M/S Victoria Motors Pvt. Ltd. vs M/S Rai Automotive Systems
2014 Latest Caselaw 3565 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI
                                                       Reserved on: 12.05.2014
                                                   Date of Decision: 06.08.2014

+      C.R.P.No.169/2013, CM No.14943/2013

       M/S VICTORIA MOTORS PVT. LTD.        ..... Petitioner
                      Through:  Mr. Amit Prasad, Adv.

                            Versus

       M/S RAI AUTOMOTIVE SYSTEMS                        ..... Respondent
                     Through:  Nemo.

       CORAM:
       HON'BLE MR. JUSTICE NAJMI WAZIRI

%      MR. JUSTICE NAJMI WAZIRI

1.     This petition impugns an order of 5.7.2013, whereby the petitioner's

application under Order VII Rule 10, CPC was dismissed.              In the said

application, it was contended that in view of the jurisdiction/exclusion clause

contained in the purchase order dated 30.7.2008, the Court of competent

jurisdiction was in Kolkata and the Delhi Courts where the suit was instituted,

did not have jurisdiction to entertain the suit. The plaintiff had argued that the

cause of action for the suit was not restricted to or governed by the sale

transaction document exclusively but was also occasioned by the incidence of

deposit of tax under the Central Sales Tax Act, 1956 (for short 'CST Act'),

which was payable in Delhi. Such payment would be on the basis of a C-

Form which was required to be issued by the defendant/purchaser of

goods/present petitioner.    The plaintiff had submitted that insofar as the

defendant was not issuing the C-Form, the cause of action would lie in Delhi
C.R.P.No.169/2013                                                       Page 1 of 4
 because Central Sales Tax was payable in Delhi and accordingly the Delhi

Courts would have jurisdiction to entertain the suit as the sale transaction was

concluded in Delhi.

2.     The Trial Court recorded that the plaintiff had claimed to have made a

payment of Rs.1,87,526/- to the Union of India towards tax, through Bank of

Baroda, Parliament Street, New Delhi and by virtue of Sections 3 & 4 of the

CST Act, the sale transaction between the parties would be deemed to have

taken place at New Delhi. The Trial Court reasoned that Section 20(c) of the

Code of Civil Procedure, 1908 confers jurisdiction upon a Court within the

local limits of whose jurisdiction the cause of action wholly or in part arises.

3.     The Trial Court took considered the following six judgements relied

upon by the applicant/present petitioner as well as the judgements relied upon

by the plaintiffs in respect of their contention to the effect that the jurisdiction

lay with Delhi courts:

       i.      M/s Angile Insulations v. M/s Davy Ashmore India Ltd. & Anr.,

               (1995) 4 SCC 153;

       ii.     Hanil Era Textiles Ltd. v. Puromatic Filters Pvt. Ltd., (2004) 4

               SCC 671;

       iii.    A.V.M. Sales Corporation v. Anuradha Chemicals Private Ltd.,

               (2012) 2 SCC 315;




C.R.P.No.169/2013                                                         Page 2 of 4
        iv.     M/s Polyblends (India) (Pvt.) Ltd. v. M/s Videocon Industries

               Ltd.,   (I.A.   No.5985/2005     &    11606/2007    in    CS(OS)

               No.1228/2005, decided on 13.7.2010 by this High Court;

       v.      Unimers India Ltd. v. The IFCI Ltd. and Ors. 2012 (129) DRJ

               608;

       vi.     Wollaque Ventilation and Conditioning Pvt. Ltd. v. Sterling

               Tools Ltd. 177 (2011) DLT 731.

       The Trial Court found the precedents cited by the applicant/petitioner

as inapplicable to the present case because in all those cases the issue of

jurisdiction had been decided on the point of sale transaction, i.e. where the

cause of action not only arose due to the transaction of sale itself. However,

in the present case, the plaintiffs had contended cause of action on the basis of

sale transaction but also for payment of tax under the CST Act, for which the

statutory place of payment was Delhi, because incidence of sale was from

Delhi. The requisite Form-C not having been supplied by the purchaser the

cause of action was found to have arisen in Delhi.

4.     The learned counsel for the petitioner relies upon M/s. Swastik Gases

Pvt. Ltd. vs. Indian Oil Corporation, JT 2013 (10) SC 35 to contend that

wherever an ouster clause exists in an agreement, it has to be given effect to,

since it would be deemed to be the clear intention of the parties to exclude the

jurisdiction of the Courts other than those mentioned in the concerned clause.

He states that those ouster clauses were never in dispute and therefore ought


C.R.P.No.169/2013                                                       Page 3 of 4
 to be given a full effect. However, this Court is of the view that M/s. Swastik

Gases Pvt. Ltd. (supra) would not be applicable to the present case because

the facts are different. Simple printed conditions on the back of a bill or a

consignment note which restricts jurisdiction to only one Court, cannot be a

rider on the jurisdiction of another competent Court to entertain the suit.

What is required to be seen in an ouster clause of an agreement is, whether the

parties were ad idem on the issue.

5.     In view of the discussion above, it is evident that the cause of action

arose in Delhi apropos the non-supply of Form-C which was a requisite

document under the CST Act, therefore, the Delhi courts would have

jurisdiction to entertain the suit. The reasoning for and the conclusion arrived

at is a plausible view and does not call for any interference. The petition is

without merit and is accordingly dismissed.



AUGUST 06, 2014                                         NAJMI WAZIRI, J.

vmk/b'nesh