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1962 Supreme(P&H) 41

PUNJAB & HARYANA HIGH COURT
I.D.Dua, J.
Tarsema Textile Traders
Versus
Tarlok Singh Sadhu Singh
Civil Revision No. 2 of 1962,
Decided On : FEBRUARY 26, 1962

An objection relating to the place of suing cannot be allowed by a revisional Court unless there has been a consequent failure of justice.

Headnote:

JURISDICTION - TERRITORIAL - OBJECTION TO - SECTION 21, CODE OF CIVIL PROCEDURE - CONSEQUENT FAILURE OF JUSTICE - ESSENTIAL - REVISION - INTERFERENCE - WHEN JUSTIFIED.

Fact of the Case:

Plaintiff, a sole proprietor of a business undertaking known as Messrs. Virdi Industries, filed a suit against the defendants, a firm of merchants and its managing partner, for the recovery of a sum of Rs. 4,783.24 nP. The plaintiff claimed that the defendants had purchased goods from him and that a balance of Rs. 4,358.24nP remained due to him. The defendants objected to the jurisdiction of the Amritsar Court, arguing that no cause of action had accrued within its jurisdiction and that they did not carry on business at Amritsar. They also claimed that there was a specific agreement between the parties that all disputes relating to the agency agreement were entertainable at Bombay alone.

Finding of the Court:

The trial court held that a part of the cause of action arose in Amritsar and that it had jurisdiction to try the suit. The court relied on the fact that the goods were dispatched from Amritsar and the rates agreed were F. O. R. Amritsar, with the result that the delivery had to be presumed to have taken place at Amritsar.

Issues: 1. Whether the Amritsar Court had jurisdiction to try the suit. 2. Whether the objection to the territorial jurisdiction of the Amritsar Court was barred by section 21 of the Code of Civil Procedure.

Ratio Decidendi: 1. The court held that the objection to the territorial jurisdiction of the Amritsar Court was barred by section 21 of the Code of Civil Procedure. 2. The court held that the objection relating to territorial jurisdiction is taken out of the general principle by virtue of the enactment of section 21, Code of Civil Procedure, which provides that an objection relating to the place of suing cannot be allowed by a revisional Court unless inter alia there has been a consequent failure of justice.

Final Decision: The court dismissed the revision petition, holding that the objection to the territorial jurisdiction of the Amritsar Court was not maintainable in the absence of a consequent failure of justice.

Judgement Key Points

Key Points from the Judgment

Core Holding on Jurisdiction Objection: - An objection relating to the place of suing cannot be allowed by a revisional court unless there has been a consequent failure of justice. (!) (!) (!) (!) [23000140200007]

Facts of the Case: - Plaintiff, sole proprietor of Messrs. Virdi Industries (manufacturing and selling shuttles), sued defendants (firm Tarsema Textile Traders and its managing partner) for recovery of Rs. 4,783.24 (balance due after debits/credits from goods supplied since 17-9-1957).[23000140200001] (!) - Goods were dispatched from Amritsar on orders received there; rates were F.O.R. Amritsar; account verified in November 1959.[23000140200001] (!) [23000140200003] - Agency agreement dated 22-1-1958 (amended 1-4-1958) for sole selling agency in Bombay area; disputes to be settled at Bombay and Amritsar; post-agency, goods supplied on mutually settled rates. (!) [23000140200002]

Defendants' Objections: - No cause of action at Amritsar; defendants do not carry on business there; specific agreement limits disputes to Bombay courts.[23000140200002] - Prior suit filed by defendants in Bombay for accounts and commission.[23000140200002] - Claimed interpolation in agreement adding "Amritsar"; relationship as principal-commission agent, business at Bombay.[23000140200002] (!)

Trial Court's Findings: - Part of cause of action arose in Amritsar (goods dispatched from there, F.O.R. Amritsar implying delivery there); prior sale-purchase transactions included.[23000140200003] - Suit treated as seller-purchaser, not principal-agent for accounts; court had territorial jurisdiction.[23000140200003]

Issues Framed: - Whether Amritsar court had jurisdiction. - Whether objection to territorial jurisdiction barred by Section 21 CPC.[judgement_subject]

Arguments on Revision: - Petitioner argued principal-agent relationship mandates Bombay courts; erroneous jurisdiction assumption warrants interference.[23000140200004] - Respondent argued seller-purchaser relationship; no failure of justice; commission issued to Bombay for evidence.[23000140200006]

Ratio Decidendi: - Section 21 CPC bars revisional interference on territorial jurisdiction objection unless taken earliest and consequent failure of justice proven; distance alone insufficient.[23000140200007] (!) (!) (!) (!) (!) (!) - No failure of justice shown (commission to Bombay issued; no material prejudice demonstrated).[23000140200006][23000140200007] (!)

Final Decision: - Revision dismissed; Amritsar court jurisdiction upheld absent failure of justice; parties to bear own costs. (!) [23000140200007]


Judgment

1. This is a revision preferred by the defendants from the order of the learned Subordinate Judge, 1st Class, Amritsar repelling the defendants objection to the jurisdiction of the Court below and holding that a part of the cause of action arose in Amritsar with the result that the Court below is empowered to entertain and try the suit.

2. According to the plaint, Tarlok Singh, the plaintiff, claims to be the sole proprietor of the business undertaking known and styled as Messrs. Virdi Industries and carries on the business of manufacture and sale of shuttles of different sizes. Defendant No. 1, Tarsema Textile Traders, is a firm of merchants carrying on business of sale and purchase of shuttles and Shri Chaman Lal Gupta, defendant No. 2, is the Managing partner of the said concern. The defendants began to purchase goods (shuttles) from the plaintiff as from 17-9-1957 which were being supplied from Amritsar and account of which was regularly maintained in the plaintiffs books of account. During the course of dealings by means of an indent dated 22-1-1958, defendant No. 1 through defendant No. 2 offered to act as plaintiffs agents for the sale of shuttles manufactured by the plaintiff for the entire Bombay State excluding the municipal limits of Sholapyt with effect from 1-1-1958 on certain terms. The prices in respect of this business were to be F. O. R. Bombay.

The agency agreement was to be for one year and it was further agreed that the disputes between the parties would be settled at Bombay and Amritsar. Subsequent to this agreement, another amending agreement is alleged to have been arrived at between the parties on 1-4-1958 which effected slight changes in clauses 7 and 8 of the original agreement. According to the terms and conditions of the agreement as modified the business was to be terminated by the end of that year and thereafter the defendant was being supplied goods on the rates mutually settled. The amounts of goods purchases were being debited to the defendants accounts and the amounts received and the price of the goods returned was being credited. From 17-9-1957 to 31-3-1960; about Rs. 40,000/- were debited and about Rs. 35,600/- credited with the result that the balance of Rs. 4,358.24nP. remained due to the plaintiff. The account was gone into somewhere in November, 1959m and after comparison was found to be correct. The money due to the plaintiff, according to the plaint is for the price of the goods supplied after crediting the amount of commission earned by the defendant on account of the goods sold directly in the agency territory by the plaintiff. It is on these allegations that the suit for the recovery of a sum of Rs. 4,783.24 nP. was instituted in January, 1961. In clause 9 of the plaint, it has been stated that since the orders were placed at Amritsar, the goods were supplied from Amritsar where the contract was made the original agreement was also accepted at Amritsar, the amount was payable at Amritsar and it was also agreed that Amritsar Courts would have the jurisdiction to try the suit, the Courts at Amritsar have thus jurisdiction to entertain and try the suit.

3. In the written statement, a preliminary objection has been raised assailing the jurisdiction of the Court of Amritsar to try the suit on the ground that no cause of action has accrued within its jurisdiction nor do the defendants carry on the business at Amritsar. It has also been pleaded that there is a specific agreement between the parties that all disputes relating to the agency agreement are entertainable at Bombay alone. A further preliminary objection is also contained in the written statement according to which the suit at Amritsar is liable to be stayed because the defendants have only filed a suit for accounts and for the recovery of certain sum as commission at Bombay. In paragraph 3 of the written statement, it has been pleaded that prior to the commencement of the sole selling agency agreement dated 22-1-1958, t

















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