Case: Patel Roadways Limited, Bombay Vs. Prasad Trading Company

3. M/s. Prasad Trading Company, the respondent in the Civil Appeal arising out of S.L.P. (C) No. 14660 of 1990 who is a dealer in cardamom entrusted a consignment of 850 kilograms of cardamom to the appellant at its subordinate office at Bodinayakanur in Tamil Nadu to be delivered at Delhi. After the goods had been transported by the appellant and kept in a godown at Delhi the same got destroyed and damaged in a fire as a result whereof the consignee refused to take delivery. The respondent instituted a suit in the Court of Subordinate Judge, Periakulam, within whose territorial jurisdiction the subordinate office of the appellant where the goods were entrusted for transport is situate for damages alleging that the fire was due to the negligence and carelessness on the part of the staff of the appellant.4. M/s. Tropical Agro Systems Private Limited, the respondent 1 in the Civil Appeal arising out of S.L.P. (C) No. 14692 of 1992 on the other hand entrusted certain packets of pesticides insured with the second respondent, M/s. Oriental Insurance Company Limited to the appellant at its subordinate office at Madras for being carried to New Delhi. According to the respondents the goods aforesaid were delivered at New Delhi in a damaged condition resulting in loss to the first respondent and a suit was instituted for recovery of the loss so sustained by the respondents in the Court of the Third Assistant Judge, City Civil Court, Madras. In both the suits the appellant inter alia took the plea in its defence that in the contract entered into between them the parties had agreed that jurisdiction to decide any dispute between them would be only with the Courts at Bombay and consequently the Courts in Madras where the two suits referred to above had been instituted had no jurisdiction. This plea was repelled in both the suits by the trial Court. The order of the trial Court in each of the two suits was challenged by the appellant before the High Court of Judicature at Madras under Section 115 of the Code of Civil Procedure (hereinafter referred to as the Code). This challenge having failed in each of the civil revisions, the appellant has preferred these civil appeals.

Court's reasoning:
13. As far as we can see the interpretation which we have placed on this section does not create any practical or undue difficulties or disadvantage either to the plaintiff or a defendant corporation. It is true that, normally, under clauses (a) to (c), the plaintiff has a choice of forum and cannot be compelled to go to the place of residence or business of the corporation and can file a suit at a place where the cause of action arises. If a corporation desires to be protected from being dragged into litigation at some place merely because a cause of action arises there it can save itself from such a situation by an exclusion clause as has been done in the present case. The clear intendment of the Explanation, however, is that, where the corporation has a subordinate office in the place where the cause of action arises, it cannot be heard to say that it cannot be sued there because it does not carry on business at that place. It would be a great hardship if, in spite of the corporation having a subordinate office at the place where the cause of action arises (with which in all probability the plaintiff has had dealings), such plaintiff is to be compelled to travel to the place where the corporation has its principal place. That place should be convenient to the plaintiff; and since the corporation has an office at such place, it will also be under no disadvantage. Thus the Explanation provides an alternative locus standi for the corporations place of business, not an additional one.14. There may be only an extraordinary situation in which this interpretation may cause an apparent anomaly. This is where the plaintiff has also his/its place of business at the same place as the corporation but the cause of action has arisen at some other place. The above interpretation would preclude him from filing a suit in that place of business common to both parties and compel him to go to a court having jurisdiction over the place where the cause of action has arisen. But this is not really a hardship because such plaintiff must had some nuxus or connection with the place since some part of the cause of action had arisen there; if he can have dealings with the corporation at such a place giving rise to the cause of action, there is no reason why he should find it disadvantageous or difficult to file a suit at such place. Equally, the corporation, having a subordinate office at the place, will suffer no disadvantage.15. In this view of the matter since in the instant two cases clause (c) is not attracted to confer jurisdiction on courts at Bombay and the appellant has admittedly its subordinate offices at the respective places where the goods in these two cases were delivered to it for purposes of transport the courts at Bombay had no jurisdiction at all to entertain the suits filed by the respondents and the parties could not confer jurisdiction on the courts at Bombay by an agreement. Accordingly no exception can be taken to the findings in this behalf recorded by the trial Court and the High Court in these twogiven our anxious consideration to the matter we are of the opinion that the courts at Bombay in these two cases did not at all have jurisdiction and consequently the agreement between the parties conferring exclusive jurisdiction on courts at Bombay is of no avail.