Skip to content


Thiakesar Alai, Manapparai, a Unit of Sri Meenakshi Mills Limited, Represented by Its Office Manager Vs. Lakshmi Shanmugham Chettiar and Company, a Registered Partnership Firm Doing Business in Yarn at Karur Represented by Its Managing Partner P.S. Kumaravel - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai High Court
Decided On
Reported in(1984)1MLJ428
AppellantThiakesar Alai, Manapparai, a Unit of Sri Meenakshi Mills Limited, Represented by Its Office Manager
RespondentLakshmi Shanmugham Chettiar and Company, a Registered Partnership Firm Doing Business in Yarn at Kar
Cases ReferredFirm v. Bird and Co.
Excerpt:
- .....into a contract with the respondent agreeing to deliver 50 bales of 181. 6. kgs. nett each of 1 on plain yarn at the rate of rs. 63 per 4,34 kgs. ex-mill plus sales tax and 50 bales of 200 kgs , nett each of 2/17 plain yarn at the rate of rs. 94 per 5 kgs ex-mill plus sales tax etc. the petitioner used to intimate the respondent about the readiness and availability of the bales and on receipt of such intimation, the respondent used to send the value of the bales either by draft or by cheque, as was the usual practice. sometimes, the respondent used to request the petitioner to send through bank also. in so far as the contract entered into on 20th november, 1980 is concerned, the respondent stated that the petitioner informed the respondent about his readiness to deliver 10's plain yarn.....
Judgment:

V. Ratnam, J.

1. The defendant in O.S. No. 154 of l961, Sub-Court, Karur, is the petitioner in this civil revision petition. That suit was instituted by the respondent herein for the recovery of a sum of Rs. 72,976-33 with subsequent interest and costs under the following circumstances.

2. The petitioner is a manufacturer of yarn and the respondent is a dealer doing business in yarn. On 20th November, 1980, according to the case of the respondent, the petitioner entered into a contract with the respondent agreeing to deliver 50 bales of 181. 6. kgs. nett each of 1 on plain yarn at the rate of Rs. 63 per 4,34 kgs. ex-mill plus Sales Tax and 50 bales of 200 kgs , nett each of 2/17 plain yarn at the rate of Rs. 94 per 5 kgs ex-mill plus Sales Tax etc. The petitioner used to intimate the respondent about the readiness and availability of the bales and on receipt of such intimation, the respondent used to send the value of the bales either by draft or by cheque, as was the usual practice. Sometimes, the respondent used to request the petitioner to send through bank also. In so far as the contract entered into on 20th November, 1980 is concerned, the respondent stated that the petitioner informed the respondent about his readiness to deliver 10's plain yarn and that had also been taken delivery of; but as per the usual practice, the respondent had sent moneys to the petitioners even before the receipt of the goods and such payment included the amounts for the supply of 2 / 17 plain yarn as well. After adjusting the value of 10's plain yarn supplied, it was found that the respondent had paid a sum of Rs. 20,105.11 in excess to the petitioner in anticipation of the supply of 2 I 17 plaint yarn in November, 1980. The delivery of 10's plain yarn was effected only in February and March, 1981. With reference to the delivery of 2 /17 plain yarn, the petitioner did not intimate the respondent about the probable date of delivery though the respondent had been througout waiting for such delivery and also been demanding the petitioner to supply 2/17 plain yarn which was being evaded by the petitioner on some ground or other. On 6th May, 1981, a letter was received by the respondent from the petitioner to the effect that the contract between the respondent and the petitioner for the supply of yarn had been cancelled and the reasons given for such cancellation, according to the respondent, are not sound The petitioner, according to the respondent, was liable to return the amount of Rs. 20,105.11 being the payment made by the respondent for the supply of Hf. 2/17 plain yarn with interestat 12 per cent per annum from 4th March, 1981. It was the further claim of the respondent that on account of the non-supply of Hf. 2/17 plain yarn by the petitioner and the commission of breach of the con tract to supply the yarn, the respondent was obliged to purchase yarn from outside at a heavy cost in respect of which the respondent had sustained a loss of Rs. 52,000 and this amount according to the respondent, was also payable by the petitioner. To recover these amounts, the respondent instituted the suit in O.S. No. 154 of 1981. Sub-Court, Karur.

3. The petitioner resisted the suit contend-ting that on 20th November, 1980, two copies of the contract were sent to the respondent for signature in token of the acceptance of the terms thereof; but that the respondent did not send back the copy of the contract duly signed and that therefore there was no contract entered into between the petitioner and the respondent on 20th November, 1980. The copy of the contract filed with the plaint by the respondent, according to the petitioner, was only the original sent by it duly signed and it was not returned by the respondent and therefore, it cannot be taken that there was any confirmation or acceptance or even a valid contract between the parties. The petitioner further put-forth the plea that according to the terms of the offer signed as original contract, the respondent should have lifted the goods by the end of November, 1980 failing which the petitioner was at liberty to cancel the contract either partly or fully as time was of the essence of the contract. The supply of 50 bales of 10's plain yarn and the payment in respect of such supply were pursuant to a different contract, according to the petitioner The petitioner denied having entered into a contract with the respondent for the supply of 50 bales of Hf. 2/17 plain yarn. The payment of Rs. 20, 105.11 stated to have been made by the respondent to the petitioner in anticipation of the supply of 50 bales of No. 2/17 plain yarn was disputed by the petitioner and the petitioner stated that no advance was received for the supply of 50 bales of Nf. 2/17 plain yarn and therefore, the petitioner was not bound to intimate the respondent about the availability of such yarn. The over-payment of Rs. 10,125.11 claimed by the respondent was characterised by the petitioner to be a voluntary one and that it had nothing whatever to do with the supply of 50 bales of Hf. 2/17 yarn. The petitioner also expressed its readiness and willingness to return to the respondent a sum of Rs. 20,105 11 under a proper voucher and disputed the right of the respondent to claim interest on that amount. The total amount sent by the respondent towards 50 bales of 10's plain yarn on three occasions was claimed by the petitioner to be Rs. 1,50,00.) against which deliveries of yarn for the total valve of Rs. 1, 29,894-89 were effected and the petitioner could not be made liable in any manner for the imaginary loss. The loss alleged to have been sustained by the respondent in a sum of Rs 52,000. was stated by the petitioner to be arbitrary, speculative and excessive and that the respondent was not entitled to claim that amount either by way of damages or even as representing the difference in the price. An objection was raised with reference to the maintainability of the suit as, according to the petitioner, the respondent had relied upon the original contract, which had provided for the institution of the suit in Madurai in the Court having jurisdiction and therefore, the Sub Court, Karur had no territorial jurisdiction to try the suit. The contract, according to the petitioner, was concluded at Madurai in the Mills and therefore, no part of the cause of action arose within the jurisdiction of the Sub-Court, Karur. On the aforesaid grounds, the petitioner prayed for the dismissal of the suit.

4. On the aforesaid pleadings of the parties, amongst other issues, the Court below framed issue No. 6 relating to the jurisdiction of the Sub-Court at Karur to try the suit and in I. A. No. 395 of 1982, on an application made by the parties that issue relating to jurisdiction was tried as preliminary issue. Excepting he-agreement entered into between the respondent and the petitioner on 20th November, 1980, no other evidence was placed by both parties before the Court below. On a consideration of the terms of the agreement dated 20th' November, 1980, the learned Subordinate Judge was of the view that no part of the cause of action arose at Madurai but the contract had been entered into between the respondent and the petitioner only at Karur within the jurisdiction of the Sub-Court at Karur and therefore, the Sub-Court at Karur had jurisdiction to entertain the suit. In this view, the suit was posted for trial of the other issues to 8th March, 1983. It is the correctness of this order that is challenged in this civil revision petition.

5. The learned Counsel for the petitioner Mr. Varghese Type strenuously contended that the view taken by the Court below that the Sub Court at Karur had jurisdiction to try the suit is erroneous as, according to clause 12 of the contract dated 20th November, 1980, the Court at Madurai alone had jurisdiction and was the competent Court to try the suit.

6. It is necessary to record at this stage that the conclusion arrived at by the Court below in paragraph 10 of its order to the effect that in entering into the contract, the petitioner had been represented by its office Manager at Manapparai and the contract had been signed only at Karur, has not been challenged at all. Though repeatedly the learned Counsel was asked to how, without challenging this conclusion, the finding of the lower Court regarding jurisdiction can be upset, the learned Counsel frankly submitted that there is absolutely no evidence on the basis of which the conclusion arrived at by the Court below and referred to earlier could be successfully assailed. It has therefore to be taken that in view of the absence of any challenge by the learned Counsel for the petitioner to the conclusion of the Court below above referred to, the contract which had been sued upon had been entered into between the respondent and the petitioner only at Karur. Whether clause 12 of the contract, would, in any manner, affect the jurisdiction of the Court at Karur, where admittedly the cause of action arose, may next be considered.

Clause 12 of the contract reads as follows:

All contracts shall be deemed to have been made and be construed and take effect as contract wholly to be fulfilled in Madurai and all proceedings of whatever nature arising out of any contract shall be instituted or taken only in Courts having jurisdiction at Madurai.

The effect of this clause in the contract would be to confer jurisdiction on the Courts in Madurai even though, according to the unchallenged finding of the Court below, the cause of action had arisen at Karur, where the petitioner represented by its office Manager at Manaparai and the respondent, had signed the contract, Such a contract which confers jurisdiction on a Court, which does not have or possess such 'jurisdiction under the provisions of the Code of Civil Procedure, cannot be valid at all. No doubt, cases have arisen where stipulations in a contract restricting the jurisdiction of one of two Courts within whose jurisdiction the cause of action had arisen, have been upheld. For instance, in Hussain Kasam Dada (India) Ltd, by agent Sakeer Dawood v. Motilal Pandampat Sugar Mills Co. Ltd. : AIR1954Mad845 , a Division Bench of this Court held on a review of the entire case law that where there are two competent Courts which can deal with the subject-matter of the litigation, it is open to the parties to a contract to agree that the dispute in respect thereof should be adjudicated upon by one of the two competent Courts and that such an agreement is legal and does not run counter to Section 28 of the Contract Act and is also not against public policy, as the party to such an agreement is not absolutely restricted or hindered from enforcing his rights under or in respect of the contract by the usual Jegal proceedings in the ordinary Courts and as the restriction is partial Similarly, in Hukam Singh v. Gammon (India) Limited : [1971]3SCR314 , dealing with a clause providing for the settlement of disputes by arbitration after providing that the contract shall be deemed to have been entered into in the city of Bombay and the law Courts in Bombay only shall have jurisdiction to adjudicate upon the disputes, the Supreme Court pointed out that it is not open to the parties by agreement to confer jurisdiction on a Court which does not possess such jurisdiction under the provisions of the Code, but that where two Courts or more have under the Code of Civil Procedure jurisdiction to try a suit or proceeding, as agreement between the parties that the dispute between them shall be tried in one of such Courts, is not contrary to public policy. In this case, it has already been noticed that the unchallenged finding of the Court below is that the contract had been entered into between the respondent and the petitioner at Karur and therefore, the cause of action for the institution of the suit arose at Karur. To hold on the strength of clause 12 of the contract referred to earlier that the Courts at Madurai alone will have jurisdiction to entertain the suit, would be to confer jurisdiction to entertain the suit, by agreement of parties on a Court at Madurai, within whose jurisdiction no part of the cause of action arose. In other words, this is not a case where the respondent and the petitioner by the terms of clause 12 of the contract have agreed to exclude the jurisdiction of one of two competent Courts having jurisdiction, but have purported to confer jurisdiction on the Court at Madurai where, according to the unchallenged finding of the Court below, no cause of action arose at all and under those circumstances, the decision in Salem Chemical Industries, a registered Firm v. Bird and Co. (P.) Ltd., Calcutta (1978) 2 M.L.J. 189 : 91 L.W. 522 : I.L.R. (1979) Mad. 35 : A.I.R. 1970 Mad. 16, will have no application whatever to the instant case. Hence, the petitioner cannot by invoking clause 12 of the contract referred to earlier contend that the Court at Karur had no jurisdiction to try the suit. The Court below was, therefore, quite correct in concluding that the Sub-Court at Karur within whose jurisdiction the cause of action arose had also the jurisdiction to try the suit. There is no irregularity or illegality in the order of the Court below. Consequently, this civil revision petition fails and is dismissed with costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //