M./BHOPAL GLUES & CHEMICALS PVT. LTD. Vs. THE SHARPEX ABRASIVE PRODUCTS, AHMEDABAD, 2. THE BOMBAY GENERAL FREIGHT CARRIERS (P) LTD. BOMBAY AND 3. THE SOUTH FREIGHT CARRIERS (P) LTD. BHOPAL

JUDGEMENT

(1.) - The short question arising for decision of this Court in this civil revision filed under section 115 C.P.C. is whether the jurisdiction of Civil Court at Bhopal is excluded by an agreement between the parties

(2.) It appears that the petitioner-company received an order from the non-applicant No. 1 for supply of Glue Flakes and supplied the first lot of one ton on 13-4-1981. The goods were handed over to the non-applicant No. 3 which admittedly is a carrier, through the non-applicant No. 3 for carriage and delivery to the non-applicant No. 1 at Bombay. It appears that there is a dispute between the parties about the manner in which the goods were sent and the loss suffered by the applicant on account thereof. The applicant however, filed the present suit claiming Rs. 24,445.50 paise being the cost of goods, interest and expenses thereupon in the Court of District Judge, Bhopal. The non-applicants, on being served, raised objection to the jurisdiction of the Court of Bhopal on the ground that the parties had agreed to get the dispute settled at Bombay. The trial Court, therefore, framed a preliminary issue and relying on the receipt issued by the non-applicants 2 and 3, held that it has no jurisdiction to entertain the suit. It is this order which is impugned in the present revision.

(3.) It is not disputed that ordinarily, the cause of action in the suit would arise at Bhopal where the goods were handed over to the non-applicants 2 and 3 for carrying the same to Bombay. It is also not in dispute that the Courts at Bombay will also have jurisdiction, as, according to the plaint allegations, the goods were damaged at Bombay. Sec. 28 of the Indian Contract Act prohibits an agreement in restraint of legal proceedings and treats such agreement as void. The said section covers those agreements which absolutely restrict a party to a contract from enforcing a right under the contract in ordinary tribunal. The Supreme Court in Hakam Singh Vs. Gammon India Ltd., AIR 1971 SC 740 has held that where two or more Courts have, under the Code of Civil Procedure, jurisdiction to try a suit or proceeding, an agreement between the parties that the dispute between them shall be tried in one of such Courts, is not contrary to public policy, nor such an agreement contravenes section 28 of the Contract Act. It must, therefore, be taken to be well settled that where two or more competent Courts can entertain as it on a contract consequent upon a part of cause of action having arisen within the jurisdiction of each of those Courts the parties to the concerned transaction can contract to vest jurisdiction in one of such Courts to try dispute which might arise as between themselves. In M/s Salem Chemical Industries Vs. Birds & Co., AIR 1979 Madras 16 a Division Bench of the Madras High Court, while interpreting section 28 of the Contract Act, held that, "When the Civil Procedure Code confers a jurisdiction on a court based on a part of the cause of action and if that court's jurisdiction was to be taken away, the parties should specifically exclude the jurisdiction of the Court and confer exclusive jurisdiction on another court. It is for this reason it has been held by series of decisions that exclusion of a court's jurisdiction and conferment of exclusive jurisdiction on a particular court should be clear, explicit and unambiguous. Under the circumstances, we may to examine if there is an agreement between the parties which clearly and unambiguously takes away the jurisdiction of the Courts at Bhopal.