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1978 Supreme(All) 389
Allahbad High Court
R.B.MISRA,J.M.L.SINHA
Maganlal Devji Mewawala - Appellant
Versus
Satya Narain - Respondent
Decided On : 05/23/1978
R.N. Singh, for Appellants.
A contractual provision specifying a particular court's jurisdiction does not automatically oust the jurisdiction of other courts unless there is clear evidence that the parties intended the specified court to have exclusive jurisdiction.
Headnote:
JURISDICTION - TERRITORIAL - CONTRACT - SUBJECT TO HAMBURG JURISDICTION - WHETHER PARTIES CONTEMPLATED HAMBURG COURT AS EXCLUSIVE FORUM - INTERPRETATION OF CONTRACT TERMS.
Fact of the Case:
Plaintiffs, a German company, entered into a contract with the defendants, an Indian company, for the purchase of Indian hand-knitted woollen carpets and rugs. The contract was subject to Hamburg jurisdiction, as noted at the foot of the letter-pad containing the terms of the contract. The defendants failed to comply with the terms of the contract, and the plaintiffs filed a suit in India. The defendants contended that the Indian court lacked jurisdiction, as the contract specified Hamburg jurisdiction.
Finding of the Court:
The court held that the mere printing of the words "subject to Hamburg jurisdiction" at the foot of the letter-pad did not amount to a contract that both parties agreed to have Hamburg as the exclusive venue for dispute resolution. The court found that there was no clear stipulation between the parties that the terms of the agreement would be subject to what was printed at the foot of the letter-pad.
Issues: 1. Whether the parties contemplated Hamburg court as the exclusive forum for dispute resolution, as indicated by the note "subject to Hamburg jurisdiction" at the foot of the contract letter-pad. 2. Whether the Indian court had jurisdiction to try the suit, considering the contractual provision for Hamburg jurisdiction.
Ratio Decidendi: 1. The court relied on precedents holding that ouster of jurisdiction of a court to which a person is entitled under the Civil Procedure Code or any other statute cannot be assumed or presumed but must be proved by express words contained in the contract or by necessary or inevitable implication. 2. The court distinguished cases where the terms printed on the back of a document were explicitly incorporated as part of the contract, noting that in the present case, there was no such stipulation that the terms at the foot of the letter-pad were part of the agreement.
Final Decision: The court allowed the appeal, set aside the lower court's order, and remanded the case for a decision on the merits. The court declined to grant a certificate of fitness for appeal to the Supreme Court.
R. B. MISRA, J. :- The present appeal is directed against the order of the Additional District Judge, Gyanpur, district Varanasi, dated 10th
April, 1978, disposing of the preliminary issue that the court at Gyanpur had no territorial jurisdiction to try the suit.
2. The facts leading to this appeal are as follows :
3. Plaintiff-appellants Nos. 1 and 2 carried on business in partnership in the name as " Rekha Warenhandels G. m. b. H and Co., K. G 2, Hamburg. West Germany." Defendant respondent No. 1 carried on business of manufacturing Indian hand-knitted woollen carpets and rugs in the name and style of M/s. Satya Naram Lal and Sons, Bhadohi, district Varanasi. The plaintiffs entered into a contract through one Sri M. P. Ramchandran on 9th of Jan. 1973 with the defendants for the purchase of Indian hand-knitted woollen carpets and rugs. The details and particulars of the contract are given in para 3 of the plaint. The terms of the contract were incorporated in a letter-pad at the foot of which was noted;
" All offers are without engagement unless otherwise stated. Subject to Hamburg jurisdiction."
The terms of the contract were all incorporated in the earlier part of the letter-pad which was signed by the representatives of both the parties under the terms of the contract, the defendants were to supply certain quantities of carpets and rugs of certain size as contemplated in the contract. The defendants failed to comply with the terms of the contract and eventually refused to send the goods. Under the terms of the contract the goods were to be delivered at Hamburg and the payment was to be made through some bank at Hamburg. In these circumstances the plaintiffs were obliged to file a suit against the defendants.
4. The claim was resisted by the defendants. We are not concerned for the present with the other pleas taken by the defendants. We are only concerned with the plea of the defendants that the Court in India had no jurisdiction to try the suit. The learned Additional District Judge tried this preliminary issue and came to the conclusion that only the court at Hamburg in Germany had jurisdiction to try the suit and the court in India had no jurisdiction to try the same. On this view he directed the return of the plaint for presentation to the proper court. The plaintiffs, being aggrieved by the order of the learned Additional District Judge, have filed the present appeal.
5. The only point for consideration in this appeal is whether the court in India has jurisdiction to try the suit. The jurisdiction of the court is dealt with by S. 20 C. P. C. S. 20, in so far as material for the purposes of this case, reads :
" 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 of in part arises."
Obviously in view of cls. (a) and (b) of S. 20, the defendants actually and voluntarily resided at the time of the suit or carried on business at Gyanpur. Therefore, the suit could be filed in the court at Gyanpur. But, in view of cl. (c) of S. 20, a part of cause of action may be said to have arisen at Hamburg inasmuch as the contract was for the supply of the goods at Hamburg and payment was also to be made through some bank at Hamburg. If the cause of action is one which had partly arisen in one court and partly in another, both cou
