( 1 ) THIS appeal is filed against an order passed by the civil Judge (S. D.), Baroda on 18/07/1987 returning the plaint for presenting it in an appropriate Court.

( 2 ) TO appreciate the controversy in question, few relevant facts may now be stated. The appellant-plaintiff is Indian Oil Corporation Limited (corporation for short ). It is a Government Undertaking, having its registered Office at Bombay. It is carrying on business of refining and marketing petroleum and other allied petroleum products in India. It is also marketing cooking gas, technically known as liquified petroleum gas (LPG) under the trade mark INDANE. This gas is marketed at many places including baroda and for which distributors and/or dealers were appointed by the corporation. One of such agreements was entered into by the Corporation with M/s. Pragat Gas Service through its proprietor Mahesh Ambalal brahmbhatt-defendants in the suit on 7/01/1986. The terms and conditions have been signed by the parties. Certain allegations have been levelled against the defendants by the plaintiff-Corporation that they have committed breach of the terms and conditions of the agreement and violated instructions issued by the Corporation. Therefore, in accordance with the terms and conditions of the agreement, the agency of defendant No. 1 was terminated by the corporation. For the purpose of recovery to the tune of Rs. 5,11,755. 00, a suit was filed in the Court of Civil Judge (S. D.), Baroda, being Special Civil suit No. 86 of 1986 and along with the plaint, applications Exhs. 5 and 6 for interim injunction as well as for the appointment of receiver were made. The defendants -appeared and contested the suit. The main contention of the defendants was that in view of the agreement and particularly Clause 36 of the agreement, the Baroda Court had no jurisdiction and the suit filed in the court of Baroda was not maintainable at all. Necessary issues were framed by the trial Court at Exh. 49 and issue No. 7 read as under : "whether this Court has no jurisdiction to hear this suit?" In view of the fact that the issue related to the jurisdiction of the Court. the Court heard that issue as preliminary issue in accordance with the provisions of Order XIV, Rule 2 of the code of Civil Procedure (hereinafter referred to as the Code) and by the impugned order held that in view of Clause 36 of the agreement, the plaintiff-Corporation should have filed suit only in Bombay Court and accordingly passed (he impugned order directing return of the plaint to the plaintiff so as. to enable it to file in proper Court. It is this order which is challenged in the present appeal.

( 3 ) M/s. Minoo A. Shah, appearing for Mr. G. N. Shah, learned Counsel for the appellant raised following contentions. The Court has committed an error of law in holding that it had no jurisdiction to entertain, deal with and decide the suit filed by the Corporation. It was further contended that as per settled principles of law, whenever an agreement is entered into between the parties, wherein it is mentioned that a particular Court will have jurisdiction, it cannot be said ipso facto that the other Court has no jurisdiction, if it otherwise possesses the jurisdiction. In that case, the Court will have to decide the question after taking into account a number of facts and circumstances and by exercising its discretion. Since that exercise has not undertaken by the trial Court, the order is not in accordance with law. Finally, it is submitted that the issue in question could not have been treated and decided as a preliminary issue. Looking to the provisions of Order XIV Rule 2 of the Code as amended by the Amendment Act, 1976 such question could have been decided only at the time of trial and not at a preliminary stage.

( 4 ) MR. B. J. Shelat, learned Counsel for the respondent-defendants, on the other hand, supported the order passed by the trial Court. He submitted that when an agreement has been entered