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TMI Blog1989 (3) TMI 370X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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 there at was expressly excluded. We accordingly find no error or infirmity in the impugned judgment of the High Court. Appeal dismissed. - Civil Appeal No. 2682 of 1982 - - - Dated:- 13-3-1989 - K. N. SAIKIA G. L. OZA, JJ. JUDGMENT This is an appeal by special leave from the judgment and order of the High Court at Madras dated 4 th November, 1980 in C.M.A. No. 218 of 1978 allowing the appeal and setting aside the judgment of the Subordinate Judge at Salem in original suit No 302 of 1975 on the preliminary question of jurisdiction. The first appellant is a manufacturer and supplier of metallic yarn under the name and style 'Rupalon Metallic Yarn' having its registered office at Udyognagar, Moh amadabad, Gujarat within the jurisdiction of the Civil Court of Kaira. The second appellant is a sister concern of the first appellant doing business wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the respondent, submits that what is being called Clause 11 of the agreement was only one of the general terms and conditions of the sale and not a clause in the agreement, and that even if it was construed as a clause in the agreement itself it was not exclusive so as to take away all jurisdictions except that of Kaira. The first question to be decided, therefore, is whether Clause 11 as aforesaid formed part of. the agreement. Mr. Javali submits that Ext. B-1 is an order of confirmation No. 68/59 dated 2.10.1974 from the Sales Executive for the first appellant to the respondent acknowledging the receipt of their order and registering the same subject to the terms and conditions 'overleaf'. The general terms and conditions printed overleaf included the aforesaid Clause 11. We are unable to agree. Admittedly the parties have transacted the business on inter alia basis of Clause 11. There is, therefore, no escape from the conclusion that Clause 11 formed part of the agreement and the parties would be bound by it so long as they would be bound by the contract itself. It is not open to the respondent to deny existence of Clause 11. The submission of Mr. Javali has, therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... questions of fact, to the decision of the domestic tribunal. They can, indeed, make the tribunal the final arbiter on questions of fact, but they cannot make it the final arbiter on questions of law. They cannot prevent its decisions being examined by the courts. If parties should seek, by agreement, to take the law out of the hands of the courts and put it into the hands of a private tribunal, without any recourse at all to the courts in cases of error of law, then the agreement is to that extent contrary to public policy and void." Under section 23 of the Indian Contract Act the consideration or object of an agreement is lawful, unless it is opposed to public policy. Every agreement of which the object or consideration is unlawful is void. Hence there can be no doubt that an agreement to oust absolutely the jurisdiction of the Court will be unlawful and void being against the public policy. Ex dolo malo non oritur actio. If therefore it is found in this case that Clause 11 has absolutely ousted the jurisdiction of the Court it would be against public policy. However, such will be the result only if it can be shown that the jurisdiction to which the parties have agreed to submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leted; (3) the place where in performance of the contract any money to which the suit relates was expressly or impliedly payable." The above Explanation III has not been omitted but nevertheless it may serve a guide. There must be a connecting factor. 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder form of the opposite party containing the printed words to show that printed words were not part of the contract and that those words in the contract was to exclude the jurisdiction of other Courts and to keep sole jurisdiction to one Court. It was observed that the object of printing such words as "subject to Madras jurisdiction" in the contract was to exclude the jurisdiction of other Courts and to give sole jurisdiction to one Court and it was in consonance with the commercial practice in India. Similarly in Sri Rajendra Mills v. Haji Hassan, A.I.R. 1970 Cal. 3 42 where there was a contract between the plaintiff and defendant No. 1 under which the parties agreed that all suits arising on or out of the contract, would be instituted in the Court at Salem, the Division Bench held that it was true that the suit could have been instituted either at Salem or at Howrah under section 20(c) of the Code of Civil Procedure, as the cause of action, admittedly arose in part in both the places and it was therefore a case where two Courts had concurrent jurisdiction and, in such a case, it was open to the parties to make a choise restricting the Court in which the suit under or upon the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction over the dispute. It was held that the Code of Civil Procedure in its entirety applied to proceedings under the Arbitration Act by virtue of section 41 of that Act. The jurisdiction of the Court under the Arbitration Act to entertain a proceeding for filing an award was accordingly governed by the provisions of the Code of Civil Procedure. By the terms of section 20(a) of the Code of Civil Procedure read with explanation 11 thereto the respondent company which had its principal place of business at Bombay w as liable to be sued at Bombay. It was held that it was not open to the parties to agreement to confer by their agreement jurisdiction on a Court which did not possess under the Code. But where two Courts or more have under the Code of Civil Procedure jurisdiction to try the suit or proceeding an agreement between the parties that the dispute between them shall be tried in one of such Courts was not contrary to public policy and such an agreement did not contravene section 28 of the Contract Act. Though this case arose out of an arbitration agreement there is no reason why the same rule should not apply to other agreements in so far as jurisdiction is concerned. Without re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could operate as estoppel against the parties to the contract, but it could not tie the hands of the Court and denude it of the powers to do justice. Ordinarily, it was observed: the Courts would respect the agreement between the parties which was borne out of the meeting of their minds out of consideration of convenience, but the Courts were not obliged to do so in every case; and that a new approach to the question deserved to be made where the ouster clause was "calculated to operate as an engine of oppression and as a means to defeat the ends of justice." In such a case the free consent may be wanting and injustice may be avoided. 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 Co., A.I.R. 1979 Madras 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 jurisdiction 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. In the clause 'any dispute arising out of this sale shall be subject to Kaira jurisdiction' ex facie we do not find exclusive words like 'exclusive', 'alone ', 'only' and the like. Can the maxim 'expressio unius estexclusio 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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