T.Motandas & Co. vs L.Hakumat Rai and another

Wazir, C.J.

(1) This is defendant's revision application and arises out of a suit instituted by plaintiffs for the recovery of Rs. 225/ Rs. 200/ as the amount

advanced for the purchase of beer and Rs. 25/ on the basis of a Credit Note No. 47 dated 31121950. The plaintiff's case was that they placed an

order with Messrs. T. Motandas & Co., a firm having head office at Bombay and Suboffice at Jodhpur, for supply of ten boxes of beer. The order

was placed with the firm at Bombay and Rs. 200/were advanced to the firm. The defendants did not supply the goods in time and there was a

breachof the contract on their part and hence the plaintiffs filed a suit for the recovery of the amount advanced. It was further alleged that Rs. 25/

were due from the defendants in connection with some previous transaction and a Credit Note was issued for the same by the defendants in favour

of the plaintiffs. The defendants resisted the suit on the ground that there was no breach of the contract on their part. They had supplied the goods

and they were entitled to recover the balance price from the plaintiffs. The defendants denied having issued any credit note in favour of the

plaintiffs. Lastly it was pleaded by the defendants that the Courts at Jammu had no jurisdiction to try the suit according to the terms of the contract

entered into between the parties. The trial Court of Munsiff, 2nd class, Jammu raised a preliminary issue whether the suit was triable by the Jammu

Courts or not. After considering the evidence led by the parties it came to the conclusion that the suit was triable by the Jammu Court. Against this

order the defendants have filed this revision application.

(2) On behalf of the petitioner it is argued that the plaintiffs placed an order with the firm at Bombay and signed the order form in which there is a

clause ""we agree to the conditions printed on reverse"". Condition No. 5 at the back of this document Ex. P. 3 is ""all disputes to be settled in

Bombay Courts."" It is argued that the parties had agreed that all disputes arising out of the contract will be settled by Courts in Bombay and not by

Courts in Jammu. The trial Court was, therefore, wrong in holding that Jammu Court had jurisdiction to try the suit.

(3) We have perused the document Ex. P. 3. There is a clear provision that the disputes arising out of the contract will be settled by Courts in

Bombay and the plaintiffs having signed the order form agreed to abide by the terms which appear on the reverse of the document Ex. P. 3. The

counsel for the respondent has argued that the order was placed with the Jodhpur branch of the Bombay firm and not with the head office at

Bombay and, therefore, Bombay Courts had no jurisdiction to try the suit and the parties could not confer jurisdiction on Bombay Courts to try the

suit by their special agreement. This contention appears to be without force. From the averments in the plaint it appears that the plaintiffs placed an

order with the head office at Bombay and they treated the Bombay head office and the Jodhpur branch as one and the same concern. In the

statement made by the plaintiff in the trial Court he had mentioned that the order was placed with Messrs. T. Motandass & Co. at their head office

at Bombay. In view of the averment made in the plaint and the statement of the plaintiff it is clear that Bombay Courts had jurisdiction to try the

suit. The suit was triable either by Jammu Court or by a Bombay Court.

(4) Now the question for consideration is whether the parties could by their agreement select a forum for filing a suit concerning any dispute which

arose out of the contract. In 'Musaji Lukmanji v. Durga Das', AIR 1946 Lah 57 (FB) (A) it has ' been held that an agreement between the parties

to a contract to the effect that the 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 is valid and enforceable and is not void under S. 28. This is a clear

authority for the proposition that the parties can select a forum out of two competent forums for filing a suit in respect of a dispute arising out of a

contract. In this case the plaintiffs have agreed, according to the terms of Ex. P. 3, that the Bombay Courts will have jurisdiction to try a suit

concerning any dispute which arose out of the contract, and the jurisdiction of Jammu Courts to try such a suit is excluded.

(5) As regards the claim of the plaintiffs in respect of Rs. 25/ on the basis of the Credit Note there is no agreement between the parties that the suit

in respect of this item will be triable by the Bombay Courts. The counsel for the applicants has frankly conceded that the Jammu Court has

jurisdiction to try the suit for Rs. 25/.

(6) This application of the defendants applicants is accepted to this extent that the suit in respect of Rs. 200/ arising out of the contract evidenced

by Ex. P. 3 is not triable by Munsiff, Second Class, Jammu whereas the suit in regard to Rs. 25/based on the Credit Note is triable by that Court.

(7) In the circumstances of the case the parties are left to bear their own costs in this Court.

(8) Application partly allowed.