R.N.BISWAL, J.
W.P.(C) NO.11213 of 2009 ( Decided on 16. 04. 2010
ZYDUS PHARMACEUTICALS LTD. …………….. Petitioner
-V-
B. RAJA RAM PATRA ……………… Opp.Party
CIVIL PROCEDURE CODE, 1908 (ACT NO.5 OF 1908) – SEC.21 r/w
ORDER 14, RULE 2(2)(a).
For Petitioner – M/s. Subash Chandra Lal, S.Lal, & Sujata La.
For Opp.Party – M/s. K.K.Jena, A.K.Mohapatra & S.N.Das.
R.N.BISWAL, J. The petitioner has challenged the order dated 27.04.2009 passed by
the learned Civil Judge (Senior Division), 1st Court, Cuttack in C.S. No.127 of 2006,
wherein he rejected the petition filed under Order-14, Rule-2 (2) (a) read with Section 21
of C.P.C., by the petitioner.
2. Opp. party as plaintiff filed the aforesaid suit against the defendant claiming
Rs.70,86,338.54/- with interest. As per his case, he was dealing in electronic goods at
Visakhapatnam. Cadila Health Care Ltd., a private company which was manufacturing
and marketing pharmaceuticals, cosmetic and other products, appointed the plaintiff as
their Clearing and Forwarding Agent for the state of Orissa by opening their office at
Cuttack. An agreement was executed between the parties to that effect on 01.02.1999.
Accordingly, the plaintiff started its establishment at Cuttack by taking a go-down-cum-
office on rent and appointing two employees. Subsequently, the aforesaid company
bifurcated its business by forming another sister concern company in the name and style
of Zydus Pharmaceuticals Limited. Cadila HealthCare Ltd., dealt in manufacturing of the
aforesaid products while Zydus Pharmaceuticals Ltd. (defendant) marketed the same.
3. Plaintiff invested a huge amount of money to fulfill the requirements of the
defendant-company. He shifted his business from Visakhapatnam to Cuttack, took a
go-down-cum-office on rent, furnished the office with Computer, Printer, Air conditioner,
Fax, Telephone line etc. to carry out the business as Clearing and Forwarding Agent. He
invested more than a sum of Rs. 1,50,685.00/-. Besides the said investment, as per the
requirement of the Cadila Health Care Limited, the plaintiff dispatched a demand draft of
Rs.7,50,000.00/- in its favour towards security deposit which was subsequently refunded
along with interest with direction to deposit a sum of Rs.7,86,813.00/- with Zydus
Pharmaceuticals Limited. Accordingly, he deposited the said amount on 30.03.2001, but
unfortunately, without any valid reason, and without canceling the agency of the plaintiff,
the defendant company stopped supply of its product to the plaintiff with effect from
18.12.2002 and directed him to handover the entire stock available with him to one M/s.
Essar Associates of Jaunliapati, Cuttack, a newly appointed Clearing and Forwarding
Agent of the defendant. So, the plaintiff filed the aforesaid suit with prayer as mentioned
earlier. On being noticed defendant appeared in the suit and filed written statement. It
also filed a petition under Order-14, Rule-2 (2) (a) read with Section 21 of C.P.C., to hear
on the point of jurisdiction as preliminary issue and pass necessary orders thereon.
As per the petition, in paragraph-4 of the plaint it is averred that:-
“4. That as the business of the Plaintiff comes under the business of Zydus
Pharmaceuticals Limited, without executing any agreement with the Plaintiff, Zydus
Pharmaceuticals Limited continued its business with the Plaintiff on the footing of the
agreement continuing with Cadila Healthcare Limited without renewing the
agreement which was valid for one year only.”
Such statement of the plaintiff clearly and unambiguously proved that although there
was no agreement between the plaintiff and the defendant-company, yet the plaintiff
continued the business with the defendant-company on the footing of the agreement
with Cadila Healthcare Limited without renewing the same. In clause 8.2 of the
agreement dated 1.2.1999, it has been provided as follows:-
“8.2-This agreement is concluded at Ahamadabad and courts at Ahamadabad
alone shall have jurisdiction to try any dispute/difference arising or connected with this
agreement”.
As per this clause, the plaintiff ought to have filed the suit at Ahamadabad only and
nowhere else.
4. After hearing the said petition, the trial court rejected it on the ground that
jurisdiction of the court being a mixed question of law and fact, it can not be decided as
preliminary issue. Being aggrieved with the said order, defendant (hereinafter called the
petitioner) has filed the present writ petition.
5. Learned counsel appearing for the petitioner submitted that as found from
paragraphs-4 of the plaint, opp. party admitted that he continued his business with the
petitioner-company on the basis of the agreement dated 1.2.1999 executed between him
and Cadila Healthcare Limited. As per the agreement, any dispute between the parties
was to be decided by a competent court at Ahamadabad. Since the petitioner-company
is a sister concern of the Cadila Healthcare Limited and the opposite party continued his
business with the petitioner-company on the basis of agreement entered into between
Cadila Health Care Limited and himself, the trial court should have allowed the petition
under Order-14, Rule-2 (2) (a) read with Section 21 of C.P.C. It committed a gross error
of law leading to miscarriage of justice in holding that the point of jurisdiction was a
mixed question of law and fact.
6. On the contrary, learned counsel for the opposite party contended that since the
agreement between the opposite party and Cadila Health Care Limited was valid for one
year only, the agreement lost its force on 31.1.2000, and, as such, the opposite party is
not bound by that agreement. So, the trial court rightly rejected the petition. He further
submitted that opp. party was representing the petitioner-company before Sales Tax
Authorities for sales tax assessment at Cuttack. The petitioner-company is carrying on
its business at Cuttack. So, the learned Civil Judge (Senior Division), 1st Court Cuttack
has jurisdiction to hear the suit. Opp. party would face much hardship and financial loss
if he would be asked to file the suit at Ahamadabad. Because of this, the writ petition
deserved to be quashed. In support of his submission, he relied on the decision, Orissa
Stavedores (P) v. Hindustan Fertilizer Corporation Ltd. and others, 1986 (I) OLR-
337, where this Court held that:
“…………………even though the agreement between the parties choosing a
particular Court out of the several Courts having jurisdiction operates as estoppel
between the parties, it does not really oust the jurisdiction of the Court and cannot
be construed to deprive a Court to exercise the jurisdiction which the law of the land
has conferred upon it. Ordinarily the Court whose jurisdiction has been ousted by
agreement between the parties would have due regard to the stipulation in the
agreement. It can still exercise jurisdiction if it is satisfied that the said stipulation is
oppressive, harsh, inequitable or unfair or that for the ends of justice, the Court in its
discretion thinks it appropriate to exercise jurisdiction.”
In the decision of Shri Janaki Ballav Patnaik v. Bennet Coleman and Co., Ltd., and
others 1988 (II) OLR 143, this court held that if an issue relating to jurisdiction of a Court
is an issue of law only, which can be decided on the admitted pleadings of the parties de
hors fact, the issue can be decided as a preliminary issue. In the present case, in his
pleading, opposite party averred that it continued to work as Clearing and Forwarding
Agent under Zydus Pharmaceuticals Limited on the basis of agreement dated 1.2.1999
entered into between himself and Cadila Healthcare Limited. Admittedly, the said
agreement was valid for one year only. Whether the clause containing jurisdiction of
court would amount to admission or not is to be decided. Evidence is not required to be
led in this regard. The issue of jurisdiction is to be decided on point of law only. The
finding of the trial court that the point of jurisdiction involves facts and law is not correct.
However, the opp. party may raise the point that the stipulation in the agreement is
oppressive, harsh, inequitable or unfair by citing the decision, Orissa Stavedores (supra)
before the trial court.
7. In the result, the writ petition is allowed and the impugned order dated 27.04.2009
passed by the learned Civil Judge (Senior Division), 1st Court, Cuttack in C.S. No.127 of
2006 is set aside and the trial court is directed to hear on the point of jurisdiction as
preliminary issue. No cost.
Writ petition allowed.
