M/s. Emcor Packaging Private Limited v. M/s. Bang Papers Private Limited

HON'BLT] SRI JUSTICE LAXMI NARAYANA AI,ISHET,ry CI\'IL l.l-EVISION PETITIO N No.3149 of 2024 ORDER: This t-'i,,,i i(evision petition, under Article 227 of the Constitutiorr cf ln dia, is filed against the docket rrde,r cr rted 03.09.2024 ir OS. l.,Jo 209 of 2024 (otd OS.No.37 of 2D20) pa;sed by the IX Arlditicrral District Judge, Ranga Reddy Disrrict a LB Nagar (hereinaft,,.referred to as the ,District Court,).

2. The re,zisit t r petitioner is the defendant and the resl)on( ent is the plaintilf i:r ilr, , suit before the District Court.

3. The bri,:i rac ts of the case, shorn off unnecessary clet;.rls, required for rli_.p, r; rl r>[ the present Civil Revision petitior . arc as follows

3.1 Initialll., t.-rc re,sponr{ent has filed a summery suit in O.S.No.37 of .20.2(, rrr the file of the XII Additional Disrrict Judqe, Ranga Redclr I)r ;.r.ict at Vikarabad, against the pelitior_rer for recovery of a srr--r of <50,64,490/_ together with futr_rre i.terrst thereon. The :e,spcrrdr.nt, claiming to be a dealer_cunt_ag,rnt or -t x 2 C.R.l' no I119 oJ202l supply of kraft paper manufactured by M/ s. Kaygyon paper. Mills Limited, contended that the petitioner, a manufacturer of corrugated boards, had purchased kraft paper, which was supplied under the respondent's instructions, to a tune of <1,92,73,723/-, out of which an amount of <50,64,490/ - remained unpaid as on 17.02.2020.

3.2 Upo;r service of summons, the petitioner failed to appear, and accordingly, the trial court decreed Lhe suit exparte by judgment dated 28.1.2.2020. Thereafter, the petitioner filed I.A No. 22 of 2021 rnder Order IX Rule 13 and Order XXXVII Rule 4 Cl']C to set aside the ex parte decree and praying to grant leave to defend the suit, and subsequently filed I.A.No.45 of 2027 seeking to set aside the ex parte decree. The respondent herein/ plaintif f filed counters in both the interlocutory applications and in view of the averments made in the counters, the petitioner/defendant I.A.No.177 of 2027 under Order XXIII Rule 3 CPC to withdraw I.A.No.45 of 2021 and I.A.No.180 of 2021. to withdraw I.A.No.22 of 2027 with liberty to file fresh applications. Both applications were dismissed by the District Court on 23.11.2027, against which r.'t J t) .1.P \,'t t9 of 2024 LAI,4,J the peLiti,)ner :referred C.R.p.Nos.41 and 31 of 2022 r,:spe ctively. This Corrrt ir-ilally granted stay on 04.02.2022 in the saic CRps. However. or: , or1test, the said Revisions were dismis ;ed on

05.06.202:\. \4,:rr-ru.hile, rhe peririoner filed C.R.p.lto .1321 f 2022 challengirr:; tlu: judgment and decree dated. 2g.12.202() pa ised in O.S.No.37 of ,l0ll0 on the ground that the summary nature of the suit clid n,r I clrrrply with the rnandatory provisiors urrder Order XXXVII Ci){. , Ir,.reb1, rendering the suit not mainta inable a nd the decree liat,le tlr t,e set aside.

3.4 Thor:gh t ro revision was initially dismissecl try or.cler dated 05.06.2023, orr,r review application in I.A.No.1 of 2023, this Court allowed th,: sarrLr, by order dated 12.01.2024. Itwas observe,l that the trial cosrt lailcd to render a finding on the malltainabi ity of the summ;rn, suit and whether procedural compliancs ,,..1a. Order XX)lV-ll v.as followed, warranting a remand for. fresh adjudicatio. , (.'orrscquently, the decree was set aside anrl the matter was ,emarrded to the triar court for a decisio^ on the issue of mainta in ab ii it ,, 4 LNI,J CRPNo3lagof202t

3.5 Pursuant thereto, the suit was restored to its original number and, consequent upon the reorganization of Districts in the state of Telangana, the said suit was transferred to the Court of IX Additional District Judge, Ranga Reddy District at L.B. Nagar and renumbered as O.S.No.209 of 2024. The District Court, after hearing both the parties on the question of maintainability and relying on the decisions cited by the responden! by the impugned order held that the suit based on invoices was maintainable as a summary suit. Challenging the said order, the defendant approached this Court by filing the present Civil Revision Petition

4. Heard Sri Shyam S.Agarwal, learned counsel for the petitioners, and Sri S.Rajagopalary Iearned for the respondents

5. Learned counsel for the petitioner submitted that the irnpugned order, wherein it is held that summary suit filed by the plaintiff under Order XXXVII of the CPC is maintainable, is legally unsustainable, arbitrary, and not based on a proper appreciation of the facts and material on record. He further submitted that the invoices in question, on their face, are issued /-) ) LtYA,J t R t' t'a lJ9 oI202t by "M/s.Kar.g!'(,n paper Mills Limited,,and are addres;sed to the petitioner. Ho'..,:ver, the respondent,s name is r:ot rnen,.ioned anywhere orL lt l invoices. In furtherance of this, i: is r:ont:nded that no conl.rirr:rual relationship can be inferrecl betwee n the responden ianr:l the petitioner. Therefore, the Distri,:t C,rur.t r:rred in treating the ,rratter as one arising out of a valil ccmrrercial transaction bett,r t,en thc parties.

5.1. Furttu:r, tlt,.: learned counsel for the petitionr:r hts cl rawn attention oI thi: l'ourt to Clause No.3 of the terms a,d c,rnc-l tio,s mentioned a: tl- e bottom of the invoices, whi,:h ,rxpr cssiy provides that rli:;putes shall be subject to the jurisclicticn of Courts in k.,:rta I{e contended that as per the saic Clluse , the Courts at I( ota ;.Lave exclusive juriscliction to ao judicate the dispute betrvr:er.r the parties. Therefore, the District (lour.t la:ked jurisdiction t(t, elr (,rtain the suit and erred in not giving ; fin ling to that effect . l_ear,ed counsel further submitted that thr:re i; no nexus, either,r-onitactual or facfual, between the res[roncent and the pefitionr:r. f rrr, pleaclings and documents fited by the plai rtiff do not esta blis r any privity of contract. Hencc, ttre r erv 6 LNA,J C.R P No.3l49 of 202.1 institution of a summary suit by the praintiff is without basis and not maintainable under Order XXXVII CpC. Therefore, he finally prayed to set aside the order of the District Court by holding that the summary suit is not maintainable.

6. Per contra, the learned counsel for the respondent submitted that the Dishict Judge in the impugrred order has rightly held that the surrunary suit filed uncler Order XXXVII of the CPC is maintainable and does r-rot suffer from any legal infirmity. It is contended that the invoices in question clearly indicate the supply of goods made to the defendant through 1"4/s. Kaygyon Paper Mitls Ltd. and the respondent is the dealer_ cum-agent of the said company; that the mention of the respondent's name on the Certificate of dealership/agency issued by M/ s. Kaygyon Paper Mills Ltd. is determinative of the contractual relationship, between the said company and the respondent. The respondent submits that a commercial transaction did, in fact, take place between the parties, which is corroborated by the petitioner,s acceptance of delivery and subsequent conduct of payment of the amount. I I I .-l 7 LNA,J (. t'\'o1lt9of202t

7. L,ea rner l c ounsel for the respondent further suhrr.ritt :d that the petitiorrer-1i attempt to evade liability by questioni rg the maintainabilit ,, of the summary suit is mercly a dila:orv tactic. He furthr:r :;rr rmitted that the suit is baserl o, r,,ritten instrumenh, r-rrunely the invoices and delivery challans, rvhich squarelv r-irrl n itrin the ambit of order xxxvil CFC, v,,arr rnting the invocitticn ,rl summary procedure. As regards the asl t:ct of jurisdiction, he: r;rrbmitted that the Clause in the inr,,tice:; ref :rring to exclusive, .u r s diction of the Courts at Kota to adju,1ica:e the disputes, does rot oust the jurisdiction of the prest:nt cour.. It is well-settleci tirat irn ouster clause in a contract must be rr:acl n the context of the -nt3ntion of the parties and the caust, of action. In the present :asr, a substantial part of the cause ,rf a,:tiorr has arisen within tl t, territoriai jurisdiction of the Disfri, t ( our! thereby renJcri 'rp tlre suit maintainable before the r_rishict court. By maki.g the ,r rove submissions, learned counst,l c.nte, rded that impue^ecl ,-der of the District Court is welr-reasc,ned and supported b1, [a i^, and hence, it does not warrant inlerfcren< e by l I Y':l .l 8 LNA J C.R.P No 3149 oJ 2021 this Court and accordingly, the present Revision Perition is liable to be dismissed. CoNSIDERATION:

8. From the aforesaid factual matrix of the case, the material placed on record and the submissions made by learned counsel for both the parties, the points that arise for consideration in this Revision Petition are L, Whether the exclusipe jurisiliction clause in the inooice stating "subject to KOTA jurisdiction only" is oalid and it bars the cioil Court hazting territorial jurisdiction from entertaining the suit? 2. Whether a sumntary suit filed uniler Order XXXW of CPC on the basis of the lnztoices maintainab le? 3. Whether the plaintiff has locus stanili to file the suit for recoaery of money against the defendant? POINT No.1: -

9. In the present case, it is pertinent to note that there exists no formal agreement or conrract between the parties expressly conferring jurisdiction uPon a particular court. The clause /-) 9 L\A,J t i? ? .\t l lt/ of 2021 mentioning t ra t the Courts at Kota have exclusive juri: cliction appears cnlv as a recital or standard printed term on the i rvoices raised br, l\{/:; r(avgyonPaper Mills Ltd.

10. 'l'o rl.ci:lc. this point, it is apt to refer to tht: ra jo laid down bi., th,: Flon'ble Supreme Court in Hakan Singh a. Gammort l'lnntro) l.td., (1971) l SCC 286,*h"r"in at nara-il it is held as here un,-ler: "4. ..lt : not open to the parties by agreemenl to cottfc, by thtir r;5 reement jurisdiction on a Court uhi..:h it dt>a ; not ,cossL,:: uttdcr the Code. But tohere ttoo courts or jnoT: lan t unrltt the Code of Cioil Procedure jurisdictiott to tr.r a suit r.tr 7 r oceeding an agreement betzoeen the pt,rtie: tln, tlrc lisptr't hehueen them shall be trierl in on,, ttf cttct, CotL"ts t. ltt cotttrary to public policy.,, 1-1,. 'Ih r; prrr11[p[e has been reaffirmed and r.eir rf o r, .,:c.l in subsequent iuclrcial pronouncements, that partir:s canntt, by mutual a[]r(,e l,rnt, confer jurisdiction upon a Cor.rrt rvhich otherwise i a cl.: i t under the provisions of the ,locl : o1 Civil Proceduret, h.r o Jrer lr,ords, the parties are only entjilecl to < hoose between tl\..r (.,1 more Courts which have jurisdiclion to t.y the disputes b,:trv.t,tr them and a clause in their mut,al ;rgre:ment 10 LNl.J C.R.P No.3119 oJ202t conferring iurisdiction on a Court which does not Possess the same under the Code of Civil Procedure is not binding'

12. In the absence of such agreement' a unilateral endorsement cannot oust the jurisdiction of the competent Court otherwise conferred by law- Accordingly, the unilateral recital regarding iurisdiction printed on the invoice cannot be held to be binding the parties or override the statutory jurisdiction of the Courts in the state of Telangana'

73. However, it is a settled principle of law that a unilateral clause printed on a document such as an invoice' which has not been mutually agreed upon or signed by both parties' cannot be heated as a valid iurisdiction clause'

14. Furthermore, from the factual matrix of the case' it is evident that M/s. Kaygyon Paper Mills Ltd' has its registered office in Aurangabad, Maharashtra, and the registered offices of both the parties to the Present suit are situated within the State of Telangana. No part of the cause of action is shown to have arisen within the territorial limits of Kota Therefore' even otherwise' --7 a;tP\)3llrif2UJ L\A,J the Court:; ir' Iiota would lack jurisdiction unde.r the provisions of the Cir.iI I]':,r:eclure Code.

15. ,{c(tl,cli rgl1, the exclusive jurisdiction clause me rtioned unilaterallv irr he invoice is not legally sustainal)le, rnLl (lannot override thr: territorial jurisdiction confel.e(i b1 law. Consequenttl', it is held that the Courts in Telangana, w.here the registeleti o [f ic e s of the parties to the suit are sihlate(l, hi Lve the jurisdiction to tr\r and entertain the present suit.

76. fh's pc ir-rt 1S accordingly answered in favcur :,f the plaintifl POINT N <t.2: - 1,7. \Vrlh rr:g,irrcl to this point, there are. catena .f d.cisi rns of various Hilh ('o :rts, viz., the judgment of the Delri High l)ourt n Flint ()"cttr]. I ndin prioate Limited o. Good lllorrrirtg ltrdia Media Priitatt, I imitedt, wherein it is held that a sr:it rrncler Order XXXrv,ll o the CpC can be maintained on the bar;is of invoices. T-his :.r.jnciple was subsequently reiterate,l bt.in F/ick :/AL, SCC Onl .,;trt I t t i-694 LNA.J C.R P No 3t19 of2021 l2 Stuilios Pat. Ltd, o. Graaity Entertainment Pot' Ltd" |CM(M) 1185 of 2027l,whelein the Court upheld the maintainability of a summary suit founded exclusively upon a series of invoices' Further, various High Courts across the counfry have consistently adopted a similar view' thereby fortifying the judicial consensus on this aspect'

18. In view of the above iudicial position' this Court is of the suit instituted bY the considered oPinion that the summary respondent under Order XXXVII CPC' based solelY on the invoices, is maintainable'

79. Accordingly, the finding of the District Judge on this issue is sustained and does not warrant any interference by this Court. POINT No.3:

20.Inordertoanswelthisissue,itisrelevanttonotethatthe plaintiffhasfiiedaCertificateissuedbyM/sKaygaonPaper Mills Limited, wherein it is specifically stated as hereunder:- l3 L.\A,J R P \a i t19 oJ )02J 'i-ltis i. tt,, cert{y that ll/s Bang paper.s pvt Lttl is ,tur authorl\ t .l d(aler-cum_agent for supply of our Kra.ft ptnrcr. t ttd trt on \:ttctlf qf Bang pvt Ltcl hcn e supplied Krt,ft lLtpet ttn drli':ret t ,ldrt's and invoices to Ws Emcor packaging t,tt ,,trl hu:ir1g 1e titctory at Chevalla, Telangana. .1t, the pa1'rneats due against the below i,ttoices aul tl,li,L,t'.., t.r uipr rt)r malerial supplied to ld/s Emcor patkagi slutrld t,t 'rurde to account of li/s Bang papers pvt l_td ,.tnlt, n thr.. ho\e tlrt'ady cleared payments against the bel.ty, int,oic:s 1q

27. llre p irn[iff also filed Ledger Account from 0l.04 2016 to 31.03.201 :'/. ,;l-rcr'ing the particulars of the dates, tle v.ucher Nos. the Bill Nos. ,r- ivhich the amounts were debitecl at thetr end to the credit of l,I/s Kaygaon paper Mills Limited.

22. Up,r,, I erusal of the above Certificate ssu rd by M/s Ka11;aor )aper Mills Limited and. the LeJger A< count, which is plat:e,_l .rn record, it is evident that M/s. l.aygVon paper Mills I-tc1. Lr;rs c> pressly authorized the respondent as 1ts ( lealer_ cum-agent a nrl j;t furtherance thereof, the petitioner h;Ls to effect all due paymerrls directly into the account of the responden . l.his documentar-,,, t, r.rclence establishes that the respondent is not a mere thirrl Fa r i\ or stranger to the transaction, [ut is a clulv l4 L\1J t: R P No Jl19 of)Ul authorized agent by the supplier-Ivl/s Kaygaon Paper Mills Limited, with a direct financial nexus to the subiect matter of thc

23. It is a settled principle of law that a persory who has a legal right to receive money under an arrangement or agency duly recognized and acted upon by the principal, though is a third party, has locus standi to initiate proceedings for recovery of such due amount.

21. Accordingly, this point is answered holding that the plaintiff has locus standi to file the suit. CoxcrustoN:

25. In the light of above discussion and the legai position, this Court is of the considered view that the petitioner failecl to shon' that there is miscarriage of justice or violation of law in the impugned docket order of the trial Court warranting interference by this Court.

26. In the result, this Revision Petition is dismissed. I{owever, it is made clear that the triai Court shall dispose of the suit - \ l5 L,\ A J (' R L ,vo 31i9 of202l uninflrte,ncccl b1, any observations and findings, if an1, made in this ortler. Ilrere shall be no order as to costs. 27 t\s; a i:.glrel, the miscellaneous applicatiorrs pe,ndi rg, if any, shall st,rn I : l,rse cj //TRUE COPYII sD/- f/toHD. tSMAtL DEPUT REGISTRAR SECT''ON OFFICER To, V '1. lXAdditionat Crtrief Juj.g.1 Ranga Reddydistrict, L.B Nagar, ilyderabad. 2. one CC tc SRt SHYAM S AG{Awnriovocal IopLrCl 3 One CC tc SRt f; RAJAGOPALAN nOrocrte-f6bUCl 4. Two CD Copies SS/gh 5 HIGH COUFIT DATED:19 ntit}O?,s ORDER GRP.No.3149t of 2OZ4 DISMISSING'I-HE C.R.P. WTHOUT CO,STS '6Tt o o, a- ^( U ; "l 2fl?\ tu z \ \'^, ll-r-; llTD * i) .J 'v I Glati4 b- a\a\nr