Rishi Raj vs B. Subhash
2004 Latest Caselaw 181 Del

JUDGMENT

Mukundakam Sharma, J.

1. In a suit filed by the plaintiff against the defendant praying for a decree for recovery of Rs.27,80,000/- along with a mandatory and permanent injunction, a preliminary objection is raised by the defendant by filing a written statement contending inter alia, that this court has no territorial jurisdiction to entertain the present suit, particularly in view of Clause-10 of the agreement dated 10th January, 1996, which was executed between the parties As a preliminary issue was framed on aforesad point, the same was directed to be listed for arguments and, therefore, the learned counsel appearing for the parties advanced their lengthy arguments on the said issue. By this judgment and order I record my views and decision on the said issue.

2. The present suit was filed by the plaintiff contending, inter alia, that the parties hereto entered into an agreement on 1st September, 1995 whereby the plaintiff undertook to sell the right on the picture `Divine Lovers AKA Divine Inquest', far entire India and Nepal on outright basis along with the dubbing rights in all Indian languages for a period of seven years from the date of release i.e 31st December, 1995 for a total consideration of Rs.27,20,000/-. The said agreement, containing arms and conditions agreed upon between the parties, was executed on 1st September, 1995, allegedly at Delhi. It is contended that pursuant to the aforesaid agreement between the plaintiff and the defendant the plaintiff paid a sum of Rs.5,00,000/- to he defendant immediately on signing of the said agreement and thereafter also paid two more installments each of Rs.5,00,000/- and, therefore, before release of the aforesaid picture by the plaintiff, the plaintiff had paid Rs.15,00,000/- in terms of the agreement dated 1st September, 1995. However, it is alleged that when the plaintiff became ready to make payment of the balance amount of Rs.12,20,000/-, which was to be paid on or before 30th December, 1995 and, in fact, sent chouse for payment of the said amount, the said chouse were not accepted by the defendant consequent to which the plaintiff immediately rushed to Bombay and contacted the defendant whereupon the plaintiff was told by the defendant that the defendant was not interested in receiving the chouse and desired payment by pay orders of the entire amount of Rs.12,20,000/-. It is stated that the plaintiff also got prepared two pay orders for a sum of Rs.12,20,000/- for making payment to the defendant on 30th December, 1995. But even thereafter, the defendant refused to meet the plaintiff. It is stated that being so situated, the plaintiff sent a telegram to the defendant for receiving the said payment and also a notice dated 6th January, 1996. However, despite all the aforesaid efforts the defendant refused to accept the aforesaid payment. It is stated that the plaintiff having invested a huge amount, had no other alternative but to again go to Bombay whereupon he met the defendant and upon discussion the plaintiff had to yield to the coercive arrangement of the defendant and under letter dated 10th January, 1996, the plaintiff was forced to agree to pay to the defendant a total sum of Rs.55,00,000/- as against Rs.27,20,000/- and the defendant thereby illegally and wrongly coerced the plaintiff to sign the letter of arrangement agreeing for cancellation of the original agreement dated 1st September, 1995. It is alleged that on account of the aforesaid coercion and force exercised by the defendant, the plaintiff had no alterative but to succumb to the aforesaid pressure and made payment of an amount of Rs.55,00,000/- as against Rs.27,20,000/-. It is contended by the plaintiff that the agreement dated 10th January, 1996 is not a voluntary act on the part of the plaintiff and the same has been got executed under force and coercion and, therefore, it has no sanctity in the eyes of law and is unenforceable in law and, therefore, the only agreement which is valid and subsisting between the parties was of dated 1st September, 1995, which provided for payment of the total sale consideration of Rs.27,20,000/- and that as the defendant has received a sum of Rs.55,00,000/- from the plaintiff as against Rs.27,20,000/- ,the defendant is required to repay the aforesaid amount Rs.27,80,000/- along with interest thereon.

3. The defendant filed a written statement denying the allegations made in the plaint. In the said written statement filed by the defendant, some preliminary objections have also been raised regarding maintainability of the suit. The first preliminary objection, as raised, is with regard to the territorial jurisdiction of this court to entertain and try the present suit. Another contention that is raised in the written statement is that the claim of the plaintiff is barred by limitation. The defendant categorically denied that any force or coercion was used in arriving at the settlement between the parties on 10th January, 1996. On the basis of the pleadings of the parties, as many as ten issues have been framed in the present suit. On of the said issues, namely, Issue No.6 is to the following effect:-

''6. Whether this court has territorial jurisdiction to try and adjudicate upon the present suit? OPD.''

4. Since the said issue relates to the jurisdictional aspect, the same goes to the root of the matter and, therefore, the same was directed to be tried as a preliminary issue, in respect of which I heard the learned counsel appearing for the parties. Two agreements executed between the parties - one dated 1st September, 1995 and other dated 10th January, 1996, are placed on record. Clause 2 of the agreement dated 1st September, 1995 provided that the plaintiff would pay an amount of Rs.27,20 000/- in four installments as follows:

Rs.5,00,000/- on signing the letter of arrangement.

Rs.5,00,000/- on or before 15-10-95 Rs.5,00,000/- on or before 30-11-95 Rs.12,20,000/- on or before 30-12-95.

5. Clause 3 of the said agreement further provided that timely payment is the essence of the aforesaid agreement. Execution of the aforesaid agreement is admitted by the parties as both the parties have put their signatures to the said agreement. The said agreement is recorded in the letter-head of the defendant and addressed to the office of the plaintiff, which is in New Delhi. It is also not disputed that an amount of Rs.15,00,000/-, in three installments, was paid by the plaintiff to the defendant. However, the plaintiff could not pay the amount of Rs.12,20,000/- ,as per schedule, before 30th December, 1995, although according to the plaintiff, he made an effort to make the said payment also, which was not accepted. Even subsequently the said amount was sought to be paid by the plaintiff but the defendant refused to accept the same on the ground that the aforesaid contract has failed as the time was the essence of the contract. The plaintiff immediately thereafter issued a legal notice to the defendant on 6th January, 1996, a copy of which is placed on record contending, inter alia, that the plaintiff desired to pay the aforesaid balance amount of Rs.12,20,000/- through pay orders taken out on 30th December, 1995 but the defendant illegally effused to accept the same and, therefore, the agreement dated 1st September, 1995 is still valid and subsisting and is binding on the defendant. It is also pointed out in the said legal notice that in case the aforesaid amount of Rs.12,20,000/- is not received by the defendant, the plaintiff shall have no other alternative but to proceed for taking legal action against the defendant in the High Court of Bombay for the specific performance of the said contract. However, on 10th January, 1996 the parties entered into a fresh agreement wherein the plaintiff agreed to pay a lease amount of Rs.55,00,000/- for commercial rights, cable and TV rights of the aforesaid picture `Divine Lovers', for a period of seven years from the date of its release along with he dubbing rights. The said agreement is also signed by both the parties, which also contains a clause being Clause-10 in the following manner:-

''10. This agreement is made and signed in Bombay and any dispute or differences arising out of this agreement between the parties , the same shall be referred to the competent courts in Bombay only.''

6. The defendant has placed heavy reliance on the said clause of the agreement dated 10th January, 1996 between the parties and on the basis thereof has submitted that any dispute or differences which arise out of the said agreement has to be agitated before a competent court in Bombay only. According to the defendant, the previous agreement dated 1st September, 1995 stood cancelled and/or superseded by the subsequent agreement entered into between the parties dated 10th January, 1996. Therefore, even issues relating to the earlier agreement between the parties would form part of the subject matter of the second agreement between the parties and, therefore, all such issues could be agitated and effectively tried in the competent courts of Bombay.

7. Counsel appearing for the plaintiff, however, submitted that there was no such clause so far the first agreement is concerned and since the second agreement was entered into between the parties by exercising force and coercion, the same was voiable at the instance of the plaintiff and the plaintiff having exercised the option of not acting on the said agreement, therefore, clause 10 of the second agreement would not be applicable to the facts and circumstances of the present case. According o the plaintiff a suit could be filed by the plaintiff in a competent court where cause of action or part thereof arises and since the first agreement was executed in Delhi, it must be held that cause of action, although in part, has arisen in Delhi and therefore, the Delhi court has the jurisdiction to entertain and try the present suit.

8. Section 20 of the Code of Civil Procedure decides the court which shall have the jurisdiction to decide a suit. It provides that a suit can be instituted in a court within the local limits of whose jurisdiction the defendant or each of the defendants where there are more than one, actually and voluntarily resides, or carries on business, or personally works for gain or in a court within the local limits of whose jurisdiction the cause of action in whole or in part arises. So far the firs agreement dated 1st September, 1995 between the parties is concerned, a specific statement is made in the plaint that the said agreement was executed in Delhi. The said statement of the plaintiff is, however, denied by the defendant and it is specifically contended in the written statement filed by the defendant that both the agreements dated 1st September, 1995 and 10th January, 1996 have been executed at Bombay and that entire payment has been made at Bombay and, therefore, the entire cause of action has arisen at Bombay only. Reliance is also placed by the defendant on the legal notice of the plaintiff dated 6th January, 1996 wherein it is stated that the plaintiff would institute a suit for specific performance of the agreement dated 1st September, 1995, in Bombay and by relying on the said statement it was contended that even the plaintiff was clear that territorial jurisdiction for filing the suit was Bombay. It is stated that ultimately the dispute in respect of the said legal notice was settled between the parties and that the plaintiff has withdrawn all his allegations and his Advocate's notice dated 6th January, 1996, which is proved by the letter dated 10th January, 1996, which is annexed as Annexure-D to the written statement.

9. The said letter categorically confirms that the notice dated 6th January, 1996 sent by the Advocate of the plaintiff in respect of the picture Divine Lovers is unconditionally withdrawn and stands cancelled and would have no effect of any kind. On the same day, the plaintiff and the defendant entered into a fresh contract, which is dated 10th January, 1996 containing the aforesaid Clause 10, vesting jurisdiction for all disputes and differences between the parties in the competent court in Bombay only

10. It is also not disputed that the payment of Rs.15,00,000/-, pursuant to the first agreement dated 1st September, 1995 between the parties and also the balance payment of Rs.40,00,000/- was made by the plaintiff to the defendant at Bombay. A sit based on a contract can be filed at the place where the contract was made. In ABC LAMINART PVT.LTD.AND ANOTHER VS. A.P.AGENCIES, SALEM it was held by the Supreme Court that determination of the place where the contract was made, is a part of law of contract and that 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. It was further held in the said decision as follows:-

''Part of cause of action arises where money is expressly or impliedly payable under a contract ............ So long as the parties to a contract do not oust the jurisdiction of all the Courts which would otherwise have jurisdiction to decide the cause of action under the law, it cannot be said that the parties have by their contract ousted the jurisdiction of the Court. If under the law several Courts would have jurisdiction and the parties have agreed to submit to one of these jurisdictions and not to other or others of them, it cannot be said that there is total ouster of jurisdiction. In other words, where the parties to a contract agreed to submit the disputes arising from it to a particular jurisdiction which would otherwise also be proper jurisdiction under the law their agreement to the extent they agreed not to submit to other jurisdictions cannot be said to be void as against public policy.''

11. There can be no denial of the fact in the present case that cause of action within the meaning of section 20(c) had arisen in Bombay as payment by the plaintiff of the lease amount was paid at Bombay. Assuming that the Delhi court also might have jurisdiction, even then the parties could by their voluntary action decide to submit the disputes arising from the contract to a particular jurisdiction, namely, the Bombay Court. The said court would have exclusive jurisdiction to try and decide the suit and a suit in respect of the said disputes would not lie in any other court. In the present case, the parties agreed to submit all their disputes in the competent courts at Bombay thereby excluding the jurisdiction of any other court, which might have other territorial jurisdiction to decide the suit. When the parties expressly vested jurisdiction in the Bombay Court, in my considered opinion, the Bombay Court shall alone have the territorial jurisdiction to try and decide a suit of the present nature, which is filed by the plaintiff. Accordingly, I hold that under the facts and circumstances of the present case, Delhi courts shall have no jurisdiction to try and decide the present suit. The plaint be returned to the plaintiff in accordance with the provisions of the Code of Civil Procedure to enable the plaintiff to file the same in an appropriate court in Bombay.

12. Since I have decided that this court does not have the territorial jurisdiction to decide the present suit and that the Bombay Courts alone shall have the jurisdiction to entertain and decide the present suit, therefore, I refrain from deciding the other issues , which arise for consideration and were framed in the present suit. The said issues shall be raised and decided by the competent court in Bombay in accordance with law. Even the issues that are sought to be raised regarding the validity of the subsequent agreement would also have to be raised and decided in a competent court in Bombay.