Escorts Limited vs G.K. Automobile
2006 Latest Caselaw 211 Del

JUDGMENT

Badar Durrez Ahmed, J.

1. This is a petition under Section 9 of the Arbitration and Conciliation Act, 1996 read with Section 151 of the Code of Civil Procedure, 1908 whereby the petitioner is seeking the relief of a direction being passed by this court restraining the respondent, its representatives, employees, agents, attorney from selling, alienating, transferring, parting with the possession and/or creating third party interest in property bearing Nos.434, 448 and 453 situate at Jila Parishad, Janta Market, Bulandshahar (UP). Two major objections have been raised by the respondent insofar as this application is concerned. The first being that this court does not have the territorial jurisdiction to entertain the present petition under Section 9. The second objection is that even if this court had territorial jurisdiction to entertain the present petition, the order that is being sought by the petitioner cannot be granted inasmuch as the properties mentioned above do not belong to the respondent.

2. It is clear that if this court does not have territorial jurisdiction then the question of deciding the second objection would not arise. Therefore, the learned counsel for the parties argued this petition on the issue of territorial jurisdiction.

3. Before the question of territorial jurisdiction is examined, it would be necessary to place on record certain facts. It is an admitted position between the parties that the parties entered into a Dealer Sales Agreement on 29.04.1992. Under this agreement, the respondent was appointed as a dealer of the petitioner for the sale and supply of tractors manufactured by the petitioner. The respondent conducts its business from Bulandshahar, UP. The respondent was to take supplies of tractors from the petitioner on advance payment basis. The tractors so delivered to the respondent by the petitioner from its depots in Faridabad, Agra and Ghaziabad were sold by the respondent to the consumers who were mainly farmers. The said Agreement dated 29.04.1992 is comprised in two parts. The first part is entitled 'Dealer Sales Agreement' and the same goes up to clause 8. Thereafter, the same has been signed and executed by the parties and attested by two witnesses. The second part is entitled 'Standard Provisions' which continues from clauses 9 to 36 and at the end it is once again signed and executed by the parties in the presence of witnesses who had attested the same. Both these parts apparently were executed on 29.4.1992. The portions of the agreement which are material for the purposes of this application are the opening words of the recitals in the Dealer Sales Agreement to the following effect:

Agreement made at New Delhi by and between

4. The other clause that is relevant for the present purpose is clause 34 of the Standard Provisions as it existed on 29.4.1992. The same reads as under:-

34. This Agreement has been signed by the Dealer and sent to the company at Faridabad (Haryana) for final approval and execution by the company, and has been signed and delivered on behalf of the company. This Agreement shall be construed as having been executed in the city of Delhi and it is agreed that the rights and liabilities of the parties hereto, including their heirs, executors, administrators, successors and assigns in case a dispute arises shall be litigated in the courts at Delhi and shall be construed according to the law for the time being in force in Delhi and shall be heard and determined by the courts at Delhi and nowhere else.

5. It is noteworthy that the aforesaid clause 34 was replaced in its entirety by a new clause 34 by virtue of a letter dated 25.7.2001 written by the petitioner to the respondent which has been accepted by the respondent. There was some controversy as to whether this letter had, in point of fact, been signed by the respondent. Initially the contention of the respondent was that the signature on this letter of the respondent was forged and fabricated. However, Mr Wali pointed out that this position has been given a go-by by the respondent itself in the averments made in the transfer petition before the Supreme Court being TP (CRL) 114/2004 where it has sought transfer of certain cases under Section 138 of the Negotiable Instrument Act, 1981 in respect of certain unpaid cheques. In fact, the petitioner has already filed an application under Section 340 of the Criminal Procedure Code, 1973 in respect of the fluctuating stands taken by the respondent before this court and the Supreme Court both of which were supported by affidavits. One, by the Power of attorney holder of the proprietor of the respondent and the other of the proprietor as herself. That, however, is the subject matter of the Crl No. 628/2006 and which shall be dealt with separately. Insofar as the present petition is concerned, it is agreed by the counsel for the parties that it shall be proceeded with on the understanding that the clause 34 as it existed on 29.4.1992 has been entirely substituted by new clause 34 as indicated in the letter dated 25.7.2001. The letter also clearly indicates that the said clause 34 would operate prospectively i.e., w.e.f. 25.7.2001. In another words, clause 34 as contained in the agreement dated 29.4.1992 would operate up to 24.7.2001 and w.e.f. 25.7.2001, the new clause 34 would be read in its place. The new clause 34 reads as under:

ARBITRATION: all disputes and difference between the parties touching any provisions of this agreement shall be amicably settled by the parties in first instance. The unsettled disputes between the parties shall be referred to for adjudication by arbitration. The arbitration proceedings shall be conducted in accordance with the Arbitration and Conciliation Act, 1996 and as amended from time to time and Rules made there under. The sole arbitrator shall be appointed by Escorts Ltd and the venue of the arbitration shall be exclusively Delhi. The cost of arbitration expenses shall be borne by the defaulting party as adjudicated by the arbitrator.

6. For the sake of the completeness, a few more facts are necessary to be stated and that is that the agreement was terminated by a letter dated 20.4.2004 and this was followed by the appointment of an arbitrator in terms of new clause 34 of the said agreement which was done on 20.10.2004. Initially the respondent did not participate in the proceedings, however, subsequently the respondent participated in the arbitration proceedings. Although the respondent did not file any reply or any document before the arbitrator. The arbitration proceedings also culminated in the making of an award dated 27.9.2005 which was rectified to a certain degree on 26.10.2005. This petition under Section 9 was filed on 12.5.2005, during the pendency of the arbitration proceedings. Another fact which needs to be noted is that ,according to Mr Wali, the learned counsel, who appeared on behalf of the petitioner, the agreement was acted upon in Delhi and terminated by a letter issued from Delhi and that part payment under the agreement was also received at Delhi.

7. With this narration of facts out of the way, I now take up the question of jurisdiction. Mr Wali, submitted that the agreement dated 29.4.1992 at the very beginning clearly recited that the agreement was made at New Delhi by and between the parties. He also submitted that by virtue of the original clause 34, jurisdiction was specifically conferred on the courts at Delhi, the venue of the arbitration was also Delhi and the Arbitration proceedings, in fact, were conducted at Delhi and the award was also made at Delhi. He further submitted that part payment under the Agreement was received at Delhi and that the termination letter was issued by the petitioner's Advocates from Delhi. In these circumstances, he submitted that clearly this court would have territorial jurisdiction to entertain the present petition. He also submitted that in the said transfer petition filed by the respondent before the Supreme Court in respect of certain proceedings under Section 138 of the Negotiable Instrument Act, 1881 pertaining to certain dishonoured cheques, the respondent requested the Supreme Court for transferring the cases from Srinagar, Jammu and Kashmir and Chennai in the State of Tamil Nadu to, inter alia, the courts at New Delhi claiming the latter to be the courts of competent jurisdiction. Therefore, according to Mr Wali there is a clear admission on the part of the respondent that this court would have territorial jurisdiction in entertaining the present petition as the cheques which were dishonoured were part of the transaction flowing from the agreement under consideration.

8. In response to these arguments, the learned counsel for the respondent submitted that the question of territorial jurisdiction in the present case has to be considered from the stand point of cause of action in the case of contracts with reference to Section 20 of the Code of Civil Procedure, 1908. In this context, he submitted that cause of action would arise under three different situations. Firstly, cause of action would arise where the contract is executed and/ or entered upon. Secondly, we must see where the contract is performed and thirdly, where the alleged breach occurred. With regard to the first aspect as to where the contract was executed, he submitted that although the recital of the contract dated 29.4.1992 states that the agreement was made at New Delhi, this is contradicted by the original clause 34 which clearly indicates that the agreement was, in point of fact, signed and executed and attested at Faridabad, Haryana and not in Delhi. He referred to the first sentence contained in the original clause 34 which provides that the agreement has been signed by the dealer (respondent) and sent to the company (petitioner) at Faridabad (Haryana) for final approval and execution by the company and has been signed and delivered on behalf of the company. After reading the first sentence, the learned counsel for the respondent submitted that this sentence clearly indicates that the respondent, who conducts the business from Bulandshahar, signed the agreement and sent it to the petitioner at Faridabad where it was finally approved and executed by the petitioner. He also pointed to the attesting witnesses, both of whom had addresses of Faridabad and, therefore, he submitted that this sentence read with the attestation and the signatures including the seals affixed by the petitioner clearly indicates that the agreement was signed at Faridabad by the petitioner. He then submitted that this sentence by itself would contradict the recital as mentioned above that the agreement has been made at New Delhi. Reading the clause further he submitted that had the agreement actually been made at Delhi, the remainder of the clause would not be necessary and would be merely surplusage because the balance portion of the clause provides that the agreement shall be construed as having been executed in the city of Delhi and also indicates the agreement between the parties that in case a dispute arises the same would be litigated in the courts at Delhi and nowhere else. The learned counsel submitted that the fiction created by the second part of the original clause 34 would not have been necessary had the agreement actually been signed in Delhi. Therefore, he submitted that on a correct interpretation of the agreement, it becomes clear that the same was executed and signed partly in Bulandshahar and partly in Faridabad and not at all at Delhi. He further submitted with reference to N.S. Bindra's Conveyancing (Draftsman and Interpretation of Deeds) Vol. 1 1996 (pages 102 to 104) that when the operative portion of a deed is clear, it cannot be controlled by the recitals or other parts of the deed. He also submitted that the reciting part of a deed is not at all a necessary part either in law or in equity. It may be made use of to explain a doubt as regards the intention of the parties but, it has no effect or operation. He further referred to page 103 of the said book to show that there are three rules applicable to the construction of such an instrument. The first being that if the recitals are clear and the operative part is ambiguous, the recitals govern the construction. The second rule being that if the recitals are ambiguous and the operative part is clear, the operative part must prevail. And the third rule is that if both the recitals and the operative part are clear but they are inconsistent with each other, the operative part is to be preferred. In the present case, there is no ambiguity with regard to the recitals. Similarly, there is no ambiguity with regard to the operative portion contained in clause 34 of the agreement. Therefore, it would be the third rule which would be applicable i.e., that the operative part shall be preferred and will prevail. Thus, insofar as the submission of the learned counsel for the respondent is concerned, I am in agreement with him to the extent that where recitals and the operative parts are both clear but contradict with each other, the operative portion has to be given preference. The operative portion in the original clause 34, makes it clear that the agreement was actually sent by the respondent from Bulandshahar to the petitioner at Faridabad for final approval and execution and that the same has been signed and delivered accordingly. The attesting witnesses also have the addresses at Faridabad and the company stamp is also of the Farm Equipment Division which is located at Faridabad. Therefore, ignoring the recitals for the time being and reading the operative portion contained in clause 34, it becomes clear that the agreement was executed partly in Bulandshahar and partly in Faridabad but not at all at Delhi. The proposition that the recitals do not control the operative part of an instrument is further fortified by a reference to the following decisions:

1. Srish Chandra Sen and Ors. v Commissioner of Income-tax,

2. Raja Rajinder Chand v Mst. Sukhi and Ors.

3. Lalit Mohun Singh Roy v Chukkun Lal Roy and Ors. 24 Indian Appeals 76

9. It is well established that where the operative part is clear, it is treated as expressing the intention of the parties and prevails over any contrary intention afforded by the recitals (see : Halsbury's Laws of India Vol 9 page 559). Therefore, the first proposition that was advanced by Mr Wali that the agreement was executed in Delhi is not made out. Mr Wali, however, submitted that the old clause 34 has been entirely replaced by the new clause 34 and if one reads the new clause 34 then there is no ambiguity inasmuch as in the new clause 34, nothing is mentioned with regard to the place of execution of the agreement and only the venue of arbitration has been mentioned as being at New Delhi. He submitted that because new clause 34 has replaced the original clause 34, all these arguments which were made by the learned counsel for the respondent and which have been referred to above, would be washed away. Unfortunately, I am unable to agree with this contention also. The reason being that the old clause 34 was amended prospectively w.e.f. 25.07.2001 and not retrospectively. Therefore, the original clause 34 did survive till 25.7.2001 and is, in any event, an indication of the contemporaneous act of execution which took place on 29.4.1992 when the agreement was admittedly executed. Therefore, it cannot be said that because the clause has been amended and substituted by a new clause, the entire arguments and factual position as explained above would get obliterated.

10. The second aspect of the matter is that, according to the learned counsel for the petitioner, part of the contract was performed at Delhi whereas on behalf of the learned counsel for the respondent it was submitted that no part of the contract was performed at Delhi. The respondent took supplies of tractors at Bulandshahar which were supplied by the petitioner from its depots at Faridabad, Agra and Ghaziabad. No supplies of tractors were affected from Delhi. The learned counsel for the respondent also said that all the payments were sent to the petitioner at its three depots at Faridabad, Agra and Ghaziabad. As a sample, he has filed the letter at page 111 and receipt at page 112 of his reply. He submitted that the petitioner has not filed a single receipt which has been issued from Delhi. In this view of the matter, according to the learned counsel for the respondent, the entire contract was performed outside the precincts of the territorial limits of this court and, therefore, this court would not have jurisdiction even on the question of performance. Mr Wali, has produced before this court photocopies of letters said to have been written by the respondent to the petitioner whereby the respondent has submitted payments of demand drafts payable at Delhi.

11. Copies of these letters which are dated 6.5.2003, 8.5.2003 and 30.4.2003 have been filed by Mr Wali as Annexure P-15 colly to an affidavit filed on 24.1.2006. The letter dated 6.5.2003 is a letter from the Respondent dispatched from Bulandshahr to the petitioner at Faridabad. Along with the letter, the respondent enclosed a draft in favor of UTI Bank Ltd for a sum of Rs 245201/- payable at New Delhi. This payment was apparently in lieu of a hundi. The other two letters are also in a similar vein. Mr Wali submitted on the strength of these letters and drafts that some payments were made at New Delhi and therefore this court would have territorial jurisdiction to entertain the present petition. In response to this submission, the learned counsel for the respondent contended that it is the place where the letter is received or the place where the cheque or draft is received that is relevant. And, that place, as is evident from the said letters themselves, is Faridabad in Haryana. Therefore, according to him, payments under these drafts also would have been made at Faridabad and not in Delhi. He also submitted that the fact that the drafts were made payable at New Delhi would not make any difference because it is the place where they were received which is important and not the place where they were honoured. The learned counsel for the Respondent placed reliance on the following two decisions of the Supreme Court :-

1. Jagdish Mills Ltd v. The Commissioner of Income tax, Bombay North, Kutch and Saurashtra, Ahmedabad :

2. South East Asia shipping Co. Ltd v. Nav Bharat Enterprises Pvt. Ltd. and Ors.

Jagdish Mills (supra) was a case under the Income Tax Act, 1922. It pertained to a period pre-independence when the merger of princely states with the dominion of India had not taken place. So, there were two Indias -British India and Princely India. The princely states had their own laws and British India its own. The income tax Act, 1922 was applicable in British India and not in the princely states. In Jagdish Mills (supra) the appellant, a company registered in the princely state of Baroda, upon a successful bid under a tender, supplied certain goods to the government of India. The payment for the goods was made by way of cheques posted by the government of India from Delhi. The cheques were received by the appellant at Baroda. The same were deposited by the appellant with its bankers at Bombay and Ahmedabad. At that point of time, i.e., in 1940-42, Baroda fell in the princely State of Baroda whereas Delhi and Bombay fell within British India. In this backdrop the question arose as to whether the appellant (Jagdish Mills) received the payments at Delhi (where the cheques were posted) or at Baroda (where the cheques were received) or at Bombay and Ahmedabad (where the cheques were deposited for collection). The appellant in that case contended that the payments were received in Baroda as the cheques were received in Baroda and, therefore, it was not liable to income tax as the income was received outside British India. On the other hand the revenue advanced a two-fold argument. It firstly contended that as the cheques were deposited in banks in Bombay and Ahmedabad (both of which were in British India), the payments were received in Bombay and Ahmedabad and were clearly within the purview of the Income Tax Act, 1922. It was secondly contended by the revenue that as the cheques were posted at Delhi, payments were received by the appellant at Delhi, the post office acting as the agent of the appellant. As regards the first contention of the revenue, the Supreme Court held :-

This contention was really of no avail to the Revenue because on the particular facts of the present case it was common ground that the payments made by cheques were accepted by the appellant unconditionally and in full satisfaction of its claims for goods supplied to the government and therefore if the cheques be held to have been received by the appellant in Baroda the income, profits and gains were also received in Baroda which was outside the taxable territories. Even if the receipts of the cheques at Baroda be treated as a conditional payment of the appellant's claims for the goods supplied to the government, the position was no better, for the simple reason that the cheques not having been dishonoured but having been duly cashed the payments related back to the dates of the receipts of the cheques and in law the dates of payments were the dates of the delivery of the cheques which was certainly is Baroda - outside the taxable territories.

12. Two points of significance emerge from the above conclusions arrived at by the Supreme Court. If cheques are accepted unconditionally at place A then payments would be held to have been made at place A and it would not matter in the least as to where the cheques are deposited for encashment. On the other hand if the cheques are received at place A but accepted only conditionally, even then, if the cheques are not dishonoured, the place of payment would be A and not some other place where the cheques may be deposited for encashment.

13. As regards the second contention raised by the Revenue in Jagdish Mills (supra), the Supreme Court, placed reliance on its earlier decision in CIT v. Ogale Glass Works Ltd: in coming to the conclusion that the payment was received by Jagdish Mills in Delhi where the cheques were posted, the post office being regarded its agent. In Ogale Glass Works (supra) the Supreme Court observed that :-

there can be no doubt that as between the sender and the addressee it is the request of the addressee that the cheque be sent by post that makes the post office the agent of the addressee. After such request the the addressee cannot be heard to say that the post office was not his agent and, therefore, the loss of the cheque in transit must fall on the sender on the specious plea that the sender having the very limited right to reclaim the cheque under the Post Office Act, 1898, the post-office was his agent, when is fact there was no such reclamation. Of course if there be no such request, express or implied, then the delivery of the letter or the cheque to the post-office is delivery to the agent of the sender himself.

14. The principle as regards cheques sent by post is this: If the addressee situated at place A requests the sender who is at place B to send the cheque by post then the post office would act as the agent of the addressee and the payment would be received by the addressee at place B where the post office, acting as his agent, receives the cheque. The request of the addressee may be express or implied.

15. This rule in Ogale Glass Works Ltd (supra) was succinctly put in CIT v. Patney and Co. : 1959 Supp (2) SCR 868 in the following words :-

In the case of payment by cheques sent by post the determination of the place of payment would depend upon the agreement between the parties or the course of conduct of the parties. If it is shown that the creditor authorised the debtor either expressly or impliedy to send a cheque by post the property in the cheque passes to the creditor as soon as it is posted. Therefore the post office is an agent of the person to whom the cheque is posted if there be an express or implied authority to send it by post.

16. But, in view of the express agreement, in that case, that the payment was to be made at Secunderabad , the rule in Ogale Glass Works Ltd (supra) with regard to cheques sent by post was held to be inapplicable. The Supreme Court observed :-

Whatever may be the position when there is an express or implied request for the cheque for the amount being sent by post or when it can be inferred from the course of conduct of the parties, the appellant in this case expressly required the amount of the commission to be paid at Secunderabad and the rule of Ogale Works' case would be inapplicable.

17. Finding that the exception in Patney & Co (supra) was not attracted in the facts of the case, the Supreme Court, in Indore Malwa United Mills Ltd. v. CIT: reiterated the rule in Ogale Glass Works (supra) as under :-

Now, if by an agreement, express or implied, between the creditor and the debtor or by a request, express or implied, by the creditor, the debtor is authorised to pay the debt by a cheque and to send the cheque to the creditor by post, the post office is the agent of the creditor to receive the cheque and the creditor receives payment as soon as the cheque is posted to him.

18. Of course, it must be mentioned that this rule in Ogale Glass Works (supra) is based on the earlier English decisions in Norman v. Ricketts : (1886) 3 Times Law Reports 182 and Thairlwall v. Great Northern Railway : (1910) 2 KB 509. The final case of this genre is that of H.P. Gupta v. Hiralal: wherein the Supreme Court held :-

If under a contract, promise prescribes the manner in which the promise is to be performed, the promisor can perform the promise in the manner so prescribed. (See Section 50 of the Contract Act). Thus, if A desires B, who owes him Rs 100 to send him a note for that amount by post, the debt is discharged as soon as B puts into the post a letter containing the note duly addressed to A. (See illustration (d) to Section 50 of the Contract Act).

19. After examining the previous decisions, the Supreme Court concluded as under (at page 441):-

8. It follows, therefore, that once a mode of payment of dividend is agreed to, namely, by posting a cheque or a warrant, the place where such posting is to be done is the place of performance and also the place of payment, as such performance in the manner agreed to is equivalent to payment and results in the discharge of the obligation.

20. In H. P. Gupta (supra) the question arose in the context of Section 207 of the Companies Act, 1956 which provides for payment of dividend within 42 days of its declaration by a company and its non-payment within the stipulated period is punishable. The Court held that when the company posts the dividend warrant at the registered address of the shareholder, the post office becomes the agent of the shareholder and the loss of a dividend warrant during the transit thereafter is at the risk of the shareholder. The Court further held that the place where the dividend warrant would be posted is the place where the company has its registered office and the offence under Section 207 of the Act would also occur at the place where the failure to discharge that obligation arises, namely, the failure to post the dividend warrant within 42 days. In the facts of that case, the Court held (at page 442) :-

In Indore Malwa United Mills Ltd. v. CIT this Court, on a question arising whether on the facts there payment was made in taxable territory, held that if by an agreement, express or implied, between the creditor and the debtor, or by a request, express or implied, by the creditor, the debtor is authorised to pay the debt by a cheque and to send the cheque to the creditor by post, the post office is the agent of the creditor to receive the cheque and the creditor receives payment as soon as the cheque is posted to him. That being the position, the place where a dividend warrant would be posted, the post office being the agent of the shareholder, is the place where the obligation to pay the debt is discharged" in the present case at Delhi where the company has its registered office. It follows that the offence under Section 207 of the Act would also occur at the place where the failure to discharge that obligation arises, namely, the failure to post the dividend warrant within 42 days.

21. This case is an extension to the rule in Ogale Glass Works (supra) inasmuch as it holds that the place of performance would also be the place of non-performance.

22. I think that this would be the appropriate juncture to refer to the decision in A.B.C. Laminart Pvt Ltd v. A.P. Agencies, Salem : , although it was referred to by Mr Wai, the learned counsel for the petitioner. This is so because the decision in A.B.C. Laminart (supra) supplements the above discussion and does not militate against it. In A.B.C. Laminart (supra), the Supreme Court held that in the matter of a contract the jurisdiction of the Court would depend on the situs of the contract and the cause of action arising through connecting factors. It further held that the performance of a contract is a part of cause of action and a suit in respect of a breach of contract can always be filed at the place where the contract should have been performed. The Supreme Court also held that in suits for agency actions the cause of action arises at the place where the contract was made or the place where the actions are to be rendered and the payments are to be made by the agent. In this context the Supreme Court observed (at page 172):-

Part of cause of action arises where money is expressly or impliedly payable under a contract.

23. In this context, the terms of payment contained in the contract between the petitioner and the Respondent need to be examined. Though not referred to by either counsel, the relevant clause is clause 14 (c) of the said Standard Provisions and it reads as under:-

(c) Payments for the value of the goods, all taxes and duties if any, in respect of sale shall be due and payable and be made by the Dealer to the Company either at Faridabad or at New Delhi at the option of the Company, prior to delivery or dispatch of the said products in cash or in such other manner as may be acceptable to the Company. Payment shall not be made to anyone except the person authorised to receive payment on behalf of the Company. Cheques, demand drafts or Letters of Credit, if accepted by the Company, do not constitute an absolute discharge and the Company shall not be responsible for presentation in time, protest, notification and return in case of non-payment of cheques, demand drafts or Letters of Credit. (No interest shall be payable on any amounts paid to the Company). The acceptance of any payment at a place other than Faridabad or New Delhi shall not constitute a waiver of the liability of the Dealer to make payment at Faridabad or New Delhi.

24. Under the contract, therefore, the Respondent was required to make the payments either at Faridabad or at New Delhi at the option of the Petitioner. The payments were to be made by the respondent to the petitioner prior to delivery or dispatch of the goods. The payments could be made in cash or in such other manner as may be acceptable to the Respondent. Payments by cheques and demand drafts were clearly contemplated under the contract though acceptance of such cheques or demand drafts was stipulated to be conditional. So, we have a situation where payments could be made by the respondent by cheques or demand drafts either at Faridabad or at New Delhi at the option of the petitioner. It is clear that the petitioner has not been able to produce a single receipt issued from Delhi. On the other hand the respondent, as aforesaid, has placed on record several receipts issued by the petitioner from Faridabad. Even the three letters dated 6.5.2003, 8.5.2003 and 30.4.2003 were all sent to the petitioner at Faridabad. the demand drafts enclosed in the said three letters were also, obviously, sent to the petitioner at Faridabad. Thus, though by virtue of the contract the amounts were payable both at Faridabad or at New Delhi, it does appear that the petitioner had exercised its option to receive the payments at Faridabad. It follows, therefore, that place of payment agreed upon by the parties was Faridabad. Clearly, if the rule in Ogale Glass Works (supra) were to apply, as cheques and/or demand drafts were acceptable modes of payment, the payment would be complete when the respondent posted them from Bulandshahr. Consequently, the post office at Bulandshahr would have acted as an agent of the petitioner. But, the rule in Ogale Glass Works (supra) would be inapplicable in the present case in view of the express condition in the contract that the acceptance of any payment at a place other than Faridabad or New Delhi shall not constitute a waiver of the liability of the Dealer to make payment at Faridabad or New Delhi.' This implies that the exception of Patney & Co (supra) would apply. As a result, even though the cheques or demand drafts were posted at Bulandshahr for delivery at Faridabad, the place of payment would be Faridabad and not Bulandshahr. That being the position the cause of action would have arisen in Faridabad and no part of it at Delhi. Thus, on this ground also this court would not have territorial jurisdiction to entertain this petition.

25. Mr Wali had referred to the following three decisions:-

1. K.L. Shroff v . State of Haryana:

1998 lV AD (DELHI) 876

2. A.B.C. Laminart Pvt. Ltd. v. A.P. Agencies, Salem :

3. Baby Marine Sarass v. M/s Triton Marinex :

26. The decision in K.L. Shroff (supra) is not applicable. That was a decision wherein the question was with regard to the interpretation of a particular clause with regard to jurisdiction. The clause under considerations stipulated that - "all disputes will be settled at Chandigarh.' After referring to various decisions including A.B.C. Laminart (supra), a learned single judge of this court held that in the absence of words such as "only", "alone" or "exclusively' the clause in question could not be construed as one ousting the jurisdiction of the courts in Delhi. Now, the question of an ouster clause does not even arise is the present case. The decision in K.L. Shroff (supra), therefore, is of no relevance for the purposes of the present case. As regards A.B.C. Laminart (supra), no further discussion is necessary. In any event, as mentioned above, it does not militate against the conclusions arrived at. This leaves me with the decision of a division bench of the Kerala High Court in the case of Baby Marine Sarass (supra). Mr Wali relied heavily on the following passage in the said decision :-

According to us, in view of the issue of an account payee cheque, it is clear that the drawer desires to pay the amount through the Bank which keeps the account of the payee. Hence, it can be said that part of the cause of action arose in Ernakulam.

27. With respect, I am unable to subscribe to this view as it runs counter to the legal principles enunciated in the various Supreme Court decisions starting from Ogale Glass Works (supra). And, none of them have been noticed in Baby Marine Sarass (supra).

28. Finally, insofar as the third aspect is concerned, that is, with regard to the breach of the agreement, the entire dispute is with regard to non-payment. Non-payment is essentially non-performance. The only thing that has to be seen is where the respondent was normally required to make the payments. That would be the place of performance. I have already concluded that the payments were to be made at Faridabad. Therefore, the place of performance was Faridabad. And, in view of H.P. Gupta (supra), Faridabad would also be the place of non-performance or breach. Therefore, the alleged breach of contract definitely did not arise in Delhi.

29 Clearly, no part of the cause of action arose in Delhi and this court would not have the territorial jurisdiction to entertain this petition. As such, this petition is dismissed on the ground of lack of territorial jurisdiction. No costs.