any, to be undergone by the defendant No. 1 would be hardly of any substance. Mr. Nanavati had alternatively urged that unless the affidavit was filed on behalf of the plaintiffs Nos. 1 and 3, the appellants herein, describing their hardships, the court should not assume anything in their favour. Affidavits are resorted to for the purpose of proof and it is the settled legal position of procedural law that the facts which are extremely notorious need not be proved. The hardships likely to be occasioned to the plffs. by the stringent availability of foreign exchange are too well-known to be stated. The plaintiffs Nos. 1 and 3 had entered into the contract in India and had entrusted the defendant No. 1 through the defendant No. 2 with their goods which appeared to be fairly substantial in value. They may be right in complaining of the loss of the goods, because of extreme deterioration. In this set of circumstances, the agreement contained in Clause (4) of the chartered party or Bill of Lading should be construed to be a restraint on legal proceedings and the court in India should be loath to say that it will not exercise jurisdiction vested in it by law, simply because there is a clause in the agreement between the parties, restricting the jurisdiction to one of the two courts.

10. Ordinarily, such restriction under Section 28 would be the restriction to one out of two or more courts in India, but where the contracting party of another country in this fashion seeks to impose restriction on the choice of forum, the courts in India should be slow to entertain them, because of the extreme difficulty, if not impossibility, of an Indian litigant of pursuing his cause of action on the foreign land.

11. In above view of the matter, I allow this Appeal from Order by quashing the order passed by the learned trial Judge, with the result that the Special Civil Suit No. 81 of 1972 of the court of the Civil Judge (S.D.) Jamnagar will stand revived on his file, and it will be proceeded with and disposed of in accordance with law. Appeal is accordingly allowed with no order as to costs.


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