Transport Company Vs. United India Insurance Co. Ltd. & Ors  Insc 316
(23 April 2004)
Raju & Arijit Pasayat.
out of SLP(C) No. 11455/2003) ARIJIT PASAYAT, J.
this appeal, the only question that is raised is whether the High Court's
conclusion that the Civil
Court at Barnala had
jurisdiction to try the suit filed by respondent No.1-United India Insurance
Co. Ltd. (hereinafter referred to as 'Plaintiff No.1') and Malwa Cotton
Spinning Mills Ltd. (hereinafter referred to as 'plaintiff No.2') is correct or
not. While the trial Court held that the Barnala Court had jurisdiction, the first Appellate Court held otherwise.
the revision filed under Section 115 of the Code of Civil Procedure, 1908 (in
short the 'CPC') the High Court by the impugned judgment held that the trial
Court's view was correct.
dispute arose in the following background.
plaintiff No.2 had purchased certain articles which were booked in 29 bales.
Material was booked with New Moga Transport Co., the present appellant
(defendant No.1) for transportation to Barnala. The goods were loaded in truck No.
HYN 6973. The consignment reached Barnala at 9.30 a.m. on 23.5.1993 near the factory of plaintiff No.2. On account
of a fire which took place allegedly due to electric short- circuiting there
was destruction of whole of the materials.
No.2 claimed that he had suffered loss and lodged a claim for a sum of
Rs.5,10,000/- against the present appellant i.e. defendant No.1. Since nothing
was paid and only a non-delivery of goods certificate was issued by the
appellant (defendant No.1), respondent No.1 (plaintiff No.1) settled the claim
for a sum of Rs.4,63,516/- on the basis of the surveyor's report and the amount
was paid to plaintiff No.2 and due receipt was obtained. Plaintiff No.2 on
receipt of the amount executed a letter of subrogation-cum-special power of
attorney, assigning, abandoning and transferring all the rights in favour of
plaintiff no.1 who claims the compensation from defendant No.1. i.e. the
present appellant. In the suit a specific plea inter alia was taken by the
present appellant that the Court at Barnala had no jurisdiction to deal with
the suit. With reference to the consignment note, it was submitted that the
Court at Udaipur alone had jurisdiction to deal with
the matter. In the consignment note it was indicated that the Court having
jurisdiction was the one situated at Udaipur. As noted above, the trial Court did not accept the plea that the Court
at Udaipur alone had jurisdiction. But in
appeal, the first Appellate Court upset the verdict of the trial Court.
impugned judgment the High Court restored the judgment of the trial Court and
held that the plaintiffs were entitled to relief and Court at Barnala had
support of the appeal, learned counsel for the appellant (defendant No.1)
submitted that the High Court has clearly over-looked the fact that the parties
by an agreement have fixed a particular Court to be the Court that has the
jurisdiction to try the suit. Without any plausible reason or basis the High
court upset the decision of the first Appellate Court.
in the consignment note it was stated as follows:
Court at Head office city shall only be the jurisdiction in respect of all
claims and matters arising under the consignment at the goods entrusted for
at the top of the consignment note the jurisdiction has been specified to be
with Udaipur Court.
reference to the aforesaid indication in the consignment note, learned counsel
for the appellant stated that there is clear exclusion of the Courts other than
the chosen one and, therefore, the suit could not have been entertained at any
other place. Unfortunately, the High Court did not appreciate the factual
position in its proper perspective holding that the Court at Barnala would have
got jurisdiction in the ordinary course. Because of the exclusion clause as
embodied in the consignment note and specific indication in the consignment
note that the Udaipur
Court alone has
jurisdiction the High Court was not justified in its conclusion.
counsel appearing for respondent No.1 (plaintiff No.1) submitted that the
consignment note was not clear and what was stated in the consignment note was
"the Court at Head Office city shall only be the jurisdiction in respect
of all claims and matters arising under the consignment at the goods entrusted
for transport". Though the parties could by agreement restrict the jurisdiction
to a Court which along with other Courts had jurisdiction, yet in view of the
vague indication of the court relating to jurisdiction the High Court has
rightly interfered. It was submitted that basing on such technical pleas there
has been considerable delay in proceeding with the matter and the trial Court
and the High Court were justified in holding that the court at Barnala had
jurisdiction. A very technical plea had been advanced by defendant No.1,
(appellant herein) to defeat the purpose of the suit. It is submitted that the
consignment note refers to the Head Office without specifying as to where the
head office was. In view of the vague indication it cannot be said that the
parties by agreement excluded the jurisdiction of one of the Courts. It is,
therefore, not possible to know as to whether the Court referred to in Clause
16 in the consignment note refers to any particular Court having jurisdiction
or was unconnected with the jurisdiction.
question has been examined by this Court on several occasions.
20 of CPC reads as follows:
suits to be instituted where defendants reside or cause of action
arises.-Subject to the limitations aforesaid, every suit shall be instituted in
a Court within the local limits of whose jurisdiction –
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
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
cause of action, wholly or in part, arises.
- A corporation shall be deemed to carry on business at its sole or principal
office in (India) or, in respect of any cause of
action arising at any place where it has also a subordinate office, at such
place." Normally, under clauses (a) to (c) plaintiff had a choice of forum
and cannot be compelled to go to the place of residence or business of the
defendant and can file a suit at a place where the cause of action arises. If
the defendant desires to be protected from being dragged into a litigation at
some place merely because the cause of action arises there it can save itself
from such a situation by an exclusion clause. The clear intendment of the
Explanation, however, is that where the Corporation has a subordinate office in
the place where the cause of action arises it cannot be heard to say that it
cannot be sued there because it does not carry on business at that place.
Clauses (a) and (b) of Section 20 inter alia refer to a Court within local
limits of whose jurisdiction the defendant inter alia "carries on
business". Clause (c) on the other hand refers to a Court within local
limits of whose jurisdiction the cause of action wholly or in part arises.
plain reading of the Explanation to Section 20 CPC it is clear that Explanation
consists of two parts, (i) before the word "or" appearing between the
words "office in India" and the word "in respect of" and
the other thereafter.
Explanation applies to a defendant which is a Corporation which term would
include even a company. The first part of the Explanation applies only to such
Corporation which has its sole or principal office at a particular place. In
that event, the Court within whose jurisdiction the sole or principal office of
the company is situate will also have jurisdiction inasmuch as even if the
defendant may not actually be carrying on business at that place, it will be deemed
to carry on business at that place because of the fiction created by the
Explanation. The latter part of the Explanation takes care of a case where the
defendant does not have a sole office but has a principal office at one place
and has also a subordinate office at another place. The expression "at
such place" appearing in the Explanation and the word "or" which
is disjunctive clearly suggest that if the case falls within the latter part of
the Explanation it is not the Court within whose jurisdiction the principal
office of the defendant is situate but the Court within whose jurisdiction it
has a subordinate office which alone have the jurisdiction "in respect of
any cause of action arising at any place where it has also a subordinate office".
20 before the Amendment by CPC in 1976 had two Explanations being Explanation I
and II. By Amendment Act, Explanation I was omitted and Explanation II was re-numbeed
as the present Explanation. Explanation which was omitted reads as follows:
1.- Where a person
has a permanent dwelling at one place and also temporary residence at another
place, he shall be deemed to reside at both places in respect of any cause of
action arising at the place where he has such temporary residence." This
Explanation dealt with the case of place of residence of the defendant and
provided with regard to a person having a permanent dwelling at one place and
also temporary at another place that such person shall be deemed to reside at
both places in respect of any cause of action arising at the place where he has
such temporary residence.
language used in Explanation II on the other hand which is the present
Explanation was entirely different. Had the intention been that if a
corporation had its principal office at one place and a subordinate office at
another place and the cause of action arose at the place where it had its
subordinate office it shall be deemed to be carrying on business at both places
the language used in Explanation II would have been identical to that of
Explanation I which was dealing with a case of a person having a permanent
dwelling at one place and also temporary residence at another place.
above position was noted in Patel Roadways Ltd., Bombay v. Prasad Trading Company (1991 (4) SCC 270).
long series of decisions it has been held that where two Courts or more have
under the CPC jurisdiction to try a suit or proceeding an agreement between the
parties that the dispute between them shall be tried in any one of such Courts
is not contrary to public policy and in no way contravenes Section 28 of the
Indian Contract Act, 1872.
if on the facts of a given case more than one Court has jurisdiction, parties
by their consent may limit the jurisdiction to one of the two Courts. But by an
agreement parties cannot confer jurisdiction to a Court which otherwise does
not have jurisdiction to deal with a matter. (See Hakam Singh v. M/s. Gammon (India) Ltd. (AIR 1971 SC 740} and M/s. Shriram
City Union Finance Corporation Ltd. v. Rama Mishra (AIR 2002 SC 2402).
aforesaid factual background, the facts of the case at hand have to be looked
only been indicated in the consignment note the Court at Head Office city had
jurisdiction then in the absence of a precise indication of the place what
would have the consequence, we are not presently concerned, more particularly,
when the consignment note itself had indicated that Court at Udaipur alone had jurisdiction.
observed by this Court in Shriram's case (supra) referring to Hakam Singh's
case (supra) an agreement affecting jurisdiction of Courts is not invalid. It
is open to the parties to choose any one of the two competent Courts to decide
the disputes. Once the parties bound themselves as such it is not open for them
to choose a different jurisdiction.
being the factual and legal position, the inevitable conclusion is that the
High Curt was not justified in upsetting the order of First Appellate Court.
not a case where the chosen Court did not have jurisdiction. The only question,
therefore, related to exclusion of the other Courts.
intention of the parties can be culled out from use of the expressions
"only", "alone", "exclusive" and the like with
reference to a particular Court. But the intention to exclude a Court's
jurisdiction should be reflected in clear, unambiguous, explicit and specific
terms. In such case only the accepted notions of contract would bind the
parties. The first Appellate Court was justified in holding that it is only the
Court at Udaipur which had jurisdiction to try the
suit. The High Court did not keep the relevant aspects in view while reversing
the judgment of the trial Court. Accordingly, we set aside the judgment of the
High Court and restore that of the first Appellate Court. The Court at Barnala
shall return the plaint to the plaintiff No.1 (respondent No.1) with
appropriate endorsement under its seal which shall present it within a period
of four weeks from the date of such endorsement of return before the proper Court
at Udaipur. If it is so done, the question of
limitation shall not be raised and the suit shall be decided on its own merits
in accordance with law. The appeal is allowed. No costs.
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