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1955 DIGILAW 18 (MP)

Dwarka Rubber Works v. Chhotelal

1955-02-11

A.H.KHAN

body1955
ORDER : 1. The plaintiff brought this suit on the allegations that the defendant entered into an agreement with him to supply goods worth Rs. 232-8-0 that the goods were supplied but because they were not according to the sample, they were returned to the defendant at Kanpore. The defendant gave him assurance that he would again supply goods according to sample but neither the goods were supplied, nor was the money refunded to him. The defence was that the Small Cause Court, Gwalior, had no jurisdiction to entertain the suit and that the plaintiff can only ask for the goods but not for the return of price, which the defendant had admittedly received. The trial Court decreed the suit against which the defendant has filed this revision. 2. The only point pressed before me is of jurisdiction, regarding which it is contended that according to condition No. 5 of the contract to supply goods, it was agreed between the parties that all disputes between them would be settled at Kanpore and in the view of this agreement, the Kanpore Court alone has the jurisdiction to try the suit. 3. The question for determination is whether the parties can be allowed to enter into an agreement that a suit, in respect of dispures arising between them out of a contract shall be instituted in only one of the courts that may have jurisdiction to try the suit and not in other courts that may be equally competent to do so. 4. The learned counsel for the applicant has cited- 'Musaji Lukman v. Durga Das', AIR 1946 Lah 57 (FB) (A) and- Hoosen Kasam Dada (India) Ltd. v. Motilal Padampat Sugar Mills Co. Ltd.', AIR 1954 Mad 845 (B) in support of the proposition that such an agreement is valid. No doubt the view taken in the above cases is in favour of the applicant. It is based mainly on the interpretation of S. 28, Contract Act, which runs as follows : "Every agreement, by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights, is void to that extent". 5. Madhavan Nair, J., in- 'Achrat Lal Kesavalal Mehta and Co. 5. Madhavan Nair, J., in- 'Achrat Lal Kesavalal Mehta and Co. v. Vijayam and Co.', AIR 1925 Mad p. 1145 (C) Broomfield J., in- 'Khandesh Lakshmivilas Mill Co. v. Vinayak Atmaram', AIR 1935 Bom p. 198 (D), Bajpai, J., in- 'Gopal Das v. Hari Kishan' AIR 1933 All p. 514 (E), Pollock, J., in- National Petroleum Co. Ltd. v. Meghraj', AIR 1937 Nag p. 334 (F), Lort Williams, J., in- 'Amilton and Co. v. Ojha Automobile Engineering Co.', AIR 1931 Cal p. 279 (G) and Mahajan J., in AIR 1946 Lah p 57 (A) have taken the view that where jurisdiction is vested in more than one Courts, parties to a suit may be allowed to enter into an agreement, providing that the suit shall be brought in one of such Courts to the exclusion of others. There are some cases in which a contrary view was also adopted and notable amongst them are those reported in- 'Radha Kishen v. Bombay Co. Ltd.', AIR 1913 Lah 295 (H),- 'National Petroleum Co. Bombay Sole Proprietor of Ishwardas Sindhi v. F.X. Robelly', AIR 1935 Nag 48 (I) and- 'Chittaranjan Guha v. Parul Rani Nandi', AIR 1946 Cal 112 (J) in which Anderson, J. held that the effect of such an agreement was to prevent the parties absolutely from filing a suit in one of the Courts and so it is hit by S. 28, Contract Act, I have no doubt that there is considerable body of judicial opinion which is inclined to take the view that such an agreement is not void under S. 28 of the Act, because if is not in absolute restraint of legal proceedings. With this view so far it interprets S. 28, Contract Act, I find myself in accord, but with respect and diffidence I venture to strike a note of discord in the ultimate decision on the point. I find that in considering this question attention was almost entirely riveted on the construction of S. 28, Contract Act, though in one or two cases a passing reference was also made, touching the aspect of public policy under S. 23, Contract Act. But I venture to suggest that S. 23 in its entirety was not considered. That aspect of the matter which I propose to discuss shortly was never canvassed at the Bar, nor was it ever considered in any of the rulings cited above. But I venture to suggest that S. 23 in its entirety was not considered. That aspect of the matter which I propose to discuss shortly was never canvassed at the Bar, nor was it ever considered in any of the rulings cited above. Section 23, Contract Act, contains five clauses, showing what considerations and objects are lawful and what are not. Clause two may be read as follows : "The consideration or object of an agreement is lawful unless it is of such a nature that, if permitted, it would defeat the provisions of any law." 6. Now what one has to see is whether the agreement under question tends to "defeat the provisions of any Law." In a case of contract, the cause of action may arise at more than one place according to S. 20, Civil P.C. If the parties agree to file a suit in only one of the Courts to the exclusion of others, which may have the jurisdiction to try it under S. 20, Civil P.C., then this agreement I venture to suggest is one which if permitted to stand, would defeat the provisions of S. 20, Civil P.C. Should the parties be allowed to come to an agreement, which in effect tends to give a different direction to law ? No doubt such an agreement not being in absolute restraint of legal proceedings is not hit by S. 28 Contract Act, but I venture to submit that it is of such a nature that if permitted it defeats the provisions of law under S. 20. Civil P.C. This puts one in mind of the legal maxim, so widely known and accepted that parties cannot by agreement oust the jurisdiction of any court, nor can they vest jurisdiction in a court not otherwise competent. 7. In this view of the matter, I am of the opinion that although an agreement confining the parties to have recourse to only one of the several competent Courts may not be within the mischief of S. 28, yet, being hit by cl. 2, S. 23, Contract Act it is not enforceable and cannot be pleaded in bar of an action rightly brought by the plaintiff. I may as well refer to two English authorities,- 'Scott v. Avery,' (1855) 5 HLC 811 (K) and- Czarnikowr v. Roth Schmidt and Co.'. 2, S. 23, Contract Act it is not enforceable and cannot be pleaded in bar of an action rightly brought by the plaintiff. I may as well refer to two English authorities,- 'Scott v. Avery,' (1855) 5 HLC 811 (K) and- Czarnikowr v. Roth Schmidt and Co.'. (1922) 2 KB 478 (L) in which the trend of English Law appears to be that if an agreement purports to oust the jurisdiction of the Court in any way, it is to that extent held contrary to public policy and invalid. 8. For reasons stated above, the revision is dismissed. As no one has appeared on behalf of the opposite party no order as to costs is made. Revision dismissed.