Delhi Bottling Co. Ltd. vs Times Guaranty Financials Ltd.
2001 Latest Caselaw 1932 Del

JUDGMENT

V.S. Aggarwal, J.

1. plaintiff M/s. Delhi Bottling Co. Ltd. has filed the present suit for recovery of Rs. 23,66,387/- against the defendant (M/s. Times Guaranty Financials Ltd.).

2. The facts alleged are that the plaintiff company was desirous of adding additional vehicles to its fleet of delivery vehicles for the purpose of expanding its distribution system in Delhi and as such decided to obtain 20 light commercial vehicles manufactured and sold by M/s. Eicher Motors Ltd. so then it could also avail the benefits of depreciation. With a view to ascertain the cost of 20 light commercial vehicles the plaintiff company has approached M/s Eicher Motors Ltd. M/s. Eicher Motors Limited gave a proforma invoice to the effect that 20 light commercial vehicle would cost Rs. 51,53,100/-. The amount of thus Rs. 50 lakhs was required towards the purchase price of these vehicles. The plaintiff company approached the defendant company for procuring 20 light commercial vehicles and for supplying the same to the plaintiff on hire purchase basis.

3. The defendant company after ascertaining the finances involved in the hire purchase transaction to be entered into between the parties requested the plaintiff company to furnish the following documents:-

(a) Hire purchase agreement duly executed by the plaintiff;

(b) Corporate guarantee duly signed in blank by the plaintiff;

(c) Promissory note duly signed in blank by the plaintiff.

4. It is claimed that that plaintiff company after executing the above documents at Delhi forwarded the same to the defendant company. After receiving the documents the defendant company provided the letter of 9th January, 1991 and forwarded the same to their agents/broker/local representative. The defendant company on 11th January, 1991 informed the plaintiff company that the credit committee has sanctioned the proposal. There were certain terms and conditions which were complied with by the plaintiff company. On receipt of these documents as required vide the said letter the defendant company vide letter dated 24th January, 1991 forwarded to Shri Munish Khurana a bank draft dated 24th January, 1991 favoring M/s Eicher Motors Ltd. towards hire purchase agreement.

5. Although the defendant company undertook to purchase and hire 20 light commercial vehicles as envisaged under hire purchase agreement the defendant company was unable to perform its part of the contract and thereupon the plaintiff company gave a notice of termination of the said hire purchase agreement to the defendant company. The plaintiff company is alleged to have paid Rs. 5,22,917/- as first hire purchase Installment. Rs. 5,22,917/- as security money and Rs. 10,45,843/- as two hire purchase Installments. The present suit has been filed for recovery of the same besides interest.

6. In the written statement filed the defendant had contested the suit. Various pleas as such had been taken but it was alleged that the civil Courts at Delhi had no jurisdiction to entertain the suit.

7. On 5th February, 1996 this court had framed the issues and issue No. 2 was treated as a preliminary issue it reads as under:-

"2. Whether Delhi Courts have jurisdiction to try the suit?"

8. It was not disputed that no evidence is required and the agreement executed between the parties had been so admitted.

9. As is apparent from the nature of the issue reproduced above the short question that has to be adjudicated is as to if civil Courts at Delhi have jurisdiction to entertain or not.

10. The defendant had written a letter to the plaintiff dated 11th January, 1991 informing the plaintiff that its credit committee has sanctioned the proposal for hire purchase of the vehicles. The said letter had been addressed to the plaintiff at their address at Bombay. In other words the acceptance was communicated to the plaintiff through their head office at Bombay. In addition to that the hire purchase agreement had been executed between the parties. The said document as such has been admitted. It clearly mentions that this agreement had been executed at Bombay. Clause 12.7 of the said agreement further reads:-

"12.7. It is agreed by and between the parties that the civil courts in BOMBAY shall have the exclusive jurisdiction in respect of any matter, claim or dispute arising out of or in any way related to this agreement."

11. It is on the strength of these documents that it was urged that only the civil Court at Bombay had the jurisdiction to entertain the suit and the civil Court at Delhi will have no jurisdiction in this regard.

12. During the course of submissions some controversy had been raised as to whether the jurisdiction of the Courts at Delhi could be excluded by the agreement or not, but indeed that presents little difficulty and the matter in this regard is concluded by the two decision of the Supreme Court to be referred to herein after. In the case of A.B.C. Laminart Pvt. Ltd. and Anr. v. A.P. Agencies, Salem . The Supreme Court was concerned with a similar question. The Supreme Court in paragraph 21 had answered the controversy that has been raised at the Bar in following words:-

"From the foregoing decision it can be reasonably deduced that where such 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 bid the parties and unless the absence of ad idem can be shown, the other Courts should avoid exercising jurisdiction. As regard 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 'expressiounius est exclusio alterius' - expression of one is the exclusion of another may be applied. That 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 others from its operation may in such cases be inferred. It has therefore, to be properly construed."

13. Similarly in the subsequent decision rendered in the case of Angile Insulatins v. Davy Ashmore India Ltd. and Anr. . The Supreme Court held that when two or more competent Courts to entertain a suit the parties can agree to vest the jurisdiction in one such Court. The findings of the Supreme Court in this regard reads:-

"On the other hand, this Court laid that where there may be two or more competent courts which can entertain a suit consequent upon a part of the cause of action having arisen therewith, if the parties to the contract agreed to vest jurisdiction in one such court to try the dispute which might arise as between themselves, the agreement would be valid. If such a contract is clear unambiguous and explicit and not ague, it is not hit by Sections 23 and 28 of the Contract Act. This cannot be understood as parties contracting against the statute, mercantile law and practice permit such agreements."

14. Even if it is assumed that some part of the cause of action might have arisen at Delhi still once parties in unambiguous terms, as already reproduced above had agreed only the Courts at Bombay will have jurisdiction in respect of the disputes that may arise, it necessarily excludes the jurisdiction of the other Court. In the present case as the agreement was executed at Bombay and acceptance of the same was also effected at Bombay it must follow that the civil Courts at Bombay also have jurisdiction to entertain the suit as referred to above. Exclusion of the jurisdiction of the other Courts and conferring it exclusively on Bombay Courts will not be hit by Section 28 of the Contract Act. As a result thereto it must be held that the civil Courts at Delhi have no jurisdiction to entertain the suit. Issue is decided against the plaintiff.

15. For these reasons given above when the civil Courts at Delhi have no jurisdiction, it is directed that the plaint be returned to the plaintiff. If so advised he may present it to the Court of competent jurisdiction at Bombay.