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1992 Supreme(MP) 655

1 (1994) ACC 252
P.P. Naolekar, J.
Raigarh Judge And Textile Mills ...
vs
New Haryana Transport Co.
Decided on : 14 October, 1992

Parties can agree to confer jurisdiction on one of several Courts having jurisdiction, but not on a Court not possessed by it under the Code of Civil Procedure.

Headnote:

JURISDICTION - CONTRACT - SECTION 28 OF THE CONTRACT ACT - PARTIES CAN AGREE TO CONFER JURISDICTION ON ONE OF SEVERAL COURTS HAVING JURISDICTION, BUT NOT ON A COURT NOT POSSESSED BY IT UNDER THE CODE OF CIVIL PROCEDURE.

Fact of the Case:

Plaintiff filed a suit for recovery of the value of goods delivered to the defendant for transportation, which were not delivered despite notice. The defendant objected to the jurisdiction of the Court at Raigarh, arguing that the consignment note contained a term conferring jurisdiction to the Calcutta Court only.

Finding of the Court:

The Court held that the plaintiff could bring a suit either for breach of contract or in torts, and that the choice of cause of action was not controlled by the defendant. Since the plaintiff had chosen to bring a suit in torts for conversion, the Court at Raigarh had jurisdiction to entertain the suit.

Issues: Whether the parties can agree to confer jurisdiction on one of several Courts having jurisdiction, and whether such an agreement is enforceable.

Ratio Decidendi: The Court held that the parties can agree to confer jurisdiction on one of several Courts having jurisdiction, but not on a Court not possessed by it under the Code of Civil Procedure. However, if the plaintiff chooses to bring a suit for breach of contract, then he is bound by the terms of the agreement, including any term selecting one of the Courts having jurisdiction to try the cause of action.

Final Decision: The Court set aside the order of the Trial Court returning the plaint for presentation to the proper Court at Calcutta and directed the parties to appear in the Court of the First Addl. Judge to the Court of District Judge, Raigarh on 6.11.1992 for further proceedings.

JUDGMENT

P.P. Naolekar, J.

1. The Trial Court returned the plaint for presentation to the proper Court at Calcutta, exercising the powers under Order 7, Rule 10 of the Code of Civil Procedure and aggrieved by this order the plaintiff/appellant has filed the present appeal.

2. The suit, as it is filed, is for recovery of Rs. 39,040/- and the allegation is that on 25.12.82, 16 bales of gunny bags were given to the respondent/defendant for transportation in his truck from Raigarh to Raipur; the goods so consigned to the respondent were not delivered to the appellant/plaintiff inspite of notice and the goods are said to have been retained by the respondent/defendant and, therefore, the suit was filed for recovery of the value of the goods so assigned to the defendant/respondent.

3. The respondent filed its written statement, amongst other defences raised, an objection to the jurisdiction of the Court at Raigarh to try the suit was taken by the defendant on the ground that on the top of the consignment note (Ex. P-1) it is written: "All disputes subject to Calcutta jurisdiction only" and, therefore, it is Calcutta Court alone which can adjudicate and decide the dispute between the parties arising out of the contract entered into between the parties, i.e. the plaintiff and the defendant. It may be mentioned here that no objection to the jurisdiction of the Court was raised on account of the term No. 18 in Ex. P/2.

4. As per the pleadings of the parties, it is clear that the goods were assigned at Raigarh for transportation to Raipur, delivery was self and the plaintiff and the defendant have their principal place of business at Calcutta and branches at Raigarh. Thus, ordinarily the suit could have been filed at Raigarh, Raipur or at Calcutta. It is well-settled that the parties by mutual agreement can choose one out of several Courts having jurisdiction to try the dispute and such a contract is not contrary to public policy and does not contravene Section 28 of the Contract Act. In Hakam Singh v. Gammon (India) Ltd. it has been held by the Supreme Court that the parties cannot by agreement confer jurisdiction on Court not possessed by it under the Code of Civil Procedure. But the agreement that one of the Courts having such jurisdiction alone shall try dispute is not contrary to public policy and does not contravene Section 28 of the Contract Act. Therefore, if the parties have agreed, whereby out of the three Courts having jurisdiction to try the dispute between the parties to confer jurisdiction to Calcutta Court only, then such an agreement will not be violative of the Contract Act and will be enforceable.

5. The plaintiff can either bring a suit for breach of contract entered into between the, parties, and in that eventuality it is the Court on which jurisdiction is conferred under the contract alone normally will have jurisdiction to adjudicate the matter, or to bring a suit in torts. The plaintiff has an authority to choose the cause of action either for breach of contractor under the torts. The plaintiff's choice is not controlled by the defendant. The plaintiff is free to choose a Court, having jurisdiction, to be the Court of competent jurisdiction to institute the suit. If the plaintiff brings an action in torts, which is independent of the cause of action for breach of contract, the plaintiff is not bound by the terms of the agreement. However, if the plaintiff chooses to bring a suit for breach of contract, then he is bound by the terms of the agreement. One of such term may be of selecting one of the Courts having jurisdiction to try the cause of action.

6. According to me, the plaintiff has based his case for value of the goods wrongfully detained by the defendant/respondent which is an act of conversion. An act of conversion may be committed:

1. When property is wrongfully taken.

2. When it is wrongfully parted with.

3. When it is wrongfully sold.

4. When it is wrongfully retained.

5. When it is wrongfully destroyed.

6. When ther







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