Madras High Court
M. CHOCKALINGAM
Andhra Pradesh State Trading Corporation - Appellant
Versus
Auro Logistic Limited - Respondent
Decided On : 02/24/2006
Jurisdiction - Memorandum of Understanding - 29-9-2003 - AIR 1985 SC 577, AIR 1989 SC 1239, AIR 1992 Mad 332, 1998 (ii) CTC 492 - The court revoked the leave granted by this Court based on the Memorandum of Understanding which specified that disputes should be settled in the Civil Court of Hyderabad jurisdiction. The court interpreted the ouster clause and held that the specific mention of jurisdiction in the contract implied the exclusion of all others, leading to the revocation of the leave.
Fact of the Case:
The plaintiff filed a suit for recovery of a sum of Rs. 15,26,236/- and declaration in respect of a shipment and for consequential permanent injunction. The defendant sought revocation of the leave granted by the Court based on the Memorandum of Understanding specifying the jurisdiction for settling disputes.
Finding of the Court:
The Court found that the leave granted by this Court had to be necessarily revoked based on the specific mention of jurisdiction in the Memorandum of Understanding.
Issues: The main issue was the interpretation of the ouster clause in the Memorandum of Understanding and whether it implied the exclusion of all other jurisdictions.
Ratio Decidendi: The court held that the specific mention of jurisdiction in the contract implied the exclusion of all others, leading to the revocation of the leave.
Final Decision: The leave granted by this Court was revoked, the interim injunction was vacated, and the application was allowed.
2. It is a suit filed by the plaintiff/respondent for recovery of a sum of Rs. 15,26,236/- along with declaration in respect of a shipment and for consequential permanent injunction. The plaint proceeds on the footing that the causes of action for the suit arise within the jurisdiction of this Court where the Memorandum of Understanding was entered into between the plaintiff and the defendant on 29-9-2003; that the plaintiff and the defendant acted in terms of the memorandum of understanding; that 81 tones of iron ores were procured by the plaintiff from the 2nd defendant; that the plaintiff has entered into contract with Fremery for export of iron ore fines in pursuance of the agreement; that a letter of credit was opened by Fremery with Standard Bank, London; that iron ores were sold and delivered at FOB Chennai Port to Fremery Resources Limited; that shipment was loaded from the Port of Madras; and that all the documents as contemplated under the letter of credit were submitted and negotiated at the instance of the 1st defendant through the 1st defendants bankers and all others.
3. The Court at the time of initiation of the proceedings granted leave on the said causes of action as alleged in the plaint.
4. On appearance, the defendant has brought forth this instant application, seeking revocation of the leave granted by this Court. What are all contended by the learned counsel for the applicant/defendant seeking revocation of the leave is that in the instant case, the causes of action though showing to have arisen in the city of Madras on the basis of which the suit has been brought forth, there is an agreement between the parties, as could be seen from the Memorandum of Understanding, wherein they have specifically spelt that any disputes between the parties should be settled by invoking the jurisdiction of the Civil Court at Hyderabad where the contract in respect of the parties were concluded and where the Memorandum of Understanding was also entered into between the parties. Hence, once they have agreed so, there is no question of filing the case before the Court of Madras. In the instant case, there is ouster of jurisdiction and hence, leave already granted has got to be revoked. In support of his contention learned counsel for the defendant relied on the decision of the Apex Court reported in (2002) 9 SCC 613 : (AIR 2002 SC 2402), (Shriram City Union Finance Corporation Ltd. v. Rama Mishra).
5. Contrary to the above contention, learned Senior Counsel for the plaintiff/respondent would submit that major part of the cause of action arises within the jurisdiction of this Court as set out in the plaint. Learned Senior Counsel would further submit that it is true that there was a Memorandum of Understanding entered into between the parties as stated by the defendant's side; but, a reading of the said Clause would reveal that there is no ouster of jurisdiction. So long as there is no ouster of jurisdiction by using the words 'exclusively', 'alone', and 'only', this Court has got jurisdiction and thus, it has been rightly done by this Court by granting leave and hence, there is no reason of legal ground to revoke the leave originally granted by this Court. In support of his contention, learned Senior Counsel relied on the decisions reported in AIR 1985 SC 577, (Abdulla Bin Ali v. Galappa); AIR 1989 SC 1239, (A. B. C. Laminart Pvt. Ltd. v. A. P. Agencies, Salem); AIR 1992 Mad 332, (Neyveli Lignite Corpn. v. M/s. Vinay Engineering); 1998 (ii) CTC 492, (Premium Industries India Ltd. v. Quality Fabricators).
6. After careful consideration of the rival submissions made, this Court is of the considered opinion that the leave already granted by this Court has got to be necessarily revoked. It is not in dispute that part of cause of action
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