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IN THE HIGH COURT OF PATNA
S.N. Jha, J.
Kameshwar Prasad Sah
vs.
The National Small Industries Corporation Ltd.
C.R.No. 1386 of 1986
Decided on : 14.8.1997
Ouster Clause - Territorial Jurisdiction - The court set aside the order returning the plaint on the ground of lack of territorial jurisdiction, citing the effect of ouster clause and previous case law.
Fact of the Case:
The plaintiff filed a civil revision challenging the order returning the plaint of a title suit on the ground of lack of territorial jurisdiction due to an ouster clause in the agreement.
Finding of the Court:
The court found that the ouster clause in the agreement did not confer jurisdiction on the Calcutta Court, as no part of the cause of action arose there, and therefore, the Hajipur court was competent to try the case. The impugned order was set aside.
Issues: The main issue was the territorial jurisdiction based on the ouster clause in the agreement.
Ratio Decidendi: The court relied on the effect of the ouster clause and previous case law to determine that the Calcutta Court did not have exclusive jurisdiction as conferred by the agreement.
Final Decision: The court set aside the order returning the plaint and allowed the plaintiff's application.
This civil revision is by the plaintiff. By the impugned order the plaint of the title Suit No. 174 of 1992 has been returned on the ground of lack of territorial jurisdiction in view of the ouster clause contained in clause 9 of the agreement.
2. Clause 9 of the agreement runs as follows :-
"In the event of any dispute or difference arising between the parties relating to the construction, meaning and effect of performance or any other matter under these presents the Court at Calcutta alone shall have exclusive jurisdiction.
3. In A.B.C. Laminart Pvt. Ltd. and another Vs. A.P. Agencies, Salem (AIR 1989 Supreme Court, 1239) the Supreme Court considered the effect of ouster clause and observed :
“.. Where the parties to a contract agreed to submit the disputes arising from it to a particular jurisdiction which would otherwise also be a proper jurisdiction under the law their agreement to the extent they agreed not to submit to other jurisdictions cannot be said to be void as against public policy. If on the other hand, the jurisdiction they agreed to submit to would not otherwise be proper jurisdiction to decide disputes arising out of the contract it must be declared being against public policy."
4. Earlier in Hakan Singh vs. M/s Gammon (India) Ltd. (AIR 1971 Supreme Court, 740), the Court had observed, "It was not open to the parties to agreement to confer by their agreement jurisdiction on a court which it did not possess under the Code."
5. In the present case, no part of cause of action appears to have arisen at Calcutta. The parties, therefore, by so called agreement could not confer jurisdiction on Calcutta Court much less to the exclusion of the jurisdiction where the cause of action has arisen. The Hajipur court is, therefore, competent to try the same. The order of the' court below returning the plaint for presentation in a court of Calcutta, therefore, does not appear to be correct in law.
6. The impugned order dated 22.5.96 is, accordingly, set aside. This application is allowed.
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