DINA NATH DUTT Vs. MAHA VIR GUPTA

JUDGEMENT

(1.) THIS appeal arises out of a suit for recovery of Rs. 16,000/- as damages apart from interest claimed on a sum of Rs. 5,000/ -. It appears that the defendant got an advertisement published in the Daily Statesman, Delhi Edition, in the issues of 9th, 10th and 11th July 1946 as follows:

(2.) THE first point that has been raised by Mr. D. R. Mancbanda on behalf of the defendant is with regard to issue No. 1. He submits that there was a clear printed condition in the contract (No. 12) in the following terms: "all orders are accepted subject to our conditions of business and are treated as placed at Kanpur. In case of any dispute Kanpur Court will have "jurisdiction to try the case. " It is contended that according to this condition the suit was triable only by the Kanpur Courts. For this purpose reliance is placed on the Full Bench decision of the Lahore High court in Musa Ji Lukman Ji v. Durga Das, AIR 1946 Lah 57 (A ). According to the decision of the Full Bench, an agreement between the parties to a contract to the effect that a suit concerning disputes arising between them on the basis of that contract should be instituted in one only out of two competent Courts having territorial jurisdiction over the subject-matter of that suit is valid and enforceable. Mr. Manchanda submits that the mere fact that the word "only" was not mentioned in condition No. 12 did not take away the effect of the agreement contained in that condition that in case of any dispute Kanpur Courts would have jurisdiction, which impliedly meant that the suit could be instituted only at Kanpur. Reliance has been placed for this purpose on Continental Drug Co. v. Chemoids and Industries Ltd, (S) AIR 1955 Cal 161 (B ). In that case the agreement was in the following terms: "any dispute arising between the parties, settlement of same legally or otherwise, will be decided in Bombay". It was held in this case that the suit was triable by the Courts at Bombay only. In Mehta and Co. v. Vijayam and Co. , AIR 1925 Mad 1145 (C), there was a clause in the agreement as follows: "in all legal disputes arising out of this contract ahmedabad will be understood as the place where the cause of action arose. " Madhavan Nair J. held that the agreement was valid and it was not open to the Madras Courts to entertain the suit. The absence of the word "only" thus does not seem in any way to materially affect the position. But the principal hurdle in the way of Mr. Manchanda's argument is section 21 of the Code of Civil Procedure which runs thus; "no objection as to the place of suing shall be allowed by any appellate or revisional Court unless such objection was taken in the Court of first instance at the earliest possible opportunity and in all cases where issues are settled at or before such settlement and unless there has been a consequent failure of justice". It is indeed true that the objection was raised at the earliest possible opportunity but the defendant never pressed for the decision of the issue relating to jurisdiction as a preliminary issue and, therefore, the question is whether this Court in appeal can entertain that objection when there has been no failure of justice. According to Mr. Manchanda Section 21 will have no application to the present case as the objection is not based on any of the grounds with regard to place of suing with reference to Sections 15 to 20 of the Code, but the defendant is only seeking an adjudication from this Court with regard to his right to have the dispute litigated or settled at Kanpur and not at Rohtak. He has based his arguments largely on the reasoning of shinde C. J. in Premadib Pictures v. New Sound Pictures, (S) AIR 1955 madh B 193 (FB) (D) on difference between Dixit J. and Chaturvedi J. In that case this very point came up for consideration. Chaturvedi J. after deciding that such a clause restricting the right of the Parties to institute suits for settlement of their disputes at a particular place was perfectly valid and enforceable, proceeded to decide whether the decree passed by the Court at Ujjain should be set aside. He held that the bombay Courts only could try the suit and he set aside the decree passed by the Ujjain Court. Dixit J. , after coming to the conclusion that both the Ujjain and Bombay Courts had jurisdiction, held that by virtue of the clause in the agreement the suit was triable at Bombay, but It did not follow that the proceedings at Ujjain were invalid, and the decision of the Ujjain Court, a nullity. It is one thing to say that by reason of the agreement between the parties the Ujjain Court could not entertain the suit. It is quite different to say that it had no jurisdiction to try the suit. He adopted the observations of Mahajan J. , as he then was, in the Lahore Full Bench case pointing out the distinction between "a question of territorial jurisdiction" and "a question of inherent jurisdiction. " An objection as regards the territorial jurisdiction could be waived, but an objection as regards the inherent jurisdiction could not be waived. He considered that Section 21 was, fully applicable and as the defendants in that case had without any demur allowed the proceedings to be carried to completion, without the question of place of suing being decided, it was no longer open to them to agitate it in the Court of appeal. When the matter was considered by Shinde C. J. he was of the view that the interpretation that can be put on the expression "objection as to the place of suing" used in Section 21, was that an objection based on the alleged infringement of any of the provisions of Sections 16 to 20 of the Code alone was covered by that expression. He referred to certain decisions of the Madras High Court according to which the provisions of Section 21 applied to all objections based on the alleged infringement of the provisions of Sections 16 to 18 as regards the institution of suits relating to immovable property. He further went on to observe:

(3.) ON the merits Mr. Machanda's principal argument has centred round the question whether there was any default on the part of the defendant with regard to carrying out his part of the contract or whether it was the plaintiff who himself was to blame for the non-performance thereof. It is submitted by him that the defendant sent a telegram followed by a letter intimating that he would be reaching Delhi on the morning of 27th September and a request was made that the payment of the balance should be duly made and the transaction completed on that day. The defendant also took a draft for Rs. 40,000/- and a sum of Rs. 10,000/-in cash with him so that the same may be paid to Basheshar Nath with whom the defendant had entered into an agreement to buy the ice plant and to whom a sum of Rs. 50,000/- had yet to be paid. The case of the defendant is that on 27th september 1946 he paid Basheshar Nath the said sum of Rs. 50,000/-out of which Rs. 10,000/- were paid in cash and the balance by means of the draft which had been drawn in the name of Bhola Nath who was the defendant's representative at Delhi, and that Bhola Nath had endorsed the draft in favour of basheshar Nath. Thereafter the plaintiff's father came to the Imperial Ice Factory at 11 a. m. or 12 noon and the defendant showed him the receipt for Rs. 50,000/- which he had brought from Basheshar, Nath. The defendant then says that he asked the plaintiff's father to complete, the transac-tion by making payment of the balance of the sale price. After considering the oral evidence produced by both the parties it seems that it will not be safe to rely on the version of either party as given by the witnesses in court and it will have to be seen how far the documentary evidence supports one version or the other. After reviewing the documentary evidence it was held that the title of the defendant was not perfected on the 27th September 1946.