HANIL ERA TEXTILES LTD V/S.

PUROMATIC FILTERS(P)LTD
( 2004) 4 Supreme Court Cases 671
Facts of the case
The Appellant company is M/S.Hanil Era Textiles Ltd., having its office at Mumbai who had
placed an order with the M/S.Puromatic Filters Pvt Ltd., having office Mumbai for supply of 136
numbers Coarse filters and 136 numbers fine filters. The purchase order read as follows:
“ Dear Sir,
We are pleased to order the material parts listed below subject to terms, conditions and
instructions, on the reverse hereof and the attachments, if any hereto. Please acknowledge your
acceptance by returning the duplicate copy duly signed within one week”
After this thirty percent of the amount was paid as advance at Mumbai. The delivery instructions
contained a clause- Deliver the material at NEW ERA HOUSE/ Patalganga factory. The
purchase order mentioned that the same was subject to the terms and conditions mentioned
therein. Condition 17 reads as under
17.Jurisdition:- Any legal proceeding arising out of the order shall be subject to the jurisdiction
of the courts of Mumbai .
Here according to M/S.Puromatic Filters Pvt Ltd.,it had dispatched from its manufacturing unit
at Delhi, the ordered materials to M/S.Hanil Era Textiles Ltd., but the full price was not paid by
them. After which M/S.Puromatic Filters Pvt Ltd., filed a civil case against M/S.Hanil Era
Textiles Ltd., in Court of District Judge ,Delhi for recovery of the sum due from M/S.Hanil Era
Textiles Ltd.,(the purchaser) along with the accrued interest. The purchaser herein i.e. M/S.Hanil
Era Textiles Ltd., moved an application under Section 20 read with Order 7 Rule 10 and Section
151 of CPC before the court praying to return the suit and to present the same before the court
having territorial jurisdiction in which the suit has to be instituted. The main contention of the
defendant in the suit was that as per Clause 17 of the Local purchase order had specifically stated
about the jurisdiction of the suit if any dispute arises would be the Courts in Mumbai and the
Plaintiff (Seller ) having accepted to the terms and conditions of the order of Sale, is bound by
the contract but had wrongly instituted the suit in Delhi. And it was also contended that the
cause of action arose in Mumbai as the offer was made by the Defendant(Purchaser) in Mumbai
it was accepted by the Plaintiff(Seller ) in Bombay and a part payment(Advance) was also made
in Mumbai.The Plaintiff(Seller) made a reply that Defendant(Purchaser) issued a Certificate to
remove the excisable goods (Form CT-3)from the factory premises of the plaintiff in Delhi and
as such the Court of Delhi had territorial jurisdiction to try the suit. The plaintiff also denied
stating that it had not accepted to the terms and conditions of the contract about fixing of
territorial jurisdiction of the court in case of any dispute and said therefore it is not bound by the
contract clause. The plaintiff stated that it had delivered the goods, following the instructions of
the Defendant(Purchaser) to deliver the same at Delhi to the agent specified by them.
The learned Additional District Judge, Delhi held that in the absence of the written
statement having been filed by the defendant, the controversy had to be decided on the basis of
the plaint and especially when the plaintiff had asserted that the goods were delivered to the
Defendant at Delhi on the basis of Form CT-3, the Court of Delhi had territorial jurisdiction to
try the suit. The appeal preferred by the Defendant(Purchaser) in High Court of Delhi was also
dismissed by the Hon’ble High Court . As the Order was against the Defendant(Purchaser) they
preferred this appeal before the Hon’ble Supreme Court as Civil Appeal No.2490 of 2004 .
Therefore the dispute here in the present appeal was regarding the territorial jurisdiction
of the Court in Delhi to try the suit.
1. whether the territorial jurisdiction was effected by the Clause 17 of the purchase order which
mentions – any legal proceedings arising out of the order shall be subject to the jurisdiction of
the Courts of Mumbai has to be examined in the aforesaid background and
2.facts of the case also has to be considered as pursuant to the ouster clause as words like alone,
only and exclusive is not used in Clause 17 of the purchase order.
a) The Hon’ble Supreme Court after going elaborately at the matter held that though according
the Section 20 clause (a) and (b) of Civil Procedure Code place of suing can be at the place
where defendant resides, where he carries on business or works for gain is determinative of the
local limits of the jurisdiction of the case , Clause (c) of Section 20 provides that the suit shall be
instituted in the court within the local limits of whose jurisdiction cause of action accrues wholly
or partly. Here there was no dispute as to where the cause of action arose as the offer was made
at Mumbai and accepted at Mumbai and an advance was made at Mumbai . Therefore part of
cause of action arose at Mumbai. According to the plaintiff the goods were dispatched from
Delhi factory premises and delivered at an agent office at Delhi following the instructions of the
Defendant. In Hakim Singh v/s.Gammon(India) Ltd. It was held that it is not open to the parties
to confer by their agreement jurisdiction on a court which it does not possess under the code. But
where two or more courts have jurisdiction under CPC to try suit or proceedings an agreement
between parties that the dispute between them shall be tried in one of such courts is not contrary
to public policy. however parties cannot by agreement confer jurisdiction on a court which it
does not possess under CPC.
b) It was also held that ouster clause restricting place of suing to one of the courts having
jurisdiction under – when binding – and how it has to be construed when there is no words used
as “alone” “only” or “exclusive” . and held that when ouster clause is not so clear, in appropriate
cases maxim expressio unius est exclusio alterius may be applied (expression of one is the
exclusion of another)
There by the appeal was allowed and both orders of the lower courts were set aside and ordered
to present the plaint in appropriate forum.
The principle followed in this case is what will be the territorial jurisdiction of a case wherein
there are more than one place of suing available and whether the agreement / contract can
override the jurisdiction fixed by the CPC when there is a specific clause regarding fixation of
jurisdiction of Court in case of dispute- appears in the contract of a company- as to when it is
ambiguous and when it is specific and when it is valid.

The cases followed were

a) Angile InsulationsV/s.Davy Ashmore Indial Ltd.(1995)4 SCC153,
B) Hakim Singh v/s.Gammon(India) Ltd (1971)1SCC286
c) A.B.C. Laminart(P)Ltd., V/s.A.P.Agencies (1989)2 SCC163