PREMCHAND SALES Vs. PRECOATED STEELS LIMITED

JUDGEMENT

(1.) THIS appeal takes exception to the Order passed by the Civil Judge, S. D. , Pune dated July 2, 1998 in Special Civil Suit No. 573 of 1998. By this order the trial Court has returned the plaint to the appellants-plaintiffs for presentation to the proper Court.

(2.) BRIEFLY stated, the parties hereto viz. the appellants and the respondents have entered into an agreement of distributorship some time in March 21, 1993 in respect of products of respondents i. e. Precoated Steels/steel Strips manufactured by the Company in the State of Maharashtra except Greater Bombay and Thane. Under the said agreement, the appellants were undoubtedly appointed as Distributors. It is also relevant to point out that at the relevant time the registered office of the respondent company was at Bombay. It is in that context, Clause 11 of the said agreement provided for that only the competent courts at Bombay will have jurisdiction in respect of any dispute or differences arising out of or touching this arrangement. It is not necessary to extensively refer to all the facts mentioned in the plaint. Suffice it to point out that the said agreement was only for a period of one year. It is also not in dispute that respondents subsequently entered into another agreement on June 22, 1994 appointing the appellants as Distributors on same terms and conditions, which agreement was also to last for a period of one year. It is relevant to point out that even when the second agreement was executed between the parties in 1994, Clause 11 relating to the jurisdiction of competent Court at Bombay was retained-inasmuch as when this agreement was executed the respondents at the relevant time had their office at Bombay. While the said agreement was in force, the respondents shifted their office to Pune and the parties thereafter continued to transact their usual business within the jurisdiction of Pune Court. In due course of time the agreement executed in the year 1994 also expired by efflux of time in the year 1995. The specific case made out in the plaint is that, in spite of expiry of the second agreement, parties arrived at oral understanding and continued to transact their usual business on the same terms and conditions. It is further asserted in the plaint that the parties had in fact prepared a draft agreement, but the same was not finally executed. However, the respondents unilaterally terminated the agreement of Distributorship by communication dated March 20, 1998. After the said communication the appellants immediately rushed to the Civil Court at Pune by filing Special Civil Suit No. 573 of 1998 on 4-4-1998.

(3.) IN other words, on perusal of the plaint as a whole the position that emerges is that when the first as well as the second agreement was executed between the parties, the respondents had its office at Bombay. Moreover, during the tenure of the second agreement the respondents shifted their office at Pune and the parties continued to transact their usual business in Pune. Admittedly, the second agreement expired in June 1994, but still the parties continued to transact usual business in Pune on same terms and conditions-albeit on the basis of oral agreement. On this premise the appellants filed the subject suit in the Civil Court at Pune contending that the entire cause of action has arisen at Pune and both the parties are also within the jurisdiction of Pune Court. Along with the said suit appellants also took out application for interim injunction being Exh. 5. In response to the said interim application the respondents filed reply taking specific plea that Pune Court has no jurisdiction, for the only competent Court to try and decide the dispute between the parties would be at Bombay in view of Clause 11 of the agreement. Besides raising this objection in reply to Exh. 5 the respondents filed separate application under section 9a of the Code of Civil Procedure for framing preliminary issue as to the jurisdiction of Pune Court to try and decide the suit. From the averments in this application it would appear that case made out by the respondents is purely on the basis of Clause 11 of the agreement which provides that "only the competent courts at Bombay will have jurisdiction in respect of any dispute or differences arising out of or touching this arrangement". According to the respondents the parties have agreed to confer jurisdiction upon the Civil Courts at Bombay and therefore the suit filed before Pune Court was not maintainable. This application further asserts that the agreements dated 29-6-1993 and 22-6-1994 have been executed in Mumbai and at the relevant time dealing of respondent Company was done from Mumbai only. The trial Court proceeded to decide this preliminary issue regarding jurisdiction of the Court at Pune by the impugned order. The trial Court has mainly held that Clause 11 of the agreement was binding on the parties and therefore the jurisdiction to try and decide the dispute between the parties was only with the competent Court at Bombay. Accordingly, the trial Court returned the plaint to the appellants for presentation to the proper Court. It is this Order which is subject matter of challenge in the present appeal.