Gujarat High Court
Judgename :J.B.MEHTA
RAI and SONS PVT.LIMITED - Appellant
Versus
TRIKAMJI KANJI GAJJAR and SONS - Respondent
Civil Revision 181 of 1968
Decided On : 11/02/1973
Indian Contract Act – Section 28 – Arbitration Act – Section 34 – Code of Civil Procedure, 1908 – Section 10 – Order of trial Judge – Jurisdiction –Challenged – Constructing flourmill – Agreement between plaintiff and defendant No. 1 did not operate as an absolute bar to jurisdiction of Court and that be had discretion ill such a case to entertain a suit as otherwise great hardship and inconvenience would result to parties if this suit was not be proceeded with in Court at Bhuj – Plaintiff-contractor firm had taken a building contract for constructing flourmill and office premises of defendant No. 1 company at Adipur as per agreement relevant clause 8 provides as under – Held, In such a case even if another defendant was added who was not a party to agreement plaintiff who had waived his right could not institute suit in Court other than one chosen by him – In this decision also this question had not been considered as to whether contractual stipulation operates as an absolute bar to the existence of jurisdiction of other Courts – Court at Bhuj where all the material witnesses were available it would be wholly unjust and inequitable to force this plaintiff contractor to file this suit in Delhi Court where there was no cause of action especially when other defendants were also joined in this suit and further agreements were relied upon by way of a tripartite arrangement for plaintiffs dues claimed in present suit against these defendants – Therefore order of learned trial Judge does not suffer from any jurisdictional error and in any event it does substantial justice and therefore this revision application must fail – Application dismissed.
( 1 ) DEFENDANT No. 1 company challenges in this revision application the order of the trial Judge holding that clause 8 of the agreement between the plaintiff and defendant No. 1 dated May 9 1964 did not operate as an absolute bar to the jurisdiction of the Bhuj Court and that be had discretion ill such a case to entertain a suit as otherwise great hardship and inconvenience would result to the parties if this suit was not be proceeded with in the Court at Bhuj. The plaintiff-contractor firm had taken a building contract for constructing flourmill and office premises of defendant No. 1 company at Adipur as per the agreement dated May 9 1964 The relevant clause 8 provides as under :-ALL disputes arising out of or in any way connected with this agreement shall be deemed to have arisen in Delhi and only Courts at Delhi shall have jurisdiction to determine the same. The plaintiff-contractor having not been paid its dues for construction in question and as defendant No. 1 had transferred these premises to defendant No. 2 the plaintiff firm further alleged that by two subsequent agreements of April 12 1965 and October 12 1966 under tripartite arrangement the plaintiffs dues were finally settled and defendant No. 2 had undertaken that liability of defendant No. 1 and relying on that express assurance possession of the premises was handed over to defendant No. 2. As the plaintiffs dues remained unpaid the suit has been filed not only against defendant No. 1 but transferee defendant No. 2 Architect No. 3 and the manager of the company defendant No. 4. When the ex parte injunction was issued by the trial Judge defendant No. 1 company made an application under sec. 151 relying on clause 8 and asked the Court to decide this preliminary issue about its jurisdiction before proceeding further with the suit or the injunction application. The learned trial Judge held that as the suit was not only against defendant No. I but against all the four defendants and as the plaintiff had relied upon not only the original agreement of May 9 1964 but also on the two subsequent agreements which had been by way of a tripartite arrangement this was a fit case where discretion ought to be exercised by entertaining the suit at Bhuj where this contract was executed and where all evidence would be available. Therefore in order to avoid great hardship and inconvenience the learned trial Judge exercised his discretion to entertain the suit filed at Bhuj and therefore the defendant company has filed this revision application.
( 2 ) IN Hakam Singh v. Gammon (India) Ltd. A. I. R. 1971 S. C 740 their Lordships have now categorically laid down that it is not open to the parties to confer by their agreement jurisdiction on a Court which it does not possess under the Code. But where two Courts or more have under the Code of Civil Procedure jurisdiction to try a suit or proceeding an agreement between the parties that the dispute between them shall be tried is one of such Courts is not contrary to public policy. Such an agreement does not contravene sec. 28 of the Contract Act. In that case the defendant company had its head office where they carried on business at Bombay and the parties had selected out of the two places the Bombay Court as on having jurisdiction and therefore it was held that under the agreement between the parties the Bombay Court alone would have jurisdiction to try the proceeding relating to arbitration and not the Court at Varanasi where the cause of action had arisen. This decision settles the question that if both the Courts have jurisdiction it is open to the parties by their agreement to select the Court in which the disputes between the parties arising out of and in connection with such agreement were to be resolved and such an agreement is not one which ousts the jurisdiction so as to be against the public policy or so as to contravene sec. 28 of the Contract Act. The decision further lays down that sec. 20 (a) of the Code of
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.