Case Note & Summary
The matter pertained to a chamber summons filed by the defendant in a suit for damages. The defendant, Integrated Finance Co. Ltd., sought return of the plaint for presentation to the appropriate court at Chennai, or alternatively, rejection of the plaint on grounds of limitation and lack of cause of action. The plaintiff, Garware Marine Industries Limited, had filed the suit claiming damages of Rs.1,93,78,667 with interest, alleging losses due to the defendant's failure to recover possession of an equipment given on lease, which was attached by the Official Liquidator of an associate company. The defendant argued that the lease agreement contained a clause conferring exclusive jurisdiction on courts at Madras, and since its registered office, execution of contract, and payment obligations were at Chennai, the Bombay High Court lacked territorial jurisdiction. The defendant also raised issues of limitation and cause of action. The court examined the submissions and the applicable legal principles from ABC Laminart regarding exclusive jurisdiction clauses, but the final decision, reasoning, and operative part of the judgment were not contained in the provided excerpt. The court's analysis on whether part of cause of action arose within Bombay jurisdiction and the outcome of the chamber summons remain unknown from the text.
Headnote
A) Civil Procedure - Territorial Jurisdiction - Exclusive Jurisdiction Clause - Code of Civil Procedure, 1908, Section 20 - The Supreme Court in ABC Laminart Pvt. Ltd. v. A.P. Agencies, 1989 SCC 163, held that an agreement conferring exclusive jurisdiction on one of the courts having jurisdiction is valid and not contrary to public policy, but an agreement ousting jurisdiction of all courts is void. Where part of cause of action arises within the jurisdiction of the chosen court, the clause is enforceable. In the present case, the court considered whether it had jurisdiction despite the clause. (Para 3(g))
Issue of Consideration
Whether this Court has territorial jurisdiction to try and entertain the suit, given the exclusive jurisdiction clause in the lease agreement conferring jurisdiction on Courts at Madras alone, and whether part of cause of action has arisen within the jurisdiction of this Court.
Law Points
- Under Section 20(c) CPC
- suit can be instituted where cause of action wholly or in part arises
- Where parties by agreement confer jurisdiction on one of several courts having jurisdiction
- such agreement is valid and not contrary to public policy
- An agreement that ousts jurisdiction of all courts is void
- If court otherwise has jurisdiction
- exclusive jurisdiction clause may not apply if parties' agreement is not clear and unambiguous
- A suit for damages for breach of contract can be filed where the breach occurred or where the contract was performed or where the defendant resides or carries on business
- The legal principle that an agreement conferring exclusive jurisdiction on one of several courts is valid only if the court chosen has jurisdiction
- if no part of cause of action arises at the chosen place
- the clause may not be enforced if it violates Section 20 CPC
