Back
1982 Supreme(Cal) 89
High Court Of Calcutta
Dipak Kumar Sen
PERIWAL PACKING INDUSTRIES PVT.LTD. - Appellant
Versus
THE FERTILIZER AND CHEMICALS TRAVANCORE LTD. - Respondent
Suit 998 Of 1980
Decided On : 03/16/1982
A forum selection clause in a contract does not necessarily confer exclusive jurisdiction to the courts of the specified jurisdiction and that other courts may have jurisdiction to entertain litigation arising from the contract.
Headnote:
JURISDICTION - FORUM SELECTION CLAUSE - INTERPRETATION - FORCE MAJEURE CLAUSE - INTERPRETATION - DELAY IN DELIVERY - PENALTY - DEDUCTION FROM BILL - LEGALITY.
Fact of the Case:
Plaintiff and defendant entered into an agreement for the sale of jute bags. The agreement contained a forum selection clause stating that any litigation arising from the contract would be taken up in a court of law in Kerala. The plaintiff delivered the goods, but there was a delay in delivery due to labor trouble and a strike at the plaintiff's factory. The defendant deducted an amount from the plaintiff's bill as a penalty for the delay.
Finding of the Court:
The court held that the forum selection clause did not confer exclusive jurisdiction to the courts of Kerala and that the plaintiff was entitled to file the suit in Calcutta. The court also held that the plaintiff was entitled to the benefit of the force majeure clause and that the defendant was not entitled to deduct any amount from the plaintiff's bill on account of delay.
Issues: 1. Whether the forum selection clause conferred exclusive jurisdiction to the courts of Kerala? 2. Whether the plaintiff was entitled to the benefit of the force majeure clause?
Ratio Decidendi: 1. The forum selection clause did not indicate that only the Courts of law in Kerala would have exclusive jurisdiction or that no other court will have jurisdiction to entertain such litigation or that the parties would not be entitled to resort to any other court. 2. The evidence on the issue of whether the plaintiff's factory was rendered unproductive on account of a strike at the relevant period and whether on account of the aforesaid the plaintiff is entitled to the benefit of force majeure clause will necessarily be at Calcutta and not at Kerala.
Final Decision: The court dismissed the defendant's application to revoke leave under Clause 12 of the Letters Patent and to take the plaint off the file or reject it. The court also directed the plaintiff to deposit Rs. 5,000 with the Advocate on record of the plaintiff to be held free from lien and subject to further orders in the suit.
( 1 ) PERIWAL Packing Industries Pvt. Ltd. , the plaintiff, instituted this suit on or about the 25th November 1980 against the Fertiliser And Chemicals Travancore Ltd. , the defendant, claiming inter alia a decree for Rs-75,237. 37, alternatively, an enquiry into the damages and a decree on the amount ascertained costs and other reliefs.
( 2 ) THE plaintiff's case is that an agreement was entered into by and between the plaintiff and the defendant on or about the 15th July 1977 where-under the plaintiff agreed to sell jute bags of specified quality and quantity at agreed rates to the defendant under inter alia the following terms and conditions recorded in the correspondence had between the parties and also in a purchase order issued by the defendant to the plaintiff: (a) 90% of the value of the goods supplied would be paid through the State Bank of India and the balance 10% would be paid within 30 days after the receipt of the goods at site. (b) In case the plaintiff defaulted in making delivery failed to explain such default and the defendant did not accept the extension of the delivery period, the defendant would be entitled to deduct from the bills of the plaintiff an amount subject to a maximum of 71/2 of the total value of the order, provided the delay in delivering was not due to any force majeure. (c) The parties would not be considered to be in default in the performance of their obligations under the contract if the same was prevented or delayed by reason, inter alia, of strikes. (d) Any litigation arising on account of the said contract would be taken up in a court of law in Kerala.
( 3 ) IT is not in dispute that the plaintiff has delivered the goods which have been duly accepted by the defendant and that 90% of the payment of the price thereof has been made. It is also not in dispute that the entire supply was not made within the stipulated period and by reason of the delayed delivery the defendant has deducted from the bills of the plaintiff a sum of Rs. 50,3267- by, way of penalty and/or liquidated damages.
( 4 ) THE plaintiff alleges that on account of labour trouble in its factory between April and Nov. 1977, a strike in the plaintiff's factory from December 1977 followed by a clouser of the factory the plaintiff could not supply the goods to the defendant within the tune stipulated. The plaintiff contends that under the force majeure clause in the contact the plaintiff is entitled to an extension of time for delivery and the defendant is not entitled to deduct any amount from the plaintiff's bill on account of delay. It is also alleged that the defendant promised to release payment of the amount deducted, on the plaintiff producing a certificate from the office of the Labour Commissioner, West Bengal certifying that the factory of the plaintiff remained closed during the period. Such' certificate it is alleged was duly produced by the plaintiff in spite whereof the defendant wrongfully retained the amount deducted.
( 5 ) THE present application is by the defendant in this suit on a notice dated the 21st August, 1981, The defendant prays for the following orders: (a) Leave under Clause 12 of the Letters Patent be revoked; (b) The plaint be taken off the file and/ or rejected;
( 6 ) THE defendant contends that in view of the terms of the written agreement only the courts in Kerala have jurisdiction and this Court has no jurisdiction to try this suit. The defendant alleges that the goods were delivered in Kerala after notification of documents submitted by the plaintiff through the State Bank at Kerala and as such a substantial part of the plaintiff's cause arose in Kerala. It is alleged further that the defendant has no office in Calcutta all its documents and its witness are in Kerala. In view of the agreed forum and in view of the balance of convenience it is contended that an order should be made in favour of the defendant.
( 7 ) ONE Mohanlal Periwal, a director of the plaintiff ha
