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Surajmall Shiwhhagawan v. Kalinga Iron Works
Factual and Procedural Background
The plaintiff, a unit of the Industrial Development Corporation of Orissa Ltd., filed a suit for recovery of money from the defendant-firm based in Calcutta, claiming balance dues for goods supplied and losses due to demurrage caused by the defendant's default. The defendant denied the claim and contended that the Keonjhar Court lacked territorial jurisdiction since no part of the cause of action arose there, and that disputes were contractually agreed to be settled in Calcutta courts. The Subordinate Judge, Keonjhar, after framing issues, decided issue No. 2 on jurisdiction in favor of the plaintiff, holding that the Keonjhar Court had jurisdiction. The defendant challenged this order by filing the present revision.
Legal Issues Presented
- Whether the Civil Court at Keonjhar has territorial jurisdiction to try the suit despite the defendant's contention of an exclusive jurisdiction clause favoring Calcutta courts.
- Whether the recital “All subject to Calcutta jurisdiction” on the defendant’s purchase order and the alleged letter from the defendant to the plaintiff effectively ousted the jurisdiction of the Keonjhar Court.
- Whether the defendant proved the existence of a binding agreement ousting the jurisdiction of the Keonjhar Court.
Arguments of the Parties
Defendant's Arguments
- The Keonjhar Court lacks territorial jurisdiction as no cause of action arose there.
- The parties agreed that all disputes would be settled exclusively in Calcutta courts, as indicated by the clause “All subject to Calcutta jurisdiction” on the defendant’s purchase order (Ext. C) and an alleged letter (Ext. B) sent to the plaintiff.
- The alleged letter (Ext. B) was sent under certificate of posting and thus should be presumed received, establishing consent to Calcutta jurisdiction.
Plaintiff's Arguments
- There was no contract or agreement confining jurisdiction exclusively to Calcutta courts.
- The recital “All subject to Calcutta jurisdiction” on Ext. C was not accepted or signed by the plaintiff and therefore not binding.
- The alleged letter (Ext. B) was not proved to have been received by the plaintiff; mere certificate of posting is insufficient without proof of actual posting of the letter in an envelope.
- The plaintiff’s own terms of business (Ext. A) provided that jurisdiction would be at Barbil within Keonjhar district, and disputes could not be brought outside the local limits of Keonjhar courts.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Hakam Singh v. Gammon (India) Ltd., 1971 1 SCC 286 | Where two or more courts have jurisdiction, an agreement to try disputes in one court is not against public policy. | Supported the view that mere recital of jurisdiction clause does not oust jurisdiction of other courts having jurisdiction. |
| Prag Oil Mills Depot v. Transport Corporation of India, 46 1978 C.L.T 89 | Same principle regarding jurisdiction agreements between parties. | Reinforced the principle that jurisdiction clauses are valid only if clearly agreed upon. |
| Savani Transport Private Limited v. Chinnaswami Mudaliar & Co., AIR 1979 Mad. 16 | Similar principle on jurisdiction and agreements between parties. | Used to support the court's approach on jurisdictional agreements. |
| M/s. Patel Bros. v. M/s. Vedilal Kashidas Ltd., AIR 1959 Mad. 227 | Ouster of jurisdiction must be proved by express words or necessary implication; mere recital of jurisdiction does not exclude other courts. | Supported the court’s conclusion that the recital “All subject to Calcutta jurisdiction” does not oust jurisdiction of Keonjhar courts. |
| S. Manuel Raj & Co. v. J. Manilal & Co., AIR 1963 Guj. 148 | Where a party signs a printed form containing a jurisdiction clause, it is binding. | Distinguished on facts: here plaintiff did not sign or accept the clause; thus, it was not binding. |
| J. Mc Gaffin v. L.I.C of India, AIR 1978 Cal. 123 | On presumption of receipt of letters posted under ordinary course of business (section 114 Evidence Act). | Applied to analyze the insufficiency of proof regarding posting and receipt of Ext. B letter. |
| Ayisabeevi v. Aboobacker, AIR 1971 Ker. 231 | Similar evidentiary principle about presumption of receipt of letters. | Reinforced the court’s skepticism on defendant’s claim of receipt of Ext. B letter. |
Court's Reasoning and Analysis
The court began by noting the undisputed fact that the cause of action arose within the jurisdiction of the Keonjhar Civil Court, thereby establishing jurisdictional competence. It recognized that both Keonjhar and Calcutta courts had jurisdiction under the Civil Procedure Code. The defendant’s reliance on a jurisdiction clause printed on the purchase order (Ext. C) was examined critically; the court held that since the plaintiff neither signed nor accepted this clause, it could not be binding. The principle that ousting a court’s jurisdiction requires clear and express agreement was emphasized, referencing relevant precedents.
The defendant’s claim that an alleged letter (Ext. B) supported exclusive jurisdiction was rejected due to lack of proof that the letter was actually sent and received by the plaintiff. The certificate of posting alone was insufficient, especially as the witness’s testimony was inconsistent and the letter was not sent by registered post despite its importance. The court also noted the absence of any mention of this letter in the defendant’s written statement, which raised suspicion about its authenticity and effect.
The plaintiff’s own terms of business (Ext. A), which stipulated jurisdiction at Barbil within Keonjhar, further undermined the defendant’s claim. The court distinguished the cited Gujarat case on the basis that there the jurisdiction clause was part of a signed order form, unlike the present case. Ultimately, the court found no contract ousting the jurisdiction of the Keonjhar Court.
Holding and Implications
The revision petition challenging the jurisdiction of the Keonjhar Court is dismissed with costs.
The direct effect of this decision is that the Keonjhar Civil Court retains jurisdiction to try the suit filed by the plaintiff. No binding agreement ousting this jurisdiction was proved. The decision does not establish any new precedent but reaffirms the principle that jurisdictional ouster clauses require clear acceptance and proof. The defendant’s failure to prove such an agreement or receipt of the alleged letter led to dismissal of the revision.
S. Acharya, J.:— The defendant has preferred this revision against the order passed by the Subordinate Judge, Keonjhar on 21.1.1978 in Money Suit No. 1 of 1975.
2. The plaintiff is a unit of the Industrial Development Corporation of Orissa, Ltd. The defendant-firm carries on business in Calcutta. The plaintiff's suit, in short, is for realisation of certain amount of money claimed on the basis of the balance dues on the defendant on account of supply of goods by the plaintiff to the defendant and on account of loss sustained by the plaintiff due to payment of demurrage and other amounts due to the default of the defendants as specified in the plaint. The defendant while denying the plaintiff's claim has alleged that the Court at Keonjhar has no territorial jurisdiction to try this suit as no part of the cause of action arose within the jurisdiction of this Court and the plaintiff had stated in an agreement with the defendant to the effect that all disputes between the parties arising out of the said contract would be settled in Calcutta or by the Courts in Calcutta.
3. After the filing of the written statement and framing of the issues in the suit, on the petition of the defendant, the Court below took up for decision the issue No. 2 namely: “Has this Court jurisdiction to try the suit ?”, and by the impugned order it has arrived at the finding that the Court at Keonjhar has jurisdiction to entertain and try this suit. The defendant has preferred this Civil Revision against the said order.
4. Ext. C dated 1-11-1971 is the purchase order sent by the defendant to the plaintiff by which the defendant placed orders with the plaintiff for supplying certain varieties of pig iron from from its concern at Barbil in the Keonjhar district to the defendant in Calcutta. The plaintiff on receipt of Ext. C sent its work order Ext. A dated 2-11-1971 to the defendant. The supply of pig iron by the plaintiff from Barbil to the defendant in Calcutta started from 13-11.1971. The above facts and the finding of the Court below that the cause of action for the suit arose at Barbil within the jurisdiction of the Keonjhar Civil Court are not challenged in this revision.
5. In view of the admitted fact that the defendant resides and carries on business in Calcutta and the unchallenged finding that the cause of action for the suit arose in Barbil within the jurisdiction of the Keonjhar Civil Court, the Courts in Calcutta as well as those in Keonjhar have jurisdiction to try the suit It is well settled that where two Courts or more have jurisdiction under the Code of Civil Procedure to try a suit or 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. Hakam Singh v. Gammon (India) Ltd.† . . 1971 1 SCC 286, Prag Oil Mills Depot v. Transport Corporation of India . 46 1978 C.L.T 89. and Savani Transport Private Limited v. Chinnaswami Mudaliar & Co. . A.I.R 1979 Mad. 16.. According to the defendant, petitioner herein, both the parties had agreed that the jurisdiction for determination of any dispute arising out of the contract between the parties would be only in Calcutta whereas the plaintiff contends that there was no such contract or agreement between them.
6. The defendant in support of his assertion to the above effect depends only on Exts. C and B. At the top of Ext. C, the purchase order dated 1-11-1971, it is printed “All subject to Calcutta jurisdiction.” The purchase order is typed in defendant's own letter-head and issued by the defendant, and it has not been signed by the plaintiff. By the mere recital of the said wordsat the top of Ext. C and by sending the same to the plaintiff it cannot be said that the plaintiff agreed to confine settlement and adjudication of all disputes between the parties relating the contract only at one place i.e in Calcutta or only in the Courts at Calcutta and no where else. Ouster of Court's jurisdiction should not be easily construed and cannot be assumed or presumed very easily. Ouster of jurisdiction must be proved by express words or by necessary or inevitable implications. Merely mentioning “All subject to Calcutta jurisdiction” by one of the parties at the top of his purchase order, it cannot be said that the jurisdiction of other Courts, which can be legally approached by the other parties under the Civil Procedure Code or under any other law, is ousted by the said words My above view gets support from the decision reported in M/s. Patel Bros. v. M/s. Vedilal Kashidas Ltd. . A.I.R 1959 Mad. 227., wherein it has been held:
“Ex. P1 says that the transaction is subject to Bombay jurisdiction.” But it does not exclude the jurisdiction of any other Court. In my opinion ouster of jurisdiction of a Court to which a person is entitled to resort to under the Civil Procedure Code or any other statute cannot be a matter of assumption or presumption but one to be proved by express words contained in the contract or at least by necessary or inevitable implication.”
7. Mr. Roy, the learned counsel for the petitioner, submits that the above view has not been accepted in the decision reported in S. Manuel Raj & Co. v. J. Manilal & Co. . A.I.R 1963 Guj. 148.. That decision was given entirely on different context and facts, which is evident from that is stated and held in the following passage extracted from that judgment:—
“(3) When one of the parties to a contract signs a printed form printed by the other party containing the words “subject to the jurisdiction of a place Q” and sends the order form to the other party it must be assumed that party agreed that Q is the place for the settlement of disputes. It is not open to a person who signs an order form of the opposite party containing the printed words to say that the printed words are not part of the contract To take the view taken by the learned Judge of the Madras High Court would be to upset the commercial practice of India, and unless such a position is necessary in view of the wording of any particular section, I am not prepared to take that view. I am not prepared to upset the commercial practice of India unless the law requiries me to do so. There is nothing in the law to hold that the expression “subject to jurisdiction of Q” printed at the top of a form may not find M who signed the order form.”
8. Towards the end of para 4 of that judgment it is said:
“xxxx This is not a case of a ticket or a receipt taken by the plaintiffs but this is a case of an order placed by the plaintiffs themselves on a form signed by them and whether is contained in the form would be binding on them in view of the signature on the form XXXXXX”
9. In the Gujrat case one of the parties to the contract signed a printed form printed by the other party containing the words in bold type “subject to Madras Jurisdiction” and sent that order form to the other party. On those facts one can say that the party who signed such a printed form consciously agreed that the place of settlement or adjudication of disputes would be Madras and not at any other place. So all that has been stared in para 5 of that decision apply only to cases of that nature. There is nothing in that decision to run contrary to the above view taken by me on the facts of this case. The Madras decision on the, point was rendered on facts similar to the facts in the present case.
10. In the present case before me the letter head on which the purchase order Ext. C was typed had been printed by the defendant and he only signed and sent the same to the plaintiff for supply of certain materials. So all the contents in Ext. C emanated from the defendant and the plaintiff had not in any manner appended its approval or assent to any part of it. Rather very soon after the latter received Ext. C, on 2.11.1971 it sent its own terms of business as contained in Ext. A to the defendant, which indicates that the defendant's order was accepted or intended to be accepted only on the terms and conditions stated in Ext. A. Clause 22 of Ext. A is as follows:
“Clause 23-All contracts to which the corporation's Terms of Business and General understandings relate, shall be deemed to have been entered into at Barbil in the district of Keonjhar, Orissa, for the purpose of jurisdiction and in the event of any dispute, arising out of any such contract, neither party to any such contract shall be competent to bring a suit in regard to any matter, by any such contract at any place outside the local limits of that jurisdiction 6f the Courts in the district of Keonjhar, Orissa.”
11. Therefore, even if it is said that the recital “All subject to Calcutta jurisdiction” printed on Ext. C was a condition for acceptance of the purchase order, from the above facts it is evident that that condition was not accepted by the other party to the contract i.e the plaintiff, and so it has had no binding effect on the plaintiff.
12. It is next contended by Mr. Roy, the learned counsel for the petitioner, that apart from the above recital on the copy of Ext. C, the defendant by his letter to the plaintiff dated 8-11-1971, copy of which, is said to be Ext. B, expressly intimated to the latter that in view of the above statement in the purchase order (Ext. C), the jurisdiction for adjudication or settlement of all disputes and controversies relating to and arising from the said purchase order, would be Calcutta and not Keonjhar. The plaintiff has expressly denied receipt of any such letter. According to the defendant that letter was sent under certificate of posting, Ext. B/1 No doubt, under the said certificate of posting one letter addressed in the name of the plaintiff was posted in the Calcutta R.M.S Post Office on 8-11-1971. Merely on the proof of the said certificate of posting, it is extremely difficult to held that the original of the letter Ext B was actually sent to the plaintiff on that date. No doubt, the Court under section 114 of the Evidence Act may presume that the common course of business has been followed in particular cases and so if it is proved that a particular letter was posted in the address of a particular person it may be presumed that the letter was received at the other end. In this case Ext.B/1 does not indicate whether the letter posted to the plaintiff under that certificate of posting was an envelope, inland letter or a postcard. Ext. B is on the letter-head of the defendant There is no direct, clear-cut, and convincing evidence on record that the original of Ext. B was actually put in an envelope and that particular envelope was posted under Ext. B/1. So long that fact is not established, it would not be possible for the Court to draw the presumption that the copy of the letter Ext. B was posted and received by the plaintiff. D.W 2, is the only witness who has deposed about the posting of the letter under Ext.B/1. He has not stated that the original of the letter Ext. B/1 was actually enclosed by him or by somebody in bis presence in an envelope, and that envelope was posted under the certificate of posting. At one stage in his cross-examination, he stated that he did not remember if be sent any letter relating to this case. He has further admitted that all important letters of the defendant's firm which were intended to definitely reach the other party were posted by registered post. If that was so, it is not understood why the said letter containing such an important term of the contract, was not sent by registered cost. Moreover, this witness could no say if he had sent any other letter to any body relating to this contract. Because of his halting and vacillating statements in this respect bis deposition does not inspire confidence. In the absence of positive proof of the fact that the original of the letter Ext. B was actually encased in an envelope and that envelope was actually posted in a post office, even the rebuttable presumption under section 114 of the Evidence Act cannot be drawn. In this connection, the decision reported in J.Mc Gaffin v. L.I.C of India . A.I.R 1978 Cal. 123., and Ayisabeevi v. Aboobacker . A.I.R 1971 Ker. 231., should be seen.
13. Moreover it is seen that there is absolutely no mention about the said alleged letter or at least the effect thereof in the written statement. As the defendant takes his stand on the question of jurisdiction of the Court on the posting of the original of Ext. B he should have, as provided under Order 6 rule 9, Civil Procedure Code mentioned about that letter or at least referred briefly to the effect thereof in his written statement, the contents of the alleged letter were material and the said material facts were capable of being evidenced by a document as alleged by the defendant. Total silence about the alleged document or the effect thereof in the written statement creates suspicion about the defendant's plea on this aspect, more so when this is considered in the context and background of other facts discussed above.
14. On the above considerations and discussions, it is extremely difficult to hold that the original of the letter Ext. B was posted by the defendant or received by the plaintiff. As that fact is not established, the recital in Ext. B that “If we do not hear anything from you contrary to what we stated, we take it that you have accepted our condition of jurisdiction” is of no avail or effect.
15. On the above considerations I agree with the finding of the Court below that there was no contract between the parties ousting the jurisdiction of the civil Court at Keonjhar for the institution of the suit in question. As the petitioner now does not challenge the finding of the Court below that the cause of action for the suit arose in Barbil within the jurisdiction of Keonjhar civil Court, the Court below has jurisdiction to try the suit. So this civil revision, challenging the jurisdiction of the Court below to try the suit in question, has no merit and it is accordingly dismissed with costs. Hearing fee Rs. 100/-.
Revision dismissed.
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