Era Textiles Ltd. Vs. M/S Puromatic Filters (P) Ltd  Insc 277 (16 April 2004)
Babu & G.P. Mathur
out of Special Leave Petition (Civil) No.5552 of 2002) G.P. MATHUR,J.
This appeal is directed against the judgment and order dated 21.12.2001 of the
High Court of Delhi by which the appeal preferred by the appellant against the
order of rejection of the appellant's application under Order VII Rule 10 CPC
passed by the Additional District Judge, Delhi on 28.3.1998 was dismissed.
appellant Hanil Era Textiles Limited, New Era House, Mogul Lane, Matunga
(West), Bombay placed a purchase order bearing No.CA/32/95 dated 31.5.1995 with
M/s Puromatic Filters Pvt. Ltd. 25/100, Yashwant Nagar, Goregaon (W), Bombay
for supply of 136 numbers Coarse Filters and 136 numbers Fine Filters. The
purchase order was in following terms :
Sir, We are pleased to order the Material parts listed below subject to terms,
conditions and instructions, on the reverse hereof and the attachments, if any
hereto. Please acknowledge your acceptance by returning the duplicate copy duly
signed within one week." Thirty per cent of the amount was paid as
advance. The delivery instructions contained a clause Deliver the material at
NEW ERA HOUSE/Patalganga Factory. The purchase order mentioned that the same
was subject to the terms and conditions mentioned thereon. Condition No.17
reads as under :
JURISDICTION Any legal proceeding arising out of the order shall be subject to
the jurisdiction of the Courts in Mumbai." According to the respondent, it
dispatched the ordered materials to the appellant through M/s Transport
Corporation of India but the price thereof was not paid.
The respondent M/s Puromatic Filters Pvt. Ltd., 12, D.S.I.D.C. Scheme-II, Okhla
Industrial Area, Phase-II, New Delhi, accordingly filed Suit No.162 of 1997 in
the Court of District Judge, Delhi, for recovery of Rs.3,93,344.80 and pendente
lite and future interest at the rate of 24 per cent per annum from the date of
filing of the suit till the date of realization of the decretal amount. The
dispute in the present appeal is regarding the territorial jurisdiction of the
Court at Delhi to try the suit and para 8 of the
plaint which contains the necessary averment in this regard is reproduced hereinbelow
That the cause of action has arisen at Delhi as the ordered goods were delivered to the defendant through their
transporters M/s Transport Corpn. of India Ltd., the value of goods was to be
paid by the defendant to the plaintiff at Delhi and as such this Hon'ble
Court is having
jurisdiction to try and adjudicate upon the matter in dispute."
appellant (defendant in the suit) moved an application under Section 20 read
with Order VII Rule 10 and Section 151 CPC before the trial Court praying that
the plaint in Suit No.162 of 1997 be returned for presentation before the Court
having territorial jurisdiction in which the suit should have been instituted.
The main plea taken in the application was that as per Clause 17 of the Local
Purchase Order No.CA/32/95 dated 31.5.1995 any legal proceedings arising out of
the order shall be subject to the jurisdiction of the Courts in Bombay and the
plaintiff having accepted the terms and conditions of said Local Purchase
Order, it was bound by the said clause. It was also pleaded that
notwithstanding the aforesaid clause 17 of the purchase order, the contract for
supply of coarse filters and fine filters was entered into between the parties
at Bombay and the advance payment of Rs.1,16,353.44
was made by the defendant to the plaintiff at Bombay. The respondent (plaintiff) filed a reply on the ground,
inter alia, that the defendant had issued a certificate for removal of
excisable goods (Form CT- 3) bearing No.CCEX/KphII/HETL/95/116 dated 13.1.1996
vide which the defendant sought permission to remove the ordered goods from the
factory premises of the plaintiff at Delhi and as such the Court at Delhi had
territorial jurisdiction to try the suit. The plaintiff also denied that it had
accepted the terms and conditions printed on the back of the purchase order or
is bound by clause 17. It was also submitted that the goods in question were
delivered to the agent of the defendant at Delhi from the factory premises of the plaintiff at Delhi under certificate in Form CT-3.
learned Additional District Judge, Delhi, held that in absence of the written
statement having been filed by the defendant, he had to decide the controversy
on the basis of the allegations made in the plaint and especially when the
plaintiff had asserted that the goods were delivered to the defendant at Delhi
on the basis of Form CT-3, the Court at Delhi had territorial jurisdiction to
try the suit. The appeal preferred by the appellant against the said order was
dismissed by the High Court on 21.12.2001.
There is no dispute that the appellant placed the order for supply of 136
coarse filters and 136 fine filters with the respondent (plaintiff) vide
Purchase Order No.CA/32/95 at Bombay on 31.5.1995 and that an advance payment
of Rs.1,16,353.44 was also made at Bombay. According to the averments made in
the plaint, the appellant (defendant) sent Form CT-3 and thereafter the
plaintiff dispatched the goods from their factory in Delhi through M/s Transport Corporation
of India, as per the directions of the
defendant. Original documents were sent to the branch office of the plaintiff
at 25/100, Yashwant Nagar, Goregaon (W), Bombay but the defendant did not retire the documents from the branch office
of the plaintiff and illegally and unauthorisedly took the delivery of the
goods from Transport Corporation of India. These averments show that the offer to purchase the goods was made by
the defendant at Bombay and the same was accepted by the
plaintiff's branch office at Bombay. The
advance payment was also made by the defendant at Bombay. Thus, a part of cause of action
accrued at Bombay. According to the plaintiff, the
goods were dispatched from Delhi through
M/s Transport Corporation of India Ltd. after receipt of Form CT-3, which was
sent by the defendant. In this manner, the plaintiff claims that a part of
cause of action accrued in Delhi.
effect of Clause 17 of the Purchase Order which mentions any legal proceedings
arising out of the order shall be subject to the jurisdiction of the Courts in Mumbai,
has to be examined in the aforesaid background.
sub-sections (a) and (b) of Section 20, the place of residence of the defendant
or where he carries on business or works for gain is determinative of the local
limits of jurisdiction of the Court in which the suit is to be instituted.
Sub-section (c) of Section 20 provides that the suit shall be instituted in a
Court within the local limits of whose jurisdiction the cause of action, wholly
or in part, accrues. As shown above, in the present case, a part of cause of
action had accrued in both the places, viz., Delhi and Bombay. In Hakam Singh v. Gammon (India) Ltd. 1971 (1) SCC 286, it was held
that it is not open to the parties to confer by their agreement jurisdiction on
a Court which it does not possess under the Code.
where two Courts or more have under the Code of Civil Procedure jurisdiction to
try a suit or a 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. It was also held that such an agreement does not contravene Section 28
of the Contract Act.
same question was examined in considerable detail in A.B.C. Laminart Pvt. Ltd.
v. A.P. Agencies AIR 1989 SC 1239 (headnote D) and it was held as under :
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.
Often the stipulation is that the contract shall be deemed to have been made at
a particular place. This would provide the connecting factor for jurisdiction
to the Courts of that place in the matter of any dispute on or arising out of
that contract. It would not, however, ipso facto take away jurisdiction of
other Courts. Where an ouster clause occurs, it is pertinent to see whether
there is ouster of jurisdiction of other Courts. When the clause is clear,
unambiguous and specific accepted notions of contract would bind the parties
and unless the absence of ad idem can be shown, the other Courts should avoid
exercising jurisdiction. As regards construction of the ouster clause when
words like 'alone', 'only', 'exclusive' and the like have been used there may
be no difficulty. Even without such words in appropriate cases the maxim 'expressio
unius est exclusio alterius' expression of one is the exclusion of another may
be applied. What is an appropriate case shall depend on the facts of the case.
In such a case mention of one thing may imply exclusion of another. When
certain jurisdiction is specified in a contract an intention to exclude all
other from its operation may in such cases be inferred. It has therefore to be
properly construed." This view has been reiterated in Angile Insulations
v. Davy Ashmore India Ltd. 1995 (4) SCC 153.
Clause 17 says - any legal proceedings arising out of the order shall be
subject to the jurisdiction of the Courts in Mumbai. The clause is no doubt not
qualified by the words like "alone", "only" or "exclusively".
what is to be seen is whether in the facts and circumstances of the present
case, it can be inferred that the jurisdiction of all other Courts except
Courts in Mumbai is excluded. Having regard to the fact that the order was
placed by the defendant at Bombay, the said order was accepted by the branch
office of the plaintiff at Bombay, the advance payment was made by the
defendant at Bombay, and as per the plaintiffs' case the final payment was to
be made at Bombay, there was a clear intention to confine the jurisdiction of
the Courts in Bombay to the exclusion of all other Courts.
Court of Additional District Judge, Delhi had, therefore, no territorial jurisdiction to try the suit.
the result, the appeal succeeds and is hereby allowed. The order dated
28.3.1997 of the Additional District Judge, Delhi as affirmed by the order dated 21.12.2001 by the Delhi High Court is set aside. The plaint
filed by the respondent herein is ordered to be returned for presentation
before the competent Court at Bombay. No