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Moti Films Vs. Kailash Saraogi - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtDelhi High Court
Decided On
Case NumberSuit No. 187 of 1984
Judge
Reported in1985RLR250
ActsCode of Civil Procedure (CPC), 1908 - Sections 16
AppellantMoti Films
RespondentKailash Saraogi
Advocates: P.C. Khanna and; D.K. Syal, Advs
Cases ReferredMusa Ji Lukman Ji v. Durga Dai
Excerpt:
.....not satisfied that it had territorial jurisdiction to entertain the suit because of clause 11 of the aforesaid agreement between the parties. under section 34 of the arbitration act the court has to be satisfied about the existence of some sufficient reasons as to why the matter should not be referred to arbitration in accordance with the arbitration agreement between the parties. parties entered into a regular agreement knowing fully well that the picture, though produced in madras, was to be exhibited within the territories of delhi and uttar pradesh. he says the parties knew fully well that the agreement is to be performed in the territories of delhi and utter pradesh, yet the parties chose with their eyes open that only courts in madras would have jurisdiction if any dispute arises..........cognizance; it merely seeks to promote the sanctity of contracts and for that purpose stays the suit. the jurisdiction of the court to try the suit remains undisputed, but the discretion of the court is on the grounds of equity interposed. the supreme court, thereforee, observed that the court, is, thereforee, not obliged to grant stay merely because the parties have even under a commercial contract agreed to submit their dispute in a matter to an arbitration tribunal a foreign country. under section 34 of the arbitration act the court has to be satisfied about the existence of some sufficient reasons as to why the matter should not be referred to arbitration in accordance with the arbitration agreement between the parties. i do not think i should import the consideration u/s 34 of.....
Judgment:

D.P. Wadhwa, J.

(1) The plaintiff filed this suit for recovery of Rs. 331.419-89 due under an agreement dated 9.8 80 in respect of a emotion picture 'Pratishod'. When the suit was registered it was observed on the application of the plaintiff seeking interim relief (LA. NO. 56/84) that the Court was not satisfied that it had territorial jurisdiction to entertain the suit because of Clause 11 of the aforesaid agreement between the parties. On this ground interim relief was declined to the plaintiffs. The defendants filed an application being La, 4121/84 praying that before they are required to file their W/S is , regarding jurisdiction of this Court be decided first. There was opposition to this application. By order dated 17.8.84 1984, this application of the defendants was allowed and the following preliminary issue was framed 'Whether this court has territorial jurisdiction to try the present suit :

(2) I have heard the arguments on this issue. Perhaps, the wording of issue was not correct. It should have been `whether the agreement dated 9.8.8O bars jurisdiction of this Court.' This would be so as it cannot be denied that Delhi Courts have jurisdiction in the matter and so also the Courts in Madras, where the agreement is stated to have been executed. Clause 11 of this agreement is : In the event of any dispute arising in between the party/s hereto in (he respect of any of the provisions of the agreement the courts in Madras City alone shall be deemed to have the jurisdiction over such dispute'. Moti Films v. Kailash Saraogi

(3) It cannot be disputed that the claim in the suit is based on the agreement dated 8.8,80. The agreement was between the plaintiffs and defendant No. 2 represented by defendant No. 1 As to how defendants No. 3 and 4 have been imp leaded as parties, Mr. P.C. Khanna, learned counsel for the plaintiffs referred to para 2 of the plaint saying that defendant No. 1 wes also carrying on the business in the names of defendants No. 3 and 4.

(4) Mr. Khanna did not dispute the existence and validity of Clause 11 in the agreement which has been reproduced above. He raised two principal objections in support of his proposition that the present case should be tried in Delhi. On the first proposition Mr. Khanna submitted that when a dispute is in respect of any of the provisions of the agreement, there must be a nexus between the dispute and -my of the provisions of the agreement. To illustrate he submitted that if the plaintiffs demand some money, the defendants must rely in defense on some provisions of the agreement itself to bar the jurisdiction of this Court. He contended that in the present case there was no dispute and with reference to certain photo copies of documents he submitted that the defendants in fact admitted the amount due to the plaintiffs and merely expressed their inability to pay the amount. Mr. Khanna then submitted that inability to pay is not a dispute. I have hot been able to appreciate this line of argument. Probably, Mr. Khanna has in mind the word 'dispute' with reference to an arbitration agreement between the parties. But, that is not so here and I do not think that I can ignore Clause-11 of the agreement between the parties on the assumption that the defendants have no defense and that the plaintiffs are to succeed as a matter of course.

(5) The second proposition advanced by Mr. Khanna is that equitable considerations demand that the case should be tried in Delhi He stated that probably the filing of the w/s by the defendants would have been more helpful to decide the present issue. But, then according to him it was perhaps more advantageous for the defendants not to file the w/s because they could then postpone the admission of the claim of the plaintiffs. Mr. Khanna pointed out that in (heir various letters to the plaintiffs the defendants have admitted the claim of the plaintiffs and inasmuch as substantial cause of action arose in Delhi, he should not be asked to go to Madras. It would be most oppressive and inequitable. In support of his arguments Mr. Khanna referred to a decision of the Supreme Court in Michael Golodetz v. Serajuddin and Co., : [1964]1SCR19 . But, then this was a case u/s 34 of the Arbitration Act, 1940, and, to my mind, different considerations apply while considering an application u/s 34 of the Arbitration Act and the agreement between the parties affecting jurisdiction of the Court whereby the parties agree not to restrict their rights or enforcing their rights in the ordinary tribunals, but only agree to a selection of one of those ordinary tribunals in which ordinarily a suit would be tried. No doubt the Supreme Court in this case observed that ordinarily the Court requires the parties to resort, for resolving the disputes arising under a contract to the tribunal contemplated by them at the time of the contract and that is not because the court regards itself bound to abdicate its jurisdiction in respect of disputes within its cognizance; it merely seeks to promote the sanctity of contracts and for that purpose stays the suit. The jurisdiction of the Court to try the suit remains undisputed, but the discretion of the Court is on the grounds of equity interposed. The Supreme Court, thereforee, observed that the Court, is, thereforee, not obliged to grant stay merely because the parties have even under a commercial contract agreed to submit their dispute in a matter to an arbitration tribunal a foreign country. Under Section 34 of the Arbitration Act the Court has to be satisfied about the existence of some sufficient reasons as to why the matter should not be referred to arbitration in accordance with the arbitration agreement between the parties. I do not think I should import the consideration u/s 34 of this Act in the present case.

(6) Mr. Khanna then referred to a decision of Gujarat High Court in M/s Snehal kumar Sarabhai M/s Economic Transport : AIR1975Guj72 , In this case the Trial Court had held that an amount of about Rs. 1985. Rajdhani Law Reporter 254 1200.00 was due to the plaintiff, but it did not grant any decree on the ground that there was a printed clause at the back of the transport receipt which obliged the plaintiff to institute the suit in Calcutta against the defendant, a public carrier. It was found that the defendant was also having an office within the jurisdiction of the court. The High Court, thereforee, held that the agreement between the parties to restrict the dispute to Calcutta Court was oppressive and on that account the stipulation printed on the back of the transport receipt was ignored. The Court was of the view that it was too much to drive the plaintiff all the way to Calcutta to recover a small sum of about Rs. 1200.00 and the costs of traveling and litigation would probably make the plaintiff to abandon his claim altogether. The facts of this case are, thereforee, quite different. In the case before me it is not that any clause as in the Gujarat case is printed on the back of the receipt. Parties entered into a regular agreement knowing fully well that the picture, though produced in Madras, was to be exhibited within the territories of Delhi and Uttar Pradesh.

(7) This is how Ms. D.K. Sya:, learned counsel for the defendants met the arguments of the plaintiffs. He says the parties knew fully well that the agreement is to be performed in the territories of Delhi and Utter Pradesh, yet the parties chose with their eyes open that only Courts in Madras would have jurisdiction if any dispute arises between them under the agreement. Mr. Syal strongly pleaded that an agreement which is valid and is a voluntary act between the parties should be enforced and the considerations which have been pointed out by the time the agreement was executed. He says equitable considerations should not be brought into play because that way any such agreement between the parties would become uncertain and that uncertainty has to be avoided. Mr. Syal then submitted that though w/s has not been filed, no advantage can be taken by the plaintiffs on account and there could be many possible defends to the claim of the plaintiffs in the present suit. I think Ms. Syal is right when he contends that even though it might be said that substantial cause of action arose in Delhi, where perhaps also the witnesses would be available, these considerations were before the parties when they entered into the agreement. Mr. Syal referred to a decision of the Supreme Court in Hakam Singh v. Gammon (India) Ltd. : [1971]3SCR314 , which held that an agreement between the parties that one of the Courts having such jurisdiction alone shall try the dispute, is not contrary to public policy and does not contravene S. 28 of the Contract Act. la Musa Ji Lukman Ji v. Durga Dai 57 (F.B.) it was held that an agreement between the parties to a contract to the effect that a suit concerning disputes arising between them on the basis of the con- tract should be instituted in only one out of two competent Courts having territorial jurisdiction over the subject matter of that suit, is valid and enforceable and is not void u/s S. 28 of the Contract Act.

(8) I must say that Mr. Khanna has not been able to refer to any such equitable considerations as would make me hold that the stipulation regarding jurisdiction should be ignored in the present case. I would, thereforee, decide the issue in favor of the defendants and against the plaintiffs and hold that this Court has no territorial jurisdiction to try the present suit. The plaint is, thereforee, liable to be returned to the plaintiff to be presented to the Court in which the suit should have been instituted. Liberty is granted to the plaintiffs to move an application under Order 7, Rule 10A of the Cpc within ten days. There will be no order as to costs.


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