The main legal point established in the judgment is that the territorial jurisdiction of the court is determined by the terms of a valid contract between the parties, and where more than one court has jurisdiction, the parties can stipulate in the contract to submit to the jurisdiction of a specified Court to try the dispute arising between them.

ORDER :

Vijay Kumar Shukla, J.

1. The petitioners have filed the present petition under Article 226 of the Constitution of India, challenging the order dated 08-05-2019, passed by the respondent no. 2, whereby the work order issued in favour of the petitioners has been terminated, security amount has been forfeited and the joint venture of the petitioners has been debarred from participation in tenders of the respondent Western Coalfields Limited (for short WCL) for a period of 12 months from the date of issuance of the impugned order dated 08-05-2019.

2. The necessary facts are that the petitioners were the successful bidder in the NIT No. 24/2014-15, issued by the respondent WCL in September, 2014. In pursuance thereof, a work order was issued to the petitioners on 08-12-2014 in their favour by the WCL. It is submitted that the petitioners had completed the work at an extremely fast pace in the initial period. According to the petitioners because of the hindrances created by the respondents and due to departmental failure, some delay occurred in the execution of the contract. The respondents also did not extend the period of execution of the contract.

3. Learned counsel for the respondents raised preliminary objection regarding territorial jurisdiction of this court in view of Clause 32.1 of the contract and urged that the parties have specifically agreed that any dispute arising between them shall be dealt with exclusively by the Nagpur Court only. It was further submitted that where cause of action arises within the territorial jurisdiction of various Courts and the parties to the contract have agreed for forum at a particular place only having territorial jurisdiction then that Court alone shall exercise jurisdiction. Elaborating further, it was urged that though the letter of acceptance was issued by the office of General Manager Contract Management Cell of WCL at Nagpur, the agreement was entered with the WCL Management and on behalf of the General Manager Pench Area and the agreement was signed in respect of the work which was to be executed at Pench Area in district Chhindwara, yet, the Courts at Nagpur alone would have jurisdiction in view of clause 32.1 of the agreement. According to the learned counsel this territorial jurisdiction of the Courts at Madhya Pradesh to entertain the petition relating to dispute between the parties would not be there.

4. Per contra, learned counsel for the petitioners argued that this court has jurisdiction under Article 226 of the Constitution of India, as part of cause of action has arisen in district Chhindwara within the territorial jurisdiction of this court. In support of his submissions, he placed reliance on the judgment of the Supreme Court in Maharashtra Chess Association Vs. Union of India (UOI) and others (Civil Appeal No. 5654 of 2019) (arising out of Special Leave Petition (C) No. 29040 of 2018), decided on 29-07-2019. Further, reference was also made to the decisions in Alchemist Ltd. And another Vs. State Bank of Sikkim and others, (2007) 11 SCC 335, Nawal Kishore Sharma Vs. Union of India and others (2014) 9 SCC 329. Judgment reported as Kusum Ingots & Alloys Ltd. Vs. Union of India and another, (2004) 6 SCC 254 was relied to contend that the forum convenience is with the plaintiff/petitioner.

5. The preliminary issue that arises for consideration herein is whether in the facts and circumstances of the present case where there is specific exclusion clause in the contract regarding territorial jurisdiction of Courts other than Nagpur Court only, the territorial jurisdiction would still vest in the Courts at Madhya Pradesh.

6. It would be apposite to refer to Clause 32.1 of the agreement, to appreciate the controversy, which reads thus:-

"Clause 32: Legal Jurisdiction:

32.1: Matter relating to any dispute or difference arising out of this tender and subsequent contract awarded based on the bid shall be subject to jurisdiction of Nagpur Court only."

7. We proceed to examine Section