Case Note & Summary
The respondent, Shell Life Sciences Pvt. Ltd., filed a summary suit under Order 37 of the Code of Civil Procedure, 1908, against the appellant, Aglowmed Ltd., for recovery of the price of goods sold and delivered. The appellant had placed five purchase orders between 20 July 2009 and 26 November 2009 from its local office in Mumbai. The respondent supplied goods from Vadodara to Roorkee. The appellant issued four cheques towards payment, which were dishonoured. The suit was filed in the Bombay High Court. At the hearing of the Summons for Judgment, the appellant contested the jurisdiction of the Bombay High Court, relying on Clause 22 of the purchase orders, which stated that the courts at Patna alone shall have jurisdiction to settle disputes, as the appellant's registered office was at Patna. The learned Single Judge rejected the objection and made the Summons for Judgment absolute. The appellant appealed. The Division Bench held that no part of the cause of action arose at Patna; the contract was concluded at Mumbai, and part payment was made at Mumbai. Therefore, the exclusive jurisdiction clause was inapplicable, and the Bombay High Court had jurisdiction. The appeal was dismissed.
Headnote
A) Civil Procedure - Jurisdiction - Exclusive Jurisdiction Clause - Section 20, Code of Civil Procedure, 1908 - Where two or more courts have jurisdiction, parties may by agreement confer exclusive jurisdiction on one of them, but such agreement is binding only if the chosen court has jurisdiction. In the present case, no part of the cause of action arose at Patna; the contract was concluded at Mumbai and part payment was made at Mumbai. Hence, the exclusive jurisdiction clause in the purchase order conferring jurisdiction on Patna courts was held inapplicable, and the Bombay High Court had jurisdiction. (Paras 2-7)
B) Civil Procedure - Summary Suit - Order 37, Code of Civil Procedure, 1908 - The suit was filed under Order 37 for recovery of the price of goods sold and delivered. The appellant's objection to jurisdiction was rejected by the learned Single Judge, and the Summons for Judgment was made absolute. The appeal against that order was dismissed. (Paras 1-7)
Issue of Consideration
Whether the Bombay High Court has jurisdiction to entertain a summary suit under Order 37 CPC when the purchase order contains a clause conferring exclusive jurisdiction on courts at Patna, and no part of the cause of action arose at Patna.
Final Decision
The appeal is dismissed. The order of the learned Single Judge making absolute the Summons for Judgment is upheld.
Law Points
- Exclusive jurisdiction clause
- Cause of action
- Section 20 CPC
- Order 37 CPC
- Contract concluded at Mumbai
Case Details
2013 LawText (BOM) (04) 31
Appeal (Lodg.) No.194 of 2012 in Summons for Judgment No.35 of 2011 in Summary Suit No.2522 of 2010
Dr. D.Y. Chandrachud, A.A. Sayed
Mr. S.D. Deshmukh with Mr. Suraj S. Kudalkar for the Appellant, Mr. Tejas Vora i/b Mr. Girish Vora, Mr. Ajay Singh and Mr. Sagar Kasar for the Respondent
Shell Life Sciences Pvt. Ltd.
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Nature of Litigation
Appeal against order making absolute Summons for Judgment in summary suit under Order 37 CPC for recovery of price of goods sold and delivered.
Remedy Sought
The appellant sought to set aside the order of the learned Single Judge making absolute the Summons for Judgment, primarily on the ground of lack of jurisdiction.
Filing Reason
The appellant contested the jurisdiction of the Bombay High Court based on an exclusive jurisdiction clause in the purchase orders conferring jurisdiction on courts at Patna.
Previous Decisions
The learned Single Judge rejected the objection as to jurisdiction and made the Summons for Judgment absolute.
Issues
Whether the Bombay High Court has jurisdiction to entertain the suit despite the exclusive jurisdiction clause in the purchase order conferring jurisdiction on Patna courts.
Whether the cause of action arose at Patna.
Submissions/Arguments
Appellant: Where two or more courts have jurisdiction, parties can by agreement confer exclusive jurisdiction on one of those courts. Since the appellant has its registered office at Patna, the court at Patna would have jurisdiction under Section 20(a) CPC, and parties could legitimately confer exclusive jurisdiction on Patna courts.
Respondent: No part of the cause of action arose at Patna; there is no nexus with Patna. The contract was concluded at Mumbai and part payment was made at Mumbai, so the Bombay High Court has jurisdiction.
Ratio Decidendi
An exclusive jurisdiction clause in a contract is binding only if the chosen court has jurisdiction over the cause of action. Where no part of the cause of action arises at the stipulated venue, the clause is inapplicable, and the court where the cause of action arises has jurisdiction.
Judgment Excerpts
Where two or more Courts have jurisdiction to entertain and try a suit, parties can by agreement confer exclusive jurisdiction upon one of those Courts.
No part of the cause of action in the present case has arisen at Patna; There is absolutely no nexus in relation to the contract in question for the sale, supply and delivery of goods with Patna.
Procedural History
The respondent filed Summary Suit No.2522 of 2010 under Order 37 CPC in the Bombay High Court. The appellant filed a Summons for Judgment No.35 of 2011. The learned Single Judge made the Summons for Judgment absolute on 17 December 2011. The appellant filed Appeal (Lodg.) No.194 of 2012 against that order. The Division Bench heard the appeal and dismissed it on 1 April 2013.
Acts & Sections
- Code of Civil Procedure, 1908: Section 20, Order 37
