LexPATEL ROADWAYS LIMITED, BOMBAY versus PRASAD TRADING COMPANY
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
' PATEL ROADWAYS LIMITED, BOMBAY v. PRASAD TRADING COMPANY. AUGUST 6, 1991 A (S. RANGANATHAN, M. FATHIMA BEEVI AND B N.D. OJHA, JJ.] Civil Procedure Code, 1908: Section 20-Explanation-Suits- 1 nstitution of-Whether parties entitled to agree that only a certain court would have iurisdiction. The appellant in both the appeals carried on the business of a carrier and transported goods on hire. It had its principal office at Bombay and branch offices at various other places. The respondent in the first appeal a dealer in cardamom entrusted a consignment of cardamom to the appellant at its branch office at Bodinayakanur in Tamilnadu 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 refuS'ed to take delivery. The respondent instituted a suit in the sub-court within whose territorial jurisdiction the branch office of the appellant was situated for damages alleging that the fire was due to the negligence and carelessness on the part of the staff of the appellant. Respondent No. 4 in the second appeal entrusted certain packets of pesticides insured with the second respondent Insurance Company to the appellant at its branch office at Madras for being carried to Delhi. The respondent alleged that the goods were delivered at New Delhi in a damaged condition resulting in loss and a suit was instituted for reco- very of the loss in the City Civil Court at Madras. c D E F In both the aforesaid civil suits the appellant pleaded in its defence that in the contract entered into between them, the parties had G 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 had been instituted had no jurisdiction. This plea was repelled by the Trial Court in each of the suits. The aforesaid orders were challenged by the appellant in the High H 391 392 SUPREME COURT REPORTS [ 1991) 3 S.C.R. A Court under Section 115 C.P.C. and having failed, the appellant appealed to this Court. In the appeal, it was contended on behalf of the appellant that since the courts at two places namely Madras and Bombay had jurisdic- tion in the matter, the jurisdiction of the courts in Madras was ousted B by the clause in the contract whereunder the parties had agreed that jurisdiction to decide any dispute under the contract would be only in the courts at Bombay. On the question: whether in view of the relevant clause in the contract between the parties the courts at Bombay alone had jurisdic- C lion and the jurisdiction of the courts at Madras where the two suits were instituted was barred. Dismissing the appeals, this Court, HELD: 1. The courts at Bombay in these two cases did not at D all have jurisdiction and cons<:quently the agreement between the parties conferring exclusive jurisdiction on courts at Bombay is of no avail. [4010) 2. Clauses (a) and (h) of Section 20 refer to a court within the local limits of whose jurisdiction the defendant "carries on business". E Clause (c) on the other hand refers to a court within the local limits of whose jurisdiction the cause of action wholly or in part arises. [397H-398A I 3. Section 20 of the Code before its amendment by the Code of Civil Procedure (Amendment) Act, 1976 had two Explanations being Explanation I and II. By the AmE,ndment Act Explanation I was omitted F and Explanation II was renumbeired a~ the present Explanation. [398G I 4. The Explanation is in two parts, one before the word "or" occurring between the words "office in India" and the words "in respect of'' and the other thereafter. The Explanation applies to a defendant which is a corporation which term, would include even a G company such as the appellant in the instant case. The first part of the Explanation applies only to such a corporation which has its sole or principal office at a particular place. In that event the courts within whose jurisdiction the sole or priincipal office of the defendant is situate will also have jurisdiction inasmuch as even if the defendant may not be actually carrying on business at that place, it will "be deem< i to carry H on business" at that place because of the fiction created by the Explanation. [398C-F] - ·.y ' ~· .. • """"\ - ( ~ r l PATEL ROADWAYS'· PRASAD TRADING CO. 393 5. The
Excerpt shown. Read the full judgment & AI analysis in Lexace.