2015 Supreme(Del) 3856
DELHI HIGH COURT
Mukta Gupta, J.
OK Play India Limited - Appellant
Versus
Pradeep Tayal - Resopndent
C.R.P. 139/2014 & CM 15107/2014 (stay)
Decided On : 15-04-2015
For the Petitioner:Mr. Anirudh Wadhwa, Advocate.
For the Respondent:Mr. Satender Verma, Advocate.
The main legal point established in the judgment is the interpretation and validity of jurisdiction clauses in contracts, and the influence of such clauses on determining the jurisdiction of the court to adjudicate disputes.
Headnote:
Jurisdiction - Contract Law - Indian Contract Act, 1872, Section 4 - A.B.C. Laminart Pvt. Ltd. & Anr. v. A.P. Agencies, Salem, (1989) 2 SCC 163 - Wollaque Ventilation & Conditioning Pvt. Ltd. v. Sterling Tools Ltd. 177 (2011) DLT 731
Fact of the Case:
A suit for recovery of Rs. 1,10760/- with future and pendente-lite interest was filed by Pradeep Tayal against M/S OK Play, a Private Limited company, for non-payment of the balance amount against the manufacturing and supply of jeans and T-shirt. The jurisdiction to adjudicate the suit was contested based on conflicting jurisdiction clauses in the purchase order and retail cash bill.
Finding of the Court:
The court found that a concluded contract came into force after protracted negotiations on the price were finalized. The jurisdiction clause in the purchase order, subject to Mewat jurisdiction, was held to be valid, ousting the jurisdiction of the Court at Delhi. The court referred to previous cases to support its finding.
Issues: The main issue was the validity of the jurisdiction clause in the purchase order and the retail cash bill, and which court had jurisdiction to adjudicate the suit.
Ratio Decidendi: The court relied on Section 4 of the Indian Contract Act, 1872 and the interpretation of ouster clauses in contracts as established in A.B.C. Laminart Pvt. Ltd. & Anr. v. A.P. Agencies, Salem, (1989) 2 SCC 163 and Wollaque Ventilation & Conditioning Pvt. Ltd. v. Sterling Tools Ltd. 177 (2011) DLT 731 to determine the validity of the jurisdiction clauses and the jurisdiction of the court.
Final Decision: The impugned order was set aside, and the suit was directed to be returned to the plaintiff to be filed before the Court of competent jurisdiction at Mewat.
Mukta Gupta, J.:--
1. Aggrieved by the order dated 22nd May, 2014 whereby the application of the Petitioner/Defendant under Order 7 Rule 11 CPC was dismissed, the Petitioner prefers the present petition.
2. A suit for recovery of Rs. 1,10760/- with future and pendente-lite interest was filed by Pradeep Tayal against the petitioner (in short M/S OK Play”) stating that Pradeep Tayal was running a firm manufacturing and supplying t-shirts, sportswear and caps. M/s OK Play, a Private Limited company placed a Purchase Order No. POOK06001346 dated 29th December, 2006 for supply of T-shirts and jeans pants. After negotiations between the parties, the price was finalized and against the purchase order 300 T-shirts and 322 Jeans pants were supplied to M/S OK Play on 27th July, 2007 in complete quantity and perfect quality along with the retail cash bill dated 27th January, 2007 for Rs. 2,54,800/-. M/S OK Play returned back 109 jeans and two T-shirts for alteration. On checking, no defect was found in the jeans and T-shirts, thus Pradeep Tayal required M/S OK Play to lift the said jeans and T-shirts however, it refused to do so. M/S OK Play paid a sum of Rs. 50,000/- in advance and Rs. 11,084/- vide cheque on 9th May, 2007 leaving the balance of Rs. 1,10,760/- legally enforceable liability against the manufacturing and supply of jeans and T-shirt. Despite emails sent by Pradeep Tayal, M/S OK Play did not send the money. A meeting was held on 11th June, 2007 wherein Mr. Rajan Handa on behalf of M/S OK Play agreed to make the payments.
3. In the plaint it was stated that the jurisdiction to adjudicate the suit vests in the Delhi Courts as M/S OK Play resides and work for gain within the territorial jurisdiction of the Delhi Court. With the plaint Pradeep Tayal filed documents. The Purchase Order dated 29th December, 2006 mentioned the words ‘subject to Mewat Jurisdiction’ whereas the retail cash bill mentioned ‘All disputes subject to Delhi Jurisdiction only’.
4. Learned counsel for M/S OK Play states that on issuing the purchase order offer of Pradeep Tayal was accepted and the agreement between the parties concluded. As per the purchase order the jurisdiction vested in the Mewat Courts and the retail cash bill of Pradeep Tayal noting that “all disputes were subject to Delhi jurisdiction only” was frivolous.
5. Section 4 of the Indian Contract Act, 1872 provides that communication of an acceptance is complete as against a proposer when it is put in the course of transmission to him so as to be out of the power of the acceptor and as against the acceptor, when it comes to the knowledge of the proposer.
6. In A.B.C. Laminart Pvt. Ltd. & Anr. v. A.P. Agencies, Salem, (1989) 2 SCC 163 the Supreme Court held-
“21. From the foregoing decisions it can be reasonably deduced that where such an ouster clause occurs, it is pertinent to see whether there is ouster of jurisdiction of other courts. When the clause is clear, unambiguous and specific accepted notions of contract would bind the parties and unless the absence of ad idem can be shown, the other courts should avoid exercising jurisdiction. As regards construction of the ouster clause when words like “alone”, “only”, “exclusive” and the like have been used there may be no difficulty. Even without such words in appropriate cases the maxim “expressio unius est exclusio alterius” — expression of one is the exclusion of another — may be applied. What is an appropriate case shall depend on the facts of the case. In such a case mention of one thing may imply exclusion of another. When certain jurisdiction is specified in a contract an intention to exclude all others from its operation may in such cases be inferred. It has therefore to be properly construed.”
7. In the plaint, Pradeep Tayal stated that M/S OK Play placed a purchase order dated 29th December, 2006 for supply of T-shirts and jeans pants. Thereafter, a protracted negotiation was held between the defendant’s representative and the pl