Calcutta High Court
Mcnally Bharat Engineering Company ... vs Maharashtra State Power Generation ... on 11 June, 2015
Equivalent citations: AIR 2015 CALCUTTA 207
Author: Soumen Sen
Bench: Soumen Sen
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
PRESENT:
The Hon'ble JUSTICE SOUMEN SEN
G.A.2875 of 2014
C.S.219 of 2014
McNally Bharat Engineering Company Limited
Vs.
Maharashtra State Power Generation Company Ltd.
For the Defendant/Petitioner : Mr. Arjak Datta, Sr. Adv.,
Mr. Dipankar Das,
For the Plaintiff : Mr. Abhrajit Mitra, Sr. Adv.
Mr. Anirban Roy,
Mr. Saumabho Ghosh,
Mr. Vivek Jhunjhunwala.
Heard On : 18.12.2014, 07.01.2015,
02.06.2015, 09.06.2015
Judgment On : 11th June, 2015
Soumen Sen, J.:- The defendant No.1 is the applicant. The
defendant No.1 has filed this application for rejection of the plaint and in
the alternative for presentation of the plaint before the appropriate Court
having jurisdiction.
The plaintiff has filed the suit praying, inter alia, for a decree for
perpetual injunction restraining the defendants their men, agents and
servants from giving any effect or further effect to the expired
performance guarantee being Bank Guarantee No.4044IFIB G070015
issued by the defendant No.2 in favour of the defendant No.1. The
plaintiff states that under the letter of award dated 5th October, 2007
followed by a formal contract agreement dated 27th May, 2008. The
plaintiff was required to carry out design, engineering, manufacture,
supply, erection, testing and commissioning of an Ash handling system
with all accessories for New Parli Thermal Project. The plaintiff in terms
of the said agreement furnished a bank guarantee dated 14th November,
2007 issued by the defendant No.2 for a sum of Rs.3,83,11,400/-. The
said bank guarantee was valid upto 5th of July, 2010 with a claim period
of six months post such guarantee period. The said bank guarantee,
inter alia, provided that the defendant No.2 undertake to pay amounts
due and payable under the guarantee on a demand received from the
defendant No.1 stating that the amount claimed is due by way of loss or
damage caused. The said performance guarantee in terms of Clause 9 of
the General Conditions of the contract was to be kept valid upto 90 days
beyond the guarantee period. The guarantee period is provided in Clause
40 of the General Conditions of the Contract which, inter alia, is a period
of 12 calendar months commencing immediately upon satisfactory
completion of the performance guarantee or acceptance tests. The
plaintiff from time to time had carried out their obligations under the
contract with the defendant No.1 and as a matter of fact the performance
guarantee test was carried out in the month of July, 2010 and
completion of such performance guarantee test was confirmed in a
meeting held on 31st July, 2010 as would be evident from the minutes of
the meeting dated 31st July, 2010. Accordingly the bank guarantee was
only liable to be extended till a period of 15 months from 31st July, 2010.
The said period expired on or about October, 2011.
The minutes of the meeting would show that the defendant No.1
was satisfied with the performance of the plaintiff. Subsequently, the
plaintiff was requested to extend the bank guarantee and the plaintiff
without understanding the true purport of the agreement between the
parties had kept on extending the bank guarantee. On 15th of July,
2013, an extension of the bank guarantee for a period upto 30th
September, 2013 was issued by the defendant No.2 in favour of the
defendant No.1. The bank guarantee stood expired on 30th September,
2013. The claim period also stood expired on 31st March, 2014. Within
the aforesaid period, the defendant No.1 did not make any demand upon
the defendant No.2 for encashment of such bank guarantee. However, on
18th June, 2014 the plaintiff received certain documents from the
defendant No.2 wherefrom it transpired that by a letter dated 28th May,
2014 had been issued to the Branch Manager of the defendant No.2 by
the defendant No.1 alleging that they had requested the plaintiff to
extend the validity of the bank guarantee. The defendant No.1 had
referred to a letter dated 9th May, 2014 by which such request was made
for extension of the bank guarantee. The plaintiff contends that without
conceding the factum that the said letter of 9th May, 2014 had not been
received by the plaintiff and without conceding that the validity of the
bank guarantee had expired by that time, the said letter is not a notice of
encashment of the bank guarantee in terms of the conditions provided in
such bank guarantee. There has not been any letter of demand issued
by the defendant No.1 on the defendant No.2 which could have led to
encashment of the bank guarantee in question which had expired and is
liable to be released and returned to the plaintiff and no demand can be
made under the bank guarantee, the defendant No.1 has invoked the
bank guarantee and is attempting to give effect to such invocation in
connivance and conspiracy with the defendant No.2. In Paragraph 34 of
the Plaint, the plaintiff alleged that the defendants in collusion and
conspiracy with each other have perpetrated fraud on the plaintiff. It is
alleged that the defendant No.2 is acting in collusion with the defendant
No.1 by aiding and abetting such illegal action of the defendant No.1 by
attempting to give effect to the letter dated 28th May, 2014 of the
defendant No.1. The defendant No.2 is fraudulently attempting to
encash the bank guarantee which has already been expired and make
over the proceeds thereof to the defendant No.1 in respect of such bank
guarantee. Fraud has been perpetrated by the defendants on the
plaintiff at the plaintiff's registered office at 4, Mangoe Lane, Kolkata -
700 001 within the aforesaid jurisdiction. On the basis of such
allegations, the suit was filed in this Court after obtaining leave under
Order 2 Rule 2 of the Code of Civil Procedure, 1908 and leave under
Clause 12 of the Letters Patent, 1861.
The defendant No.1 has filed this application disclosing the
contract agreement. It is stated that the plaintiff deliberately did not
annex a portion of the contract agreement from Pages 8 to 12 which had
the following relevant clauses inserted therein:-
"... 18. Arbitration - This shall be applicable as per Clause 30
Section 2A, Vol.1 of Bit Specification.
19. Jurisdiction of Contract - The law applicable to this
contract shall be the laws in force in India. The Courts of
Mumbai, India shall be the exclusive jurisdiction in all matters
arising under and on account of this contract. ..."
It is submitted that from the aforesaid Clauses in the contract, it
would be clear that the defendant No.1 have been expressly barred by
the forum selection clause and the Courts in Mumbai would have the
exclusive jurisdiction to determine the same. Moreover, the instant suit
is also barred under Section 8 of the Arbitration and Conciliation Act,
1996 as against the defendant No.1 in view of the Arbitration Clause.
Mr. Arjak Datta, the learned Senior Counsel appearing on behalf of
the defendant has submitted that on a meaningful reading of the plaint it
would appear that the principal dispute is between the plaintiff and the
defendant No.1. It is submitted that the invocation of the bank
guarantee by the defendant No.1 is not a material fact which can be
taken into consideration for the purpose of deciding the jurisdiction of
this Court when it is apparent that the parties have agreed to have their
disputes resolved in appropriate courts in Mumbai. It is submitted that
the offer of the plaintiff was accepted at the office of the defendant No.1
at Mumbai and the letter of award was issued by the office of the
defendant No.1 from Mumbai which is admittedly outside the jurisdiction
of this Hon'ble Court. The work relates to carry out design, engineering,
manufacture, supply, erection, testing and commissioning of an Ash
handling system with all accessories for New Parli Thermal Project of the
defendant No.1 at Mumbai.
The learned senior Counsel has relied upon a judgment delivered
by me in SPML Infra Ltd. Vs. South Bihar Power Distribution Co.
Ltd. & Ors. reported at 2015 (1) CLT 15 (HC) and submits that in the
said decision on similar facts this Court has revoked the leave and
directed the plaintiff to institute proceeding before the appropriate Court
at Patna.
The learned Counsel has relied upon a decision of the Hon'ble
Supreme Court in Hanil Era Textiles Ltd. Vs. Puromatic Filters (P)
Ltd. reported at 2004 (4) SCC 671 for the proposition that where two or
more courts have jurisdiction under the Code of Civil Procedure to try a
suit or a proceeding and agreement between the parties that the dispute
between them shall be tried in one of such courts is not contrary to
public policy inasmuch as when words 'alone', 'only', 'exclusive' are used
and when certain jurisdiction is specified in a contract, an intention to
exclude all other for a from its operation may in such cases be inferred.
Mr. Abhrajit Mitra, the learned senior Counsel appearing on behalf
of the plaintiff submits that there cannot be any dispute that a part of
the cause of action has arisen within the jurisdiction of this Hon'ble
Court unless the invocation of bank guarantee has taken place within
the jurisdiction of this Hon'ble Court and, accordingly, it cannot be
doubted that a part of cause of action has arisen within the jurisdiction
of this Hon'ble Court.
The plaintiff has prayed for Clause 12 of the Letters Patent since a
part of the cause of action has arisen within the jurisdiction of this
Court. The foundational pleading for invocation of Clause 12 of the
Letters Patent can be found in Paragraphs 5, 7, 22(part), 29, 36(part) and
44(part) of the plaint. The said paragraphs are reproduced below:-
"5. In or about May/June, 2007 the plaintiff came across a
Tender Notice issued by the defendant no.1 for carrying out
design, engineering, manufacture, supply, erection, testing
and commissioning of an Ash Handling System together with
all accessories for the defendant No.1's New Parli Thermal
Project.
7. By way of a letter dated 5th October, 2007 the Letter of Award
was issued by the defendant no.1 on the plaintiff.
22. From the said documents it appeared that a letter dated 28th
May, 2014 had been issued to the Branch Manager of the
defendant no.2 by the defendant no.1 alleging that they had
requested the plaintiff to extend the validity of the Bank
Guarantee and since there has been no extension the Bank
Guarantee should be encashed in accordance with a previous
letter dated 9th May, 2014.
29. The defendant no.1 has admitted that the performance
guarantee test has been completed to their satisfaction on 31st
July, 2010. The period of 15 months i.e. one year subsequent
to the completion of the performance guarantee test and 90
days thereafter had expired in the month of October, 2011.
36. The fraud so perpetrated is such that it vitiates the
underlining contract that is to say the contract clearly
indicated the terms of the Bank Guarantee which is being
attempted to be vitiated by such fraudulent action of the
defendants. The said Bank Guarantee was only to kept valid
till 15 months from the date of performance guarantee test
which is at the maximum October, 2011.
44. The plaintiff is entitled to perpetual injunction restraining the
defendants their men, agents and servants from giving any
effect or further effect to the expired performance guarantee
being Bank Guarantee No.4044IFIB G070015 issued by the
defendant No.2 in favour of the defendant no.1."
Mr. Mitra, the learned senior Counsel has relied upon a decision of
the Queen's Bench in Midland Bank Ltd. Vs. Seymour reported at
1955 (2) Llooyd's List Law Reports 147 at pages 169, an unreported
decision of this Hon'ble Court in Besco Ltd. Vs. State Bank of India &
Anr. on 26th November, 2009 and Maheswari Brothers Ltd. Vs.
Airports Authority of India Ltd. & Anr. reported at AIR 2006 Cal
227 and submitted that in the said decisions it has been stated that the
jurisdiction clause mentioned in the contract would not exclude the
jurisdiction of this Court with which the dispute is inextricably
connected. It is submitted that nothing in the bank guarantee entitled
the beneficiary to demand any extension thereof or oblige the bank to
accede to a request by the beneficiary for extending the validity thereof.
Since the period of the bank of guarantee had expired, the bank is not
obliged to accede to request of the beneficiary.
The knowledge of the plaintiff about the tender is not a material
fact. The acceptance of the letter of award is also not a material
consideration. The invocation of bank guarantee at Calcutta in the
absence of a forum selection clause could be of some relevance. The
exercise of jurisdiction by the Court is discretionary. In the plaint, it is
admitted that the letter of award has been issued by the defendant No.1
from its office at Mumbai and fraud as stated in the plaint had been
perpetrated by the defendant No.1 from Mumbai upon the plaintiff at its
office with the aforesaid jurisdiction. The plaintiff for obvious reasons
have roped in the defendant No.2 and alleged that both the defendants
have perpetrated fraud on the plaintiff.
Moreover, the plaintiff is under an obligation to disclose the said
entire contract and ought to have brought attention of the Court of the
exclusive jurisdiction since the grant of leave under Clause 12 of the
Letters Patent is discretionary. The plaintiff is required to state the full
facts.
There cannot be any quarrel with the proposition of law that the
parties by agreement cannot confer jurisdiction on a Court which does
not otherwise have the jurisdiction to try and determine the suit. Under
the Code of Civil Procedure as well Clause 12 of the Letters Patent, save
and except, disputes relating to immovable properties outside the
jurisdiction of the Calcutta High Court, a Court would have jurisdiction
to try a suit if the entirety of the cause of action arises within its
jurisdiction irrespective of whether the defendant may dwell or carry on
business or personally work for gain or if a part of the cause of action
arises within the jurisdiction of this Court. The jurisdiction of the High
Court to try and determine the suit is by virtue of Clause 12 of the
Letters Patent. The circumstances under which a suit under Clause 12
of the Letters Patent would lie has been elaborately discussed in
Chainrup Sampatram Vs. Punjab & Sind Bank reported at 2009 (1)
CHN 346 at Paragraph 24 which reads:-
"24. There are three limbs to Clause 12 of the Letters Patent: the
first limb covers suits for land or other immovable property,
which is not germane for the present purpose; the second limb
speaks of the place of accrual of the cause of action in the
suit, requiring no previous leave if the cause of action arises
wholly within jurisdiction but requiring previous leave if only a
part - however infinitesimal or significant - of the cause of
action arises within jurisdiction; and, the third is the situs of
the defendant at the time of commencement of the suit. A suit
for land (or other immovable property) stands on a different
pedestal and it is unnecessary to go into that aspect of Clause
12 here. But in a suit which is not a suit for land (or other
immovable property) the plaintiff has a choice of invoking the
jurisdiction of this Court on either of the two remaining limbs
of Clause 12. If there is a solitary defendant in a suit which is
not a suit for land (or other immovable property), the plaintiff
may unquestionably institute it on the Original Side of this
Court if the entirety of the cause of action arises within the
original jurisdiction of the Court and irrespective of where the
defendant may dwell or carry on business or personally work
for gain. If there is a solitary defendant in a suit which is not
a suit for land (or other immovable property), the plaintiff may
institute it on the original side of this Court if a part of the
cause of action arises within the original jurisdiction of this
Court irrespective of where the defendant may dwell or carry
on business or personally work for gain, subject, however, to
obtaining prior leave under Clause 12 to institute the suit. If
there is a solitary defendant in a suit which is not a suit for
land (or other immovable property), the plaintiff may institute
it on the original side of this Court if the defendant, at the time
of the commencement of the suit, dwells or carries on business
or personally works for gain within the original jurisdiction of
this Court, irrespective of where the cause of action may be
arisen. The second and third limbs of Clause 12 that cover
suits other than suits for land (or other immovable property)
are, in a sense, mutually exclusive; in that the plaintiff has the
choice of either founding territorial jurisdiction on situs of
cause of action or on location of the defendant at the time of
commencement of the suit. In a suit other than a suit for land
(or other immovable property) where the plaintiff sues more
than one defendant, either of the last two limbs of Clause 12
of the Letters Patent has to be satisfied in respect of each
defendant in the suit for the action to be launched on the
Original Side of this Court."
In so far as the Courts not governed by Letters Patent, provisions
of the Code of Civil Procedure would apply. Any agreement between the
parties containing a Forum Selection Clause for adjudication of the
dispute would certainly override Clause 12 of the Letters Patent. If it is
found that the said forum is otherwise inextricably connected with the
subject matter of the dispute, the said forum alone would have the
jurisdiction to decide the dispute to the exclusion of others. On the basis
of the averments made in the plaint, it cannot be said that no part of the
cause of action has arisen at Mumbai. In fact, the award of contract, the
letter of termination and invocation of bank guarantee all have taken
place at Mumbai. The argument that the suit cannot be filed against the
bank at Mumbai appears to be misconceived. The essential dispute is
between the plaintiff and the defendant No.1. The furnishing of bank
guarantee is not a material fact on which the cause of action in the suit
is founded.
In South East Asia Shipping Co. Ltd. Vs. Nav Bharat
Enterprise Pvt. Ltd. & Ors. reported at 1996 (3) SCC 443 in a similar
situation it was held by the Hon'ble Supreme Court that since the bank
guarantee was executed and the said guarantee was invoked at Delhi,
the Court would not assume jurisdiction. The findings of the Hon'ble
Supreme Court are stated below:-
"2. The only controversy is whether the Delhi High Court has
jurisdiction to entertain the suit. It is an admitted position
that the contract was executed in Bombay. It is also an
admitted position that the performance of obligation and
liabilities under the contract was required to be done in
Bombay inasmuch as Cargo of livestock was to be transported
in the ship from Kandla to Daman or Jeddah. It is also an
admitted position that in furtherance of the execution of the
contract at Bombay, the respondents had executed the bank
guarantee at Delhi and had transmitted it to Bombay for performance of the contract. The question, therefore, is whether any part of the cause of action had arisen in Delhi. The learned Counsel for the respondents had relied upon a judgment of this Court in ABC Laminart Pvt. Ltd. and Anr. Vs. A.P. Agencies, Salem MANU/SC/0001/1989 : [1989] 2 SCR 1a to contend that since part of the cause of action had arisen in Delhi, the High Court on the original side has jurisdiction to entertain the suit. We are unable to accept the contention.
3. It is settled law that cause of action consists of bundle of facts which give cause to enforce the legal injury for redress in a court of law. The cause of action means, therefore, every fact, which if transversed, it would be necessary for the plaintiff to prove in order to support his right to a judgment of the Court. In other words, it is a bundle of facts, which taken with the law applicable to them, gives the plaintiff a right to claim relief against the defendant. It must include some act done by the defendant since in the absence of such an act no cause of action would possibly accrue or would arise. In view of the admitted position that contract was executed in Bombay, i.e, within the jurisdiction of the High Court of Bombay, performance of the contract was also to be done within the jurisdiction of the Bombay High Court; merely because bank guarantee was executed at Delhi and transmitted for performance to Bombay, it does not constitute a cause of action to give rise to the respondent to lay the suit on the finding and that since the bank guarantee was executed and liability was enforced from the bank at Delhi, the Court got jurisdiction, cannot be sustained."
The said judgment was considered in The Iron and Steel Co. Ltd. Vs. Tiwari Road Lines reported at 2007 (5) SCC 703 in Paragraph 11 which reads:-
"11. Learned Counsel for the appellant has also submitted that City Civil Court, Hyderabad had no jurisdiction to entertain the application moved by the respondent as no part of cause of action had accrued there. In this connection, he has referred to Clause (b) of Sub-section (12) of Section 11 and Clause (e) of Sub-section (1) of Section 2 of the Act which will govern the question of jurisdiction as to Chief Justice of which High Court has to be approached for moving an application under Section 11 of the Act. Learned Counsel has submitted that the tenders were floated at Kolkata, the respondent submitted the tender at Kolkata, the agreement was executed at Kolkata and, therefore, the Court at Hyderabad had no jurisdiction to entertain the application. Learned Counsel has also submitted that the view taken by the High Court that as the bank guarantee was furnished at Hyderabad and was encashed at Hyderabad, "the court at Hyderabad has jurisdiction is erroneous in law inasmuch as the agreement did not contain any clause regarding the place from where the bank guarantee had to be furnished. Learned Counsel has submitted that there was only a requirement for furnishing the bank guarantee and that it could be furnished from anywhere in India and since in the present case the bank guarantee was furnished by the respondent from a bank at Hyderabad it was encashed there and, therefore, the said fact was wholly irrelevant for deciding the plea of jurisdiction. He has also relied upon a decision of this Court in South East Asia Shipping Co. Ltd. v. Nav Bharat Enterprises Pvt. Ltd. MANU/SC/1124/1996: [1996] 3 SCR 405, in support of his contention that the submission of the bank guarantee from Hyderabad or the encashment thereof does not constitute even a part of cause of action to confer jurisdiction on the Court at Hyderabad. Though we find substance in the contention raised by the learned Counsel for the appellant but in view of our finding recorded on the main point, we do not consider it necessary to express any final opinion on the second contention."
It is settled law that by agreement, the parties cannot confer a jurisdiction upon a Court which otherwise it does not inheres. However, that situation is not applicable in the instant case. The suit is instituted in this Court could have been instituted before the appropriate Court at Mumbai.
The law with regard to the ouster of jurisdiction is well-settled. In ABC Laminart (P) Ltd. Vs. A.P. Agencies reported at 1989 (2) SCC 163 the Hon'ble Supreme Court held that 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 being 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. It was further held that even when words like 'alone', 'only', 'exclusive' and the like have been used in the contract if the Court is of the view that the parties intended to have their dispute resolved by a particular court or forum, the Court shall refer the dispute to have particular court and may refuse to exercise its jurisdiction to decide the dispute. This view has been recently followed and clarified in Swastik Gases (P) Ltd. Vs. Indian Oil Corpn. Ltd. reported at 2013 (9) SCC 32. The parties with their eyes wide open had agreed to submit their dispute to a Court which otherwise would have jurisdiction to decide the lis between the parties.
In Swastik Gases (supra), the Hon'ble Supreme Court has considered A.B.C. Laminart (supra) in Paragraphs 13, 14 and 26. The said Paragraphs are reproduced below:-
"13. In A.B.C. Laminart, this Court was concerned with Clause 11 in the agreement which read, "any dispute arising out of this sale shall be subject to Kaira jurisdiction". The disputes having arisen out of the contract between the parties, the respondents therein filed a suit for recovery of amount against the appellants therein and also claimed damages in the Court of the Subordinate Judge at Salem. The appellants, inter alia, raised the preliminary objection that the Subordinate Judge at Salem had no jurisdiction to entertain the suit as parties by express contract had agreed to confer exclusive jurisdiction in regard to all disputes arising out of the contract on the Civil Court at Kaira. When the matter reached this Court, one of the questions for consideration was whether the Court at Salem had jurisdiction to entertain or the jurisdiction of the court in the matter of contract would depend on the situs of the contract and the cause of action arising through connecting factors. The Court referred to Sections 23 and 28 of the Contract Act, 1872 (for short "the Contract Act") and Section 20(c) of the Civil Procedure Code (for short "the Code") and also referred to Hakam Singh and in para 21 of the Report held as under:
"21. .....When the clause is clear, unambiguous and specific accepted notions of 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 exclusio 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 others from its operation may in such cases be inferred. It has therefore to be properly construed."
14. Then, in para 22 of the Report, this Court held as under:
"22......We have already seen that making of contract was a part of the cause of action and a suit on a contract therefore could be filed at the place where it was made. Thus, Kaira Court would even otherwise have had jurisdiction. The bobbins of metallic yarn were delivered at the address of the respondent at Salem which, therefore, would provide the connecting factor for Court at Salem to have jurisdiction. If out of the two jurisdictions one was excluded by Clause 11 it would not absolutely oust the jurisdiction of the court and, therefore, would not be void against public policy and would not violate Sections 23 and 28 of the Contract Act. The question then is whether it can be construed to have excluded the jurisdiction of the Court at Salem. In the clause 'any dispute arising out of this sale shall be subject to Kaira jurisdiction' ex facie we do not find exclusionary words like 'exclusive', 'alone', 'only' and the like. Can the maxim expressio unius est exclusio alterius be applied under the facts and circumstances of the case? The order of confirmation is of no assistance. The other general terms and conditions are also not indicative of exclusion of other jurisdictions. Under the facts and circumstances of the case we hold that while connecting factor with Kaira jurisdiction was ensured by fixing the situs of the contract within Kaira, other jurisdictions having connecting factors were not clearly, unambiguously and explicitly excluded. That being the position it could not be said that the jurisdiction of the Court at Salem which court otherwise had jurisdiction under law through connecting factor of delivery of goods thereat was expressly excluded."
26. The question in Inter Globe Aviation, inter alia, was whether the Permanent Lok Adalat at Hyderabad had territorial jurisdiction to deal with the matter. The standard terms which governed the contract between the parties provided, "all disputes shall be subject to the jurisdiction of the courts of Delhi only". The contention on behalf of the appellant before this Court was that the ticket related to travel from Delhi to Hyderabad. The complaint was in regard to delay at Delhi and, therefore, the cause of action arose at Delhi and that as the contract provided that the courts at Delhi only will have the jurisdiction, the jurisdiction of other courts was ousted. This Court in para 22 of the Report held as under:
"22.As per the principle laid down in A.B.C. Laminart, any clause which ousts the jurisdiction of all courts having jurisdiction and conferring jurisdiction on a court not otherwise having jurisdiction would be invalid. It is now well settled that the parties cannot by agreement confer jurisdiction on a court which does not have jurisdiction; and that only where two or more courts have the jurisdiction to try a suit or proceeding, an agreement that the disputes shall be tried in one of such courts is not contrary to public policy. The ouster of jurisdiction of some courts is permissible so long as the court on which exclusive jurisdiction is conferred, had jurisdiction. If the clause had been made to apply only where a part of cause of action accrued in Delhi, it would have been valid. But as the clause provides that irrespective of the place of cause of action, only courts at Delhi would have jurisdiction, the said clause is invalid in law, having regard to the principle laid down in A.B.C. Laminart. The fact that in this case, the place of embarkation happened to be Delhi, would not validate a clause, which is invalid."
In the instant case, the plaintiff does not dispute that part of the cause of action has arisen at Mumbai. In fact, the plaintiff cannot dispute the same. If a part of the cause of action has arisen at Mumbai even without the exclusivity clause, the jurisdictions of other Courts are ousted. This Court would be required to give due importance to such ouster clause and refuse exercising discretion in favour of the plaintiff. In fact, in Swastik Gases (supra) Justice Lokur in His Lordship's concurring judgment held that absence of words like "alone", "only", "exclusive" or "exclusive jurisdiction" is neither decisive nor does it make any material difference in deciding the jurisdiction the jurisdiction of a Court. The very existence of a jurisdiction clause in an agreement makes the intention of the parties to an agreement quite clear and it is not advisable to read such a clause in the agreement like a statute.
Since the defendant No.1 has not prayed for referring the dispute to arbitration as would be clear from the prayers made in the petition namely for return of the plaint to be filed before the appropriate forum, the question of arbitrability of the dispute is not gone into. It is further recorded that apart from the averment made in the petition in Paragraph 4 that the instant suit is also barred under Section 8 of the Arbitration and Conciliation Act, 1996 as against the defendant No.1, in view of the arbitration clause, no argument is made for referring the dispute to arbitration and hence it can be concluded that the defendant No.1 is not claiming referring of the dispute to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996.
In Maheswari Brothers (supra) was cited for the proposition that since the defendant No.2 is not a party to the arbitration agreement hence no reference could be made of the dispute raised in the plaint.
In Maheswari Brothers (supra) in a proceeding under Section 9 of the Arbitration and Conciliation Act, 1996, the learned Judge was deciding the jurisdiction of the Court, vis-à-vis the general conditions of contract which had a forum selection clause for settlement of dispute. The forum selection clause conferred exclusive jurisdiction to Delhi High Court. The letter of termination was issued on behalf of the defendant No.1 by the defendant No.2. The defendant No.2 was not a party to the arbitration agreement. It was on such facts held that the said jurisdiction clause has no application so far as the defendant No.2 is concerned and the Court referred to in forum selection clause would mean Court as contemplated in Arbitration and Conciliation Act and not as mentioned in Code of Civil Procedure. This issue is not required to be decided in the instant case as the defendant No.1 has not prayed for referring the dispute to arbitration.
In view thereof, the leave granted under Clause 12 of the Letters Patent is revoked. The plaint filed in the suit is returned to the plaintiff in order to enable the plaintiff to institute the suit before the appropriate Courts at Mumbai upon furnishing an authenticated copy of the Plaint in the Department concerned. However, the interim order passed on 7th July, 2014 shall continue for a period of four weeks or until any order that may be passed by the appropriate Courts at Mumbai after presentation of the Plaint whichever is earlier. It is made clear that the extension of the interim order shall not be treated as an expression of opinion on the merits of the injunction application. Moreover, the defendants in the suit have not filed any affidavit in dealing with the merits of the injunction application. G.A.No.2875 of 2014 is allowed.
In view of the aforesaid order C.S.No.219 of 2014 shall not be shown as pending in this Court.
Urgent xerox certified copy of this judgment, if applied for, be given to the parties on usual undertaking.
(Soumen Sen, J.)