S.P.Srivastava, J.:-
(1) The defendant/applicant feels aggrieved by an order passed by the trial court whereunder an application filed by it under order vii rule 10 of the code of civil procedure, 1908 hereinafter referred to as the code, for return of the plaint has been dismissed holding that the consent of the parties cannot oust the jurisdiction of a court to try a suit if under the law the said court is vested with such a jurisdiction.
(2) I have heard the learned counsel for the applicant - defendant as well as the learned counsel representing the respondent/plaintiff, and have carefully perused the record.
(3) The facts in brief, shorn of details and necessary for the disposal of this revision lie in a narrow compass. The plaintiff/respondent had filed the suit out of which the present revision has arisen praying for a declaratory 'decree declaring the letter dated 1st february, 1996, issued by the defendant whereby the plaintiff's dealership had been terminated to be illegal and legally ineffective. The plaintiff had further prayed for a decree of prohibitory injunction restraining the defendant from prohibiting or interfering with continuance of the plaintiff's business as a dealer of mahindra tractors. This suit had been filed on the allegations that the plaintiff had been appointed as a dealer by the defendant under a 'dealership agreement' which had been executed in shivpuri, madhya pradesh. It had been further alleged that the letter dated 1st of february, 1996, terminating the dealership of the plaintiff had been received by the plaintiff at shivpuri, therefore, the cause of action for the suit had arisen at shivpuri where he was carrying on his business as a dealer of mahindra tractors manufactured by the defendant,
(4) The defendant had moved an application on 29th january, 1997, under order vii, rule 10 of the code praying that the plaint be returned to the plaintiff so that it may be tried by a civil court of competent jurisdiction at bombay. In the aforesaid application, the defendant had asserted that the plaintiff had been appointed as a dealer under an agreement which had been executed at bombay. In clause 23 of the said agreement, the parties to the agreement had agreed that in case there was any dispute, the same shall be triable in a court of competent jurisdiction at bombay indicating that the agreement had in fact been executed at bombay and the plaintiff was bound by the ouster clause as indicated in clause 23 of the agreement.
(5) The defendant had further urged that the suit at shivpuri could not proceed, and in fact, the courts at shivpuri had no jurisdiction to try the same.
(6) It may be noticed that in clause 23 of the agreement relied upon by the contesting defendant, it had been stipulated that for any legal purpose the said agreement shall be considered to have been signed in bombay and any legal proceedings arising out of the said agreement or relating thereto or in any manner connected with the dealership shall be instituted in bombay courts only,
(7) A perusal of the copy of the agreement placed on the record shows that it was executed on 19th april, 1988. In paragraph 2 of the said agreement it was stipulated that the dealership was to continue to remain effective only till december 31, 1988.
(8) The learned counsel for the defendant/applicant has assailed the finding of the court below on the question regarding the stipulation contained in clause 23 of the agreement holding that by mutual consent neither a jurisdiction can be conferred on a civil court nor vested in it by law or not a court of competent jurisdiction could be ousted of its jurisdiction by mutual consent of the parties to the suit. In other words, it is urged that the trial court erroneously came to the conclusion that the jurisdiction could not be vested in a court with the consent of the parties and the clause 23 of the agreement relied upon by the defendant was legally ineffective and could not be taken to be binding on the plaintiff and had the effect of ousting the court of its jurisdiction to try the suit with which it stood vested which was not permissible.
(9) The legal position in this regard is amply clear. In case a suit, taking into consideration the nature of the cause of action on which it is based is triable only by one civil court of competent jurisdiction, in that event by agreement the parties cannot vest any other court with the jurisdiction to try such a suit. However, if a suit, taking into consideration the nature of the cause of action is triable by two different civil courts of competent jurisdiction with different territorial limits, it is left at the discretion of the plaintiff to choose the forum. In that event, the parties may agree to have the suit tried in any of the aforesaid civil courts of competent jurisdiction. Such an agreement is permissible and is not hit by section 23 or 28 of the contract act, 1872. This position was clarified by the hon'ble apex court in its decision reported as a. B. C. Laminart put. Ltd. And anr. V. A. P. Agencies, salem. The apex court in its aforesaid decision had indicated that so long as the parties to a contract do not oust the jurisdiction of all the courts which would otherwise have jurisdiction to decide the cause of action under the law it cannot be said that the parties have by their contract ousted the jurisdiction of the court. If under the law several courts would have jurisdiction and the parties have agreed to submit to one of these jurisdictions and not to other or others of them it cannot be said that there is a total ouster qf jurisdiction. In other words where the parties to a contract agreed to submit the disputes arising from it to a particular jurisdiction which would otherwise also be a proper jurisdiction under the law their agreement to the extent they agreed not to submit to other jurisdictions cannot be said to be void as against public policy. If on the other hand the jurisdiction they agreed to submit to would not otherwise be proper jurisdiction to decide disputes arising out of the contract it must be declared void being against public policy.
(10) It was further clarified that it is now a settled principle that where there may be two or more competent courts which can entertain a suit consequent upon a part of the cause of action having arisen therewith, if the parties tand the contract agreed to vest jurisdiction in one such court to try the dispute which might arise as between themselves the agreement would be valid. If such a contract is clear, unambiguous and explicit and not vague it is not hit by section, 23 and 28 of the contract act. This cannot be understood as parties contracting against the statute. Mercantile law and practice permit such agreements.
(11) In an earlier decision, the hon'ble apex court itself had observed that the parties cannot confer jurisdiction by consent on a court which the said court did not posses, see: hakam singh v. M/s, gammon (india). Ltd. However, the later decision of the supreme court in the case of arc. Laminart put. Ltd. , (supra) carved out an exception and upheld the ouster clause contained in an agree ment subject to certain conditions.
(12) In the present case, what i find is that the court below has not considered the implications arising under the ratio of the decision of the supreme court in a. B. C. Laminart put. Ltd. (supra).
(13) The defendant in the present case had come up with clear allegation that the agreement in question had been executed at bombay. The plaintiff on the other hand claimed that the agreement relied upon by the defendant had been executed at shivpuri. In fact, as pointed out by the learned counsel for the plaintiff/respondent, the agreement which is relied upon by the defendant/applicant was executed in the year, 1988, and was to remain effective upto 31st december, 1988, only.
(14) The court below has not examined as to whether on the cause of action pleaded by the plaintiff, the suit could be tried both at bombay and shivpuri, and in that event there being a choice whether the agreement could be arrived at permitting the exclusion clause to be effective.
(15) I am not inclined to go into the aforesaid questions in the. Present proceedings since the trial court has simply based its decision on the assumption that there can be no agreement ousting a court of its jurisdiction to try a suit which stands vested in it and has not taken into consideration the exceptions as pointed out by the apex court in its decision in the case of a b. C. Laminart pot. Ltd, (supra) and has further failed to examine the relevant questions which arose taking into consideration the stand taken by the parties. In the circumstances, i am of the opinion that it will be proper that the matter be re - examined by the court below.
(16) In the aforesaid view of the matter, this revision succeeds in part with a direction to the trial court to reconsider the matter in regard to the enteretainability of the suit and the implications arising under the exclusion clause relied upon by the defendant in support of its application.
(17) The trial court shall now consider afresh the application of the defendant dated 29th january, 1997, raising the question relating to the territorial jurisdiction and finally dispose it off in accordance with law within a period not later than three months.
(18) Considering the circumstances of the case, there shall be no order as to the costs. Revision succeeds partially.