( 1 ) A short but interesting question arises in this appeal. The plaintiff M/s. Sponge Iron India Ltd. , are manufacturers of Sponge Iron with their Office in S. I. I. L Campus, Khammam District within the jurisdiction of the Subordinate Judge s Court at Kothagudem. The defendant M/s. Andhra Steel Corporation Ltd. , is a firm based at Bangalore engaged in the manufacture of steel billets for which the raw material is sponge iron. The defendant placed a purchase order dated 21-12-1981 requiring the plaintiff to supply 15,000 metric tonnes of sponge iron at Rs. 1425/- per metric tonne. These conditions are mentioned on the first page of the purchase order. On the reverse, there were other terms and conditions out of which Condition No. 11 says that the purchase order "shall be subject to the jurisdiction of the Bangalore Courts". The plaintiff in his turn sent a sale order dated 26-12-81 agreeing to supply 15,000 metric tonnes of sponge iron at Rs. 1425/- per tonne, subject to general terms and conditions specified overleaf. On the overleaf, one of the conditions mentioned at Item No. 11 is that "all orders accepted by S. I. I. L. are subject to Andhra Pradesh State Jurisdiction only". The plaintiff started supplying the goods from 29-12-1981. On 3-3-1982 the plaintiff sent the duplicate of the purchase order duly signed by him to the defendant. Subsequently, disputes arose between the parties and the plaintiff filed a suit O. S. No. 171 of 1982 in the Court of the Subordinate Judge at Kothagudem for recovery of the amount alleged to be due for the goods supplied with interest etc.

( 2 ) THE defendant filed a written statement taking several pleas that the goods supplied were not of standard quality and there were shortages from time to time and that the interest claimed is excessive. They also took plea that the Court at Kothagudem has no jurisdiction to try the suit as the parties have agreed that all disputes regarding the transaction should be settled in Bangalore Courts only.

( 3 ) ON these pleadings, the learned Subordinate Judge, Kothagudem framed issues, one of which is whether the Court at Kothagudem has not jurisdiction. He decided the said issue first. The learned Judge referred to S. 20 of the Civil Procedure Code and held that though the Courts at Bangalore and the Court at Kothagudem have got jurisdiction, since the parties have agreed to limit the jurisdiction to the Courts at Bangalore, the Kothagudem Court has no jurisdiction to try the suit. The learned Judge dismissed the suit without giving any findings on other issues.

( 4 ) IN this appeal, the submissions of the learned Counsel for the appellant are twofold. (1) The condition in the purchase order does not have the effect of ousting the jurisdiction of the Courts in Andhra Pradesh and, (2) There was no consensus or agreement on the conditions put forth by the defendant that all disputes should be settled only in Courts at Bangalore.

( 5 ) TO appreciate the respective contentions of the parties, it is necessary to refer to S. 20 of Civil Procedure Code which reads as follows :"other suits to be instituted where defendants reside or cause of action arises: - 20. 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 suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided 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 work for gain, as aforesaid, acquiesce in such institution; or (c) the cause of action, wholly or in part, arises. "

( 6 ) IT is