Sabyasachi Mukharji, J.
1. This is an application by the Rajasthan State Mines & Minerals Ltd. defendant No. 2 in this suit, asking that the plaint in the above suit should be rejected and/or be taken off the file and further that the said suit be stayed. In order to appreciate the contentions raised in this case, it would be relevant to refer to certain facts.
2. On 6th April, 1976, the petitioner, i.e., the said defendant No. 2 in this suit, published in the Statesman a tender notice inviting tenders for the transport of gypsum from the gypsum deposit of respondent No. 2 at Mahila Mines in Sri Ganganagar to Hanumangarh Town Railway sidings on the Northern Railway, both in the State of Rajasthan. On 20th April, 1976, respondent No. 1, i.e., the plaintiff in this case, in response to the said tender notice, submitted a tender at Bikaner in the State of Rajasthan along with a deposit of earnest money of Rs. 20,000 as stipulated in the said notice.
3. After prolonged discussions between the petitioner and respondent No. 1, i.e., the plaintiff in this case, during the period between May, 1976, and November, 1976, according to the petitioner, both at the office of the petitioner at Calcutta as well as at Udaipur in the State of Rajasthan, the petitioner duly accepted the said tender on or about 13th November, 1976, at its said office at Calcutta. As a condition precedent to the terms and conditions of the said acceptance of the tender the plaintiff through defendant No. 1, the Bank of Rajasthan Ltd., furnished two separate bank guarantees both dated 22nd January, 1977, for Rs. 2 00,000 and Rs. 21,00,000, respectively. The first of the said bank guarantees was furnished against the contract for transportation of gypsum and the second bank guarantee was issued for the payment of the purchase price of 9 Beaver Haulage Trucks which the plaintiff wanted to purchase from the petitioner for the transportation of the said gypsum. Apart from the said bank guarantee for Rs. 21,00,000 respondent No. 1 also acccepted 50 separate hundies of usance bills drawn up by the petitioner. Out of the said usance bills, 48 usance bills were guaranteed by respondent No. 2 in respect of the said bank guarantee for Rs. 21,00,000.
4. On the 31st January, 1977, two separate contracts in writing were entered into by and between respondent No. 1 and the petitioner, one being called Carriage Agreement No. 1 and the other being called Purchase Agreement No. 1. It may be proper at this stage to refer to certain clauses of the said two agreements.
5. Clause 16 of the first agreement provided as follows :
' 16. The carrier shall furnish a bank guarantee for Rs. 2,00,000 (rupees two lakhs only) for due performance of any or all the terms and conditions of this agreement. Such guarantee shall be in full force during the pendency of this agreement PROVIDED HOWEVER that it shall be lawful for the company to enforce the said guarantee in the event of the failure to keep the said trucks in proper order and condition and also in case the carrier fails to perform the terms and conditions of this agreement PROVIDED FURTHER that the company shall be entitled to appropriate the said sum of Rs. 2,00,000 (rupees two lakhs) under the said BANK GUARANTEE for all its claim for such proportion of loss, injury or damages caused to the company or to the third party by failure of the carrier to perform the terms and conditions of this agreement PROVIDED ALSO that the company shall be the sole judge in calculating such proportion of loss, injury or damages caused to be occasioned to the company or to the third party. '
6. Clause 24 of the said first agreement contained as follows:
' 24. If at any time during the continuance of this agreement or thereafter any doubt, difference, question or dispute whatsoever shall hereafter arise between the parties hereto concerning or touching this agreement or construction or interpretation thereof or any clause herein contained or in any way relating to or concerning the said transport of gypsum entrusted to the carrier by the company under this agreement the same shall be referred to the arbitration of a sole arbitrator to be appointed by both the parties in accordance with the Arbitration Act, 1940. In the event no court other than the Bikaner courts shall have jurisdiction to entertain any suit, claim and/or proceedings pertaining to this agreement. '
7. As mentioned before, Clause 5 of the first purchase agreement provided as follows :
' 5. The purchasers shall furnish the company with a bank guarantee from any scheduled bank acceptable to the company for the purpose of guaranteeing due and regular payment of the instalments as aforesaid and in the event of any default made by the purchasers in the payment of the instalments as mentioned in Clause 4 above, the company will be entitled to enforce the guarantee for the payment of the instalments together with interest as mentioned in Clause 4 above. '
8. A bank guarantee recited, inter alia, as follows:
' AND WHEREAS after protracted negotiations, M/s, General Industries, a partnership firm registered under the Indian Partnership Act, 1932, represented through its partners Shri Shyam Sundar Bajaj and Shri Shiv Chand Bajaj, having place of business at 216, Mahatma Gandhi Road, Calcutta-7 (hereinafter called the 'contractor or the carrier') has agreed with the company to undertake transportation of Gypsum from mines to the railway siding under the terms and conditions contained in the memorandum of agreement subject to any amendments or modifications thereof, if any (hereinafter called/referred to as ' the agreement') annexed to and forming part of this guarantee to be executed between the contractor and the company. '
9. And then Clause 1 of the said bank guarantee provided as follows :
' 1. We, the Bank of Rajasthan Ltd., do hereby agree and undertake to keep the company harmless and indemnified against all losses, damages, costs, charges and expenses caused to, occasioned to or suffered by the company by reasons of any act/s or omission/s of the contractor arising out of the performance, or non-performance of the obligations under the said agreement during the subsistence thereof.'
10. The other clauses were the usual clauses of a bank guarantee. The annexure contained a letter to the petitioner which, inter alia, stated as follows:
' ...We, the Bank of Rajasthan Ltd., understand that out of the consideration as agreed to be paid to you, RSMMI, by our customers M/s. General Industries, for the purchase of the said vehicles, our customer, M/s. General Industries, has agreed to pay to you, Rajasthan State Mines & Minerals Ltd., the sum of Rs. 79,345.40 (rupees seventy-nine thousand three hundred forty-five and paise forty only) in cash on or before the delivery of the possession of the said vehicles and Rs. 1 lakh (rupees one lakh) in equal instalments of Rs. 50,000 (rupees fifty thousand only) each duly backed by a separate bank guarantee within a period of six months from the date of the payment of Rs. 79,345.40 (rupees seventy-nine thousand three hundred forty-five and paise forty only) as aforesaid......
The payment of such first instalment will commence from 31st March, 1977, and such payments will the over and above the payment as mentioned in para. 3 above. '
11. It is asserted that on 18th May, 1977, being dissatisfied about the performance and carrying capacity of the said trucks the respondents made enquiries with the Ashok Leyland Ltd. about the carrying capacity of each of the said trucks. Ashok Leyland Ltd., Madras, by a letter addressed to respondent No. 1 confirmed that the said Ashok Leyland beaver haulage chassis was designed to carry an estimated load of 9,655 kgs. and not 15 metric tonnes as stipulated in the tender notice. It is further the case of the petitioner that inasmuch as due to bad road conditions between Mahila Mines and Hanumangarh Town Railway Station the use of the said 9 trucks became impossible, therefore, by a letter, permission was sought to remove the said vehicles outside Rajasthan. There were certain correspondence about the inaccessability of the roads to which it is not necessary to refer in detail. In January, 1978, respondent No. 1, i. e., to say, M/s. General Industries, filed a suit, being suit No. 35 of 1978 in the High Court at Calcutta.
12. On the 12th February, 1978, by two separate agreements the said Suit No. 35 of 1978 had been amicably settled out of court. By the said agreement dated 12th February, 1978, the earlier agreement dated 31st January, 1977, was repealed or abrogated or cancelled and both the parties had discharged each other from all the duties, liabilities and obligations whatsoever under the repealed agreement for all time to come, at least that is the assertion of the plaintiff in this suit. It is, therefore, necessary to refer to the two agreements settling the disputes. Clause 9 contained as follows:
' 9. The carrier/contractor has irrevocably and unconditionally withdrawn all the allegations and/or claims and notices including the petition and Suit No. 35 of 1978 in relation to or arising out of the repealed agreement and have also waived and/or surrendered all rights and/or remedies and/or claims and both the parties have discharged each other from all the duties, liabilities and obligations whatsoever under the repealed agreement for all time to come.'
13. Clauses 25 and 26 provided as follows :
'25. It is expressly agreed and understood between the parties that if at any time during the continuance of this agreement or thereafter any doubt, difference, question or dispute of whatsoever nature shall hereafter arise between the parties hereto concerning or touching this agreement or construction or interpretation thereof in respect of any clause herein contained or in any way relating to or concerning this agreement the same shall be referred to the arbitration of a sole arbitrator only to be appointed in accordance with the provisions of the Arbitration Act, 1940, who shall have its sitting in Bikaner and both the parties shall be bound by such award.
26. No courts other than the courts of Rajasthan shall have jurisdiction to entertain any suit, petition, writ, claim and/or proceedings pertaining to this agreement.'
14. Similarly, Clause 4 of the second agreement entered on the 12th February, 1978, reads as follows :
' 4. An agreement dated 31st January (hereinafter referred to as ' the repealed agreement') was executed between the parties hereto and pursuant thereto the purchasers have obtained the possession of the vehicles on 2-2-1977 and have so far paid to the company a sum of Rs. 5,19,345.40 leaving a sum of Rs. 17'60 lakhs to be paid hereinafter.'
15. Clauses 9, 10 and 11 of the the second agreement at page 83 set out in the affidavit of Shiv Chand Bajaj affirmed on the 23rd July, 1979, provide as follows:
' 9. The purchasers have irrevocably and unconditionally withdrawn and/or cancelled all the letters and notices and the petition with Suit No. 35 of 1978 under or in relation to or arising out of the repealed agreement and have also withdrawn and/or waived/surrendered all rights/remedies and claims and both the parties have discharged each other from all the the duties, liabilities and obligations whatsoever under the repealed agreement.
10. The company under intimation to the guarantor bank is empowered to vary all or any of the terms of the contract and grant any other composition or indulgence to the purchaser, vide Clause 3 of the principal deed of guarantee No. 4/77 dated 22-1-1977.
11. The purchasers have also agreed and undertaken to request their banker to execute a supplemental deed of guarantee confirming to the company that the bank is continuing to stand as guarantor for due and timely payment of a sum of Rs. 16,60,000 (rupees sixteen lakhs sixty thousand only) on the same terms and conditions contained in the principal guarantee deed No. 4/77 dated 22nd January, 1977, and the terms and conditions herein contained.'
16. Clauses 10 and 11 of the agreement at page 87 provide as follows :
' 10. The purchasers do hereby agree and undertake with the company that so long the balance purchase consideration of the vehicles, Rs. 17,60,000, is not duly paid to the company they shall ensure that the bank guarantee No. 4/77 dated 22nd January, 1977, executed by the Bank of Rajasthan Ltd., Strand Road Branch, Calcutta, shall continue to stand as guarantor for faithful performance of these presents and the guarantee as read with supplemental deed of guarantee shall be kept in full force and effect. The purchaser further agree and undertake with the company not to cancel the said guarantee and not to do such acts of whatsoever nature, so as to refrain the bank-guarantor from effecting the payments of instalment to the company under Clause 9 hereof.
11. The company shall have full power to enforce the bank guarantee and to direct the guarantor to effect the payment of all instalments as aforesaid in the event of any default or breach made or committed by the purchaser in violation of any of the provisions of the agreement.'
17. Clause 17 at page 89 provides as follows:
' 17. No courts other than the courts of Rajasthan shall have jurisdiction to entertain any suit, petition, writ, claim or proceeding pertaining to or arising under this agreement,'
18. Now, this suit is sought to be stayed on the ground that there is a choice of forum, that is to say, the Court of Rajasthan and, secondly, the balance of convenience is overwhelmingly in favour of the trial of the suit at Rajasthan. The suit is by the General Industries Ltd. against the Bank of Rajasthan and another. In the said suit, the plaintiff having set out in essence the facts, as I have mentioned hereinbefore, inter alia, alleged in para. 4 of the plaint, at page 26, as follows :
' 4. As a condition precedent to the terms and conditions referred to in paragraph 4 above, the plaintiff on or about January 22, 1977, furnished through the defendant No. 1, in .Calcutta, within the aforesaid jurisdiction, two separate bank guarantees both dated January 22, 1977, for Rs. 2 lakhs and Rs. 21 lakhs, respectively. The first of the said guarantee was furnished against the said carriage agreement No. 1 while the said second guarantee was issued against the said purchase agreement No. 1. Copies of the said two bank guarantees are annexed hereto and marked with the letters ' D ' and ' E ', respectively. Apart from the said bank guarantee for Rs. 21 lakhs, the plaintiff also accepted 50 separate hundis or usance bills (hereinafter referred to as the first set of ' hundis ') drawn by the defendant No. 2, full particulars whereof will appear from a Schedule annexed hereto and marked with the letter 'F'. Out of the said 50 hundis or usance bills 48 were supported by the said bank guarantee for Rs. 21 lakhs.'
19. The plaintiff further alleges that the second set of agreements of 12th February, 1978, were entered into and the two separate agreements, which I have set out hereinbefore, have been annexed to the plaint. Thereafter the plaintiff alleges that since the said second set of agreements referred to above have been entered into between the defendants and the plaintiff, viz., the petitioner herein, defendant No. 2, that is to say, Rajasthan State Mines and Minerals Ltd. has persistently committed serious breaches of the terms and conditions of the said carriage agreement No. 2 both within and outside the aforesaid jurisdiction and the plaintiff has set out the particulars of such breaches and has claimed damages for Rs. 13,20,000. The plaintiff further alleges in para. 12 of the plaint that under Section 20 of the Arbitration Act, 1940, it has filed a plaint in the Court of the District Judge of Bikaner for determination of such claim for damages. The plaintiff has further alleged that since the purchase agreement No. 1 had been discharged the liability of the plaintiff to pay any instalment therein had ceased and the said two bank guarantees had become void and unenforceable and the plaintiff was entitled to claim a declaration to that effect. The plaintiff has further alleged that though the said bank guarantees are not enforceable, as the bank was seeking to enforce, the plaintiff has sought for a declaration that the said two bank guarantees, both dated January 22, 1977, be delivered up, cancelled and a perpetual injunction restraining the company from enforcing the said bank guarantee as also an injunction restraining defendant No. 1 from making any payment and other consequential reliefs. There was an interlocutory application and from that interlocutory application, there was an appeal and in the appeal, A.N. Sen J., as the Chief Justice then was, observed in his judgment, inter alia, as follows :
' In the affidavit-in-opposition filed on behalf of the bank it has been stated that the bank is not going to make the payment on the basis of the guarantee unless the bank is so directed by a competent court in an appropriate proceeding. Mr. Tibrewal, learned counsel appearing on behalf of the bank, has drawn our attention to the said statement made on behalf of the bank in the present proceeding. Mr. Tibrewal appearing on behalf of the bank has also made the same submission before us. The said statement of the bank made in the affidavit and also made by the counsel in the proceeding before us that the bank is not going to pay any money on the basis of the guarantee to the respondent, Rajasthan State Mines and Minerals Ltd., unless the bank is ordered by a competent court in an appropriate proceeding to pay the money to respondent No. 2 on the basis of the said guarantees or any of them is hereby recorded.'
20. Now, in these circumstances, the question arises whether the suit should be stayed. The suit has been sought to be stayed on two grounds, viz., that no court apart from the Court of Rajasthan has jurisdiction to entertain this suit in view of the bargain between the parties, as mentioned hereinbefore, and, secondly, the balance of convenience is in favour of the trial of the suit at Rajasthan because of the essential facts that are required to be proved had taken place at Rajasthan. It has been contended on behalf of the plaintiff-respondent, on the other hand, that the suit is for really and primarily restraining the bank from enforcing the guarantee and the agreement not to enforce the guarantee was as a result of settling the Suit No. 35/78 by the subsequent agreement dated 12th February, 1978, clauses whereof have been set out hereinbefore. The rights of the parties really depend upon the interpretation of these clauses and in so far as the claim for damages of the plaintiff, the plaintiff has sought for filing of the arbitration agreement at the appropriate court at Bikaner, and secondly, it was urged that though the registered office and the head office of the bank were at Rajasthan, the bank guarantee was given at the Calcutta office and for this purpose the Calcutta office would be treated as a separate (entity. For these reasons, it was contended that neither because of the clause ousting the jurisdiction of this court nor because of the balance of convenience, the suit should not be stayed in this court.
21. Before I deal with the rival contentions, it would be necessary to refer to certain decisions to which my attention was drawn by learned advocates appearing on behalf of both sides. Reliance was placed on certain observations in the decision in the case of Hansraj Bajaj v. Indian Overseas Bank, : AIR1956Cal33 , where Mr. Justice P. B. Mukharji, as the Chief Justice then was, observed that a right of action exercised by a party and entertained by a court was primarily based on one pre-eminent principle that where a conflict had arisen between the parties, the conflict should be resolved according to a fair judicial trial and justice rendered to the parties. That was both the primary and ultimate purpose. If, therefore, conditions existed which defeated that primary purpose, the court might decline to proceed with the suit even where it had jurisdiction to determine it. It was further observed that jurisdiction of the court was inherent. In that case Section 151 of the CPC was sought to be invoked and it was emphasised that this jurisdiction to stay was to be exercised only for the ends of justice or to prevent the abuse of the process of the court. The principles upon which the jurisdiction under Section 151 should be exercised were reiterated and it was further observed that although the branch office was in fact an agency of the principal banking corporation, the branch office had often been regarded as very distinct for many special purposes. There the question was about the operation of an account maintained in one of the branch offices.
22. Next decision to which my attention was drawn was a decision in the case of Sri Rajendra Mills Ltd. v. H.F.M. Hazi Hasan Dada, : AIR1970Cal342 , where the Division Bench of this court held that as the case before the Division Bench was a case where two courts had concurrent jurisdiction the suit could have been instituted at either of the places under Section 20(c) of the CPC. As the parties by an agreement waived their right to institute any action except at Salern, it was not open to the plaintiff to object to the order of return of the plaint for presentation to the Salem court. It was recognised in that case that, though the Union of India, as co-defendant, was not a party to the agreement for ouster of jurisdiction, it could not object to such a course as the choice of forum in cases of alternative forum lies with the plaintiff. In that case, the suit was instituted claiming damages for loss of certain goods against two defendants, defendant No. 1 who supplied the goods and defendant No. 2, Union of India, representing the railways. As there was a bargain between the plaintiff and the defendant No. 1 that the suit would be instituted in the court at Salem, the court found that it would not be inconvenient to hold the parties to the bargain and directed that the suit should be filed at Salem and the plaint should be returned for presentation to the appropriate court.
23. Reliance was also placed on a decision of mine in the case of Jokai (Assam) Tea Co. Ltd. v. Bhawani Shankar Bagaria, : AIR1976Cal18 . That was a suit to recover moneys advanced under contracts for supply of food-grains, coins and currency notes of required denominations instituted in Calcutta and the jurisdiction was sought only on the ground that letters terminating the contracts were sent from Calcutta. It was found that the place of the suit chosen caused grave injustice to the defendant at Dibrugarh in Assam where all the documents and witnesses for defence were available. The clause which provided that the claim was subject to Dibrugarh jurisdiction was taken note of and the suit was stayed notwithstanding that the court had jurisdiction to try this suit.
24. Reliance was also placed on a decision in the case of Shah Prabhudas Gulapchand v. Eurasian Equipments & Chemicals Ltd., : AIR1977Cal449 , where the Division Bench of this court held that the specific provision in the contract between the 'plaintiff and the defendant made the contract subject to Bombay jurisdiction. The bank which was not a party to the contract was also made a party to the suit. The branch office of the bank was at Calcutta but the head office was at Bombay and a part of the cause of action against the bank also arose in Bombay. The balance of convenience as also the cause of action, which arose at least against defendants Nos. 1 and 2 was, inter alia, in favour of the trial of the suit at the Bombay Court. It was held by the Division Bench that the place of suing in respect of enforcement of any claim under the contract was restricted to the Bombay Court. The mere fact that the bank was impleaded as a party to the suit and the plaintiff had transaction with its branch at Calcutta would not entitle the plaintiff to file the suit at Calcutta. The question of balance of convenience of the defendant bank in the facts and circumstances of the case lost a great deal of its importance.
25. Reliance was placed on another decision in the case of Bhagatram Goyal v. Gupta Cables Pvt. Ltd., : AIR1977Cal451 , where I held that the court would prevent vexatious proceedings which would have the effect of preventing the due administration of justice and the general principle was that the court could and would interfere when there was vexation and oppression to prevent the administration of justice being perverted for an unjust end. The principles to be followed in such a matter were, firstly, mere balance of convenience was not a sufficient ground for depriving the plaintiff of his choice of forum. Secondly, the court would have to be satisfied that by such stay, the plaintiff would not suffer any injustice whereas action, if continued, the defendant in defending the action would be a victim of such injustice as would amount to vexation and oppression which vexation or oppression would not arise if the suit was stayed. It was further reiterated that it was well settled that the clause excluding the jurisdiction or vesting the jurisdiction of a particular forum did not oust the jurisdiction of the appropriate court. The jurisdiction of the court to try the suit was vested in it by the Letters Patent or by the Constitution. The parties could not by any private agreement confer or take away the jurisdiction, but the court could compel the parties to abide by their contracts. There, the plaintiff's suit in the Calcutta High Court was sought to be stayed on the ground that the parties had contracted to raise disputes in the Bhubaneswar court itself and that the cause of action arose at Bhubaneswar itself. It was held that the defendant had a registered office at Calcutta or Howrah and that he had some business connection with Calcutta or Howrah. Some witnesses of the defendants were available at Calcutta at some point of time and that though the defendant might face some inconvenience to defend the suit in Calcutta still such inconvenience would not amount to such vexation as could be described oppression on it.
26. My attention was also drawn to an unreported decision of mine in the case of Magnum Engineering Co. Pvt. Ltd., v. Sakamari Steel & Alloy Ltd., where I reiterated merely the same principles and I did not stay the suit because there was a clause that the Nagpur Court would have jurisdiction.
27. In this case, three main questions arise for consideration, viz., whether the fact that the bank guarantees, which were sought to be prevented to be enforced, as a relevant factor, should compel this court to refuse a grant of stay. Secondly, it is to be considered whether the clause ousting the jurisdiction is a relevant factor which would entitle the petitioner to ask for a stay of the suit and, thirdly, whether, on the whole, the balance of convenience is so overwhelmingly in favour of the stay of the suit that this court should exercise its jurisdiction to deprive the plaintiff of the choice of this forum. Now, so far as the question that the bank being not a parly to the agreement whereby it was agreed between the parties that the court at Bikaneer would have jurisdiction, it is to be borne in mind that the right of enforcement of the bank guarantee would depend mainly and perhaps solely on the right as to whether the bank guarantees still subsist to be enforceable by defendant No. 2 against the plaintiff. The right to enforce the bank guarantee is merely incidental. Indeed, the statement of the bank before the Division Bench as recorded, as I have set out hereinbefore, clearly indicates that the bank, was not going to pay immediately unless there was a proper adjudication by an appropriate forum on this question. The second aspect is that mainly the question is dependant on the construction of the clauses of the second agreement whereby the first two agreements were settled. This is a matter of construction of clauses and the court at Bikaneer has equal jurisdiction as this forum, to construe the effect of the clauses and, therefore, in that background the parties should normally be held bound to the bargain they have made even though the plaintiff has a choice of forum. Thirdly, the suit is a combined one, viz., the right to claim damages on the basis that the defendant No. 2 has committed breaches and, therefore, the plaintiff has suffered damages as mentioned in the plaint and consequently it has lost its right in view of the subsequent agreements to enforce the bank guarantee. In that view of the matter and the facts, in my opinion, the question of vexation and oppression, as such does not arise because both parties have equal access and convenience at both the forums and it being merely a question of construction where the parties have chosen one particular forum, in their bargain, and where a part of the cause of action has arisen, the trial would be more appropriate at Bikaneer. In my opinion, in the exercise of the jurisdiction that the court possesses under Section 151 of the CPC, this suit should be stayed and, therefore, I am making an order staying this suit and I am further directing that the plaintiff will be at liberty to institute appropriate proceedings in Rajasthan. I further make it quite clear that the defendant No. 2 would be entitled to take appropriate action for enforcement of the bank guarantees at the appropriate court in case the plaintiff does not succeed in its assertions made in the plaint herein.
28. With these observations, there will be an order in terms of prayer (b) of the petition. Each party will pay and bear its own costs.
29. There will be a stay of operation of this order for four weeks.