K.G. Khosla Compressors Ltd. vs The U.P. State Electricity Board
2002 Latest Caselaw 309 Del

JUDGMENT

Mukundakam Sharma, J.

1. The present suit is instituted by the plaintiff for recovery for a sum of Rs. 1,16,558.50, that is, Rs. 78,776/- on account of principal and Rs. 37,812.50 on account of interest up to 19th January, 1986 at 18 per annum along with pendente lite and future interest and costs.

2. It is stated in the plaint that as against the Purchase Order dated 26th September, 1981, placed by Senior Accounts Officer, Construction Accounts Cell, U.P. State Electricity Board on the plaintiff Company at its registered office at New Delhi, the plaintiff/Company supplied certain goods to the defendant and, therefore, the plaintiff was entitled to receive the value of the said goods of an amount of Rs, 78,776/- which was not paid by the defendant in spite of notice and, therefore, the present suit was instituted seeking for recovery of the aforesaid amount.

3. The defendant contested the suit by filing a written statement and one of the contentions raised in the written statement was that this Court does not have territorial jurisdiction to entertain the present suit as an appropriate suit should have been filed and instituted in the appropriate Civil Court under the jurisdiction of the Allahabad High Court. In view of the aforesaid pleadings of the parties, an issue was framed by this Court while framing issues and Issue No. 2 reads as follows :-

2. Whether this Court has no jurisdiction to try this suit?

Although several other issues were framed and evidence was led by the parties thereto, it may not be necessary for me to discuss and deal with the other issues framed in the suit as the present suit could be disposed of on the issue of the jurisdiction alone.

The parties adduced evidence in respect of the aforesaid issue as well. The plaintiff altogether examined two witnesses. Shri B.P. Chand was examined as PW-1 and Shri O.P. Bhatia was examined as PW-2. So far the first witness is concerned, namely PW-1, he did not deal with the aspect of jurisdiction at all. PW-1 examined on behalf of the plaintiff proved the tender filed by the plaintiff with the defendant dated 27th December, 1980 which was 'Ex.PW-2/1'. He also stated that the tender for supply was submitted at Lucknow and that negotiation before the award of work was also held at Lucknow. He further stated that the plaintiff dispatched the materials before receipt of instructions to send it by road. On behalf of the defendants also two witnesses were examined.

5. Mr. P.K. Srivastava who was the Accounts Officer of the defendant/organisation was examined as DW-1. He had stated that the Agreement as well as the purchase order was placed from Lucknow and the goods were to be delivered at OBRA Thermal Unit, U.P. and that the payment was to be made from construction account OBRA. He had also stated that as per the Agreement, the jurisdiction clause provided that in case of dispute jurisdiction would be under the High Court of Allahabad. In the cross-examination, he was asked as to whether a letter of intent was sent at Delhi to which he deposed that he cannot say whether such a letter of intent was sent at Delhi. He, however, stated that it is correct that the purchase order was sent at the headquarters of the plaintiff/Company at Delhi. He was also asked as to whether in the condition of sale by the plaintiff, the jurisdiction clause was that of Delhi. In his deposition, he had stated that although it is correct that the condition of sale by the plaintiff and the jurisdiction clause was mentioned to be at Delhi, but the same was not accepted by the defendant.

6. The next witness examined on behalf of the defendant was Mr. S.C. Diwedi, who was posted at the concerned plant as Assistant Accountant. He also stated in his cross-examination that the offer was received at Lucknow Electricity Board and that the purchase order was also issued from Lucknow to the registered officer of the plaintiff/Company at Delhi and that the purchase order was under the signature of Superintending Engineer, Thermal Design Circle, Lucknow.

7. In the light of the aforesaid evidence adduced by the parties, I have looked into the pleadings as also heard the learned counsel appearing for the parties on the aforesaid issue, i.e., issue No. 2.

8. The tender offer of the plaintiff is proved as 'Exb.PW-2/1'. The said tender offer was made by the plaintiff on 27th December, 1980 and in the said tender the plaintiff had included a clause regarding jurisdiction stating that for all matters of disputes, jurisdiction would be a Court in Delhi/New Delhi. The purchase order of the defendant as against the aforesaid tender is also proved by the parties, being an admitted document. The said purchase order was issued in the month of August, 1981. The said purchase order states that with reference to the tender of the plaintiff followed by up to date correspondence exchanged therewith, an order is placed for supply of air compressors and accessories as per specifications to the plaintiff making it clear therein that the said purchase order would be further governed by the terms and conditions mentioned in the said purchase order.

9. I have carefully gone through the terms and conditions governing the said purchase order and Clause 24 thereof clearly states that the aforesaid purchase order would be further governed by all the clauses and specifications and general conditions of Contract UPSEB from 'B' expect for those which were specifically excluded in the said document. Clause 32 of the aforesaid General Conditions of Contract provides that any action taken or proceeding initiated on any of the terms of this Agreement shall be only in the Court of competent jurisdiction under the High Court of Judicature at Allahabad. The said clause is not an excluded clause in the purchase order and, therefore,t he said clause is applicable to the transaction and the contract involved in the present suit. It is thus proved and established that the parties were governed by the aforesaid Clause 32 of the General Conditions of Contract. The Offer of the plaintiff providing jurisdiction in Delhi was not accepted and did not form part of the Agreement.

10. The plaintiff while making his offer put a condition that the jurisdiction for any dispute would be in the Court of Delhi/New Delhi whereas, the said offer was not accepted and in the purchase order a specific clause in the aforesaid nature was incorporated which was accepted by the plaintiff and pursuant to which, according to the plaintiff, it made the deliveries also. Therefore, the said Clause No. 32 is definitely binding and is the only relevant Clause for the purpose of the present transaction and the contract in question. The said clause specifically says that any action taken or proceeding initiated on any of the terms of the agreement would be only in the court of competent jurisdiction under the High Court of Judicature at Allahabad. The emphasis is on the word only whereby the jurisdiction even if it is vested in any other Court stood excluded and the parties by their mutual consent have vested the jurisdiction of the action taken on the proceeding initiated in the court of competent jurisdiction under the High Court of Judicature at Allahabad.

11. In this connection, reference may also be made to the decision of the Supreme Court in the case of A.B.C. Laminart Pvt. Ltd. and Anr. v. A.P. Agencies, Salem; . In paragraph 18 of the said judgment, the Supreme Court held 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 therewithin, 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. The ratio of the aforesaid decision is fully applicable to the facts of the present case.

12. In view of the aforesaid position, therefore, the present suit should have been instituted in the competent Civil Court having jurisdiction under the High Court of Judicature at Allahabad. The suit filed in this court, therefore, cannot be entertained in view of lack of territorial jurisdiction. Therefore, exercising my powers under Order VII Rule 10 CPC, I direct that the plaint and the documents be returned to the plaintiff in order to enable the plaintiff to present the same in the competent Court in which the suit should have been instituted. While returning the plaint as also the documents in accordance with law, the Registry shall follow the procedure as prescribed under Order VII Rule 10 CPC.

13. The suit stands disposed of in terms of the aforesaid order. There shall be no order as to costs.