2004 (4) TMI 530 - SC - Indian Laws

Whether the High Court s conclusion that the Civil Court at Barnala had jurisdiction to try the suit filed by respondent No.1-United India Insurance Co. Ltd. (hereinafter referred to as Plaintiff No.1 ) and Malwa Cotton Spinning Mills Ltd. (hereinafter referred to as plaintiff No.2 ) is correct or not? Held that - The inevitable conclusion is that the High Curt was not justified in upsetting the order of First Appellate Court. It is not a case where the chosen Court did not have jurisdiction. The intention of the parties can be culled out from use of the expressions only , alone , exclusive and the like with reference to a particular Court. But the intention to exclude a Court s jurisdiction should be reflected in clear, unambiguous, explicit and specific terms. In such case only the accepted notions of contract would bind the parties. The first Appellate Court was justified in holding that it is only the Court at Udaipur which had jurisdiction to try the suit. The High Court did not keep the relevant aspects in view while reversing the judgment of the trial Court. Accordingly, we set aside the judgment of the High Court and restore that of the first Appellate Court. The Court at Barnala shall return the plaint to the plaintiff No.1 (respondent No.1) with appropriate endorsement under its seal which shall present it within a period of four weeks from the date of such endorsement of return before the proper Court at Udaipur. If it is so done, the question of limitation shall not be raised and the suit shall be decided on its own merits in accordance with law. The appeal is allowed.

Summary

Issues:
Jurisdiction of the Civil Court at Barnala to try the suit filed by the respondents.

Analysis:
The dispute revolved around the jurisdiction of the Civil Court at Barnala to try a suit filed by the United India Insurance Co. Ltd. and Malwa Cotton Spinning Mills Ltd. The trial Court initially held that Barnala Court had jurisdiction, but the first Appellate Court disagreed. The High Court, through a revision filed under Section 115 of the Code of Civil Procedure, upheld the trial Court's view, leading to the appeal in question.

The core issue was whether the consignment note specifying the jurisdiction of the Court at Udaipur alone was binding, excluding the jurisdiction of other Courts. The appellant contended that the High Court overlooked the clear exclusion clause in the consignment note, which indicated Udaipur Court's sole jurisdiction. The respondent argued that the consignment note was vague, referring to the "Head Office city" without specifying a location, justifying the trial Court and High Court's decision that Barnala Court had jurisdiction.

The legal analysis delved into Section 20 of the CPC, emphasizing that parties could choose a forum through agreement, but such choice could not confer jurisdiction on a Court lacking it. The judgment cited precedents highlighting that the intention to exclude a Court's jurisdiction must be explicit and unambiguous in the agreement. The Court concluded that the High Court erred in overturning the First Appellate Court's decision, as the consignment note clearly indicated Udaipur Court's exclusive jurisdiction. Therefore, the judgment set aside the High Court's decision and directed the return of the plaint to be presented before the appropriate Court at Udaipur.

In summary, the judgment meticulously analyzed the consignment note's jurisdiction clause, the parties' intentions, and the legal principles governing jurisdiction agreements. The decision emphasized the importance of clear and unambiguous terms in excluding a Court's jurisdiction and upheld the First Appellate Court's ruling in favor of Udaipur Court's exclusive jurisdiction, thereby allowing the appeal and directing the transfer of the suit to the proper Court at Udaipur.