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1986 Supreme(Ori) 55
High Court Of Orissa
P. C. MISRA
INDIAN RARE EARTHS LTD. - Appellant
Versus
UNIQUE BUILDERS LTD. - Respondent
CIV. REVN. 63 Of 1985
Decided On : 04/09/1986
B.DAS, DEEPAK MISRA, DEVANAND MISRA, JAYANTA DAS, M.S.HAQUE, P.K.PATRA, R.N.NAIK, RAJEN MOHAPATRA
A Court which is possessed of the jurisdiction by operation of any law to try a suit or proceeding cannot be divested merely because the parties have by agreement chosen a different forum. However, the Court can ignore the ouster clause if it is considered to be oppressive, unjust or unfair having regard to the facts and circumstances of the case.
Headnote:
ARBITRATION - JURISDICTION - OUSTER OF JURISDICTION BY AGREEMENT - VALIDITY - COURT CAN IGNORE OUSTER CLAUSE IF UNFAIR, UNJUST, INEQUITABLE OR OPPRESSIVE.
Fact of the Case:
The petitioner and the respondent entered into an agreement for the execution of certain work. The agreement contained a clause that all disputes arising out of or in any way connected with the agreement shall be deemed to have arisen in Bombay and only the Courts of Maharashtra shall have jurisdiction to determine the same. The respondent filed an application before the Subordinate Judge, Cuttack for appointment of an arbitrator to adjudicate disputes between the parties. The petitioner objected to the jurisdiction of the Subordinate Judge, Cuttack on the ground that the jurisdiction of all other Courts having been ousted by an agreement between the parties.
Finding of the Court:
The Subordinate Judge, Cuttack held that the said Court had jurisdiction to entertain the present case and the stipulation in the agreement to the effect that the Court of Maharashtra alone shall have the jurisdiction in the matter is oppressive, unfair and inequitable.
Issues: 1. Whether the Subordinate Judge, Cuttack had jurisdiction to entertain the application under S. 8 of the Arbitration Act? 2. Whether the jurisdiction of the Subordinate Judge, Cuttack has been ousted by agreement of the parties? 3. Whether the Subordinate Judge, Cuttack can still exercise his jurisdiction on the ground that the ouster clause is inequitable and oppressive?
Ratio Decidendi: 1. The Court held that the Subordinate Judge, Cuttack had jurisdiction to entertain the application under S. 8 of the Arbitration Act as the cause of action arose within the territorial jurisdiction of the Courts at Cuttack. 2. The Court held that the jurisdiction of the Subordinate Judge, Cuttack has not been ousted by agreement of the parties as the parties cannot by agreement confer jurisdiction not inherently possessed by it. 3. The Court held that the Subordinate Judge, Cuttack can still exercise his jurisdiction on the ground that the ouster clause is inequitable and oppressive.
Final Decision: The Court allowed the revision petition, set aside the impugned order and remanded the case to the Subordinate Judge, Cuttack with a direction to consider the matter afresh after giving the parties full opportunity to adduce evidence to establish the facts and circumstances relevant to the issue namely whether the stipulation as to the choice of forum in the agreement was unfair, oppressive or inequitable.
P. C. MISRA, J.
( 1 ) THIS revision is directed against the order dated 5-1-85 passed in Misc. Case No. 117 of 1983 (Arbitration) by the Subordinate Judge (I), Cuttack. The aforesaid Miscellaneous case was filed for appointment of an Arbitrator to adjudicate disputes between the parties. The learned Court below after hearing the parties ordered for appointment of an Arbitrator overruling the objection raised by the present petitioner on the ground that only the Courts of Maharashtra shall have the jurisdiction to determine the matter in issue and the jurisdiction of all other Courts having been ousted by an agreement between the parties.
( 2 ) THE present opp. party was entrusted with the work "structural Steel and Cladding Work in Bulk Ware Houses" as per the agreement between the petitioner and the opp. party. The work order issued by the present petitioners was received by the contractor (present opp. party) in their office at Cuttack. During the execution of the work certain disputes arose between the parties which was brought to the notice of the present petitioners, by letters dated 7-6-82 and 11-8-82. There being no response to the said letters the present opp. party requested for appointment of an arbitrator by letters dated 20-11-82 and 19-2-83, but the same also produced no effect. Hence, this application was filed before the Subordinate Judge, Cuttack under Ss. 5, 8 and 11 of the Arbitration Act.
( 3 ) THE present petitioners who were opp. parties in the aforesaid misc. case in the Court below contested the application mainly on the ground that it was stipulated in the agreement executed between the parties that all disputes arising out of or in any way connected with the agreement shall be deemed to have arisen in Bombay and only the Courts of Maharashtra shall have jurisdiction to determine the same. It was, therefore, contended that the jurisdiction of all other Courts have been expressly barred by the terms of the said agreement for which the Subordinate Judge at Cuttack had no jurisdiction to entertain the application in question. It was further stated that none of the present petitioners reside or carry on business within the jurisdiction of the Subordinate Judge, Cuttack for which there was lack of jurisdiction on the part of the said Court. In this connection, it was also stated that the registered office of the present petitioners-company being located at Bombay and the work in question being within the district of Ganjam, the Courts at Bombay, Berhampur or Chhatrapur were competent to entertain the petitioner and not the Subordinate Judge, Cuttack. An objection was taken that the present petition for appointment of an arbitrator was not maintainable as the Consulting Engineer, i. e. M. N. Deatur and Co. Pvt. Limited had not been approached which according to the terms of the agreement a pre-condition before approaching the arbitrator.
( 4 ) THE learned Subordinate Judge after hearing the parties came to the conclusion that the said Court (Subordinate Judge, Cuttack) had jurisdiction to entertain the present case and the stipulation in the agreement to the effect that the Court of Maharashtra alone shall have the jurisdiction in the matter is oppressive, unfair and inequitable. It was also held in the impugned order that in the facts and circumstances of this case, an application for appointment of an arbitrator was competent as the disputes were brought to the notice of the Consulting Engineer who took no action as was required of him. On these findings, the learned Court below ordered that an arbitrator be appointed for adjudication of the disputes between the parties and directed the parties for submitting panel of names from out of which one was to be selected and appointed as the arbitrator. In this revision the aforesaid order of the Subordinate Judge, Cuttack has been challenged on the very same grounds which were taken against the application in the Court below.
( 5 ) THE finding of the Subordin
