A.V.M.Sales Corporation vs M/S Anuradha Chemicals Pvt.Ltd

1. On 23rd December, 1988, the parties to the Special Leave Petition entered into an Agreement at Calcutta 2 for supply of chemicals manufactured by the Respondent to the Petitioner. In continuation of the aforesaid Agreement, the parties arrived at a Mutual Understanding on 15th May, 1989, whereby the Respondent would adjust the advance lying with it and would exclusively supply to the Petitioner its two products, namely, Sodium Chromate and Sodium Dichromate in West Bengal, Bihar, Orissa and Assam. The Understanding between the parties included other terms and conditions as well. The terms of the Understanding entered into between the parties were reduced into writing in an agreement and the same was executed at Calcutta on 5th August, 1989, reiterating the terms of the Understanding and containing an additional clause indicating that "Any dispute arising out of this agreement will be subject to Calcutta jurisdiction only." [Emphasis supplied].

5. On the strength of the pleadings of the parties, five issues were framed by the Trial Court, of which the first issue was whether the Court at Vijayawada had 6 territorial jurisdiction to entertain the suit. By his judgment and decree dated 5th March, 1999, in O.S. No.519 of 1991, the learned Principal Senior Civil Judge, Vijayawada, held that the Court at Vijayawada had jurisdiction to entertain the Suit as part of the cause of action for the suit arose within its jurisdiction. The learned Trial Judge, accordingly, decreed the Suit, as indicated hereinabove. In the First Appeal, being F.A. No.1352 of 1992, the learned Single Judge of the Andhra Pradesh High Court observed that the main contention of the Appellant before the High Court, who is the Petitioner herein, was that the Principal Senior Civil Judge, Vijayawada, had no jurisdiction to entertain the Suit as no part of the cause of action had arisen at Vijayawada. According to the Petitioner, its place of business was at Calcutta and the Agreement for the supply of the goods in question was also entered into at Calcutta. The goods were to be delivered at Calcutta and payment in respect thereof was to be made at Calcutta and, accordingly, 7 the Court at Vijayawada had no territorial jurisdiction to entertain the Suit under Section 20 of the Code of Civil Procedure as no part of the cause of action had arisen within its jurisdiction. It was also emphasised that in the Agreement which was made Exh.D-5, it has been stipulated in Column 13 that any dispute arising out of the Agreement would be subject to the Calcutta jurisdiction only.

At the same time, since the Petitioner/ Defendant in the Suit had its place of business at Calcutta and the Agreement for supply of the goods was entered into at Calcutta and the goods were to be delivered at Calcutta, a part of the cause of action also arose within the jurisdiction of the Courts at Calcutta for the purposes of the suit. Accordingly, both the Courts within the jurisdiction of Calcutta and Vijayawada had jurisdiction under Section 20 of the Code of Civil Procedure to try the Suit, as part of the cause of action of the Suit had arisen within the jurisdiction of both the said Courts.

14. As indicated herein earlier, in this case also the cause of action for the Original Suit No.519 of 1991, filed by the Respondent before the Principal Senior Civil Judge, Vijayawada, arose partly within the 16 jurisdiction of the Calcutta Courts and the Courts at Vijayawada.

15. Having regard to the provisions referred to hereinabove, though the Courts at Vijayawada would also have jurisdiction, along with the Courts at Calcutta, to entertain and try a suit relating to and arising out of the Agreement dated 23rd December, 1988, and the Mutual Understanding dated 15th May, 1989, such jurisdiction of the Courts at Vijayawada would stand ousted by virtue of the exclusion clause in the Agreement.

16. The Special Leave Petition has, therefore, to be allowed. The decree passed by the Principal Senior Civil Judge, Vijayawada in O.S. No.519 of 1991, and the impugned judgment of the High Court dated 18th January, 2007, are set aside. The Trial Court at Vijayawada is directed to return the plaint of the Original Suit No.519 of 1991 to the Plaintiff to present the same 17 before the appropriate Court in Calcutta having jurisdiction to try the suit.

17. The Special Leave Petition is, accordingly, allowed, but there will be no order as to costs.