SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Audio Icon Pause Audio Icon
judgment-img

1995 Supreme(SC) 549

SUPREME COURT OF INDIA
K. RAMASWAMY AND B.L. HANSARIA, JJ.
M/s. Angile Insulations, Appellant
Versus
M/s . Davy Ashmore India Ltd. and another, Respondents.
Civil Appeal No. 5185 of 1995, (arising out of S. L.P.(C) No. 13685 of 1987
Decided on 18-4-1995.

Advocates:
D.P.MUKHERJI, P.R.SITHARAMAN, S.N.Mishra, SANJAY GHOSH

Headnote:

Civil Procedure Code,1980 – Section,20 - Contract Act – Section, 23 - Territorial Jurisdiction - Recovery of the amounts - Court of Subordinate Judge for recovery of certain amounts said to be due from first respondent- appellant filed case on a contract executed by first respondent- On filing suit for recovery of amounts respondents raised objection as regards jurisdiction Court and placed reliance of contract- trial court returned plaint for presentation proper court by order Thereon appellant carried matter in revision to High Court- High Court in impugned order view trial Court and dismissed revision- Thus this appeal by special leave provides that where cause of action had arisen partly within territorial jurisdiction one court or partly in another Court it would be open to parties to avail of remedy at Court where part of cause of action had arisen- In support thereof he contended that contract was entered into and executed within jurisdiction of Court of Subordinate Judge - Therefore by operation of Explanation must be deemed that cause action had arisen within local limits of jurisdiction of court–Held, Court of Bangalore only- controversy has been considered by this Court Agencies - Considering entire case law topic this Court held that citizen has right to have his legal position determined by ordinary Tribunal except of course subject contract when an arbitration clause which is valid and binding under law and when parties t contract agree as jurisdiction to which dispute in respect of contract shall be subject- This is Contract Act - But an agreement to oust absolutely jurisdiction Court will be unlawful and void being against public policy Contract Act- Court do not find any such invalidity of Clauses Contract pleaded in this case- On other hand this Court laid that where there may be two or more competent courts which can entertain a suit consequent upon a part of cause of action having arisen therewith if parties to contract agreed to vest jurisdiction in one such court to try dispute which might arise as between themselves agreement would be valid- If such a contract is clear unambiguous and explicit and not vague it is not hit Contract Act- This cannot be understood parties contracting against statute- Mercantile law and practice permit such agreements law and in view of fact that agreement under which Clause was incorporated as one such clause parties are bound by contract- contract had not been pleaded to void and being opposed Contract Act- As seen Clause unambiguous and explicit and that therefore parties having agreed to vest jurisdiction of Court situated within territorial limit of High Court of Karnataka Court subordinate Bihar State has no jurisdiction to entertain suit laid by appellant- Therefore High Court was right in upholding order of Trial Court returning plaint for presentation to proper Court - Appeal dismissed

JUDGMENT

 Leave granted.

2. The appellant had initiated action in the Court of Subordinate Judge, Dhanbad for recovery of certain amounts said to be due from the first respondent. The appellant filed the case on a contract executed by the first respondent. On filing the suit for recovery of the amounts, the respondents raised the objection as regards the jurisdiction of the Court and placed reliance on Clause (21) of the contract. The trial court returned the plaint for presentation to the proper court by its order dated September 1. 1983. Thereon, the appellant carried the matter in revision to the High Court. The High Court in the impugned order made in C.R.No.20/84 dated August 17,1987 upheld the view of the trial Court and dismissed the revision. Thus, this appeal by special leave.

3. The principal contention raised by the appellant is that S.20,of C.P.C.provides that where cause of action had arisen partly within territorial jurisdiction of one court or partly in another Court it would be open to the parties to avail of the remedy at the Court where part of the cause of action had arisen. In support thereof, he contended that the contract was entered into and executed within the jurisdiction of the Court of the Subordinate Judge, Dhanbad. Therefore, by operation of the Explanation to S.20, it must be deemed that the cause of action had arisen within the local limits of the jurisdiction of the court of Subordinate Judge, Dhanbad.

4. Normally, the plea of jurisdiction of the Court is to be considered in accordance with Ss. 16 to 20 of CPC. Section 20 provides that subject to some limitations, 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 carried on business. or personally works for gain or any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carried 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 on business, or personally work for gain.

5. So, normally that court also would have jurisdiction where the cause of action, wholly or in part, arises. But it will be subject to the terms of the contract between the parties. In this case, Clause (21) reads thus :

"This work order is issued subject to the jurisdiction of the High Court situated in Bangalore in the State of Karnataka. Any legal proceeding will, therefore, fall within the jurisdiction of the above court only."

A reading of this clause would clearly indicate that the work order issued by the appellant will be subject to the jurisdiction of the High Court situated in Bangalore in the State of Karnataka. Any legal proceeding will, therefore, be instituted in a Court of competent jurisdiction within the jurisdiction of High Court of Bangalore only. The controversy has been considered by this Court in A.B.C. Laminart Pvt. Ltd. v. A. P. Agencies, Salem. (1989) 2 SCC 163. Considering the entire case law on the topic, this Court held that the citizen has the right to have his legal position determined by the ordinary Tribunal except, of course, subject to contract (a) when there is an arbitration clause which is valid and binding under the law, and (b) when parties to a contract agree as to the jurisdiction to which dispute in respect of the contract shall be subject. This is clear from S. 28 of the Contract Act. But an agreement to oust absolutely the jurisdiction of the Court will be unlawful and void being against the public policy under S. 23 of the Contract Act. We do not find any such invalidity of Clauses (21) of the Contract pleaded in this case. On the other hand, this Court laid that where there may be two or more competent courts which can entertain a suit consequent upon a part of the cau




Click Here to Read the rest of this document
1
2
3
4
5
6
7
8
9
10
11
SupremeToday Portrait Ad
supreme today icon
logo-black

An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers

Please visit our Training & Support
Center or Contact Us for assistance

qr

Scan Me!

India’s Legal research and Law Firm App, Download now!

For Daily Legal Updates, Join us on :

whatsapp-icon Back to top