ORDER Satish Chandra, J. - This revision is directed against the decision of an issue relating to the jurisdiction of the courts of Varanasi to entertain an application u/s 20 of the; Indian Arbitration Act for referring the dispute to arbitration in accordance with the arbitration clause in the contract entered into by the parties. 2. In defence, Clause 13 of the contract was relied upon to sustain the plea that courts at Bombay alone had jurisdiction. Clause 13 reads thus: Notwithstanding the place where the work under this contract is to be executed it is mutually understood and agreed by and between the parties hereto that this contract shall be deemed to have been entered into by the parties concerned in the City of Bombay and the court of law in the city of Bombay alone shall have jurisdiction to adjudicate thereon. The learned Civil Judge held that on the evidence adduced by the parties the contract was actually entered into at Varanasi. He held that the phrase in Clause 13, that, 'this contract shall be deemed to have been entered into by the parties concerned in the city of Bombay, has no meaning unless the contract is actually entered into in the city of Bombay. He observed that there was no evidence to establish that it was really entered into at Bombay. He concluded that the entire cause of action arose at Varanasi and the courts at Bombay have no jurisdiction. In this situation the parties could not, by an agreement, confer jurisdiction on courts at Bombay. He, therefore, held that courts at Varanasi had jurisdiction to take cognizance of the application. Aggrieved the Defendant has come to this Court in revision. 3. The question that arises is whether any part of the cause of action arose at Bombay so that in view of Clause 13 of the agreement the courts at Varanasi had no jurisdiction to entertain the application for reference of the dispute to arbitration. Munshi Ambika Prasad, appearing for the opposite party, has raised a preliminary objection. He has urged that the aforesaid question is concluded by findings of fact based on the assessment of evidence on the record and in a revision this Court is not entitled to reassess the evidence and record its own finding. I am unable to accept this submission.
Munshi Ambika Prasad, appearing for the opposite party, has raised a preliminary objection. He has urged that the aforesaid question is concluded by findings of fact based on the assessment of evidence on the record and in a revision this Court is not entitled to reassess the evidence and record its own finding. I am unable to accept this submission. The vital point, as I shall show a little later, is whether the court below was, by law, empowered to permit evidence, to be adduced on this question. If it was not entitled to do so the, court has clearly, exercised its jurisdiction illegally and with material irregularity. This apart, the question whether any part of the cause of action arose at Bombay is a jurisdictional fact, the decision of which will determine the jurisdiction of the court to entertain the application. The finding on such a fact is amenable to scrutiny in a revision, see Ch. Jagdish Prasad, v. Ganga Prasad Chaudhary 1959 Supp. 1 SCR 733 and Deep Chand Jain v. Board of Revenue UP Alld. 1966 ALJ 113. The preliminary objection cannot, therefore, be sustained. 4. Coming to the merits, it is settled that where two courts have jurisdiction to try a matter under the ordinary law, an agreement that disputes will be tried by one court only is valid, and does not contravene Section 28 of the Contract Act. It is equally plain that if court at one place do not have jurisdiction under the ordinary law, a provision in a contract that such a court alone shall have jurisdiction is void, because jurisdiction cannot be conferred by the consent of parties. The question, therefore, is whether the courts at Bombay had jurisdiction. u/s 20 of the Code of Civil Procedure, a suit can be instituted in a court inter alia, within the local limits of whose jurisdiction the cause of action, wholly or in part, arises. In a suit based on breach of contract, a part of the cause of action arises at the place where the contract is entered into. In the absence of any allegation or proof that Clause 13 of the agreement was not entered into voluntarily, it should be binding between the parties, provided it is otherwise valid in law.
In a suit based on breach of contract, a part of the cause of action arises at the place where the contract is entered into. In the absence of any allegation or proof that Clause 13 of the agreement was not entered into voluntarily, it should be binding between the parties, provided it is otherwise valid in law. The first part of Clause 13 that the parties agree that the contract shall be deemed to have been entered into at Bombay, is an agreed statement of fact. It has not been shown to be in contravention of any provision of law or otherwise invalid in law. 5. The Lahore High Court had occasion to deal with such a term in a contract. In AIR 1930 611 (Lahore) , Clause 15 of the agreement provided: The civil courts in Lahore alone will have jurisdiction to try cases relating to disputes arising under the agreement because the agreement has been made at Lahore and the motor lorry has been delivered to the hirer at Lahore and all payments under the agreement have to be made in Lahore. The High Court observed that there is a clear distinction between two clauses of cases i.e. (1) where inspite of the fact that under the ordinary provisions of law a particular court would have jurisdiction, the parties provided that another court, to the exclusion of the former court, shall have jurisdiction to adjudicate upon the disputes arising under the agreement and (2) cases in which the agreement specified the place where the terms of the contract had to be carried out, in other words where according to the facts stated in the agreement the cause of action was to be deemed to arise. It then held, that the first kind of agreements had been held illegal, but the second description of the agreements could not be held to be illegal. 6. The first part of Clause 13 which says that it is mutually understood and agreed by the parties that this contract shall be deemed to have been entered into iii the city of Bombay is valid and binding. Evidently, this clause was put in to avoid any dispute on the question as to where the contract was entered into and to eliminate the necessity of proving it.
Evidently, this clause was put in to avoid any dispute on the question as to where the contract was entered into and to eliminate the necessity of proving it. In the absence of any plea which might enable the Plaintiff to avoid the binding effect of this clause of the contract, the Plaintiff should not have been permitted to lead evidence in derogation of his agreement. Such evidence was inadmissible u/s 91 Indian Evidence Act, The court below should have given effect to this part of the contract and disallowed the Plaintiff from attempting to establish that the contract was actually executed at Varanasi. In my opinion, this pan of Clause 13 was binding between the parties and the Defendant was entitled to a finding that the contract was entered into at Bombay. 7. On this finding, the courts at Bombay Would have jurisdiction, under the general law. The second part of Clause 13 was, therefore, applicable and equally binding between the parties. The parties having agreed that the courts at Bombay alone shall have jurisdiction to adjudicate on the contract, the application could not be entertained by courts at Varanasi. 8. In the result, the revision succeeds. The impugned finding on issue No. 1 is set aside. It is held that the courts at Varanasi had no jurisdiction to take cognizance of the application. The issue is answered in the affirmative. The application will be returned for presentation to the proper court. The Applicant will have his costs of the revision.