[Cites 24, Cited by 0]
Madhya Pradesh High Court
Itc Ltd vs Kn Agri Resources on 31 March, 2026
Author: Vivek Rusia
Bench: Vivek Rusia
NEUTRAL CITATION NO. 2026:MPHC-JBP:25581
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IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE VIVEK RUSIA
&
HON'BLE SHRI JUSTICE PRADEEP MITTAL
ON THE 31st OF MARCH, 2026
MISC. PETITION No. 5797 of 2024
ITC LTD
Versus
KN AGRI RESOURCES
Appearance:
Shri Kishore Shrivastava, Senior Advocate with Shri Priyankush Jain
and Ms. Aditi Shrivastava, Advocates for petitioner.
Shri Shantanu Chourasia, Advocate appears through VC for
respondent.
ORDER
Per: Justice Pradeep Mittal
This petition under Article 227 of the Constitution of India is filed
against the order dated 21.08.2024 passed by the District Judge, Commercial
Court Bhopal whereby the application filed by the petitioner/defendant under
Order VII Rule 11 read with Section 151 of the CPC has been dismissed.
2. The contention of the petitioner/defendant is that the
respondent/plaintiff has filed the present suit seeking compensation of
Rs.2,35,15,275/- on account of breach of contract, along with interest at the
rate of 24% per annum. However, the respondent/plaintiff has not clearly
specified in the plaint as to when the cause of action arose. Therefore, on this
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ground, the plaint is liable to be rejected. Additionally, the
petitioner/defendant before the Commercial Court has contended that the
said court lacks territorial jurisdiction to entertain the suit. It is stated that the
purchase contract, on the basis of which the suit has been filed, clearly
mentions that in case of any dispute between the parties, the courts at Guntur
shall have jurisdiction. The petitioner/defendant has further submitted that
its head office is situated in Guntur. It is also objected that the
respondent/plaintiff did not file a statement of truth along with the plaint.
Hence, on these grounds as well, the plaint deserves to be rejected.
Accordingly, the petitioner/defendant has prayed for rejection of the plaint.
3. In support of the contention the learned senior counsel for the
petitioner relied upon the judgments of the Hon'ble Supreme Court and
various High Courts in the cases of Kamala and others Vs. K.T. Eshwara Sa
and others reported as (2008) 12 SCC 661, Shriram City Union finance
Corporation Ltd. Vs. Rama Mishra (2002) 9 SCC 613, Rajasthan State
Electricity Board Vs. Universal Petrol Chemicals Limited (2009) 3 SCC 107,
Swastik Gases Private Limited Vs. Indian Oil Corporation Limited (2013) 9
SCC 32, Reliance Securities Ltd. Vs. Ajit Kumar 2016 SCC OnLine MP
10541, Wollaque Ventilation and Conditioning Pvt Ltd. Vs. Sterling Tools
Ltd. 2011 SCC OnLine Del893: (2011) 177 DLT 731, Dahiben Vs.
Arvindbhai Kalyanji Bhanuysali (Gajra) dead Through Legal
Representatives and others (2020) 7 SCC 366, Bajranglal Agarwal Vs.
Susheela Agarwal and others 2024 SCC OnLine TS 1823 SPML Infra
Limited Vs. Graphite India Limited 2020 SCC OnLine Del 2808: (2020)3
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Arb LR 439, M/s Bharat Barrel and Drum MFG. Co. Vs. The Employees
State Insurance Corporation 1971(2) SCC 860, Nibro Limited Vs. National
Insurance Company Limited 1990 SCC OnLine Del 65:ILR (1991) 2 Del
172 : AIR 1991 Delhi 25, State Bank of Travancore Vs. Kingston Computers
India Private Limited, (2011) 11 SCC 524 to argue that where parties have
entered into an agreement regarding jurisdiction, only the court agreed upon
shall have jurisdiction to decide disputes. It is further argued that even if
words like "alone," "only," or "exclusive jurisdiction" are not expressly used,
the intention of the parties to confer jurisdiction on one court is sufficient to
exclude other courts.
4. The respondent/plaintiff had opposed the application before the
Commercial Court contending that under Section 20 of the Code of Civil
Procedure, jurisdiction is conferred upon courts, and where more than one
court has jurisdiction, the parties may agree to vest jurisdiction in any one of
such courts. In the present case, since the cause of action arose in Khandwa,
this Commercial Court has jurisdiction to hear the matter. The
respondent/plaintiff further submitted that the contract was neither executed
in Guntur nor was the delivery of goods made there. It is also stated that the
petitioner/defendant has an office in Bhopal; therefore, the Commercial
Court at Bhopal has jurisdiction. The application filed by the
petitioner/defendant under Order VII Rule 11 CPC being misconceived,
baseless, and not maintainable, and was rigthly dismissed. The Defendant's
application was defective, as it was not duly signed on each page and was
unsupported by any valid authorization such as a Board Resolution or Power
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of Attorney. The Plaintiff has duly disclosed the cause of action and
territorial jurisdiction in the plaint. The cause of action arose in Khandwa,
and the defendant carries on business in Bhopal; therefore, the Commercial
Court had proper jurisdiction. The contention regarding exclusive jurisdiction
of courts at Guntur is untenable, as no part of the cause of action arose there,
nor does the petitioner/defendant carry on business there. The plaint, when
read as a whole, clearly discloses a valid cause of action. The
petitioner/defendant's objections are merely technical, frivolous, and
intended to delay the proceedings. The plaint discloses substantial material
facts requiring adjudication on merits and cannot be rejected on such
grounds. Accordingly, the petition filed by the defendant deserves to be
dismissed with costs.
5. Respondent relied upon the judgments in the cases of Peerless
General Finance & Investment Co. Ltd. vs. Punjab & Sind Bank
2008(1)CTLJ74(DEL), Kamla vs. K.T. Eshwara Sa & Others (2008) 12 SCC
661, Harji Engineering Works Pvt. Ltd. vs. Hindustan Steel Works
Construction Ltd. 2021 SCC OnLine Cal 2457.
6. The Commercial Court after hearing the parties held that although
the agreement provides for jurisdiction of courts at Guntur, the
petitioner/defendant has failed to establish any legal basis conferring
jurisdiction on those courts. The material on record indicates that the
petitioner/defendant is based in Bhopal and the cause of action arose in
Khandwa; hence, the objection to territorial jurisdiction is untenable. It
further held that the objection regarding non-filing of the statement of truth is
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also without merit, as the same was subsequently filed. Further, a reading of
the plaint as a whole discloses a cause of action based on alleged breach of
contract and dismissed the application under Order 7 Rule 11 CPC.
7. Heard the learned counsel for parties and perused the material
available on record.
8. In the case of Maharashtra Chess Assn. v. Union of India, (2020)
13 SCC 285 it was held that parties cannot by agreement confer jurisdiction
on a court which lacks the jurisdiction to adjudicate. But where several courts
would have jurisdiction to try the subject-matter of the dispute, they can
stipulate that a suit be brought exclusively before one of the several courts, to
the exclusion of the others.
9. In the case of Riveria Commercial Developers Ltd. Versus
Brompton Lifestyle Brands Pvt. Ltd. 2022 SCC OnLine Del 4624 it was held
that the High Court of Calcutta in Harji Engineering Works Pvt. Ltd. v.
Hindustan Steel Works Construction Ltd., 2021 SCC OnLine Cal 2457 , has
ruled that the consequence of not filing a 'Statement of Truth' in the
prescribed form would not debar a party from proceeding with the Suit if
such defect is cured.
10. In the case of A V Industries Vs Neo Neon Electrical Pvt. Ltd.
2023 SCC OnLine Del 5397, it was held that the issue of part cause of
action having arisen is wholly untenable for the reason that the learned
counsel for the respondent/plaintiff was unable to show even one instance of
any cause of action having arisen at Delhi at all.
11. In the case of Mayar (H.K.) Ltd. v. Vessel M.V. Fortune
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Express, (2006) 3 SCC 100, it was held that the Court has found that the
Calcutta Court has jurisdiction to try the proceedings except when the forum
selection clause excludes the jurisdiction of the Court.
12. In case Nahar Industrial Enterprises Ltd. v. Hong Kong and
Shanghai Banking Corpn., (2009) 8 SCC 646 following Dwarka Prasad
Agarwal v. Ramesh Chander Agarwal [(2003) 6 SCC 220 in which it was
held that a bare perusal of the aforementioned provisions leaves no manner
of doubt that thereby the jurisdiction of the civil court has not been ousted.
The civil court, in the instant case, was concerned with the rival claims of the
parties as to whether one party has illegally been dispossessed by the other
or not. Such a suit, apart from the general law, would also be maintainable in
terms of Section 6 of the Specific Relief Act, 1963.
13. In the case of Hakam Singh v. Gammon (India) Ltd., (1971) 1
SCC 286 it was held that plainly by the terms of Section 20(a), read with
Explanation II, the respondent Company was liable to be sued at Bombay
where it had its principal place of business.
14. After considering all cited judgements of both sides, it is emersed
that this is a well-settled principle of law that when multiple courts have
jurisdiction over a dispute, the parties can choose one of them. However,
parties cannot confer jurisdiction on a court that has no inherent jurisdiction
to hear the case.
15. This means that while contractual agreements to choose one
court over another are valid (exclusive jurisdiction clauses), such agreements
only apply to courts that are already competent to hear the matter under the
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Code of Civil Procedure (CPC) or other applicable statutes. Parties cannot by
agreement give jurisdiction to a court that inherently lacks it (territorial,
pecuniary, or subject matter).
1 6 . Section 19 of the CPC provides jurisdiction for Suits for
compensation for wrongs to person or movables.--Where a suit is for
compensation for wrong done to the person or to movable property, if the
wrong was done within the local limits of the jurisdiction of one Court and
the defendant resides, or carries on business, or personally works for gain,
within the local limits of the jurisdiction of another Court, the suit may be
instituted at the option of the plaintiff in either of the said Courts.
17. Section 20 of the CPC provides jurisdiction for Other suits to be
instituted where defendants reside or cause of action arises. Subject to the
limitations aforesaid, every suit shall be instituted in a Court within the local
limits of whose jurisdiction--
(a) the defendant, or each of the defendants where there are more than
one, at the time of the commencement of the suit, actually and voluntarily
resides, or carries on business, or personally works for gain; or
(b) any of the defendants, where there are more than one, at the time of
the commencement of the that in such case either the leave of the Court is
given, or the defendants who do not reside, or carry on business, or
personally works for gain, as aforesaid, acquiesce in such institution; or
(c) The cause of action, wholly or in part, arises.
[Explanation]. --A corporation shall be deemed to carry on business
at its sole or principal office in [India] or, in respect of any cause of action
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arising at any place where it has also a subordinate office, at such place.
18. The petitioner/defendant company has filed a power of attorney
along with the written statement, namely Deed Ex. A8, executed on 5
February 2018, wherein it is stated that ITC Limited, a company
incorporated in India and having its registered office at Virginia House, 37,
Jawaharlal Nehru Road, Kolkata, West Bengal, nominated, constituted, and
appointed Mr. Rajendra Kumar Singhi as its true and lawful Attorney,
Representative, and Agent in and outside India for the purposes mentioned in
the Deed, thereby conferring upon him the necessary powers and authority.
By virtue of the said power of attorney, Mr. Rajendra Kumar Singhi further
nominated Mr. Ashit Kumar, son of Late Shravan Kumar, working as Vice
President - Finance & MIS, Agri Business Division, ITC Limited, Guntur
(hereinafter referred to as 'the Attorney'), to act as the true and lawful
Attorney, Representative, and Agent of the Company, in its name and on its
behalf, for exercising the powers granted under the said deed in India.
However, the said power of attorney does not clearly establish that the
respondent company and the Agri Business Division, ITC Limited, Guntur,
are subordinate entities of the respondent.
19. Under Section 20(c) of the Code of Civil Procedure, the
Explanation provides that a corporation shall be deemed to carry on business
at its sole or principal office in India or, in respect of any cause of action
arising at any place where it has a subordinate office, at such place. In the
present case, there is no evidence to show that the respondents have a
subordinate office at Guntur. Therefore, the courts at Guntur do not presently
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have jurisdiction over the subject matter of the suit. Mere reference to
Guntur does not oust the jurisdiction of other competent courts, including
those at Bhopal, especially where jurisdiction has been agreed upon by the
parties. Whether the respondent company has a subordinate office at Guntur
is a matter of evidence. Such an objection may be raised in the written
statement and must be established by cogent evidence at the appropriate
stage. At the preliminary stage, in the absence of evidence, it cannot be
determined that the Guntur court has jurisdiction over the subject matter of
the suit.
20. From the above, it appears that the principal place of business of a
corporation is the place where its governing power is exercised, or where its
chief executive offices are located, commonly referred to as the 'nerve
centre', or the place designated as its principal place of business under the
relevant statutes of incorporation. Therefore, in order to determine the
principal place of business, the parties are required to place relevant material
before the Court. The Court cannot arrive at such a finding at the preliminary
stage of the suit merely on the basis of a power of attorney. In the present
case, the defendants have not placed any material before the Court, except
the power of attorney, to establish that the courts at Bhopal constitute
another available forum which is clearly or distinctly more appropriate. The
Commercial Court has taken into consideration that the action initiated by
the plaintiff-respondent in the Bhopal Court is founded on facts that are real
and substantially connected with that forum, particularly in terms of
convenience, expense, availability of witnesses, and the law governing the
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transaction. Further, there is no averment in the application filed by the
defendant that continuation of the proceedings in the Bhopal Court would
cause injustice to them, or that it is oppressive, vexatious, or an abuse of the
process of the Court. There is also no material on record to demonstrate how
trial at Guntur would be more convenient to the parties, as compared to trial
at Bhopal, or that justice could be achieved with substantially less
inconvenience and expense. In the facts and circumstances of the case, we
are not satisfied that the Guntur Court has jurisdiction or that the matter can
be more appropriately tried there in the interest of all parties and in
furtherance of the ends of justice.
21. The objections regarding non-disclosure of cause of action and
non-filing of the statement of truth are found to be without substance,
particularly in view of the subsequent compliance. No evidence has been
placed before the trial court to establish that the Guntur Court has
jurisdiction over the subject matter of the suit, especially when the courts at
Bhopal otherwise have jurisdiction. Therefore, the agreement between the
parties cannot oust the jurisdiction of the Bhopal Court. We find no error in
the impugned order. Accordingly, the writ petition deserves to be dismissed
and is hereby dismissed. There shall be no order as to costs.
(VIVEK RUSIA) (PRADEEP MITTAL)
JUDGE JUDGE
MSP
