PATEL ROADWAYS P. LTD. Vs. TROPICAL AGROSYSTEMS P. LTD., REPRESENTED BY POWER AGENT, THE ORIENTAL INSURANCE COMPANY LTD. AND ORS.

JUDGEMENT

(1.) THE defendant in O.S. No. 6720 of 1985 on the file of III Assistant Judge, City Civil Court, Madras, is the petitioner in this Civil Revision Petition. The suit was laid by the respondents herein for the recovery of a sum of Rs. 91,077 -67 with interest at 9% p.a. from the date of plaint till the date of payment and for other reliefs. According to the case of the first respondent, they entrusted 664 and 518 packets of pesticides, insured with the second respondent to the petitioner carrier at Madras, which was accepted and acknowledged by the petitioner by the issue of lorry receipts dated 20 -5 -1983 and 7 -5 -1983, and the goods were delivered by the petitioner in a damaged condition at New Delhi and it had thus failed to discharge its statutory obligations under the Carriers Act, which had resulted in the first respondent sustaining loss to the tune of the amounts claimed in the suit, which was made good by the second respondent, for recovering which the first respondent executed a letter of subrogation in favour of the second respondent, on the basis of which, the respondent instituted the suit. In paragraphs 3 and 5 of the plaint, the respondents referred to the petitioner having acted as a common carrier undertaking to carry and deliver the consignments in good order and condition at New Delhi at the branch of the first respondent and also an absolute unconditional liability under the Carriers Act for its failure to do so. In paragraph 8 of the Plaint, the respondents staled that the cause of action for the suit arose at Madras on 30 -4 -1983 and 7 -5 -1983 when the consignments were entrusted to the petitioner and it acknowledged such entrustment on 6 -5 -1983 and 17 -5 -1983 when the consignments were delivered in a damaged condition, on 29 -9 -1983 when open delivery certificates confirming such shortages were issued, on 10 -10 -1983 when the first respondent lodged its notice of loss on the petitioner, on 19 -10 -1983 when the petitioner repudiated its liability and also on 15 -11 -1983 when the first respondent executed a letter of subrogation and special power of attorney in favour of the second respondent. In the written statement filed by the petitioner, it raised a plea that as per the terms of the goods forwarding note and the goods consignment note, the parties had agreed that any dispute arising out of the contract, would be subject to the jurisdiction of the Courts at. Bombay only and, therefore, the Court at Madras will not have any jurisdiction to entertain the suit. Issue No. 1 framed in the suit related to the objection raised by the petitioner regarding territorial jurisdiction of the Court at Madras to try the suit and that was, at the instance of the petitioner, taken up as a preliminary issue. On a consideration of the terms of the goods forwarding note and the goods consignment note, the Court below held that the City Civil Court at Madras has territorial jurisdiction to try the suit, the correctness of which is questioned in this Civil Revision Petition.

(2.) LEARNED Counsel for the petitioner contended that the principal office of the petitioner is situate in Bombay and that under the Explanation to Section 20, C.P.C., the petitioner should be deemed to carry on business in Bombay and with reference to the arising of the cause of action for the institution of the suit at Madras, where the petitioner has also a subordinate Office, it was open to the parties to the contract to agree of the two Courts having jurisdiction to entertain the suit, the one at Bombay alone will have jurisdiction, and, therefore, the City Civil Court at Madras had no jurisdiction to try the suit. Reference in this connection was also made to the decisions in Globe Transport Corporation v. Triveni Engineering Works : (1983) 4 SCC 707 , Patel Roadways (P) Ltd. v. Ponds India Ltd. C.C.R.P.Nos. 698 of 1984, decided on 29.8.1986 Messrs Patel Roadways Pvt. Ltd. : (1988) 1 L.W. 252. On the other hand, learned Counsel for the respondents submitted that on a proper construction of Section 20, C.P.C. read with the Explanation, it is clear that even though the principal office of the petitioner might be in Bombay, with reference to the cause of action for the institution of the suit, it had arisen at Madras where the petitioner had a subordinate office and the suit was properly laid before the City Civil Court at Madras and further that by agreement of parties, it is not open to confer on the Court in Bombay jurisdiction to entertain a suit which did not otherwise possess under Section 20, C.P.C. It was also pointed out that the decision relied on by learned Counsel for the petitioner have no application at all on the facts of this case, particularly with reference to the cause of action set out in the plaint and that the matter would be governed by the decision reported in Prakash Roadlines Pvt. Ltd. v. P.M. Gounder & Co. : AIR 1985 Mad 84 . Before entering upon a consideration of the rival submissions so made, it is necessary to notice certain uncontroverted facts. The head office of the petitioner, which in a company, is situate at Bombay. It has also branch office at Madras. The first respondent delivered the goods to the petitioner at its branch office at Madras for onward carriage to Delhi. The goods forwarding note contained a clause that disputes arising between the parties were subject to the jurisdiction of the Court at Bombay only. It is in the aforesaid background of undisputed facts, the question arises for consideration whether the City Civil Court at Madras, had jurisdiction to entertain the suit instituted by the respondents. It is seen from paragraph 8 of the plaint that the cause of action for the suit arose at Madras on 30 -4 -1983 and 7 -5 -1983, when the first respondent entrusted the consignment in question to the branch office of the petitioner and also on other subsequent dates. It is. in the light of the cause of action set out as above, the applicability of Section 20, C.P.C. has to be considered. There are three clauses in Section 20, C.P.C. and the clauses are disjunctive making provision for distinct and different situations. With reference to Clause (a) of Section 20, C.P.C., the requirement is that the defendant, or if there are more defendants than one, each of the defendants, at the time of the commencement of the suit, must be actually and voluntarily residing, or carrying on business, or personally working for gain, within the local limits of the jurisdiction of the Court before which the suit is laid. The use of the expressions "actually and voluntarily resides or personally works for gain" connote a reference to natural persons only and not artificial persons, like the petitioner. No question, therefore, of the petitioner actually or voluntarily residing or personally working for gain within the local limits of the jurisdiction of a Court at Madras could arise. That was the reason why it was stated in the plaint that the cause of action arose at Madras when the goods were entrusted to the branch office of the petitioner at Madras in the course of its business as a common carrier. The Explanation elucidates what is set out in Section 20(a), C.P.C. and it has to be read and interpreted to clear up any ambiguity in the main section and cannot be applied independently of the provision, which it is intended to explain. Bearing in mind this as well as the scope of the Explanation, on any analysis, it is seen that there are two distinct parts therein with reference to the place where the defendant carried on business. By the first part of the Explanation, a Corporation like the petitioner is deemed to carry on business at its sole or principal office. In the latter part of the Explanation it shall be deemed to carry or business in respect of any cause of action arising at any place, where it has also a subordinate office at such place. That the two parts of the Explanation are intended to be distinct and separate is also clearly made out by the use of the word 'or'. Thus reading the Explanation along with Section 20(a), C.P.C., a Corporation shall be deemed to carry on business at its sole or principal office in India or with reference to a cause of action, arising at a place, where it has a subordinate office, it shall be deemed to carry on business at such a place. Applying this interpretation, it follows that by reason of the application of the latter part of the Explanation, the petitioner is deemed to carry on business at Madras, where the subordinate office of the petitioner is located, and where the cause of action had also arisen by the entrustment of the goods by the first respondent to the petitioner for carriage to Delhi. Section 20(b), C.P.C. cannot have any application at all. That leaves only Clause (c) of Section 20, C.P.C. which provides that a suit has to be instituted in a Court within the local limits of whose jurisdiction, the cause of action wholly or in part, arises. There is no dispute that the first respondent delivered the goods to the petitioner at its branch office at Madras and, therefore, part of the cause of action arose within the local limits of the jurisdiction of the City Civil Court at Madras. Thus, applying Section 20(a), C.P.C. in the light of the latter part of the Explanation or Section 20(c), C.P.C it is obvious that only the City Civil Court at Madras has jurisdiction to entertain the suit and not any other Court. The Court at Bombay, where the head office of the petitioner is situate, did not have any jurisdiction at all under Section 20, C.P.C. Therefore, the agreement between the parties in this case, even if that could be spelt out of the printed conditions on the reverse of the goods consignment note, was to confine the jurisdiction of the court at Bombay with reference to disputes arising between them and to exclude the jurisdiction of the Court of Madras. The Court at Bombay, as seen earlier, did not have any jurisdiction at all considering Section 20, C.P.C. and by an agreement between the parties, they cannot confer jurisdiction upon a Court at Bombay, for, it is well settled that it is not open to the parties by agreement to invest a Court with jurisdiction, which it does not otherwise possess, but that if there are more Courts than one having jurisdiction to entertain a suit under Section 20, C.P.C., it is open to the parties to agree to have a particular forum to the exclusion of the other forum as regards the claims which one party may have against the other. In Prakash Roadlines Pvt., Ltd. v. P.M. Gounder & Co., A.I.R. 1985 Mad. 84 relied on by learned Counsel for the respondents, almost under identical circumstances, the question of the jurisdiction of the Sub Court at Karur to entertain a suit, when part of the cause of action arose within its jurisdiction while the head office was located at Bangalore, came to be considered with reference to an agreement between the parties conferring exclusive jurisdiction on the Court at Bangalore. It was held that considering the provisions of Section 20(a) and (c) read in the light of the Explanation, part of the cause of action arose within the jurisdiction of the Sub Court at Karur and the Bangalore Court will not have jurisdiction to entertain the suit. Similar is the situation in this case also and the decision on Prakash Roadlines Pvt. Ltd. v. P.M. Gounder & Co. : AIR 1985 Mad 84 ), would squarely apply. In that decision, reference has been made to Globe Transport Corporation v. Triveni Engineering Works : (1983) 4 SCC 707 and distinguished as not applicable to the facts, as it was found on the terms of the contract in that case that the Courts at Allahabad and Jaipur had jurisdiction to entertain suits and by an agreement of parties, the jurisdiction of the Court at Jaipur was accepted to the exclusion of the Court at Allahabad. That situation does not obtain in this case and the distinction made in Prakash Roadlines Pvt. Ltd. v. P.M. Gounder & Co. : AIR 1985 Mad 84 .