Gujarat High Court
Indian Oil Corporation Ltd. vs Pragat Gas Service And Anr. on 28 August, 1992
Equivalent citations: (1993)1GLR82
Author: C.K. Thakker
Bench: C.K. Thakker
JUDGMENT C.K. Thakker, J.
1. This appeal is filed against an order passed by the Civil Judge (S.D.), Baroda on July 18, 1987 returning the plaint for presenting it in an appropriate Court.
2. To appreciate the controversy in question, few relevant facts may now be stated. The appellant-plaintiff is Indian Oil Corporation Limited ('Corporation' for short). It is a Government Undertaking, having its Registered Office at Bombay. It is carrying on business of refining and marketing petroleum and other allied petroleum products in India. It is also marketing cooking gas, technically known as liquified petroleum gas (LPG) under the trade mark INDANE. This gas is marketed at many places including Baroda and for which distributors and/or dealers were appointed by the Corporation. One of such agreements was entered into by the Corporation with M/s. Pragat Gas Service through its proprietor Mahesh Ambalal Brahmbhatt-defendants in the suit on January 7, 1986. The terms and conditions have been signed by the parties. Certain allegations have been levelled against the defendants by the plaintiff-Corporation that they have committed breach of the terms and conditions of the agreement and violated instructions issued by the Corporation. Therefore, in accordance with the terms and conditions of the agreement, the agency of defendant No. 1 was terminated by the Corporation. For the purpose of recovery to the tune of Rs. 5,11,755/-, a suit was filed in the Court of Civil Judge (S. D.), Baroda, being Special Civil Suit No. 86 of 1986 and along with the plaint, applications Exhs. 5 and 6 for interim injunction as well as for the appointment of receiver were made. The defendants -appeared and contested the suit. The main contention of the defendants was that in view of the agreement and particularly Clause 36 of the agreement, the Baroda Court had no jurisdiction and the suit filed in the Court of Baroda was not maintainable at all. Necessary issues were framed by the trial Court at Exh. 49 and issue No. 7 read as under:
Whether this Court has no jurisdiction to hear this suit?" In view of the fact that the issue related to the jurisdiction of the Court, the Court heard that issue as preliminary issue in accordance with the provisions of Order XIV, Rule 2 of the Code of Civil Procedure (hereinafter referred to as 'the Code') and by the impugned order held that in view of Clause 36 of the agreement, the plaintiff-Corporation should have filed suit only in Bombay Court and accordingly passed (he impugned order directing return of the plaint to the plaintiff so as to enable it to file in proper Court. It is this order which is challenged in the present appeal.
3. M/s. Minoo A. Shah, appearing for Mr. G. N. Shah, learned Counsel for the appellant raised following contentions.
The Court has committed an error of law in holding that it had no jurisdiction to entertain, deal with and decide the suit filed by the Corporation. It was further contended that as per settled principles of law, whenever an agreement is entered into between the parties, wherein it is mentioned that a particular Court will have jurisdiction, it cannot be said ipso facto that the other Court has no jurisdiction, if it otherwise possesses the jurisdiction. In that case, the Court will have to decide the question after taking into account a number of facts and circumstances and by exercising its discretion. Since that exercise has not undertaken by the trial Court, the order is not in accordance with law. Finally, it is submitted that the issue in question could not have been treated and decided as a preliminary issue. Looking to the provisions of Order XIV Rule 2 of the Code as amended by the Amendment Act, 1976 such question could have been decided only at the time of trial and not at a preliminary stage.
4. Mr. B. J. Shelat, learned Counsel for the respondent-defendants, on the other hand, supported the order passed by the trial Court. He submitted that when an agreement has been entered into between the parties by which they have agreed to get the dispute settled by a particular Court and if that Court has jurisdiction, only that Court could entertain, deal with and decide the dispute.
5. Mr Shelat further submitted that even if it is assumed that both the Courts have jurisdiction, in the facts and circumstances, the impugned order passed by the Baroda Court cannot be said to be contrary to law, particularly when the agreement has been obtained by the Corporation and the Corporation has become the plaintiff by filing a suit and an order is passed.
6. Mr. Shelat also submitted that the question about the applicability of the provisions of Order XIV, Rule 2 of the Code was never pressed into service by the Corporation and that such a contention may not be allowed at this stage.
7. Mr. Shelat then submitted that even if this Court considers the said argument, looking to the ambit and scope of Order XIV, Rule 2, such a point can always be decided by a competent Court and such a point ought to be decided before regular trial so as to avoid delay and multiplicity of proceedings.
8. Finally, Mr. Shelat submitted that if in the facts and circumstances of the case, the Baroda Court has passed an order returning the plaint to the Corporation for filing it in the proper Court on the basis of Clause 36 of the agreement and if this Court is of the opinion that the impugned order cannot be said to be without jurisdiction, the order cannot be interfered with in the present proceedings.
9. Having gone through relevant records as well as judgments cited by the learned Counsel for the parties, I am of the opinion that the impugned order passed by the Baroda Court does not require any interference by this Court. The facts are not in dispute between the parties. So far as the merits of the matter are concerned, without expressing any opinion, I will restrict this order by making necessary observations only regarding jurisdiction of the Court and the question which has been posed in the present proceedings. Section 36 which is relevant for the purpose of the present controversy reads as under:
This agreement has been made in all respects in the local jurisdiction of Bombay and the payments thereunder shall be due and made in Bombay unless otherwise directed by the Corporation the Courts in the City of Bombay alone shall have jurisdiction to entertain any suit, application or other proceeding in respect of any claim or dispute arising under this agreement.
(Emphasis supplied)
10. Looking to the above clause, it becomes clear that not only that the Corporation has mentioned in the agreement that all agreements are subject to jurisdiction of Bombay Court but has gone a step further by stating that the Courts in that City of Bombay alone shall have jurisdiction to entertain any suit, further proceedings etc. Such clause came for interpretation before various Courts including the Hon'ble Supreme Court as well as of this Court in a number of matters. In the case of Hakam Singh v. Gammon (India) Ltd. reported in AIR 1971 SC 736 the Supreme Court had an occasion to consider such a clause. The Court also considered the provisions of Section 20 of the Code as also Section 28 of the Indian Contract Act and held that it is not open to the parties to the agreement to confer by their agreement, jurisdiction to a Court which does not possess it under the Code, but where two Courts or more have jurisdiction under the Code to try a suit or proceeding, an agreement entered into between the parties that the dispute between them shall be tried by one of such Courts, cannot be said to be contrary to law or against the public policy under Section 28 of the Indian Contract Act. My attention was invited to the decision of this Court in the case of Snehalkumar Sarabhai v. Economic Transport Organisation and Anr. . In the said decision this Court held that while the parties can lawfully enter into an agreement restricting a dispute to a particular Court having jurisdiction and ordinarily the Courts would respect the agreement but the stipulation can be ignored by the excluded Court which otherwise possesses jurisdiction if it is considered to be oppressive having regard to the surrounding circumstances and stakes involved and can proceed with the matter. A similar view was taken in the case of Rajasthan Golden Transport Co. Pvt. Ltd. v. United India Fire & General Insurance Co. Ltd. and Anr. reported in 1979 (2) XX (2) GLR 283 and in the case of Simac Group v. Verb Deutsche Seereederai reported in 1982 (1) XXIII (1) GLR 268. Relying on the above cases, the learned Counsel argued that such an exclusionary clause does not totally oust the jurisdiction of the Court. According to her, the material question is not whether or not an agreement has been entered into between the parties, but whether Baroda Court possesses jurisdiction or not. If the Court does not possess jurisdiction, as per settled principle of law, it cannot be conferred by agreement of parties. Equally well settled principle is that if the Court has jurisdiction, the same cannot be ousted or taken away by consent of parties. She submitted that a Court may invoke the doctrine of estoppel against a party and it may refuse to grant relief. It is, however, entirely different from holding that the Court has no jurisdiction. In case of estoppel, the Court has jurisdiction but taking into account the conduct of a party who comes before it, the Court refuses to grant relief in his favour. But the Court cannot throw away the matter at the threshold, if it has jurisdiction. For granting or refusing relief, the Court has to take into account a number of circumstances as discussed in the above judgments. For that purpose, evidence will have to be seen and only after appreciating the evidence, such a finding can be recorded. Obviously, such action can only be taken by the Court at the time of conclusion of the trial and not at a preliminary stage. It is, therefore, submitted that the impugned order requires to be interfered by this Court.
11. Mr. Shelat, however, submitted that in all those cases, the proceedings were initiated either by a third party or by the person who felt aggrieved by such agreement and was of the opinion that gross injustice was meted out to him and the contention was taken by the other side that the Court had no jurisdiction to entertain the suit in view of the agreement of the parties. In the light of the facts and circumstances, in those cases, this Court held that notwithstanding an agreement, the Court may grant relief in favour of the plaintiff. According to Mr. Shelat, in the instant case, it does not lie in the mouth of the appellant Corporation to ignore Clause 36 and to invoke jurisdiction of Baroda Court. He submitted that the defendants were doing business at Baroda. It was the plaintiff-Corporation whose Head Office is at Bombay entered into an agreement with the defendants and they were compelled to sign such agreement, if they were interested in dealership/distributorship. He further submitted that the clause was specific and unambiguous and explicitly clear. In such cases, the Courts have taken a view that if the agreement is not hit by the provisions of Sec 28 of the Contract Act, only that Court would decide the matter which has been agreed to by the parties to the contract. A number of decisions have been cited before me. However, I intend to refer only two decisions of the Hon'ble Supreme Court in the case of Globe Transport Corporation v. Triveni Engg. Works, reported in 1984 GLH 63 (SC) and A. B. C. Laminar! Pvt. Ltd. v. A.P. Agencies, Salem . Again, it is pertinent to note that in both the cases, the matters reached to the Supreme Court only at preliminary stage. In the former case, the Hon'ble Supreme Court observed that if the parties by agreement opted for jurisdiction of a particular Court excluding other Courts and if that Court had jurisdiction, such an agreement would be legal and valid and must be given effect to. In the latter case, the Hon'ble Supreme Court had made the position much more clear. Referring to a number of cases, the Supreme Court observed in para 21 as under (at page No. 745 of GLR):
From the foregoing decisions it can be reasonably deduced that where such 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 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 quarter 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 alteriiis' -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.
(Emphasis supplied)
12. Looking to the above observations and particularly the italicised portion, it becomes clear that according to the Supreme Court, when a clause in a contract is clear, unambiguous or specific and the words like 'alone', 'only', 'exclusive' etc. are used, it would bind the parties unless the absence of ad idem is shown. Even in absence of such words, looking to the surrounding circumstances, the Court may hold the agreement to be binding to the parties. In that case, the agreement entered into between the parties contained a clause 'any dispute arising out of this sale shall be subject to Kaira Jurisdiction'. The Supreme Court observed that though ex-fade, there was no exclusionary words like 'exclusive', alone', 'only' and the like, the intention of the parties was to confer jurisdiction to Kaira Court alone. In these circumstances, jurisdiction of Salem Court was excluded,
13. In view of these decisions of the Hon'ble Supreme Court, in my opinion, the submission of Mr. Shelat appears to be well-founded and deserves to be accepted. In the instant case, the plaintiff has obtained an agreement from the defendants. Clause 36 thereof is clear, unambiguous and specific. As per that clause, the Corporation was bound to approach Civil Court at Bombay for taking an action against the defendants. If in the light of such provisions, a contention was taken by the defendants that the suit filed by the plaintiff-Corporation in Baroda Court was not maintainable and that contention was upheld by the Court, it cannot be said that the order passed by the trial Court is contrary to law or requires any interferences. I am also of the opinion that for the purpose of deciding this preliminary issue, the Court will have to take into account the necessary facts and circumstances though for a limited purpose of deciding the preliminary issue on question of law regarding the jurisdiction of the Court. In the instant case, upholding the preliminary objection of the defendants, the Court has passed the impugned order. Looking to the judgments of the Hon'ble Supreme Court and particularly in A. B. C. Laminarts Pvt. Ltd. (supra), it becomes clear that the impugned order passed by the trial Court directing the Corporation to file suit in an appropriate Court at Bombay is according to law and does not require any interference. In the result, I do not find any substance in any of the contentions raised by the learned Counsel for the appellant and the appeal requires to be dismissed. The appeal is accordingly dismissed, however, in the facts and circumstances, with no order as to costs.
14. Ms. Minoo Shah, learned Counsel for appellant prays that operation of this order may be suspended for some time so as to enable her client to approach the Hon'ble Supreme Court. I think the prayer to be reasonable. la the facts and circumstances of the case, the operation of this order is stayed upto November 16, 1992.