2006 Supreme(Bom) 191

IN THE HIGH COURT OF BOMBAY
Vazifdar S.J., J.
Pacific Refractories Ltd . ... Plaintiff
Versus
Stein Heurtey India Projects Pvt. Ltd . ... Defendant.
Chamber Summons No. 1818 of 2004 in Summary Suit No. 3242 of 2004, decided on 10-2-2006.
Advocates appeared:
O.S. Kutty, for plaintiff.
Virag Tulzapurkar with A.S. Doctor i/b. Junnarkar & Associates, for defendant.

Headnote:Civil Procedure Code, 1908 - Section 20 Territorial Jurisdiction of Court Determination of Suit for recovery of amount Contract made at Calcutta Contract’s clause requiring all communications to be addressed to M.D. at Calcutta Arbitration proceedings also required to be taken under Jurisdiction of Calcutta High Court Calcutta High Court have jurisdiction to decide dispute Absence of words "only", "alone" or "exclusively" in clause of contract is of no consequence. In the instant case, the Defendant’s Principal Office is in Calcutta. It is fir this reason that Article 43 of the contract required all communication to be addressed to the Managing Director in Calcutta. The communication of the acceptance by the Plaintiff of the offer was required to be made in Calcutta. Article 12 of the contract required the Plaintiff to keep the Defendant informed of the progress of work by forwarding monthly status reports for the Defendant’s review. Article 12 also required the Plaintiff to report immediately to the Defendant any exigencies in the work. The implementation and the execution of the contract was monitored by the Defendants from Calcutta. Even the arbitration clause requires the proceedings to take place under the jurisdiction of the Calcutta High Court. The same reads as under :

       "Article 40. Arbitration. All unresolved disputes arising in connection with the contract shall be resolved through an arbitrator acceptable to both the parties. In the event of failure in selecting any mutually acceptable arbitrator arbitration proceedings will take place under the jurisdiction of Calcutta High Court.

       All involved parties shall abide by the findings of the Arbitrator or the verdict of arbitration by Calcutta High Court. The terms of the contract shall in all respects be construed and operated as a Indian Contract and in conformity with Indian Laws.

       Performance of the Contract shall continue during Arbitration proceedings unless the Purchaser shall advise the suspension of the contract as a whole or part thereof.’’

       An important question to be determined in such cases would be the reason for the inclusion of such a clause. The Calcutta High Court and the Courts situated within the territorial limit of the Calcutta High Court (for brevity referred to as the Calcutta High Court), in any event, had jurisdiction. Thus in the present case, Article 39 was not for the purpose of conferring jurisdiction on the Calcutta High Court because the parties were of the view that otherwise the Calcutta High Court would have no jurisdiction. Parties cannot by consent confer jurisdiction upon a place or a Court which has none. I am not, however, on the question of law. I am considering what the parties had in mind when they entered into the contract. The Calcutta High Court in any event, had jurisdiction and the parties knew and in any event must be deemed to have known same.

       Contract Act, 1872 - Section 2(4) Term in a contract was to confine jurisdiction to the Calcutta High Court and the Courts situated within its territorial limit and to exclude the jurisdiction of the Courts in any other place The inclusion of a term in a contract must signify something unless it is shown to have been included by mistake. The parties vide Article 39 of the contract agreed to vest the jurisdiction in the Courts within the territorial limit of the Calcutta High Court, regarding legal actions or suits arising out, or in connection with the contract. In view of the express stipulation governing the jurisdiction of the Courts, the Bombay High Court has no jurisdiction to entertain the suit of the plaintiff. The inclusion of a term in a contract must signify something unless it is shown to have been included by mistake. It is not the plaintiff’s case that the parties were not ad-idem or that the clause was included in the contract by mistake. It is not the plaintiff’s case that they were unaware of Article 39 in the contract. It is not the plaintiff’s case that the clause was inserted for a purpose other than for the purpose of conferring jurisdiction. It is not even the plaintiff’s case that the parties were of the view that the Calcutta High Court would otherwise have no jurisdiction and that the clause was therefore included. AIR 1990 Ker 291, Dist. (1995) 4 SCC 153, Ref.

       Contract Act, 1872 - Sections 3 and 4 Territorial jurisdiction The defendant posted the letter dated 8.8.2003 from Calcutta, accepting the offer made by the plaintiff’s letter dated 7.8.2003 Held, the contract must be deemed to have been made in Calcutta. When an offer is accepted by post, the contract is complete when the acceptance is put into a course of transmission by posting the letter. It is not the plaintiff’s case that the offer was accepted telephonically or by any other mode of instantaneous communication. Nor is it the plaintiff’s case that the defendant accepted the offer in Bombay. In fact, it is admitted that the contract, was signed by the defendant in Calcutta. It i s further admitted that the contract itself was forwarded by post. In the circumstances, it is clear that the contract was accepted by the defend ant in Calcutta and the acceptance was put into a course of transmission by the defendant by posting the same to the plaintiff in Bombay. Therefore, the submission on behalf of the defendant that no part of the cause of action arose in Mumbai, is therefore well founded. AIR 1966 SC 543, Rel.