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Achratlal Kesavalal Metha and Co. Vs. Vijayam and Co. by Proprietor G. Vijiaraghavachariar - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported in90Ind.Cas.1019
AppellantAchratlal Kesavalal Metha and Co.
RespondentVijayam and Co. by Proprietor G. Vijiaraghavachariar
Cases ReferredCrawley v. Luchmee Ram
Excerpt:
contract act (ix of 1872), section 28 - contract providing for suit to be brought in one of two courts having jurisdiction, validity of. - .....of agreement mentioned above, which runs as follows: 'in all legal disputes arising out of this contract, ahmedabad will be understood as the place where the cause of action arose.'4. the learned trial judge interpreted the above clause to mean that the parties thereby stipulated that all suits in respect of the contract should be instituted at ahmedabad. he held that this agreement did not offend against the provision in section 28 of the indian contract act, because no party thereto is restricted absolutely from enforcing his rights under or in respect of the contract, by usual legal proceedings in the ordinary tribunals, inasmuch as the restriction is only partial. he accordingly decided that the agreement was valid and must be given effect to and that the suit should therefore, be.....
Judgment:

Madhavan Nair, J.

1. This revision petition arises out of a suit instituted in the Madras Small Causes Court, and the only question raised is whether the suit can be entertained by the Madras Court.

2. The plaintiffs are a firm of merchants at Madras and the defendants are residents of Ahmedabad. The defendants firm was engaged by the plaintiffs as their Adat agents for the purpose of purchasing 80 bales of Ahmedabad dhoties from the manufacturers at Ahmedabad and sending them to Madras. Exhibit I is the deed of agreement which regulated their relationships inter se. The suit is for the recovery of the amount alleged to be due to the plaintiffs in respect of the several dealings between the parties.

3. The defendants besides denying the plaintiffs' allegations on the merits also set up the plea that the suit should not be entertained by the Small Causes Court at Madras and that it should be instituted at Ahmedabad. They relied for this purpose on Clause 8 of Ex. I, the deed of agreement mentioned above, which runs as follows: 'In all legal disputes arising out of this contract, Ahmedabad will be understood as the place where the cause of action arose.'

4. The learned Trial Judge interpreted the above clause to mean that the parties thereby stipulated that all suits in respect of the contract should be instituted at Ahmedabad. He held that this agreement did not offend against the provision in Section 28 of the Indian Contract Act, because no party thereto is restricted absolutely from enforcing his rights under or in respect of the contract, by usual legal proceedings in the ordinary Tribunals, inasmuch as the restriction is only partial. He accordingly decided that the agreement was valid and must be given effect to and that the suit should therefore, be brought in the Ahmedabad Court and in that view dismissed the suit.

5. On application by the plaintiffs, the Full Bench of the Small Causes Court consisting of all the three Judges considered the question again; they agreed with the Trial Judge in his interpretation of the above clause, but the majority of the Judges held that the agreement is void because it ousts the jurisdiction of the Madras Court. They, therefore, remanded the suit to the Trial Judge for enquiry as to whether the cause of action arose either in whole or in part within the local limits of the jurisdiction of the Madras Court and directed him to proceed with the suit if he finds that it did so arise, or to return the plaint (under Section 19(a) of the Presidency Small Cause Courts Act) for presentation to the proper Court if he holds that it did not. The defendants have filed this revision petition against the decision of the Pull Bench.

6. In the first place, I do not think it is right to construe Clause 8 of Ex. I so as to mean that no suit in respect of the contract shall be brought in the Madras Court at all under any circumstances. Supposing, for instance, the defendants at the time of the institution of the suit happened to reside or carry on business at Madras that clause which deals with the question as to where the cause of action shall be deemed to have arisen--even if given full effect to, could not obviously stand in the way of the suit being instituted at Madras. It is, therefore, not strictly correct to say that the agreement by itself has the effect of ousting the jurisdiction of the Madras Court. But, even assuming that it has that effect, that is to say, that the agreement means that all suits in respect of the contracts should be brought at Ahmedabad only and not at Madras, I do not think that it is void, because the Ahmedabad Court is also a Court which would normally have jurisdiction to entertain those suits. I am, of course, assuming for the purpose that part of the cause of action in this case has arisen at Madras as well, so that the Madras Court would but for such agreement have jurisdiction to entertain the suit. Where there are two Courts both of which would normally have jurisdiction to try the suit, I do not see why the parties should not be allowed to agree among themselves that a suit should be brought in one of those Courts and not, in the other. Such an agreement does not, in my opinion, contravene the provision in Section 28 of the Indian Contract Act, because the plaintiff is not thereby restricted absolutely from enforcing his rights under or in respect of the contract by the usual legal proceedings in the ordinary Tribunals as the restriction is only partial. The case of Crawley v. Luchmee Ram 1 Agra H.C.R. 129 relied on by the Full Bench is clearly distinguishable. In that case it was held that a clause in a Bill of Lading whereby it was agreed that the questions arising on the bill should be heard by the High Court of Calcutta instead of the Court at Mirzapur which was the proper Tribunal to try the questions was void and could not be pleaded in bar of a suit brought in the Mirzapur Court. There, the Calcutta High Court had no jurisdiction to try the suit; the only Court having jurisdiction being the Mirzapur Court. The case was decided before the Indian Contract Act came into force, but, I think, the decision would be the same even under Section 28 of the Act; for, as no amount of consent by the parties would confer jurisdiction on the Calcutta High Court and as the Mirzapur Court was the only Court having jurisdiction, the agreement has the effect of absolutely restricting the parties thereto from enforcing their rights under the contract contained in the Bill of Lading by the usual legal proceedings in ordinary Tribunals. In the present case, as stated above, the agreement has not this effect.

7. I would, therefore, hold that the agreement, between the parties embodied in Clause 8 of Ex. I is valid and must be given effect to. It is not, therefore, open to the Madras Court of Small Causes to entertain the present suit. The plaint should be returned for presentation to the proper Court and I direct accordingly.

8. The defendants will get their costs upto date.


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