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TMI Blog2007 (12) TMI 533X X X X Extracts X X X X X X X X Extracts X X X X ..... goods under the name and style 'Prodigy Electronics', Hong Kong. The main area of business of the Company is Printed Circuit Board (PCB). The business carried on by the Company involves keen understanding of the requirements of the customers in order that the products may be manufactured to the specific needs of the customers and they may be made available at competitive prices. The Company is, therefore, required to take care of the consumer- complaints, if any. It also involves a reach into the market identifying the potential consumers of the products which involves substantial investment of time, effort and finance. According to the Company, it has developed solid reputation in India under the trade name and trade mark 'Prodigy Electronics' in the field of electronics generally and PCBs particularly. 4. According to the plaintiff-Company, on July 22, 2002, the defendant (appellant herein) joined Prodigy Electronics in India as a representative for marketing PCB products of the Company in India. An employment contract was entered into on October 2, 2003 between the defendant-employee and the plaintiff-Company. Under the said contract, the defendant was given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said Multi Circuit Board (CHINA) Ltd. had a representative in India and he was none else but the defendant who operated under the name and style of Prodigy Circuit Boards . On being contacted, Multi Circuit Board (CHINA) Ltd. also confirmed that it had executed a contract with the defendant. It also came to the notice of the Company that the defendant had registered a deceptively similar domain name 'www.prodigycircuits.com' as far back as on October 5, 2004 while he was still in the employment of the Company. The Company was thus convinced that the defendant had not resigned on account of personal reasons or family problems but he wanted to misuse confidential information which he had received from the Company and he wanted to take undue advantage in spite of the agreement entered into with the Company. The Company also discovered that the defendant had incorporated a Company under the name and style of 'Canton Treasure Corporation Ltd.' on July 16, 2004 when he was stationed in Hong Kong and was still serving with the Company. Thus, obvious breach of employment contract was committed by the appellant. 6. In view of the above facts and breach of contract by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel, the agreement entered into between the parties made it expressly clear that the law applicable, in case of dispute between the parties would be law of Hong Kong Special Administrative Region and, hence, Indian Courts have no jurisdiction to entertain, deal with and decide such question. It was also submitted by the learned Counsel that in the light of the agreement between the parties, only remedy available to the plaintiff-Company was to take appropriate proceedings in accordance with law in a competent Court in Hong Kong and no Indian Court could have jurisdiction inasmuch as jurisdiction of all Courts in India is barred by necessary implication. The counsel also contended that the High Court committed an error in holding that Delhi High Court had jurisdiction as the defendant was residing in Delhi. In the plaint itself, the plaintiff gave the address of the defendant of Ghaziabad which is not in Delhi but in Uttar Pradesh (U.P.). The counsel also made grievance that the High Court was not right in observing that the defendant wanted to delay the proceedings and was not justified in imposing costs of ₹ 4,000/-. It was, therefore, submitted that the appeal deserves to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany, nor would use it for personal benefit. Clause 18 is material for the purpose of controversy and may be reproduced: 18. The terms and conditions as stipulated above shall be interpreted in accordance to the laws of the Hong Kong Special Administrative Region. (emphasis supplied) 14. It is this Clause (Clause 18), which requires interpretation. According to the appellant, since the terms and conditions in the agreement have to be interpreted in accordance with the laws of Hong Kong, no Court in any country other than a Court in Hong Kong shall have jurisdiction to entertain a suit, petition, application or any other proceeding. The submission of the respondent-Company, on the other hand, is that what is agreed upon is not territorial jurisdiction of a Court but applicability of laws. Clause 18 deals with the second eventuality and declares that terms and conditions of the agreement would be interpreted in accordance with the laws of Hong Kong. 15. We find considerable force in the submission of the learned Counsel for the respondent Company. In our view, 'cause of action' and 'applicability of law' are two distinct, different and independent things ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reside or cause of action arises. Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction- (a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or (b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry or business, or personally work for gain, as aforesaid, acquiesce in such institution ; or (c) the cause of action, wholly or in part, arises. 20. Bare reading of Clause (c) leaves no room for doubt that a suit would lie in a court within the local limits of whose jurisdiction the cause of action has arisen, wholly or partly. 21. Section 20 has been designed to secure that justice might be brought as near as possible to every man's hearthstone and that the defendant should not be put to the trouble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corporated in England. Clause 3 of the Bill of Lading dealt with jurisdiction of the Court. The said clause read as under: 3. JURISDICTION: The contract evidenced by this bill of lading shall be governed by English law and disputes determined in England or, at the option of the Carrier, at the port of destination according to English law to the exclusion of the jurisdiction of the Courts of any other country. 25. Though the above clause made it clear that the dispute should be determined in England, this Court held that the objection as to territorial jurisdiction had been waived by the defendant. So far as the law is concerned, it was held that proper law to govern the contract was English law. 26. The learned Counsel for the appellant submitted that the ratio laid down in British India Steam Navigation Co. applies to the case on hand and the High Court of Delhi committed an error of law in not upholding the objection of the defendant that Indian Court had no jurisdiction to deal with the matter. 27. We are unable to agree. Clause 3, as extracted hereinabove, clearly provided that the contract would be governed by English law. The High Court was, therefore, right in ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ascertained on the basis of the principles laid down in the Code of Civil Procedure. Since a part of 'cause of action' has arisen within the local limits of Delhi as averred in the plaint by the plaintiff Company, the question has to be considered on the basis of such averment. Since it is alleged that the appellant- defendant had committed breach of agreement by using trade mark/trade name in Trade Fair, 2005 in Delhi, a part of cause of action has arisen in Delhi. The plaintiff-Company, in the circumstances, could have filed a suit in Delhi. So far as applicability of law is concerned, obviously as and when the suit will come up for hearing, the Court will interpret the clause and take an appropriate decision in accordance with law. It has, however, nothing to do with the local limits of the jurisdiction of the Court. The High Court, in our opinion, was right in rejecting the application and in overruling preliminary objection. Since prima facie the plaint disclosed a cause of action as also territorial jurisdiction of the Court, the High Court rightly rejected both the contentions and no error was committed by it in not rejecting plaint, nor returning it for presentatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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