Sh. Mohd Salim vs Union Of India (Uoi) And Ors.
2003 Latest Caselaw 989 Del

JUDGMENT

Badar Durrez Ahmed, J.

1. The petitioner has prayed for an appropriate writ, order or direction, inter alia, quashing the order dated 09.04.2003 passed by the respondent No. 2 (Indian Oil Corporation Ltd) whereby the petitioner's dealership was terminated invoking clause 58 (m) of the Dealership Agreement/Petrol/HSD Pump dealership Agreement with immediate effect. At the outset, the learned counsel Mr Kalra submitted that this Court does not have territorial jurisdiction to entertain the present writ petition. He submitted that the retail outlet of the petitioner was at Sarendhi district, Agra (UP). The letter of termination was also issued by the respondent No. 3 from Lucknow to the petitioner at Sarendhi. The entire cause of action with regard to the termination of the retail outlet, according to Mr Kalra, has occurred in Agra. The inspection which resulted in the drawal of samples was also carried out at the petitioner's retail outlet at Agra itself. Accordingly, he submitted that this Court has no territorial jurisdiction to hear and decide the present writ petition.

2. On the other hand, Mr Maitri, appearing on behalf of the petitioner, submitted that this Court has territorial jurisdiction to entertain the present writ petition and in particular he submitted that the Dealership Agreement which was entered into between the petitioner and the respondents (Indian Oil Corporation) on 18.09.1989 was made in Delhi. Clause 68 thereof reads as under:-

''68.This agreement has been made in New Delhi and all payments there under shall be due and made in New Delhi, unless otherwise directed by the Corporation. The Courts in the city of New Delhi alone shall have jurisdiction to entertain any suit, application or other proceeding in respect of any claim or dispute arising under this Agreement.''

3. Based upon this clause, Mr Maitri submits that the case would be entirely covered by the decision of A.K. Surekha and Ors v. The Pradeshiya Investment Corporation of U.P. Ltd: , where a Division Bench of this Court, while construing a similar clause pertaining to jurisdiction, held that the Courts to which jurisdiction has been restricted would be the Courts having jurisdiction in the matter. In this regard, the petitioner in particular relied upon paragraph 28 of the aforesaid decision of the Division Bench. I had occasion to deal with a similar question in the case of Mahesh Chand Gupta v. Assistant Collector, Sadar Bazar, Delhi and Anr being CW1730/2003 wherein, after noticing the decisions of the Supreme Court in the case of Hakam Singh v. Gammon (Indid) Ltd: and ABC Laminart Pvt Ltd and Anr v. A.P. Agencies, Salem: , I held as under:

''From the aforesaid two decisions of the Supreme Court it is clear that where two or more competent Courts have jurisdiction to entertain a matter, if the parties by contract agree to vest jurisdiction in only one of them then such a contract or agreement would have to be held to be valid. The consequences thereof are that the Court on which jurisdiction was conferred by agreement would be the only Court entitled to exercise such jurisdiction. It is in fact not so much a question of conferment of the jurisdiction but one of election and exclusion of jurisdiction. Where two or more Courts have jurisdiction because part of the cause of action may have arisen there within, parties may contract to exclude jurisdiction and elect to restrict it to one or more of the courts.''

4. In the facts of this case, the Dealership Agreement which contained clause 68, clearly indicates that ''the Courts in the city of New Delhi alone have jurisdiction to entertain any suit, application or other proceedings in respect of any claim or dispute arising under the same agreement''. Therefore, the only question that needs to be examined is whether any ''claim or dispute arising under the said Dealership Agreement'' can be said to have arisen in Delhi. A grievance qua termination under one of the clauses of an agreement is clearly within the ambit of the expression, ''any claim or dispute arising under this agreement''. In ABC Laminart (supra), the Supreme Court observed as under:-

''15. In the matter of a contract there may arise causes of action of various kinds. In a suit for damages for breach of contract the cause of action consists of the making of the contract, and of its breach, so that the suit may be filed either at the place where the contract was made or at the place where it should have been performed and the breach occurred. The making of the contract is part of the cause of action. A suit on a contract, therefore, can be filed at the place where it was made. The determination of the place where the contract was made is part of the law of contract. But making of an offer on a particular place does not form cause of action in a suit for damages for breach of contract. Ordinarily, acceptance of an offer and its intimation result in a contract and hence a suit can be filed in a court within whose jurisdiction the acceptance was communicated. The performance of a contract is part of cause of action and a suit in respect of the breach can always be filed at the place where the contract should have (been) performed or its performance completed. If the contract is to be performed at the place where it is made, the suit on the contract is to be filed there and nowhere else. In suits for agency actions the cause of act on arises at the place where the contract of agency was made or the place where actions are to be rendered and payment is to be made by the agent. Part of cause of action arises where money is expressly or impliedly payable under a contract. In cases of repudiation of a contract, the place where repudiation is received is the place where the suit would lie. If a contract is pleaded as part of the cause of action giving jurisdiction to the Court where the suit is filed and that contract is found to be invalid, such part of cause of the action disappears. The above are some of the connecting factors.''

5. From the above, it would be apparent that the making of a contract is a part of the cause of action and particularly where termination of the contract is being complained of. Accordingly, a suit on a contract, therefore, can be filed at the place where it was made. Similar principles would govern jurisdiction under Article 226 of the Constitution. Thus, the place at which the Dealership Agreement has been entered into would also be the place where an action in respect of termination thereof can be brought. In the present case, the Dealership Agreement was executed and made in New Delhi. Therefore, Delhi would also have jurisdiction in the matter. Clause 68 would, therefore, be operative and by virtue of which the Courts at Delhi alone would have jurisdiction to entertain any suit, application or other proceedings in respect of any claim or dispute arising under the same Dealership Agreement. Accordingly, this Court would have territorial jurisdiction to deal with the matter at hand. The question then would be whether the order of termination dated 09.04.2003 issued by the respondents, whereby the Dealership Agreement with the petitioner has been terminated in purported exercise of clause 58 (m) of the said Agreement is legal and valid. But, then, that might reduce the matter to being a purely contractual matter. It is one thing that this Court has territorial jurisdiction, it is an altogether different matter as to whether this would not take the matter into the realm of contract and out of the arena of public law. That, however, is the other question of maintainability of the present writ petition on which no arguments have been heard.

6. Accordingly, holding that this Court has territorial jurisdiction to entertain the present petition, the matter is fixed for arguments on the question of maintainability on 11.09.2003.