Kerala High Court
The National Starch And Chemicals vs Weikfield Products Co. (India) on 14 August, 1989
Equivalent citations: AIR1990KER291, AIR 1990 KERALA 291, (1990) 1 KER LT 217, 1989 (3) CURCC 481, 1989 (2) KER LJ 502
ORDER Varghese Kalliath, J.
1. This Civil Revision Petition concerns a question of ouster of jurisdiction. The short facts are these :-- The plaintiff was directed to supply certain goods by the defendant. For the supply of goods, the defendant placed a purchase order. As per the purchase order, the plaintiff supplied the goods to the defendant. The defendant returned the goods stating that the goods have been supplied not in time. When the goods were returned, the plaintiff filed the present suit in Trivandrum Sub Court. The defendant contended that the Trivandrum Sub Court has no jurisdiction to entertain, the suit by virtue of certain terms of the contract entered into between the parties evidenced by the purchase order.
2. Though the parties cannot confer jurisdiction on a Court which has no jurisdiction, over the subject-matter, the parties have got the right to choose one of the Courts where a suit can be filed if the suit is entertainable in different Courts. This choosing of a Court by the agreement of parties is not hit by Sections 23 and 28 of the Contract Act.
3. In short, the power to choose one of the forums where the suit has to be maintained is a matter for the parties to contract. Here the parties are not contracting out (of) a Court, which has got jurisdiction or to oust the jurisdiction of the Court in its true sense but electing one of the Courts having jurisdiction. When once the parties agree as to a particular Court which has got jurisdiction for settling the dispute the parties are bound by that agreement and the Court has to give effect to that agreement.
4. In this case, there is no difficulty to find the Courts at Trivandrum and Courts at Poona have got jurisdiction to try the suit. The Court below, which found that the suit has to be instituted at Poona and that Trivandrum Courts cannot entertain the suit also found that the Courts at Poona and Trivandrum have got jurisdiction. The Courts below found that the ouster of jurisdiction of Courts at Trivandrum happened because of the agreement between the parties. So the only question that has to be considered is whether there is a clear and unambiguous agreement whereby the parties agreed that the Courts at Poona alone can entertain the suit where by agreement the parties have excluded the jurisdiction of Courts at Trivandrum for the settlement of the dispute. As I said earlier, the parties are bound by the agreement, so the only question which this Court has to consider is what is the nature of the term of the agreement concerning the ouster of jurisdiction of a Court, which normally can entertain the suit by the terms of the agreement.
5. Now I turn to the term of the agreement relevant in this case. The term of the agreement reads thus :--
"Jurisdiction -- All transactions are subject to Poona jurisdiction."
I have to examine whether the above quoted condition is sufficient to exclude the jurisdiction of the Court, which has got jurisdiction to entertain the suit, in this case Trivandrum Sub Court. Ouster of jurisdiction is a matter on which the Courts must be too vigilant and careful when holding that a Court, which has got jurisdiction has lost its jurisdiction by virtue of an agreement. What is the criteria to be applied in deciding this matter has been plainly laid down by the recent decision of the Supreme Court reported in AIR 1989 SC 1239 (A.B.C. Laminart Pvt. Ltd. v. A. P. Agencies, Salem). Saikia, J. speaking for the Court observed thus (at p. 1246):--
"When the Court has to decide the question of jurisdiction pursuant to an ouster clause it is necessary to construe the ousting expression or 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. Thus, in Salem Chemical Industries v. Bird and Co., AIR 1979 Madras 16 where the terms and conditions attached to the quotation contained an arbitration clause provided that: "any order placed against this quotation shall be deemed to be a contract made in Calcutta and any dispute arising therefrom shall be settled by an Arbitrator to be jointly appointed by us", it was held that it merely fixed the situs of the contract at Calcutta and it did not mean to confer an exclusive jurisdiction on the Court at Calcutta, and when a part of the cause of action had arisen at Salem, the Court there had also jurisdiction to entertain the suit under Section 20(c) of the Code of Civil Procedure."
The enquiry that has to be made largely depends upon a correct and meaningful understanding of the clause in the agreement so as to find out whether the clause provides for exclusion of Courts having jurisdiction, that is to say whether there is exclusion of all other Courts having jurisdiction and confining solely and wholly the jurisdiction to a named Court. This finding, the Court cannot detract or extract by gleaning into the words used in the terms, but can conclude only if the words used in the term in question are clear and plain. If there is a plain and clear statement confining solely and entirely the jurisdiction in one Court then alone the Court can hold that there is ouster of jurisdiction of the other Court which has got normally the jurisdiction over the subject-matter in dispute. This I say because that the ouster of jurisdiction is to be found only if the Court finds that the terms excluding the jurisdiction of the Court in the agreement are unequivocal, total perfect straight and downright. It should be explicitly expressed and should be clear, peremptory definitive and decisive as to the point that the parties agreed that only in one Court and in that Court alone the dispute has to be settled. If the terms of the agreement manifest itself by using the word 'only' or 'alone' so as to spell out and explicate that the other Courts jurisdictions have been excluded and the jurisdiction is confined to a named Court, there will not be any difficulty for the Court to say that the term is plain and clear and unequivocal. The difficulty sally forth and check in when such expressive words are not used. Even in such cases the Court is not powerless to examine to certain extent to find out whether by clear implication there is exclusion of jurisdiction. When I say by implication there also the provision should imply definitely and decisively that the parties agreed for one named Court for settling the controversy. There the Courts function is to see whether the words used are definitive and decisive to draw a plain implication that the named Court alone has got the jurisdiction to try the suit. The question is how and to what extent a Court is bound to investigate the implied ouster of jurisdiction and is there any sure parameter? I say no positive stable and unfaltering parameters. But the Court is not powerless. The term of the agreement is a question always depending upon the circumstances involved in the case and the exact words used in the ouster clause.
6. Now I turn to the clause in question in this case. It has to be noted that the clause to be construed in this case is termed as one of the conditions attached to the purchase order. It is not an agreement as such, but it has to be presumed that both the parties have agreed as to the conditions attached to the purchase order even though one of the parties has not signed expressing his consent. But when the party, who has not given the consent by signing the purchase order has acted upon the purchase order, it is possible to determine the question on the purchase order as if it is a concluded contract between the parties. In the clause it is significant to note that the parties have not used the word 'Courts'. What is stated is 'transactions are subject to Poona jurisdiction'. An analysis of this clause would certainly imply that when the transaction is subject to Poona jurisdiction impliedly the parties agree that if there is any dispute and if it has to be settled by a Court of law, it can be a Court in Poona. This itself requires unravelling of the implication of the words 'transactions are subject to Poona jurisdiction'. After finding that the clause implicits that 'Poona jurisdiction' means Courts in Poona, further it has to be found that for excluding the jurisdiction of Courts at Trivandrum, which have got jurisdiction over the subject-matter, have lost that jurisdiction because the parties have confined the jurisdiction to settle their dispute exclusively in the Courts in Poona.
7. In 1983 Ker LT 652 (Secretary, Vika-langa Sevaka Co-op. Society Ltd. v. Sheth Brothers) this Court said that ouster of jurisdiction must be proved by express words or by necessary or inevitable implications. By using the word 'inevitable implications' the Court is putting more emphasis on the fact that a probability or possibility of an implication is insufficient. Inevitable means a result that cannot be avoided, not admitting of escape or evasion; that cannot fail to occur. So it is said that there is no good in arguing with the inevitable -- (Lowell). So the implication to oust the jurisdiction should be kismetic preordained and fatalistic. The implication itself must be definitive and decisive. The implication is inevitable only if the Court can come to one finding and one finding alone that the jurisdiction of other Courts have been excluded. Of course, the maxim expressio unius est exclusio alterius that is by expressing one thing there can be exclusion of other, thing is not excluded in understanding the meaning of the ouster clause in an agreement. But it can be done only if the Court feels that it is compelled to do so. I say so because only if the implication is inevitable the Court can find ouster by applying the principle above stated. Generally the Courts are disinclined to find ouster of jurisdiction by implication. In AIR 1940 PC 105 (Secretary of State v. Mask & Co.) Lord Thankerton said that the exclusion of the jurisdiction of the civil courts is not to be readily inferred, but that such exclusion must either be explicitly expressed or clearly implied.
8. Even in a case where the clause was subject to Bombay jurisdiction alone, a Division Bench of this Court has held that it is insufficient to oust the jurisdiction of the other Court, which has got jurisdiction. This, of course, the Court held on the ground that the note was sent only by an employee of the respondent though the note was handed over to the consignee and there was no indication that there was an agreement between the parties to confer exclusive jurisdiction to Bombay Court. In this case, the Court further said that the printed words by themselves and without anything more would not be sufficient to constitute an agreement to oust the jurisdiction of all Courts other than the Court specified.
9. Again in another Division Bench decision, 1986 Ker LT 220 (Economic Transport Organisation v. United India Insurance Co. Ltd.), after considering the question whether choosing of forum by the parties which has got jurisdiction in law to entertain the suit the provisions of Section 28 of the Contract Act is not attracted. The Court considered the requirements and the conditions to find ouster of jurisdiction. The Court said choice is for the parties. But the parties have to agree and that agreement must be for an exclusive forum for the settlement of their disputes. Further it is said that the agreement should be clearly and plainly spelled out either by express words or by necessary implication on the factum of exclusive jurisdiction. In this decision also the learned Judge observed that "ouster of jurisdiction-of Courts cannot be lightly assumed or presumed. If there is such a concluded agreement, it will certainly operate as estoppel against the parties to the contract". The learned Judge further elucidating the point said that "unilateral affirmation or statement made by one of the parties, as long as it is not shown that the statement has been accepted by the other party as a term or condition of the agreement, it cannot be held that there is an agreement to confer exclusive jurisdiction on any Court". It is also pointed out that particularly caution has to be taken if the clause is one contained in a printed form. Importance is given to the fact where both the parties have given their consent for such a contract is evidenced by their acceptance of the contract in writing or under their signature.
10. In this case, as I said earlier, there is no specific word excluding the jurisdiction of. Trivandrum Sub Court and it is difficult for me to agree with the Courts below that by implication there is exclusion of Trivandrum Courts.
In the result, I set aside the orders of the Courts below and I hold that the suit is entertainable by Trivandrum Court. Civil Revision Petition is allowed as above.
Send back the records immediately.