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2005 DIGILAW 653 (ORI)

Bhaskar Bhatt (Manager Director) Titan Industries Limited Golden Enclave v. Crescent Art Times Pvt. Ltd. represented by its Managing Director

2005-11-14

L.MOHAPATRA

body2005
JUDGMENT L. MOHAPATRA, J. — The petitioners in this revision chal¬lenge the legality of the order dated 25.1.2005 passed by the learned District Judge, Khurda in Arbitration P. Misc. Case No.28 of 2004 holding that it has jurisdiction to entertain the appli¬cation. 2. From the impugned order, it appears that the opposite party filed an application under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act”) before the learned District Judge, Khurda. After appearance, the petitioners raised preliminary objection with regard to jurisdic¬tion of the Court in entertaining such an application in view of Clause 26 of the agreement entered into between the parties which, according to the petitioners, excludes the jurisdiction of the other Courts except the Courts in Bangalore. The learned District Judge after hearing the learned counsel for the parties and on consideration of the said clause held that the jurisdic¬tion of the Court at Bhubaneswar is not excluded and part of the cause of action having taken place at Bhubaneswar, it has juris¬diction to entertain the application. 3. Learned counsel appearing for the petitioners referring to the Franchise Agreement executed between the parties, submit¬ted that all disputes arising out of the agreement shall be subject to the jurisdiction of the Courts in Bangalore and there¬fore the learned District Judge, Bhubaneswar had no jurisdiction to entertain the application filed under Section 9 of the Act. The learned counsel also relied on some decisions of this Court as well as the Apex Court in this regard. 4. Shri Mishra, learned counsel appearing for the opposite party, also referring to the same clause contended that interpre¬tation of the entire agreement read with Clause 26 thereof would clearly indicate that the jurisdiction of the Courts apart from Bangalore have not been excluded. Shri Mishra also relied on some decisions in this regard. Clause 26 of the agreement provides as follows : “JURISDICTION 26. This agreement shall be subject to the jurisdiction of the Courts in Bangalore.” 5. In the case of A.B.C. Laminart Pvt. Ltd. and another v. A. P. Agencies, Salem, reported in A.I.R. 1989 SC 1239, the Apex Court held that when the Court has to decide the question of jurisdiction pursuant to an ouster clause it is necessary to construe the ousting expression of clause properly. In the case of A.B.C. Laminart Pvt. Ltd. and another v. A. P. Agencies, Salem, reported in A.I.R. 1989 SC 1239, the Apex Court held that when the Court has to decide the question of jurisdiction pursuant to an ouster clause it is necessary to construe the ousting expression of clause properly. Often the stipulation is that the contract shall be deemed to have been made at a particular place. This would provide the connecting factor for jurisdiction to the Courts of that place in the matter of any dispute on or arising out of that contract. It would not, however, ipso facto take away jurisdiction of other Courts. Where an ouster clause occurs, it is pertinent to see whether there is ouster of jurisdiction of other Courts. When the clause is clear, unambiguous and specific, contract would bind the parties and unless the absence of ad idem can be shown, the other Courts should avoid exercising jurisdiction. As regards construction of the ouster clause when words like ‘alone’, ‘only’, ‘exclusive’, and the like have been used there may be no difficulty. Even without such words in appropriate cases the maxim ‘expressio unius est exlusio alterius’ - expression of one is the exclusion of another may be applied. What is an appropriate case shall depend on the facts of the case. In such a case mention of one thing may imply exclusion of another. When certain jurisdiction is specified in a contract an intention to exclude all other from its operation may in such cases be inferred.It has therefore to be properly construed. Where the clause under which it was claimed that there was ouster of jurisdiction of Courts only stated that any dispute arising out of sale would be subject to jurisdiction of Court within whose jurisdiction order was placed but there were no exclusive words like ‘exclusive’, ‘alone’, ‘only’ and the like, other jurisdictions having connect¬ing factors were not clearly, unambiguously and explicitly ex¬cluded. This decision was taken note of by the Apex Court in the case of Hanil Era Textiles Ltd. v. Puromatic Filters (P) Ltd., reported in (2004) 4 SCC 671 , and the Court endorsed the same view in the said judgment. This decision was taken note of by the Apex Court in the case of Hanil Era Textiles Ltd. v. Puromatic Filters (P) Ltd., reported in (2004) 4 SCC 671 , and the Court endorsed the same view in the said judgment. The Apex Court in the case of M/s. Shriram City Union Finance Corporation Ltd. v. Rama Mishra, 2001 (I) OLR (SC) 164, held that a party is bound either by the provisions Constitution, statutory provisions or any rule or under terms of any contract which is not against the public policy. It is open for a party for his convenience to fix the jurisdiction of any competent Court to have their dispute adjudicated by that Court alone and if such a clause is available in the agreement, a party to the agreement can file the suit in that Court alone to which they have agreed to. In the case of M/s. Ajanta Enterprisers v. M/s. Hoechst Pharmaceutical Ltd. and others, AIR 1987 Orissa 34, interpreting the agreement executed between the parties this Court held that though under the agreement the disputes were to be litigated in Bombay Court, jurisdiction of Cuttack Court to entertain the suit for injunction and recovery of amount was not completely ousted. A different view has been taken by this Court in the place of M/s. Jagadamba Agency Pvt. Ltd. v. Ambuja Cement Eastern Ltd. and others, AIR 2000 Orissa 119. In this case, referring to the arbitration agreement, the Court held that since the agreement provided that the same shall be subject to juris¬diction of the Courts situated at a particular place, filing of an application for appointment of Arbitrator at another place is not permissible. 6. In the case of A.B.C. Laminart Pvt. Ltd. and another v. A. P. Agencies, Salem (supra), the Apex Court held that where the clause under which it is claimed that there was ouster of juris¬diction of Courts and the clause provides that the dispute aris¬ing out of the agreement would be subject to jurisdiction of a particular Court and no exclusive words like ‘exclusive’, ‘alone’, and ‘only’ or the like have not been used, depending on the interpretation of the said agreement, the Court can decide as to whether it has jurisdiction or not. This decision, as earlier stated, has been taken note of by the Apex Court in the case of Hanil Era Textiles Ltd. v. Puromatic Filters (P) Ltd (supra) and the view taken has been confirmed. However, in the case of M/s. Shriram City Union Finance Corporation Ltd. v. Rama Mishra (supra), the decision rendered by the Apex Court in the case of A.B.C. Laminart Pvt. Ltd. and another v. A.P. Agencies, Salem (supra) was not taken note of. As is evident from Clause 26 of the agreement, the words ‘exclusive’, ‘alone’ and ‘only’ or the like have not been used and therefore on reading of the entire agreement, it cannot be said that the jurisdiction of other Courts is excluded. Apart from the above, as it appears from the application filed under Section 9 of the Act, the office of the opposite party is located at Bhubaneswar and materials were supplied to the opposite party at Bhubaneswar from Bangalore and as such, a part of the cause of action arises within the juris¬diction of the Courts at Bhubaneswar. Since I have already held that jurisdiction of other Courts has not been excluded in view of the reasons indicated earlier, a part of the cause of action having arisen at Bhubaneswar, the learned District Judge, Bhuba¬neswar had jurisdiction to entertain the application. 7. In view of the discussions made above, I do not find any merit in this revision and the same is dismissed. Revision dismissed.