Case Note & Summary
The Plaintiff, Pacific Refractories Ltd., filed a summary suit in the Bombay High Court against the Defendant, Stein Heurtey India Projects Pvt. Ltd., to recover Rs.28,61,938/- with interest for goods sold and delivered. The Plaintiff obtained leave under Clause XII of the Letters Patent to file the suit in Bombay. The Defendant took out a Chamber Summons for revocation of that leave, contending that the contract was entered into in Calcutta and that Article 39 of the contract required all legal proceedings to be instituted only in the Calcutta High Court. The court examined the pleadings in paragraphs 3 and 4 of the plaint, which stated that the contract was entered into at Bombay, but the Defendant argued that the contract was actually entered into in Calcutta. However, the court found it unnecessary to decide this factual dispute because Article 39 of the contract clearly provided that 'the contract shall be deemed to have been entered into in Calcutta and the parties agree to adopt legal proceedings only in the Calcutta High Court.' The court held that such an exclusive jurisdiction clause is valid and binding on the parties, and it ousts the jurisdiction of all other courts, including the Bombay High Court, even if part of the cause of action arose in Bombay. Consequently, the leave granted under Clause XII was revoked, and the plaint was directed to be returned to the Plaintiff for presentation in the appropriate court. The Chamber Summons was allowed with no order as to costs.
Headnote
A) Civil Procedure - Territorial Jurisdiction - Leave under Clause XII of Letters Patent - Where contract entered into - Court held that the place where the contract was entered into is relevant for determining territorial jurisdiction under Clause XII, but in this case, the contract was entered into in Calcutta, not Bombay, based on the pleadings and documents (Paras 5-10). B) Contract Law - Exclusive Jurisdiction Clause - Article 39 of Contract - Ouster of Jurisdiction - Article 39 provided that 'the contract shall be deemed to have been entered into in Calcutta and the parties agree to adopt legal proceedings only in the Calcutta High Court' - Court held that such a clause is valid and binding, and ousts the jurisdiction of all other courts, including the Bombay High Court, even if part of the cause of action arose in Bombay (Paras 11-16). C) Civil Procedure - Leave under Clause XII - Revocation - Where the contract contains an exclusive jurisdiction clause vesting jurisdiction in a particular court, leave granted under Clause XII of the Letters Patent must be revoked as the parties have voluntarily submitted to the jurisdiction of that court alone (Paras 17-18).
Issue of Consideration
Whether the leave granted under Clause XII of the Letters Patent to file the suit in the Bombay High Court should be revoked on the ground that the contract was entered into in Calcutta and/or that Article 39 of the contract required the parties to adopt legal proceedings only in the Calcutta High Court.
Final Decision
The Chamber Summons is allowed. The leave granted under Clause XII of the Letters Patent by order dated 26.10.2005 is revoked. The plaint is directed to be returned to the Plaintiff for presentation in the appropriate court. No order as to costs.
Law Points
- Territorial jurisdiction
- Leave under Clause XII of Letters Patent
- Exclusive jurisdiction clause
- Ouster of jurisdiction
- Contract interpretation
