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1995 (4) TMI 250 - SC - Indian LawsWhether where cause of action had arisen partly within territorial jurisdiction of one court or partly in another court it would be open to the parties to avail of the remedy at the court where part of the cause of action had arisen? - Held that - Appeal dismissed. The parties having agreed to vest the jurisdiction of the Court situated within the territorial limit of High Court of Karnataka the Court of subordinate Judge Dhanbad in Bihar State has no jurisdiction to entertain the suit laid by the appellant.
Issues:
Jurisdiction of the Court based on the location of the cause of action and contractual agreement. Analysis: The appellant initiated action for recovery of amounts due from the first respondent, who objected to the jurisdiction of the Court based on a contract clause. The trial Court returned the plaint, and the High Court upheld this decision. The appellant argued that as per Section 20 of the CPC, the cause of action partly arose within the jurisdiction of the Court where the contract was executed. However, Clause (21) of the contract specified the jurisdiction of the High Court in Bangalore for legal proceedings. The Supreme Court referred to previous case law and highlighted that parties can agree on the jurisdiction for disputes as long as the agreement is clear and unambiguous. The Court noted that Clause (21) was explicit, and the parties were bound by the contract, which did not violate the Contract Act. Therefore, the Court in Dhanbad had no jurisdiction to entertain the suit, and the High Court's decision was upheld. This judgment clarifies that parties can agree on the jurisdiction for legal disputes through contractual clauses, as long as the agreement is clear and not against public policy. It emphasizes the importance of upholding valid contractual agreements, even if they limit the jurisdiction of a particular Court. The Court's decision reinforces the principle that clear and unambiguous contractual clauses determining jurisdiction are enforceable and must be respected by the parties involved.
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