Grandhi Pitchaiah Venkatraju & Co. v. Palukuri Jagannadham & Co.

1. This is a revision petition under Sec. 25 of the Provincial Small Causes Courts Act. The plaintiff is the petitioner. The suit was filed in the court of the Subordinate Judge at Rajahmundry for recovery of a sum of Rs. 1533-42 by way of damages.

2. The plaintiff is a registered firm doing business in pulse and grains at Rajahmundry. The defendant is also a registered firm with its office at Calcutta. On the plaintiff's indent, the defendant supplied black gram to the plaintiff as per the bill Ex. A-1, dt. 3-7-1967. The consignment was received at Rajahmundry by the plaintiff which found it in a very bad condition and unfit for consumption. The defendant was duly intimated by phone call on 27-1-1967 about this. The defendant gave a reply stating that the matter would be looked into. As the defendant took no action in the matter, the plaintiff had to file the suit for recovery of the amount claimed by way of compensation for the loss sustained by it. The 1st defendant had lied a written statement which was adopted by the other defendants. The contention in the main was that the contract entered into between the plaintiff and the defendant was always subject to the jurisdiction of the court at Calcutta and that therefore the Sub-Court at Rajahmundry had no territorial jurisdiction to entertain the suit. So the plaint should be returned for presentation to the proper court. On these pleadings, the court below framed a point for consideration as follows:—

“Whether this court has no jurisdiction to entertain this suit and as to whether the plaint has to be returned for presentation to the proper court”.

3. The lower court opined that the plaint allegations did not disclose any clear terms that the contract was concluded at Rajahmundry and that the only averment in the plaint on that aspect was that on the indent of the plaintiff the defendant firm supplied black-gram as per the bill Ex. A-1. Referring to Ex. A-1 the court below pointed out that on the top of Ex. A-1 it was printed ‘subject to Calcutta jurisdiction’ and that the whole action of the plaintiff rested upon Ex. A-1, which contains the note ‘subject to Calcutta jurisdiction’. The lower court relied upon the decisions reported in M.B.T Co., Madras v. A. Narasimharao (1) 1968-1 An. W.R 424 and Libra Mining Works v. Baladota Bros. Bombay (1962-1 An. W.R 165). In the learned judge's opinion these rulings were on all fours to the case before him. He therefore directed that the plaint be returned for presentation to the proper court holding that the court had no territorial jurisdiction to entertain the suit.

4. In this revision petition by the plaintiff firm it is contended by the learned counsel that Ex. A-1 is not the contract between the parties and that the delivery of the goods was to be made at Rajahmundry and in fact has been so made and the whole of the cause of action to claim damages has arisen at Rajahmundry where the goods were taken delivery of on the facts of the case. He submitted that the reliance placed upon the two rulings above referred to by the court below is absolutely incorrect. The cases contained facts which are wholly dissimilar to the facts of the present case and were certainly not on all fours with the facts of the case.

5. The two questions that fall for consideration in this case are:—

1) Whether the whole or any part of the cause of action for the plaintiff's claim arose within the jurisdiction of the Rajahmundry Sub-Court; and

2) Even if it has so arisen whether the words contained on the top of Ex. A-1 viz., ‘subject to Calcutta jurisdiction’ exclude the jurisdiction of the Rajahmundry Sub-Court to try the suit.”

6. So far as the cause of action, according to the plaintiff as stated in paragraph to is concerned, it arose on the date of indent for the goods on 3-7-1967 which is the date of the bill Ex. A-1 and on the date the goods were taken delivery of by the plaintiff-firm and the various other dates mentioned in that paragraph. We may at once notice that this is not the case of the defendant-firm in the written statement that no part of the cause of action had arisen at Rajahmundry and that therefore the suit did not lie in the Rajahmundry court. But the objection to territorial jurisdiction was solely based upon Ex. A-1. I think that the cause of action in respect of recovering damages had arisen only at Rajahmundry where the goods were found to be damaged and unfit for consumption. Even otherwise on the facts unhesitatingly it must be held that part of the cause of action for the suit had arisen at Rajahmundry.

7. Coming to the second of the points it is necessary to refer to Ex. A-1 in some detail. This purports to be a bill dated 3-7-67. It was prepared by the defendant-company at Calcutta and addressed to the plaintiff at Rajahmundry. It contained the description of the pulses supplied, the weight and the rate and the total amount payable. It also contained the particulars of the number of the bill as 576, the particulars of the railway wagon by which they were sent, the particulars of the R.R and the fact that it was consigned from Balligung (Calcutta) to Rajahmundry it further contained at the top the words ‘subject to Calcutta jurisdiction’ and the same is underlined in print. The question is whether the words ‘subject to Calcutta jurisdiction’ operate to exclude the jurisdiction of the Rajahmundry Sub-Court where without doubt part of the cause of action in respect of the claim in this suit had arisen.

8. I will first deal with the cases relied on by the court below. In Libra Mining Works v. Baladota Bros. Bombay (2) (1962-1, An. W.R 165) there was an agreement between the parties and it was clearly stated as a clause in the agreement that the contract was ‘subject to Bombay jurisdiction’. It was held by the Bench that the clause constituted a contracting out the right to bring actions in other competent courts. I fail to see how this is a case on all fours with the present case. Here there is no written contract between the parties, it is not brought out by evidence that the defendant had produced that there is even an oral contract in this behalf. As the contract it self had provided for the exclusion of the jurisdiction of other competent courts, the Bench in the above case had held that the agreement amounted to a selection of one of several jurisdictions and the same was valid. In this case Ex. A-1 does not represent the contract between the parties but it merely purports to be a bill with the words printed at the top ‘subject to Calcutta jurisdiction’.

9. In M.B.T Co., Madras v. A Narsimha Rao (1) 1968 (1) An. W.R 424) Basi Reddi, J., had to consider whether the jurisdiction of the Sattenapalli court was excluded. In that case the exclusion of the jurisdiction of the Sattanapalli court was pleaded on the ground of the terms of conditions printed on the forwarding note. As per the terms and conditions of the forwarding note the Madras court alone had jurisdiction in respect of all claims and matters arising under the consignment of the goods entrusted for transport. The question in the main debated before the learned judge was whether the condition relating to the jurisdiction of the Madras court was opposed to Sec. 28 of the Contract Act. The learned judge after referring to certain authorities observed that those authorities lay down that where the parties agree to have their disputes arising out of a particular transaction settled in a particular forum, any other forum which has also territorial jurisdiction, is precluded from entertain ingra suit. I am unable to see what assistance the court below could have received from this decision in its application to the facts of the present case. There is not even a semblance of similarity between that case and the present case. These two above referred to decisions being out of the way. It is necessary to consider the petition whether in the absence of a specific contract or a necessarily implied contract conferring jurisdiction only on a particular court a bill of the type Ex. A-1 which states subject to the jurisdiction of the Calcutta court only can operate to confer jurisdiction only on the Calcutta court and not on any other court where whole or any part of the cause of action has arisen.

10. In Patel Bros. v. Vadilal (3)(AIR 1959 Madras 227) Ramachandra Iyer J., had to consider a similar question. In that case the plaintiff was a firm carrying on business at Madras. That firm entered into a contract at Bombay for the purchase of a bale of cotton cloth. The contract was that the defendant-company which was carrying on business at Bombay had to make the delivery of the goods at Madras. When a suit was filed in the Madras court in relation to this contract for the supply of the cotton cloth the defendant had contested the claim on several grounds. But one of the objections was that the Madras court had no jurisdiction over the subject matter of the suit. Reliance was placed only upon Ex. P-1. Ex. P-1 is a bill issued by the defendant to the plaintiff and according to the plaintiff, that evidenced the contract. It was held by the learned judge that though the pare of cause of action arose at Bombay where the contract was entered into, a part of the cause of action also arose at Madras where the goods were to be delivered and that therefore the Madras Court had jurisdiction to entertain the suit. Referring to Ex. P-1 it was pointed out that it stated that the transaction ‘was subject to Bombay jurisdiction’. It may be noted that these words are exactly similar to the words in Ex. A-1 of the present case where the words are ‘subject to Calcutta jurisdiction’. The learned judge has observed that these words did not exclude the jurisdiction of any other court and that in his opinion ouster of jurisdiction of a court to which a person was entitled to resort to under the Code of Civil Procedure or any other statute cannot be a matter of assumption or presumption but it had to be proved by express words contained in the contract or at least by necessary or inevitable implication. A reference was made by the learned Judge to a case reported in A.K Kaliappa Chettiar and Sons v. Currimbhoy Laljee Sajun and Co. (4) (AIR 1954 Tray. Co. 461). In that case there was a clause in a bill of lading stating that Bombay courts alone shall have jurisdiction. The learned judges held that such an agreement was not void under Sec. 28 of the Contract Act and that there was a specific exclusion of all other courts except the Bombay court. This Madras case, in my opinion, provides a complete answer to the contention raised by the defendant-firm in this case regarding the territorial jurisdiction of the court at Rajahmundry.

11. The learned counsel for the respondent had referred me to the decision reported in Jhun Jhun Wala Bros. v. Subbaramier (AIR 1968 Mad. 194). In that case there was a suit for recovery of a sum of Rs. 1077-45. The defendant has got a factory near Cuttack and he supplied some soda bottles to the plaintiff at Madurai. The plaintiff had claimed the excise duty which was newly levied on the goods from the defendant. The suit was filed in the court at Madurai. The objection was that the Madurai court had no territorial jurisdiction to try the suit. Reliance in that case was placed upon Ex. B-4, which contained an order for the supply of the goods noted in that document; but the goods were to be supplied as per the terms of the contract of the other party printed on the back. One of the terms of the contract was that the order in question was ‘subject to confirmation by the works at Barang, S.E Railway and should be considered as having been made at Barang and subject to the jurisdiction of Cuttack court only. There can be no doubt having regard to the contents of Ex. B-4 that the clause conferring jurisdiction only on the Cuttack Courts is tantamount to an express contract between the parties. I do not think that this decision renders any help to the learned counsel for the respondent.

12. The other case referred to by him is the decision reported in Kanpur Sugar Supply Company…Plaintiff- v. Harsukh Lal…Defendant-. (6) AIR 1977 Allahabad 502. The question that arose in that case was whether the suit should have been instituted in the Rajkot courts instead of in the Kanpur court. There were a number of transactions between the parties as evidenced by Hundies Bills, and Letters in all of them it was written as ‘subject to Rajkot jurisdiction only’. The learned judge stated that there on the facts and the circumstances of the case before him these words viz. ‘subject to Rajkot jurisdiction only’ amounted to a contract between the parties, that only Rajkot courts should have the jurisdiction to entertain the suit. The learned judge opined that a contract between the parties can be direct or implied. Where there was only one transaction between the parties, it could be said that by accepting the hundi or the bill, the receiver thereof was not agreeing to the condition that only Rajkot courts shall have the exclusive jurisdiction over the dispute. He might have accepted the bill and taken delivery of the goods to avoid unnecessary disputes. But where in spite of the clear provisions as to the exclusive jurisdiction of Rajkot courts the party places fresh order and accepts the condition, no other inference can be drawn except that both the parties had agreed that Rajkot courts alone shall have the exclusive jurisdiction. In the case before the learned judge he pointed out that there had been many transactions between the parties and that the words ‘subject to Rajkot courts only’ were written on all the material documents including hundis and bills. The earned judge went on to hold that consequently in the eye of law it should be held that there was a contract and that the legal remedy in respect of the disputes between the parties could be sought before the Rajkot courts only. It is clear from the opinion expressed by the learned judge if as in the present case before me there was only one bill showing that the transaction was subject to the jurisdiction of Calcutta courts, then it would not enable to infer by reason of that single document that it is only the Calcutta courts that should have jurisdiction. In fact the reasoning of the learned judge if applied to the facts of the present case before me would support the plaintiff and not the defendant. As a result of the discussion above, I have no hesitation in holding that the Rajahmundry court had territorial jurisdiction to entertain the suit and that Ex. A-1 containing the words at the top ‘subject to Calcutta jurisdiction’ do not amount to a contract between the parties which confers exclusive jurisdiction on Calcutta courts to the exclusion of any other court that may have jurisdiction by reason of section 21 of the Code of Civil Procedure.

13. The order of the court below directing the return of the plaint is therefore set aside and the court below will proceed to try the suit in the usual manner. The civil revision petition is accordingly allowed with costs in this court only.