Mere printed conditions on the back of consignment note not conclusive to restrict territorial jurisdiction #indianlaws

Jurisdiction stated in the printed format at the back of consignment note will not bind the parties unless parties agreed to the same.

Simple printed conditions on the back of a bill or a consignment note restricting jurisdiction to only one Court whether can be a rider on the jurisdiction of another competent Court to entertain the suit? The Court held – No.

It was contended by the Plaintiff that cause of action arose on the basis of not only sale transaction but also for payment of tax under the Central Sales Tax Act. In the instant matter, the statutory place of payment of tax was Delhi since incidence of sale was from Delhi. Since the requisite Form-C was not supplied by the purchaser, the cause of action was stated to have arisen in Delhi.

On the other hand, Defendant contended that wherever an ouster clause exists in an agreement, it has to be given effect to, since it would be deemed to be the clear intention of the parties to exclude the jurisdiction of the Courts other than those mentioned in the concerned clause. Further since the ouster clauses were never in dispute and therefore ought to be given a full effect.

It was however held that simple printed conditions on the back of a bill or a consignment note which restricts jurisdiction to only one Court cannot be a rider on the jurisdiction of another competent Court to entertain the suit. What is required to be seen in an ouster clause of an agreement is, whether the parties were ad idem or in agreement on the issue.

In the instant case the issue related to non-supply of Form-C, a requisite document under the CST Act and therefore, the Delhi courts held to have jurisdiction to entertain the suit.

[M/s. Victoria Motors Pvt. Ltd. vs. M/s. Rai Automative Systems]
(Delhi HC, 06.08.2014)