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1930 Supreme(Cal) 125

CALCUTTA HIGH COURT
Lort-Williams, J., Lord Williams, J.
A. Milton and Co. - Appellant
Versus
Ojha Automobile Engineering Co. - Respondent
Decided On : 13-01-1930

The main legal point established in the judgment is the validity of a jurisdiction clause in an agency agreement and the applicability of injunctions to stay proceedings in a different court.

Headnote:

Jurisdiction - Agency Agreement - Contract Act, Section 28; Specific Relief Act, Section 56(b); Civil P.C., Order 39, Rule 2(1), Section 136(1) - The court discussed the validity of a jurisdiction clause in an agency agreement and the applicability of injunctions to stay proceedings in a different court. It also considered the principles governing the court's jurisdiction to restrain a person from proceeding in courts outside its jurisdiction.

Fact of the Case:

The plaintiffs and defendants entered into an agency agreement for the sale of motor cars in Agra and elsewhere. Disputes arose, and the plaintiffs sought an injunction to restrain the defendants from proceeding with a suit in Agra.

Finding of the Court:

The court found in favor of the plaintiffs, granting an injunction restraining the defendants from prosecuting their suit in Agra until the final determination of the plaintiffs' suit in Calcutta.

Issues: The issues included the validity of the jurisdiction clause in the agreement, the applicability of injunctions to stay proceedings in a different court, and the court's jurisdiction to restrain a person from proceeding in courts outside its jurisdiction.

Ratio Decidendi: The court held that the jurisdiction clause was valid and not in conflict with the Contract Act. It also determined that injunctions could be applied to restrain proceedings in a different court and discussed the principles governing the court's jurisdiction to restrain a person from proceeding in courts outside its jurisdiction.

Final Decision: The court granted an injunction restraining the defendants from prosecuting their suit in Agra until the final determination of the plaintiffs' suit in Calcutta.

JUDGMENT

Lort-Williams, J. - The facts of this case are peculiar. The plaintiffs and defendants entered into an agency agreement for the sale of motor cars in Agra and elsewhere.

2. By Clause 18 thereof it was agreed that

any litigation arising out of this agreement shall be settled in the High Court of Judicature, Calcutta, or in the Small Cause Court, Calcutta, and in no other Court whatsoever.

3. Disputes having arisen the defendants brought a suit in Agra. Subsequently the plaintiffs brought a suit in Calcutta claiming inter alia an injunction to restrain the defendants from proceeding with the Agra suit.

4. Then they applied to the Agra Court for a stay upon the contention that the Agra Court had no jurisdiction owing to the above clause. This application was refused, but a temporary stay was granted pending an application to the High Court at Calcutta.

5. The plaintiffs now ask for an order restraining the defendants from proceeding with the suit at Agra until the final determination of this suit.

6. They base their contention on the above clause, and in addition say that this suit is more comprehensive than the Agra suit, that the contract was made in goods supplied from, and other incidents of the contract arose in Calcutta; that from every point of view, it will be more convenient to litigate in Calcutta, and that the defendants commenced their suit in Agra with the sole object of harassing and delaying the plaintiffs.

7. So far as it is necessary for me to find facts, I am satisfied from the affidavits that plaintiff's contentions are correct.

8. But defendants' counsel has raised various points of law.

9. He contends, in the first place, that the clause itself is ultra vires and illegal, being in conflict with Section 28, I. Contract Act. This contention, in my opinion, is unsound, for the reasons given in Aahratlal Kesavlal Mehta & Co. v. Vijayam & Co. AIR 1925 Mad. 1l45.

10. Secondly, he says that Section 56 (b), Specific Relief Act, prohibits an injunction to stay proceedings in a Court not subordinate to that from which the injunction is sought. In my opinion, this Section 56 contemplates injunctions directed to the Court itself and does not prevent any Court from making an order in personam forbidding an individual from prosecuting proceedings in another Court even if such person be outside the jurisdiction of the Court Cohen v. Rothfield [1919] 1 K.B. 410 : Scrutton L.J., at p. 413. Moreover, Section 56 refers only to perpetual injunctions. Temporary injunctions are regulated by the Civil P. C (Order 39) : see Section 53, Specific Relief Act and Amir Dulhin v. Administrator-General of Bengal [1895] 23 Cal. 351. But defendants' counsel next contends that the Court will not grant any injunction, when, as in the present case, the defendant is not within the jurisdiction, because any such order in personam cannot be enforced. The answer to that contention is that Order 39, Rule 2 (1) provides that, in any suit for restraining the defendant from committing a breach of contract, a temporary injunction may be granted to restrain the defendant from committing the breach complained of, and u/s 136 (1), Civil P. C, such orders may be enforced outside the local limits of the jurisdiction of the Court to which the application is made. Even if such specific provision had not been made I am satisfied that the Court is not powerless in such circumstances and can, if necessary, resort to its inherent jurisdiction for the remedy.

11. It is contended for the defendants, however that the jurisdiction of this Court to restrain a person from proceeding in Courts outside its jurisdiction is governed by the same principles as those which governed Courts of equity in England, and that no injunction will be granted where such person is not within the limits of the jurisdiction of this Court, so that ha would be subject to process for contempt; and reliance in support of this contention is placed upon the judgments in the well-known case of the C

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