High Court of Delhi

Bajaj Plasto Industries and Ors. Vs. Pendo Plast Pvt. Ltd. (Neutral Citation: 2024 : DHC : 3152)

MANU/DE/3007/2024

23.04.2024

Civil

If parties to a dispute agree to choose jurisdiction of a particular Court, that Court alone has jurisdiction to decide the dispute

The limited question that arises in the present petition filed under Article 227 of the Constitution of India, 1950 invoking the supervisory jurisdiction of this Court is whether the Commercial Court at Delhi has jurisdiction to try the commercial suit filed by the Respondent. The Trial Court dismissed the application filed by the Petitioner no.1 under Section 11 of the Commercial Courts Act read with Order VII Rule 10 and 11 and Section 151 of Civil Procedure Code, 1908 ("CPC"), on the ground that the plaint revealed a part of cause of action has arisen in Delhi, that the Petitioner no.1 was working for gain in Delhi and passed the impugned order.

It is settled law that, if parties to a dispute agree to choose jurisdiction of a particular Court, that Court alone has jurisdiction to decide the dispute. Since the agreed jurisdiction is of Courts at Bahadurgarh, therefore, the said Court has jurisdiction to adjudicate the case at hand.

Where two or more Courts have jurisdiction under CPC to try a suit, an agreement between the parties that the dispute between them shall be tried in any one of the Courts is not contrary to public policy. Through a conjoint reading of Section 20 of CPC and Sections 23 and 28 of Contract Act, 1872, there is a scope for partial restriction by limiting the parties to take recourse to one forum. Exclusion of jurisdiction clauses occupy this space between absolute restraint and convenience based forum.

In Hakam Singh v. Gammon (India) Ltd., it is observed that when two Courts have the jurisdiction to entertain a dispute, a choice of one by agreement, would not amount to restraint of legal proceedings or violate public policy under Sections 28 and 23 of the Contract Act. Further, the Supreme Court clarified that the parties cannot by way of an agreement confer jurisdiction on a Court that would otherwise not have jurisdiction in law to adjudicate the dispute.

Admittedly, a part of cause of action, in the present case, arises within the territorial jurisdiction of both the Courts i.e. at Bahadurgarh and Delhi. The intention of the parties can be inferred from use of the exclusion of jurisdiction clause as well as the places where the payments were to be received. From the printed invoices, the Respondent has exhibited its intention that in case of any dispute with respect to the invoices raised, the jurisdiction of Courts at Bahadurgarh, Haryana, is to be invoked. Furthermore, as specifically mentioned on the invoices, the payments of the said invoices were to be received at Bahadurgarh, Haryana.

The intention of the Petitioners is reinforced by the fact that the said invoices have been duly acknowledged by the Petitioners. Also, they have accepted the jurisdiction of Bahadurgarh Courts by filing an application under Order VII Rule 11 of CPC emphasising that the Courts at Bahadurgarh have the jurisdiction. The Respondent, therefore, cannot try and wriggle out of the ouster of jurisdiction clause printed on its own invoices to discard the jurisdiction of Bahadurgarh Courts. The impugned order is set aside. Petition allowed.

Tags : Jurisdiction Parties Intention

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