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All Bengal Transport Agency and ors. Vs. Hare Krishna Banik - Court Judgment

LegalCrystal Citation
Subject;Contract;Civil
CourtGuwahati High Court
Decided On
Case NumberCivil Revn. Nos. 52 and 53 of 1979
Judge
ActsContract Act, 1872 - Sections 23; Code of Civil Procedure (CPC) , 1908 - Sections 20 and 115; Carriers Act, 1865 - Sections 8
AppellantAll Bengal Transport Agency and ors.
RespondentHare Krishna Banik
Appellant AdvocateN.M. Lahiri, B. Kalita and M.Z. Ahmed, Advs.
Respondent AdvocateS.R. Bhattacharjee, Adv.
DispositionPetitions dismissed
Excerpt:
.....be gone into especially when there is said to be no decision of this court on this aspect. but in hakam singh, the apex court has clearly ruled that an agreement between the parties that the dispute between them shall be tried in one of the courts otherwise having jurisdiction to do so is not against public policy, and such an agreement does not contravene section 28. shri bhattacharjee, however, contends that such an agreement would come within the mischief of section 23 of the contract act as it would defeat the provision of section 20, civil p. kathotia som, air 1980 :raj 42, the objection relating to jurisdiction of court at jaipur was negatived, as the bill of the other side has said 'subject to delhi jurisdiction' without the word 'only'.9. these decisions do bring home the point..........in snehal kumar, which has been arrived at by missing what has been held by the supreme court in hakam singh v. gammon (india) ltd., air 1971 sc 740, wherein such an agreement has been held as binding. as to nanak chand, it is submitted that that case had dealt with this matter on appeal from a decree. though this is correct, but in view of section 21, civil p.c. question of failure of justice has to be examined by a revisional court before whom objection as to place of suing is raised. in any case, this aspect, or question of irreparable injury has to be borne in mind in view of the proviso added to section 115, civil p.c. by the amending act of 1976, inasmuch as clause (a) of the proviso has no application, as the suits would not be finally disposed of even if the order is reversed......
Judgment:

B.L. Hansaria, J.

1. Jurisdiction to try a case is derived by the courts from a statute; parties cannot confer the same by agreement. The question is : Can they oust the same totally by mutual agreement If so, when?

2. This poser has arisen in the two suits at hand as the defendant, a common carrier and its partners, has taken the stand that as per Clause 16 of the Consignment Note, the Court in Malda alone has jurisdiction to entertain suits in respect of 'all claims and matters arising under the consignment or of goods entrusted for transport.' The suits being for recovery of compensation due to non-delivery of goods booked through the petitioner, the clause is otherwise attracted. The question is whether such a term can prevent any of the parties to approach a Court, other than the one specified, even if that court otherwise has jurisdiction?

3. To clear the deck, let it be said that undisputably the Court of learned Munsiff at Nowgong before whom the suits were filed has jurisdiction to entertain the same, as a part of the cause of action had arisen there, and the defendant has its branch office at Hojai, wherefrom the plaintiff also hails. Then though it has been urged by the plaintiff in his counter that the aforesaid agreement is not binding on him, as the same had been entered into by one Baisnab Saha who had booked the goods at Calcutta through the defendant, there is no force in this contention, as Shri Saha has to be regarded as an agent of the plaintiff for this purpose, as the latter had got his goods booked by the former in his name.

4. The main question is the effect of the agreement like the above. The learned Munsiff has rejected the contention of the defendant, as according to him the enforcement of the agreement would be oppressive on the plaintiff who shall have to incur more expenditure, if he were to approach the Malda Court, then what has been claimed by him. In coming to this conclusion, reliance has been placed mainly on Snehal Kumar Sarabhai v. E. T. Organisation, AIR 1975 Guj 72. The defendant, has challenged the correctness of the view.

5. As the matter relates to the jurisdiction of the Court, the question comes within the fold of Section 115 par excellence. Shri Bhattacharjee, however, submits by referring to Renown Biscuit Co. v. Kamalanathan, AIR 1980 Mad 28, that as entertainment of the suit at Nowgong would not cause any failure of justice, the Court may not interfere with the order. This view was taken by a learned single Judge in the aforesaid case by referring to Snehalkumar (supra) and Nanakchand v. T.T. Electric Supply Co., AIR 1975 Mad 103. Learned Advocate-General, Meghalaya, appearing for the petitioners has challenged the correctness of the view expressed in Snehal Kumar, which has been arrived at by missing what has been held by the Supreme Court in Hakam Singh v. Gammon (India) Ltd., AIR 1971 SC 740, wherein such an agreement has been held as binding. As to Nanak Chand, it is submitted that that case had dealt with this matter on appeal from a decree. Though this is correct, but in view of Section 21, Civil P.C. question of failure of justice has to be examined by a revisional court before whom objection as to place of suing is raised. In any case, this aspect, or question of irreparable injury has to be borne in mind in view of the proviso added to Section 115, Civil P.C. by the amending Act of 1976, inasmuch as Clause (a) of the proviso has no application, as the suits would not be finally disposed of even if the order is reversed.

6. I do not however, propose to decide the revision only by examining the question of failure of justice, or irreparable injury, as the point being of importance, the legality of the order merits to be gone into especially when there is said to be no decision of this Court on this aspect. First of all, it has to be seen

whether such a contract is void or unlawful in any way. Section 28 of the Contract Act makes any agreement in restraint of legal proceedings as void. But in Hakam Singh, the apex Court has clearly ruled that an agreement between the parties that the dispute between them shall be tried in one of the Courts otherwise having jurisdiction to do so is not against public policy, and such an agreement does not contravene Section 28. Shri Bhattacharjee, however, contends that such an agreement would come within the mischief of Section 23 of the Contract Act as it would defeat the provision of Section 20, Civil P.C.; and refers to Dwarka Rubber Works v. Chhotelal, AIR 1956 Madh Bha 120, where this view has been taken. With respect, I am not in agreement with the ratio of the decision for two reasons. First, Section 23 deals with lawfulness or otherwise of consideration and objects of an agreement, none of which can be said to be unlawful qua the agreement at hand, as its object is the carriage of goods by one party, and consideration is the freight paid, or to be paid, by the other party. Secondly, the English cases referred in this connection in para 7 of the judgment, are said to have regarded such an agreement as contrary to public policy, which is against the view expressed by the Supreme Court in Hakam Singh (supra).

7. Learned Advocate-General submits, by referring to Hakam Singh, that as such an agreement has not only been held as not violative of Section 28 of the Contract Act, but as binding between the parties, there is no escape from the conclusion that the two suits could not have been filed anywhere else than the appropriate Court in Malda, as that Court alone is contemplated by the agreement; and as the defendants' head office is there, the Malda Court has the jurisdiction to entertain the suit otherwise. It is stated that various High Courts, of the country have also taken the same view. He refers in this context to National Tar Products v. H. P. State Electricity Board, AIR 1979 Delhi 255; Savani Transport v. Mudaliar & Co., AIR 1979 Mad 21; EID Party (India) Ltd v. Savani Transport, AIR 1980 Andh Pra 30; Patel Roadways v. Bata India Ltd., AIR 1982 Cal 575; and C.K. Prasad v. Mohd. Mumir Alam, AIR 1983 NOC 33 (Pat), which has been fully reported in 1982 East LR 384. (A recent decision of the Supreme Court in Globe Transport Corporation v. Triveni Engineering Works, (1983) 4 SCC 707 taking this view was brought to my notice after conclusion of the argument).

8. Other High Courts have also taken this path, but they have added some riders which are important In Manganlal v. Satya Narain, AIR 1978 All 455, a note at the foot of the letterpad of the defendant that all offers etc. were 'subject to Hamburg jurisdiction', was not held sufficient to hold that there was stipulation between the parties that the agreement will be subject to what has been printed at the foot of the letter-pad. Surajmall v. Kalinga Iron Works, AIR 1979 Orissa 126, is a case where at the top of the purchase order it was stated that 'AH subject to Calcutta jurisdiction'. It was stated that because of this recital it could not be held that the other side had agreed to confine the disputes to the jurisdiction of Calcutta courts only. It was pointed out that ouster of a court's jurisdiction cannot be assumed easily, and the same must be proved by express words or by necessary implication. The same stand has been taken in Salem Chemical Industries v. Bird & Co., AIR 1979 Mad 16 by pointing out that for such an agreement to exclude the jurisdiction of the court, the same must be clear, unambiguous and explicit. In Jaishree Luxury House v. Kathotia Som, AIR 1980 : Raj 42, the objection relating to jurisdiction of Court at Jaipur was negatived, as the bill of the other side has said 'subject to Delhi jurisdiction' without the word 'only'.

9. These decisions do bring home the point that before a court's due jurisdiction can be ousted on the strength of a clause like the one at hand, the meeting of mind must not be in doubt For this it is undoubted that the Court must be satisfied that the party who is sought to be bound down by the term had knowledge of the same. (See para 10 of Hindusthan Tiles Corporation v. Kisanlal, AIR 1979 Bom 69 where the plea about lack of knowledge is examined). It is doubtful how far clear knowledge can be ascribed to a party, or his servant or employee, who may often be illiterate, to some such clause printed at the back of, say, a consignment note, and in one of the various terms printed in close small letters without even bearing the signature of the person concerned Mention has been made about waiver also in para 10 of the judgment.

10. Before dealing with Snehalkumar (AIR 1975 Guj 72) (supra), reference may be made to Prakash Roadlines v. United India Insurance 1983 Ace CJ688 (Mad). In this rendering by a learned single Judge of Madras High Court, a view has been taken that the ratio of Hakam Singh (AIR 1971 SC 740) does not apply to cases under the Carriers Act, as that case dealt with mutual rights and obligations arising only out of contract (an arbitration clause in a construction contract), whereas the obligation of a common carrier, as well as the inter-relationship between the carrier and the consignor and consignee, are governed by the aforesaid Act, because of which the relationship between the parties cannot be regarded as contractual It has been stated in the judgment that a term like the one at hand can be understood in a bigger contract, but 'where the parties are drawn to each other not under the terms of the contract, but under the terms of the Carriers Act, any stipulation by the carrier can hardly be regarded as an exercise in contractual obligation'. With respect, this reasoning has not appeared convincing to me. Though the Carriers Act has spelt out and fixed some liability of the common carrier, the same can become enforceable only if there is a contract with the carrier. Further, though Section 8 of the Act does not permit even a special contract to be made to limit the liability in case of loss or damage due to negligence or fraud of the carrier or his agent or servant, the Act does not seem to stand in the way of having a term like the present in the contract. Thus, a reference to consignment note of any carrier would show that such a term is a part of 'bigger contract' and is rarely the only term of such a contract.

11. To Snehalkumar now. This is a decision by Thakkar, J. (as he then was of Gujarat High Court). As this has been rendered without referring to any case law, the learned Advocate General contends that this cannot be regarded as a good law especially in view of Hakam Singh. There is great force in this submission. But it needs serious consideration whether the point raised in the judgment oppressiveness having regard to the surrounding circumstances, can be gone into keeping intact the ratio in Hakam Singh Mehta, J. of that High Court did this thinking in Rai & Sons v. Trikamji Kanji, (1975) 16 Guj LR 31 in the backdrop of Hakam Singh, which has been referred with approval in R.G. Transport Co. v. United India Insurance Co., AIR 1980 Guj 184. Mehta, J. observed as below (at P. 188) :--

'.....the settled legal position is entirely to the effect that such a contract, by which the parties selected one of the two competent forums, does not amount to ouster of the jurisdiction of the ordinary Court Therefore, such a contractual stipulation, in favour of which court would have prima facie a great leaning for upholding the solemnity of the contract so as to bind the parties to their own bargains, could never operate as an absolute bar to the jurisdiction of the competent court Therefore, the competent court would always have a discretion to resolve this question by taking into consideration this stipulation as only one of the factors, which would be given great weight as the parties had selected a particular forum, but ultimately the question would have to be decided not by treating the stipulation as if there was an absolute bar to the existence of the jurisdiction but as one of the factors to be considered for exercise of the jurisdiction on sound judicial principles.'

Nanavati, J. agreed with it in the 1980 decision and keeping in view the inconvenience and hardship likely to be caused to the plaintiff in asking it to go to Delhi for pursuing claims of Rs. 1028/- and Rs. 1257/-, upheld the jurisdiction of the Small Cause Court at Ahmedabad as that alone was felt to be just and expedient on the facts of the case.

12. The question is whether despite the Supreme Court having held such an agreement as binding in Hakam Singh (AIR 1971 SC 740), can the question of relative hardship or oppressiveness be examined by a Court in this context Learned Advocate General says, no. But I would demur to return a bald 'No'. This is for various reasons. First, even if a contract is binding between the parties, they may not always be able to get it enforced through a Court of law, say, when a valid and legal claim is barred by time. Secondly, the remedy of specific performance being discretionary, a Court may keep in mind this aspect of oppressiveness when deciding whether such an agreement should be allowed to be enforced with its aid There is not much to doubt that by seeking to prevent a party from approaching an otherwise competent Court, the other side is really praying the Court to enforce the agreement in question by which the suitor has otherwise bound himself. Thirdly, and most importantly, any rigidity in this regard will hit the lower strata of the society more, as compared to the well-off segment inasmuch as the former would find it very difficult to approach a far away court for realising its small compensation. A Court of Justice, as distinguished from a court of law, cannot be a party to such a result. Fourthly, remedy in most of such cases will become elusive, as, for small amount hardly anybody will take long journeys at great cost for long years. Now, a right without remedy is like a writ in water. This will cause great dent to the doctrine of ubijustibi remedium which has to be avoided. Finally, matters relating to procedure are devised to advance justice, and not to thwart the same; it cannot be allowed to take the form of a punishment-a thing to trap people up. (See Bhagwan v. Moolchand, AIR 1983 SC 355). Now, which Court should deal with the dispute is definitely a matter of form, an aspect relating to procedure.

13. As in Hakam Singh, the summit Court had no occasion to go beyond saying that an agreement is binding, or as Globe Transport has not dealt with this aspect, I am of the view that the Courts in India can still examine as to when such an agreement will be enforced by them.

14. The following principles emerge on the basis of what has been stated above, on the question as to when such an agreement would oust the jurisdiction of a competent court.

(a) The agreement must be clear and unambiguous.

(b) Any one-sided declaration will not do in this regard.

(c) The Court must be satisfied that party sought to be bound by the agreement had knowledge of the same.

(d) Plea of waiver, if taken, shall have to be examined.

(e) The Court which is mentioned in the agreement must be one which has jurisdiction dehors the agreement to entertain the matter. (Hakam Singh makes this aspect very clear).

(f) The agreement will not be an absolute bar to the jurisdiction, but while trying to uphold the solemnity of the contract, the Court will see if there are countervailing oppressive circumstances.

(g) A revisional Court will not interfere with the matter unless there is failure of justice.

Application of these principles to the facts of the case presents no problem. The agreement is clear and does not appear to be one-sided. The plaintiff as principal is bound by what was agreed by aforesaid Shri Sahani. It is however doubtful if he had knowledge about this. The suits are for realisation of small amounts of Rs. 2150.88 and Rs. 3300.00. The plaintiff is an inhabitant of Hojai, which is far removed from Malda. What is more important is that the defendant company has also its branch office at Hojai, as is apparent from the plaint, and the replies of the Malda Advocate to the legal notices issued by the plaintiffs' counsel. (See page 4 of File D of both the suits). AH these amply go to show that trial at Nowgong Court will be perfectly just with no real inconvenience to any side. The impugned order has therefore caused neither failure of justice nor irreparable injury to the petitioners.

15. The petitions are therefore dismissed.


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