CANDID DRUG DISTRIBUTORS Vs. WANBURY LTD.

JUDGEMENT

(1.) This first appeal is directed against the judgment and order dated 19-5-2008 passed by he learned Civil Judge (Senior Division), No. 1, Guwahati in Misc. (J) Case No. 129 of 2007 as well as the order dated 19-5-2008 passed in the connected Money Suit No. 20 of 2007 returning the plaint on the ground that he had no territorial jurisdiction to entertain the suit.

(2.) The appellant as the plaintiff i.e. Candid Drug Distributors, Guwahati had instituted the money suit in question against the respondent/defendant, namely, Wanbury Ltd. Mumbai, before the learned Civil Judge (Senior Division) No. 1, Guwahati for recovery of Rs. 1,71,24,267.00.This is how the dispute arose. The appellant was appointed by the respondent on 30-3-2001 as Distributor on consignment basis ('DCB') in terms of the agreement executed between them, and the nature of this appointment was subsequently converted to Carrying and Forwarding Agent ("C&FA") with reduced commission due to poor performance on the part of the appellant. In clause 36 of the agreement dated 30-3-2001, it had been agreed by the parties that in the event of any dispute arising between them warranting litigation, the Courts in Mumbai alone would have the jurisdiction to decide such a dispute. Clause 35 of the said agreement also incorporates similar agreement. Clause 43 was incorporated in the agreement dated 13-1-2003 stipulating that the court in Greater Mumbai only will have the jurisdiction to decide all matters arising out of the agreement. For better appreciation of the controversy, both the clauses are reproduced below:

(3.) There is no dispute at the bar that the agreement dated 13-1-2003 was for a period of one year i.e. it was to remain in force until 12-1-2004 unless (i) it was determined by either party in the manner hereinafter provided and (ii) mutually extended by the parties hereto in writing. There is also no dispute at the bar that there was no express determination of the agreement by either party or mutual extension of the agreement by either party after 12-1-2004. The respondent contested the suit and promptly filed a petition under Sec. 21 Code of Civil Procedure before the learned Civil Judge praying for return of the plaint on the ground that his territorial jurisdiction to adjudicate the dispute in question stood ousted by clause 43 of the agreement dated 13-1-2003. According to the respondent, though the agreement dated 13-1-2003 was not mutually extended by the parties in writing, for all intent and purpose, the parties continued to govern themselves by the terms and conditions thereof in respect of all transactions after 12-1-2004 till the C&FA was terminated with effect from 31-5-2006 by closing down the operation for the reasons assigned in the various communications made: such communications would go to show that the claims and counter-claims of the parties arose out of the agreement dated 13-1-2003. As there was specific agreement between the parties to oust the jurisdiction of all other courts, contended the appellant, the learned Civil Judge had no territorial jurisdiction to entertain the suit filed by the appellant. The petition was opposed by the appellant by filing its written objection. It was contended by the appellant that the petition was merely a device to stall the smooth proceedings of the suit and that as the issue raised by the respondent was a mixed question of fact and of law, the same could not be decided as a preliminary issue, more so, when written statement was yet to be filed by the respondent. It was also the contention of the appellant therein that as the clauses relating to jurisdiction relied on by the respondent in the agreement dated 13-1-2003 had spent its force by efflux of time on 12-1-2004, the conferment of jurisdiction upon the courts in Mumbai stood exhausted, and it is only the Civil Court (Senior Division), Guwahati, where the respondent has its subordinate office, which would have the ordinary territorial jurisdiction to entertain the suit: no cause of action thus accrued in Mumbai. After hearing the parties, the learned Civil Judge passed the impugned order returning the plaint by holding that he had no jurisdiction to adjudicate the dispute and that the appellant had the liberty to present the same in the appropriate forum at Mumbai.