Delhi High Court
M/S Metal Engineering & Treatment ... vs Manish Kumar Aggarwal Prop on 20 July, 2016
$~A-26
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 20.07.2016
+ C.R.P. 102/2016
M/S METAL ENGINEERING & TREATMENT
CO PVT LTD ..... Petitioner
Through Mr. Asit Kumar Roy, Advocate.
versus
MANISH KUMAR AGGARWAL PROP ..... Respondent
Through None.
CORAM:
HON'BLE MR. JUSTICE JAYANT NATH
JAYANT NATH, J. (Oral)
CM No. 25505/2016 (exemption)
Exemption is allowed subject to all just exceptions.
C.R.P. 102/2016 and CM No. 25504/2016 (for stay)
1. By the present petition, the petitioner seeks to impugn the order dated
21.03.2016. By the said order, the court had decided the preliminary issue
which was framed regarding the territorial jurisdiction of the court to
entertain the suit. The issue concerned reads as follows:-
"Whether this court has no territorial jurisdiction to entertain
and try the present suit? OPD"
2. The brief facts which led to filing of the present petition are that the
respondent/plaintiff deals in manufacturing of various cables, wires and
similar products. The petitioner company/defendant during the course of
business placed a purchase order dated 07.03.2011 for specified material.
Subsequently, a revised purchase order dated 22.03.2011 for specified
material was placed. The respondent sent an advance payment performa
invoice against which a payment of Rs.99,225/- was received on 12.04.2011.
The petitioner further paid a sum of Rs.99,225/- to the respondent and the
amount was credited to the account of the respondent in Delhi. Further the
invoice issued by the respondent subsequently mentions "All disputes are
subject to Delhi jurisdiction".
3. The trial court concluded that a perusal of the purchase order dated
22.03.2011 shows that the purchase order was placed by the petitioner on
the plaintiff at the address of Village Patparganj, Delhi. The trial court also
relied upon the judgments of this High Court in the case of Startech
Enggcon Pvt. Ltd. vs. Bundelkhand University, 147(2008) DLT 276 and
Rameshwar Das Dwarka (P) Ltd. vs. Deepak Puematics (P) Ltd., 147
(2008) DLT 624 to hold that payments received for the work done is a part
of the cause of action and the place where the payment is being made or
requires to be paid would be relevant to determine the territorial jurisdiction.
4. I have heard the learned counsel for the petitioner. He has relied upon
the judgment of the Supreme Court in the case of Union of India vs. Adani
Export Ltd. Anr.(2002) 1 SCC 567 to contend that the impugned order is
erroneous and that the place where the payment is received would not
constitute a part of the cause of action and would not confer jurisdiction on
this court. He submits that the defendant has its place of business in Calcutta
and has no presence in Delhi whatsoever. He submits that appropriate courts
in Calcutta would have territorial jurisdiction.
5. The issue would be under the facts of the case, the Delhi Courts have
territorial jurisdiction to try the suit. The relevant judgment in this regard
would be the judgment of the Supreme Court in the case of ABC Laminart
Pvt. Ltd. & Anr. v. A.P.Agencies, Salem, (1989) 2 SCC 163. In para 15 of
the judgment, the court states as follows:
"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 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
action 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."
6. Hence, making of the contract is part of the cause of action. The trial
court has held in the present case that the purchase order was placed by the
petitioner at Delhi indicating acceptance of the offer resulting in a binding
contract.
7. The trial court also held that the payments were received by the
respondent in Delhi. As noted in the above judgment, part of cause action
accrues where the money is payable under the contract. Hence, part of cause
of action arose in Delhi on this account also.
8. It also cannot be ignored that there is an ouster clause in the contract
which states that "All disputes are subject to Delhi Jurisdiction". In the
recent judgment of the Supreme Court in the case of M/s Swastik Gases Pvt.
Ltd. v. Indian Oil Corporation Ltd., CA No.5086/2013, decided on
03.07.2013, (2013) 7 S.C.R. 581, the court while interpreting the ouster
clause held as follows:
"31.In the instant case, the appellant does not dispute that part
of cause of action has arisen in Kolkata. What appellant says is
that part of cause of action has also arisen in Jaipur and,
therefore, Chief Justice of the Rajasthan High Court or the
designate Judge has jurisdiction to consider the application
made by the appellant for the appointment of an arbitrator
under Section 11. Having regard to Section 11(12)(b) and
Section 2(e) of the 1996 Act read with Section 20(c) of the
Code, there remains no doubt that the Chief Justice or the
designate Judge of the Rajasthan High Court has jurisdiction
in the matter. The question is, whether parties by virtue of
clause 18 of the agreement have agreed to exclude the
jurisdiction of the courts at Jaipur or, in other words, whether in
view of clause 18 of the agreement, the jurisdiction of Chief
Justice of the Rajasthan High Court has been excluded. For
answer to the above question, we have to see the effect of the
jurisdiction clause in the agreement which provides that the
agreement shall be subject to jurisdiction of the courts at
Kolkata. It is a fact that whilst providing for jurisdiction clause
in the agreement the words like 'alone', 'only', 'exclusive' or
'exclusive jurisdiction' have not been used but this, in our view,
is not decisive and does not make any material difference. The
intention of the parties - by having clause 18 in the
agreement - is clear and unambiguous that the courts at
Kolkata shall have jurisdiction which means that the courts at
Kolkata alone shall have jurisdiction. It is so because for
construction of jurisdiction clause, like clause 18 in the
agreement, the maxim expressio unius est exclusio alterius
comes into play as there is nothing to indicate to the contrary.
This legal maxim means that expression of one is the
exclusion of another. By making a provision that the agreement
is subject to the jurisdiction of the courts at Kolkata, the
parties have impliedly excluded the jurisdiction of other
courts. Where the contract specifies the jurisdiction of the
courts at a particular place and such courts have jurisdiction
to deal with the matter, we think that an inference may be
drawn that parties intended to exclude all other courts. A clause
like this is not hit by Section 23 of the Contract Act at all. Such
clause is neither forbidden by law nor it is against the public
policy. It does not offend Section 28 of the Contract Act in
any manner.
32. The above view finds support from the decisions of
this Court in Hakam Singh, A.B.C. Laminart, R.S.D.V.
Finance, Angile Insulations, Shriram City, Hanil Era Textiles
and Balaji Coke."
9. Hence, based on the ouster clause and the fact that a part of cause of
action arose in Delhi, the courts in Delhi would have exclusive jurisdiction
to try the present suit.
10. A perusal of the judgment of the Supreme Court in Union of India vs.
Adani Export Ltd. Anr. (supra) would show that in that case the issue
involved was regarding the jurisdiction of a High Court under Article 226 of
the Constitution of India. What was interpreted in that judgment was Article
226 (2) of the Constitution of India which provides that the concerned High
Court exercising jurisdiction in relation to territories within which the cause
of action, wholly or part, arises. In that writ petition, the petitioners of that
case had pleaded that the Ahmedabad Court had territorial jurisdiction based
on the following averments.
"(i) the respondents carry on their business of export and
import from Ahmedabad ;
(ii) their orders of export and import are placed from and are
executed at Ahmedabad ;
(iii) documents and payments for export and import are
sent/made at Ahmedabad ;
(iv) the credit of duty claimed in respect of exports were
handled from Ahmedabad since export orders were received at
Ahmedabad and payments also received at Ahmedabad ;
(v) non-granting and denial of utilisation of the credit in the
pass-book will affect the business of the respondents at
Ahmedabad ;
(vi) respondents have executed a bank guarantee through
their bankers at Ahmedabad as well as a Bond at Ahmedabad."
11. The court noted the submissions of the petitioner. The court held as
follows:
"2.Though in these appeals, principal contention involved
pertains to the entitlement of the respondents herein to the
benefit of the Pass Book Scheme found in paragraph 54 of the
Import Export Policy introduced by the appellants herein w.e.f.
1st April, 1995 in relation to certain credits to be given on
export of Shrimps, the appellant firstly challenges before us the
territorial jurisdiction of the High Court of Gujarat at
Ahmedabad to entertain the civil applications and grant relief in
favour of the respondents.
xxxxxxxxxx
7. The appellant contended as follows:-
With reference to para 16 of the petition, I say that since the
Pass Book Licence was issued at Chennai by the designated
authority at Chennai and the transactions concerning the said
pass book were made from Chennai port and cause of action is
lying at Chennai, it is in order that the case is transferred to the
jurisdiction of the Hon'ble High Court of Madras at Chennai
notwithstanding the petitioners having their office at
Ahmedabad from where the export import planning work was
being executed.
xxxxxxxxxxxx
17. It is seen from the above that in order to confer
jurisdiction on a High Court to entertain a writ petition or a
special civil application as in this case, the High Court must be
satisfied from the entire facts pleaded in support of the cause of
action that those facts do constitute a cause so as to empower
the court to decide a dispute which has, at least in-part, arisen
within its jurisdiction. It is clear from the above judgment that
each and every fact pleaded by the respondents in their
application does not ipso facto lead to the conclusion that those
facts give rise to a cause of action within the courts territorial
jurisdiction unless those facts pleaded are such which have a
nexus or relevance with the lis that is involved in the case. Facts
which have no bearing with the lis or the dispute involved in
the case, do not give rise to a cause of action so as to confer
territorial jurisdiction on the court concerned. If we apply this
principle then we see that none of the facts pleaded in
Paragraph 16 of the petition, in our opinion, fall into the
category of bundle of facts which would constitute a cause of
action giving rise to a dispute which could confer territorial
jurisdiction on the courts at Ahmedabad.
18. As we have noticed earlier, the fact that the respondents
are carrying on the business of export and import or that they
are receiving the export and import orders at Ahmedabad or that
their documents and payments for exports and imports are
sent/made at Ahmedabad, has no connection whatsoever with
the dispute that is involved in the applications. Similarly, the
fact that the credit of duty claimed in respect of exports that
were made from Chennai were handled by the respondents from
Ahmedabad have also no connection whatsoever with the
actions of the appellants impugned in the application. The non-
granting and denial of credit in the pass-book having an
ultimate effect, if any, on the business of the respondents at
Ahmedabad would not also, in our opinion, give rise to any
such cause of action to a court at Ahmedabad to adjudicate on
the actions complained against the appellants."
12. Hence, the important criteria on the basis of which determination can
be made as to whether part of cause of action arose in the territorial
jurisdiction of a particular court, would be determined based on the facts
pleaded in the petition, the truth or otherwise of the said averments being
immaterial.
13. A perusal of the fact above shows that the contract is concluded in
Delhi. Further payments have been made by the petitioner in Delhi. Hence, a
part of cause of action arose within the territorial jurisdiction of Delhi.
Further on account of the ouster clause contained in the invoice courts in
Delhi would have exclusive jurisdiction. There is no infirmity in the
impugned order. The present petition is dismissed .
JAYANT NATH, J
JULY 20, 2016/rb
