A contractual ouster clause does not divest a court with jurisdiction of its power to try a suit, and the court has the discretion to ignore such a clause in the interest of justice, particularly when the stakes involved are small and the costs of litigation would outweigh the amount claimed.

ORDER :- The defendant in O.S. No. 1317 of 1975 on the file of the Court of the District Munsif, Coimbatore, is the petitioner herein. The suit was filed by the respondent herein for recovery of a sum of Rs. 2,500 on the basis of the appointment of the plaintiff-respondent as the sole selling distributor for the biscuits manufactured by the petitioner in the Districts of Coimbatore and Nilgiris on 5-7-1961, and on account of the transactions that took place between the parties, the plaintiff-respondent claiming to be entitled to the amount in question. The petitioner raised a preliminary objection to the jurisdiction of the Court of the District Munsif, Coimbatore. The petitioner's case was that Cl.13 of the agreement entered into between the parties contemplated the courts situate in the City of Bombay alone having jurisdiction to entertain any, dispute between the parties. The existence of such a Clause in the agreement is not disputed. Equally, as part of the cause of action arose within the Court of the District Munsif, Coimbatore, there is no dispute that that court has jurisdiction. In view of this, the petitioner's case is that notwithstanding the fact that in law the Court in Coimbatore has jurisdiction, in view of the agreement entered into between the parties the respondent should have filed the suit only in the court in Bombay, and, therefore, the Court in Coimbatore did not have jurisdiction to entertain the suit in question. The learned District Munsif held that he had jurisdiction to entertain the suit, therefore, decided the question of jurisdiction in favour of the respondent herein. It is this order which is sought to be revised in the present petition.

2. There is no controversy on the following facts. (1) The Court in Bombay has jurisdiction, because the petitioner defendant resides in Bombay. (2) The Court in Coimbatore has jurisdiction because a part of the cause of action arose there. (3) The parties, in Clause 13 of the agreement entered into between them, have agreed that no Court other than the Courts in the City of Bombay shall have jurisdiction to decide any dispute that may, be arising between the parties. In such a context, the general rule is no doubt that the plaintiff-respondent will have to file the suit in the Court in Bombay. However, the Gujarat High Court in M/s. Snehalkumar Sarabhai v. M/s. Economic Transport Organisation (AIR 1975 Guj 72) had struck a new path. In para 3 of the judgement, it was stated that,

"While parties can lawfully enter into an agreement to restrict a dispute to a particular court having jurisdiction, that stipulation though valid cannot take away the jurisdiction of the court which admittedly has jurisdiction. The ouster clause can operate as estoppel against the parties to the contract. It cannot tie the hands of the Court and denude it of the power to do justice. It is no doubt true that ordinarily Courts would respect the agreement between the parties which is born out of the meeting of their minds and out of considerations of convenience. But the Courts are not obliged to do so in every case. In a case like the present where the claim is Rs. 1,207.92 to oblige the plaintiff to go to Calcutta merely for the pleasure of respecting the stipulation embedded in the contract between the parties is to deny justice. A new approach to this question deserves to be made for the ouster clause is calculated to operate as an engine of oppression and as a means to defeat the ends of justice for in a case like the present it would be oppressive to drive the plaintiff all the way to Calcutta to recover a small sum of Rs. 1,208. The costs of travelling and litigation will far exceed the stakes involved and even a rightful claimant would be obliged to abandon his claim rather than incur greater expenditure than the sum involved in order to seek redress. In this backdrop the question assumes importance whether the stipulation to confine the jurisdiction in one of the Courts