NATIONAL INSURANCE COMPANY Vs. MOSSAMAT DAS CHOUDHARY

JUDGEMENT

(1.) This appeal by the plaintiff appellant is directed against the order dated 28.4.1987 passed by the Sub Judge -VI, Patna in Title Suit No. 41 of 1990 whereby and whereunder the learned Court below allowed the petition filed by the defendant respondents holding that the Court at Patna has no jurisdiction to try the suit and accordingly, ordered for return of the plaint for presenting the same before the appropriate Court. The plaintiff had filed the aforementioned suit against the defendant respondents for a declaration that the defendant -respondent No. 2 M/s. Hindustan Antibiotics Limited is not entitled to forfeit the bank guarantee issued by the defendant No. 1. A further prayer has been made for restraining the defendant respondent No. 1 from making payment of the guarantee amount to the defendant No. 2 till the disposal of the suit.

(2.) The plaintiff's case, inter alia, is that the defendant No 2 appointed the plaintiff as 'clearing and selling agent' on certain terms and conditions duly incorporated in the agreement dated 2.3.1987 made between the plaintiff and the defendant No. 2. The plaintiff's further case is that in terms of the agreement, the plaintiff agreed to store the Company's products for the purpose of despatch to the company's approved stockists and hospitals as per the company's instruction and to ensure execution of all orders received by the agency for the company's products expeditiously. It is pleaded that in terms of the agreement aforesaid, the plaintiff furnished are irrevocable bank guarantee of rupees five lakhs which was issued from the defendant No. 1, Canara Bank, Govind Mitra Road, Patna, which is still subsisting. The plaintiff's further case is that pursuant to the orders received from the Deputy Director Health Services, Bihar, Patna, defendant No. 2 asked the plaintiff to execute the orders and, accordingly, orders were executed, but payments were with -held on the ground that medicines were sub -standard. It further appears that some disputes and differences arose by and between the plaintiff and the defendant No. 2 and the plaintiff's case is that defendant No. 2 has committed breach of the terms of the agreement by supplying products of other medicine companies, which resulted in serious complications, including withholding of payments as a result of which, the plaintiff alleged to have suffered loss for reputation in the business circle. However, defendant No. 2 sent a letter requesting the plaintiff to make payment of penal interest of the total invoice value and further a demand letter was issued for payment of certain amount, and threatened to invoke the abovementioned bank guarantee; hence the instant suit was filed by the plaintiff. On being summoned, the defendant respondent No. 2 appeared in the suit and challenged the jurisdiction of the patna Court by filing a petition stating, inter alia, that Patna Court has no jurisdiction to try the suit. According to defendant No. 2, by virtue of the agreement aforesaid, both the plaintiff and defendant No. 2 agreed that in case of disputes and differences, the Court at Pune shall have jurisdiction. It was further stated that the agreement was executed at Pune and the cause of action for the suit arose at Pune and, therefore, Patna Court has no jurisdiction. Learned Court below after hearing the parties allowed the petition filed by the defendant No. 2 and ordered for returning of the plaint holding that the Court at Patna has no jurisdiction to try the suit.

(3.) Mr. K.D. Chatterjee learned Senior Counsel for the appellant assailed the impugned order as being illegal and without jurisdiction. Learned Counsel submitted that from bare reading of the plaint, it would appear that the suit was exclusively with respect to bank guarantee which the defendant No. 2 wanted to forfeit and the said bank guarantee being a collateral document executed at Patna, the Court below wrongly held that the Patna Court has no jurisdiction. The learned Counsel further developed his argument by submitting that the bank guarantee is an independent agreement and further defendant No. 1 Bank is not a party to the agreement of the year 1987. The exclusion clause of the agreement shall not apply to the instant suit which has been rightly filed at Patna Court. Referring to the Clause 26 of the agreement, learned Counsel submitted that the jurisdiction of the Patna Court has been excluded by Clause 26 which relates to the agency agreement and not the bank guarantee. Learned Counsel further submitted that the Court below has failed to take notice of the fact that no part of cause of action arose within the jurisdiction of Pune Court and the agreement dated 2.3.1987 has no bearing on the facts and circumstances of the case.