Engineering Project (India) Limited v. J. A. Brothers
2026-03-24
Kaushik Goswami
body2026
DailyLaw.ai
JUDGMENT : KAUSHIK GOSWAMI, J. 1. Heard Mr. P. Goswami, learned counsel appearing for the petitioners. Also heard Mr. R.B. Phookan, learned counsel appearing for the respondent. 2. By this application under Section 115 of the Code of Civil Procedure, 1908 (hereinafter referred to as the “CPC”), the petitioners have assailed the order dated 14.05.2019 passed by the learned Civil Judge No. 1, Kamrup (Metro), Guwahati (hereinafter referred to as the “trial court”) in Petition No. 290/2019 arising out of Title Suit No. 527/2018, whereby the application filed under Order VII Rule 10 CPC for return of the plaint came to be rejected. 3. The brief facts, shorn of unnecessary details, are that the respondent, as plaintiff, instituted Title Suit No. 527/2018 before the trial court seeking, inter alia, declaration, specific performance, alternative monetary reliefs, and injunctions. At the threshold, the defendants/petitioners filed Petition No. 290/2019 under Order VII Rule 10 CPC praying for return of the plaint on the ground that the courts at Guwahati lacked territorial jurisdiction, inasmuch as the parties had expressly conferred exclusive jurisdiction upon the courts at Delhi. The trial court, by the impugned order, rejected the said application, giving rise to the present revision petition. 4. Mr. P. Goswami, learned counsel for the petitioners, submits that it is an undisputed position that the parties, by agreement, have conferred exclusive jurisdiction upon the courts at Delhi. In support of such contention, he has drawn attention to the General Conditions of Contract, the Memorandum to the Form of Tender, as well as the Additional Conditions of Contract. It is further submitted that although the work was to be executed in Mizoram and a regional office of the petitioner is situated at Guwahati, once the parties have consciously agreed to vest exclusive jurisdiction in the courts at Delhi, the same would be binding. Reliance is placed on the decisions of the Apex Court in A.B.C. Laminart Pvt. Ltd. v. A.P. Agencies, Salem , (1989) 2 SCC 163 and M/s Exl Careers v. Frankfinn Aviation Services Pvt. Ltd ., (2020) 12 SCC 667 . 5. Per contra, Mr. R.B. Phookan, learned counsel for the respondent, submits that notwithstanding the existence of an exclusive jurisdiction clause, substantial parts of the cause of action arose within Guwahati.
5. Per contra, Mr. R.B. Phookan, learned counsel for the respondent, submits that notwithstanding the existence of an exclusive jurisdiction clause, substantial parts of the cause of action arose within Guwahati. It is contended that the petitioner has its office at Guwahati, the work order was issued from Guwahati, negotiations were held there, advances were mobilised there, and significant correspondence, including execution of the Memorandum of Understanding dated 18.10.2016, took place at Guwahati. Accordingly, it is urged that the courts at Guwahati possess jurisdiction in terms of Section 20 of the CPC. 6. I have considered the submissions advanced by the learned counsel for the parties and perused the materials on record, including the authorities cited at the Bar. 7. The short question that arises for determination is whether, in the presence of an exclusive jurisdiction clause, the courts at Delhi alone would have jurisdiction to entertain the suit, thereby excluding the jurisdiction of other competent courts. 8. On a perusal of the contract dated 28.12.2012, it is evident that Article 5.0 (Governing Law and Jurisdiction) stipulates that jurisdiction shall vest in the court(s) specified in the “Memorandum” to the “Form of Tender.” Clause 76.3 of the General Conditions of Contract further reinforces that only the courts mentioned therein shall have jurisdiction to adjudicate disputes arising out of the contract, to the exclusion of all other courts. The Memorandum to the Form of Tender, at Serial No. xvii, unequivocally specifies “Courts in Delhi.” Further, the Additional Conditions of Contract, which prevail over the General Conditions, reiterate under Article 22.0 that courts at Delhi/New Delhi alone shall have jurisdiction. 9. Thus, it is manifest that the parties have, by express agreement, conferred exclusive jurisdiction upon the courts at Delhi/New Delhi. 10. It is a well-settled proposition of law that where two or more courts have jurisdiction under the provisions of the Code of Civil Procedure, 1908, it is open to the parties, by mutual agreement, to restrict the jurisdiction to any one of such competent courts. Such a stipulation does not amount to an absolute ouster of jurisdiction but constitutes a lawful selection of one forum from among several courts otherwise vested with jurisdiction. 11.
Such a stipulation does not amount to an absolute ouster of jurisdiction but constitutes a lawful selection of one forum from among several courts otherwise vested with jurisdiction. 11. In Swastik Gases Pvt. Ltd. v. Indian Oil Corporation Ltd ., ( 2013) 9 SCC 32 , the Apex Court held that an exclusive jurisdiction clause is legally enforceable, provided that the court chosen by the parties otherwise has jurisdiction in law. It was observed that the absence of words such as “only”, “alone”, or “exclusive” is not decisive; if the intention of the parties to confer exclusivity can be gathered from the language of the clause, the same must be given effect. 12. The relevant paragraphs of the aforesaid judgment read as under: “31. In the instant case, the appellant does not dispute that part of cause of action has arisen in Kolkata. What appellant says is that part of cause of action has also arisen in Jaipur and, therefore, the Chief Justice of the Rajasthan High Court or the designate Judge has jurisdiction to consider the application made by the appellant for the appointment of an arbitrator under Section 11. Having regard to Section 11(12)(b) and Section 2(e) of the 1996 Act read with Section 20(c) of the Code, there remains no doubt that the Chief Justice or the designate Judge of the Rajasthan High Court has jurisdiction in the matter. The question is, whether parties by virtue of Clause 18 of the agreement have agreed to exclude the jurisdiction of the courts at Jaipur or, in other words, whether in view of Clause 18 of the agreement, the jurisdiction of the Chief Justice of the Rajasthan High Court has been excluded? 32. For answer to the above question, we have to see the effect of the jurisdiction clause in the agreement which provides that the agreement shall be subject to jurisdiction of the courts at Kolkata. It is a fact that whilst providing for jurisdiction clause in the agreement the words like „alone, „only?, „exclusive? or „exclusive jurisdiction? have not been used but this, in our view, is not decisive and does not make any material difference. The intention of the parties-by having Clause 18 in the agreement is clear and unambiguous that the courts at Kolkata shall have jurisdiction which means that the courts at Kolkata alone shall have jurisdiction.
or „exclusive jurisdiction? have not been used but this, in our view, is not decisive and does not make any material difference. The intention of the parties-by having Clause 18 in the agreement is clear and unambiguous that the courts at Kolkata shall have jurisdiction which means that the courts at Kolkata alone shall have jurisdiction. It is so because for construction of jurisdiction clause, like Clause 18 in the agreement, the maxim expressio unius est exclusio alterius comes into play as there is nothing to indicate to the contrary. This legal maxim means that expression of one is the exclusion of another. By making a provision that the agreement is subject to the jurisdiction of the courts at Kolkata, the parties have impliedly excluded the jurisdiction of other courts. Where the contract specifies the jurisdiction of the courts at a particular place and such courts have jurisdiction to deal with the matter, we think that an inference may be drawn that parties intended to exclude all other courts. A clause like this is not hit by Section 23 of the Contract Act at all. Such clause is neither forbidden by law nor it is against the public policy. It does not offend Section 28 of the Contract Act in any manner.” 13. Further in M/s Exl Careers (supra) , the Apex Court has reiterated that where two or more courts have jurisdiction under the law, the parties are competent to agree to vest exclusive jurisdiction in one of such courts. Such a contractual stipulation is legally enforceable, provided that the court so chosen otherwise possesses jurisdiction over the subject matter of the dispute. 14. Likewise, in A.B.C. Laminart Pvt. Ltd. (supra) , the Apex Court authoritatively laid down that while parties cannot, by agreement, confer jurisdiction on a court which otherwise lacks it, they are competent to agree to vest jurisdiction in one of several courts having jurisdiction under Sections 16 to 20 of the CPC. The Court further held that where the clause is clear, unambiguous, and explicit, it must ordinarily be enforced. 15. The relevant paragraphs of the aforesaid judgment read as under: - “21. 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.
15. The relevant paragraphs of the aforesaid judgment read as under: - “21. 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 accented 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. 22. Coming to clause 11 we already found that this clause was included in the general terms and conditions of sale and the order of confirmation No. 68/59 dated October 2, 1974 with the general terms and conditions was sent from Udyognagar, Mohmadabad, Gujarat to the respondent's address at 12 Suramangalam Road Salem, Tamil Nadu. The statement made in the special leave petition that Udyog-nagar, Mohamadabad, Gujarat is within the jurisdiction of the civil court of Kaira has not been controverted. We have already seen that making of the 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 juris-diction 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.
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 exelusionary 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. We accordingly find no error or infirmity in the impugned judgment of the High Court.” 16. Thus, the legal position that emerges is that: (i) parties are entitled to choose one among multiple competent courts; (ii) such a clause is not hit by Section 28 of the Indian Contract Act, 1872; (iii) jurisdiction cannot be conferred by agreement where none exists; and (iv) an exclusive jurisdiction clause, when clearly worded or necessarily implied, must be given full effect. 17. In view of the aforesaid settled principles, an exclusive jurisdiction clause, when validly incorporated and unambiguous in its terms, deserves to be enforced, thereby upholding party autonomy and ensuring certainty in contractual dealings. 18. In the present case, although part of the cause of action may have arisen at Guwahati, the parties have consciously agreed to confer exclusive jurisdiction upon the courts at Delhi. It is not in dispute that the contract in question was entered into and executed at Delhi. In terms of Section 20 (c) of the CPC, a suit may be instituted in a court within whose jurisdiction the cause of action, wholly or in part, arises. The expression cause of action includes every material fact necessary for the plaintiff to succeed.
In terms of Section 20 (c) of the CPC, a suit may be instituted in a court within whose jurisdiction the cause of action, wholly or in part, arises. The expression cause of action includes every material fact necessary for the plaintiff to succeed. In A.B.C. Laminart Pvt. Ltd. (supra) the Apex Court further held that the place where a contract is made or is to be performed constitutes part of the cause of action. Paragraph 15 of the aforesaid judgment read as under: - “15. In the matter of a contract there may arise causes of action of various kinds. In a suit for damages for breach of contract the cause of action consists of the making of the contract, and of, its breach, so that the suit may be filed either at the place where the contract was made or at the place where it should have been performed and the breach occurred. The making of the contract is part of the cause of action. A suit on a contract, therefore, can be filed at the place where it was made. The determination of the place where the contract was made is part of the law of contract. But making of an offer on a particular place does not form cause of action in a suit for damages for breach of contract. Ordinarily, acceptance of an offer and its intimation result in a contract and hence a suit can be filed in a court within whose jurisdiction the acceptance was communicated. The performance of a contract is part of cause of action and a suit in respect of the breach can always be filed at the place where the contract should have been performed or its performance completed. If the contract is to be performed at the place where it is made, the suit on the contract is to be filed there and nowhere else. In suits for agency actions the cause of action arises at the place where the contract of agency was made or the place where actions are to be rendered and payment is to be made by the agent. Part of cause of action arises where money is expressly or impliedly payable under a contract. In cases of repudiation of a contract, the place where repudia-tioh is received is the place where the suit would lie.
Part of cause of action arises where money is expressly or impliedly payable under a contract. In cases of repudiation of a contract, the place where repudia-tioh is received is the place where the suit would lie. If a contract is pleaded as part of the cause of action giving jurisdiction to the court where the suit is filed and that contract is found to be invalid, such part of cause of the action disappears. The above are some of the connecting factors.” 19. Applying the aforesaid principles since the agreement was executed at Delhi, a part of the cause of action has undeniably arisen within Delhi, thereby conferring jurisdiction upon the courts at Delhi. The exclusive jurisdiction clause in the agreement further fortifies this position. Hence, the agreement must be respected and enforced. 20. In that view of the matter, this court is of the considered opinion that the court at Guwahati lacks territorial jurisdiction to entertain the subject suit. Hence, the institution of the suit before the court at Guwahati cannot be sustained in law. The learned trial court, therefore, committed a jurisdictional error in rejecting the application for return of plaint under Order VII Rule 10 CPC. The impugned order dated 14.05.2019 is thus liable to be interfered with in exercise of revisional jurisdiction. 21. Accordingly, the impugned order dated 14.05.2019 is set aside and quashed. Let the trial court return the plaint to the respondent/plaintiff in accordance with law for presentation of the same before the competent court at Delhi. 22. The civil revision petition stands allowed. 23. Return the Trial Court Record(s) (TCR).