Holding

A jurisdictional clause that does not expressly exclude other competent courts and designates a court which already has jurisdiction is valid and not void as against public policy.

Summary

The appellants, manufacturers of metallic yarn, entered into a contract with the respondent that included clause 11 stating that any dispute would be subject to the jurisdiction of the Kaira court. The respondent sued the appellants in the Subordinate Judge's court at Salem for unpaid amounts and damages. The trial court dismissed the suit on the basis of the jurisdictional clause, but the High Court set aside that order and directed the suit to be tried in Salem. The Supreme Court examined whether clause 11 formed part of the agreement and whether an ouster of jurisdiction is permissible under Sections 23 and 28 of the Indian Contract Act. It held that an absolute ouster of all courts is void as against public policy, but a clause that designates a court which already has jurisdiction, without expressly excluding other competent courts, is valid. Since clause 11 did not expressly exclude the Salem court, which also had jurisdiction due to the delivery of goods, the clause was not void and the High Court's decision stood. Consequently, the appeal was dismissed.

Issues considered

Whether clause 11 was part of the contract between the parties.
Whether clause 11, by attempting to confer exclusive jurisdiction on the Kaira court, is valid under Sections 23 and 28 of the Indian Contract Act, 1872.
Whether the clause amounts to an unlawful ouster of the jurisdiction of the Salem court under public policy.
What is the proper jurisdiction for a suit arising out of the contract under CPC Section 20(c) and the connecting factors of the cause of action.

Legislation cited

Code of Civil Procedure, 1908s. 20(c)
Indian Contract Act, 1872s. 23, s. 28

Subjects

ouster clausejurisdictionIndian Contract ActSection 23Section 28CPC Section 20(c)contract interpretationpublic policyexclusive jurisdictioncause of action

Judgment

A.B.C. LAMINART PVT. LID. & ANR. A
v.
A.P. AGENCIES, SALEM

MARCH 13, 1989

[G.L. OZA AND K.N. SAIKIA, JJ.] B

Sections 23 & 28-Indian Contract Act-Parties to contract agree
to submit dispute to the jurisdiction of a particular court-Interpretation
... of clauses of such contract-Ouster clause 11-Interpretation and con-
struction of-In particular:
c
Section 9-Civil Procedure Code-Civil court-Jurisdiction-
Ouster of-Interpretation of clauses of contract.

Statutory Interpretation 'Ouster clause'~onstruction of.

Words and Phrases 'Ex dolo malo non oritur actio'-'expressio D
unus est exclusio alterius'-meatring of.

The first appellant is a manufacturer and supplier of metallic
yarn under the name and style "Rilplon Mettalic Yarn" having its
registered office at Udyognagar, Mobamadabad, Gujarat within the
jurisdiction of the civil court at Kaira. The second appellant is the sister E
concern of the first appellant.

The Respondent is a registered partnership firm doing business in
metallic yarn and other allied products at Salem. The first appellant
~
entered into an agreement with the Respondent on 2.10. 74 whereunder
~ the appellants were to supply 5000 bobbins of Ruplon Metallic Yarn to F
~ · the Respondent at the rate of Rs.35 per bobbin as stipulated in the
terms of the agreement. Under clause (11) of the agreement it was
provided that any dispute arising our of this sale shall be subject to
Kaira jurisdiction. Dispute having arisen out of this contract, the
Respondent filed a suit against the appellants in the court of Subordi-
nate Judge at Salem for the recovery of Rs.1,63,240 being the balance G
)-, of the advance in the hands of the appellants and also for a sum of
Rs.2,40,000 towards. damages. The appellants inter alia took prelimi-
nary objection that the Subordinate Judge at Salem bad no jurisdiction
to entertain the Snit as the parties by express contract had agreed to
confer exclusive jurisdiction in regard to all disputes arising out of the
contract on the civil court at Kaira. The trial court upheld the prelimi- H

1
2 SUPREME COURT REPORTS I1989) 2 S.C.R.
-f.,
nary objection and found that it had, in view of clause (11) of the
A contract, no jurisdiction to entertain the suit. It accordingly returned
the plaint for presentation before the proper court.

The Respondent appealed to the High Court against the order of
the Subordinate Judge. The High Court allowed the appeal, set aside
a the Judgment of the trial court, with a direction to take the plaint on file
~
and dispose of the suit on merits and on other issues.

Hence this appeal by the appellants. Dismissing the appeal, this
Court, " ,.
HELD: That an agreement to oust absolutely the jurisdiction of
c the court will be unlawful and void being against the public policy,
Ex-do/a rnalo non oritur actio. l6G I 'r-
The jurisdiction of the court in the matter of a contract will
depend on the situs of the contract, and the cause of action arising
D through connecting factors. l7B-C]

So long as the parties to a contract do not oust the jurisdiction of
all the courts which would otherwise have jurisdiction to decide the
cause of action under the law, it cannot be said that the parties have by
their contract ousted the jurisdiction of the court. ISG I ~
E
Where the parties to a contract agreed to submit the disputes
arising i'rom it to a particular jurisdiction which would otherwise also >
be a proper jurisdiction under the law, their agreement to the extent
they agreed not to submit to other jurisdictions cannot be said to be void
as against public policy. If on the other hand the jurisdiction they agree ~

F to submit to would not otherwise be proper, jurisdiction to decide dis-
pules arising out of the contract it must be declared void being against -1--
public policy. ISH; 9A-B]

Where there may be two or more competent courts which can
entertain a suit consequent upon a part of the cause of action having
G arisen there-within if the parties to the contract agreed to vest jurisdic-
lion on one such court to try the dispute which might arise as between f,i..
themselves the agreement would be valid. If such a contract is clear,
unambiguous and explicit and not vague, it is not hit by sections 23 & 28
of the Contract Act. This cannot be understood as parties contracting
against the Statute. Mercantile Law and Practice permit such agree-
H ments. [ l lB-C I
A.B.C. LAMINART v. A.P. AGENCIES !SAIKIA, J.] 3

;.,.- Where such au ouster clause occurs, it is pertinent to see whether A
there is ouster of jurisdiction of other courts. When ihe clause is dear,
unambiguous aud specific accepted notions of contract would hind the
parties and unless the absence of ad idem can be shown the other courts
should avoid exercising jurisdiction. As regards construction of the
ouster clause, when words like 'alone', 'only' 'exclusive', and the like B
have been used, there may be no difficulty. Even without such words in
appropriate cases the maxim "expressio unius est exclusio alterius'-
·~ expression of one is the exclusion of another may be applied. What is an
4 appropriate case shall depend on the facts of the case. In such a case

.. mention of one thing may imply exclusion of another. Where certain
jurisdiction is specified in the contract, an intention to exclude all
others from its operation may in such cases be inferred. It has therefore c
to be properly construed. I12E-G]
-(
S. Manuel Raj & Co. v. J. Muni Lal & Co., AIR 1963 Gujarat
148; Sri Rajendra Mills v. Haj Hassan, AIR 1970 Cal. 342; Hakam
Singh v. M/s. Gammon (India) Ltd., 11971) 3 SCR 314; Nanak Chand D
v. T. T. Elect. Supply Co., AIR 1975 Mad 103; Naziruddin v. V.A.
Annamalai & Ors., [1978) 2, MLJ 254; Snehal Kumar Sarabhaiv. E.T.
Orgn., AIR 1975 Gujarat 72 and Salem Chemical Industries v. Bird &
Co., AIR 1979 Mad. 16, referred to.

-< CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2682
E
of 1982

From the Judgment and Order dated 4.11.1980 of the Madras
-.. High Court in C.M.A. No. 218 of 1978

Pinaki Mishra, Shishir Sharma and P.H. Parekh for the Appel-
F
!ants.
-~- S.S. Javeli, B.R. Agarwala and R.B. Hathikhanavala for the
Respondent.

The Judgment of the Court was delivered by
G
,.I. K.N. SAIKIA, J. This is an appeal by special leave from the
judgment and order of the High Court at Madras dated 4th 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. H
4 SUPREME COURT REPORTS [1989] 2 S.C.R.

A The first appellant is a manufacturer and supplier of metallic '-f..
yarn under the name and style 'Rupalon Metallic Yarn' having its
registered office at Udyognagar, Mohamadabad, Gujarat within the
jurisdiction of the Civil Court of Kaira. The second appellant is a sister
concern of the first appellant doing business with it. The respondent is
a registered partnership firm doing business in metallic yarn and other
B
allied products at Salem.
1>-
The first petitioner entered into an agreement with the respon-
dent on 2.10.1974 whereunder the appellants were to supply 5000 ~
bobbins of Rupalon Metallic Yarn to the respondent at the rate of
Rs.35 per bobbin as stipulated in different clauses of the agreement. "
c Clause 11 of the agreement provided as follows:

"Any dispute arising out of this sale shall be subject to y
Kaira jurisdiction."

Disputes having arisen out of the contract the respondent filed a
D
suit, being original suit No. 302 of 1975, against the appellants in the
Court of Subordinate Judge at Salem for the recovery of a sum of
Rs.1,63,240 claiming to be the balance of the advance remaining in the
hands of the appellants and also a sum of Rs.2.40,000 towards
damages. The appellants took a number of defences and also took a
preliminary objection that the Subordinate Judge at Salem had no ~
E jurisdiction to entertain the suit as parties by express contract had
agreed to confer exclusive jurisdiction in regard to all disputes arising
out of the contract on the civil Court at Kaira.
>-
The Trial Court, inter alia, framed issue No. 2 as follows:
F "Issue No. 2. Has the court no jurisdiction to entertain or <

try this suit?"
1''
The learned Court treating it as a preliminary issue in its judgment
dated 18.4.1978 found that it had no jurisdiction to entertain the suit in
view of Clause 11 and accordingly it returned the Plaint for presenta-
G tion in the proper court. The respondent appealed therefrom, in
C.M.A. No. 218 of 1978, to the High Court of Madras which by the A
impugned Judgment and Order dated 4.11.1980 allowed the appeal, -
setting aside the judgment of the Trial Court with a direction to take
the plaint on file and dispose of the suit on merits on other issues.
Hence this appeal.
H
A.B.C. LAMINART v. A.P. AGENCIES ISAIKIA, J.] 5

Mr. Pinaki Misra, the learned counsel for the appellants, submits
~ A
that Clause 11 of the agreement having provided that any dispute
arising out of this sale shall be subject to Kaira jurisdiction, the parties
are bound by it and the suit could therefore have been filed only within
Kaira jurisdiction and not at Salem, and as such, the High Court
committed error of law in setting aside the Trial Court judgment and in
directing the Court as Salem to entertain the suit. Mr. S.S. Javali, the' B
'
-"\'
.~
. learned counsel 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 exclu-
• sive so as to take away all jurisdictions except that of Kaira .

The first question to be decided, therefore, is whether Clause 11
c
--{
as aforesaid formed part of. the agreement. Mr. Javali submits ttiat
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 acknow-
!edging the receipt of their order and registering the same subject to
the terms and conditions 'overleaf. The general terms and conditions D
printed overleaf induded 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 sub- E
mission of Mr. Javali has, therefore, to be rejected.

The next question is whether Clause 11 is valid, and if so, what
would be its effect? As Clause 11 formed part of the agreement it
would be valid only if the parties could have validly agreed to it. It is
common knowledge that the law of contract only prescribes certain F
'~ limiting principles within which parties are free to make their own
contracts. An agreement enforceable at law is a contract. An agree-
men! which purports to oust the jurisdiction of the Court absolutely is
contrary to public policy and hence void. Each of the citizens has ·the
right to have his legal position determined by the ordinary Tribunal
except, of course, in a contract (a) when there is an arbitration clause G
,I. which is valid and binding under the law, and (b) when parties to a
contract agree as to the jurisdiction to which disputes in respect of the
contract shall be subject .."It has long been established", say Cheshire
and Fifoot, "that a contract which purports to des\roy the right of one
or both of the parties to submit questions oflaw to the courts is con-
trary to public policy and is void pro tanto". However, arbitration is a H
6 SUPREME COURT REPORTS [1989] 2 S.C.R.

statutory mode of settlement; and as a matter of commercial law and -{.
A
practice parties to a contract may agree as to the jurisdiction to which
all or any disputes on or arising out of the contract shall be subject.

Section 28 of the Indian Contract Act, 1872 provides that every
agreement by which any party thereto is restricted absolutely from
B enforcing his rights under or in respect of any contract, by the usual
'
legal proceedings in the ordinary tribunal, or which limits the time /-
within which he may thus enforce his rights, is void to that extent. This '
~
is subject to exceptions, namely, (1) contract to refer to arbitration
and to abide by its award, (2) as a matter of commercial law and
practice to submit disputes on or in respect of the contract to agreed •
proper jurisdiction and not other jurisdictions though proper. The
c principle of Private International Law that the parties should be bound
by the jurisdiction clause to which they have agreed unless there is y
some reason to contrary is being applied to municipal contracts. In Lee
v. Showmen's Guild, [1952] 1 All E.R. 1175 at 1181 Lord Denning
said:
D
"Parties cannot by contract oust the ordinary courts from
their jurisdiction. They can, of course, agree to leave ques-
tions of law, as well as 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
r
E
its decisions being examined by the courts. If parties should
seek, by agreement, to fake the law out of the hands of the
courts and put it into the hands of a private tribunal, with-
out any recourse at all to the courts in cases of error of law,
then the agreement jg to that extent contrary to public pol-
~

F icy and void."

Under section 23 of the Indian Contract Act the consideration or
+-
object of an agreement is iawful, 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 abso-
G lutely 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 jurisdic-
tion 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 submit had nothing to do with the contract. If
H on the other hand it is found that the jurisdiction agreed would also be
A.B.C. LAMINA.RT v. A.P. AGENCIES [SAIKIA, J.) 7
)("" a proper jurisdiction in the matter of the contract it could not be said
A
that it ousted the jurisdiction of the Court. this leads to the question
in the facts of this case as to whether Kaira would be proper jurisdic-
tion in the matter of this contract. It would also be relevant to examine
if some other courts than that of Kaira would also have had jurisdic-
tion in the absence of Clause 11 and whether that would amount to
_.,,. ouster of jurisdiction of those courts and would thereby affect the
validity of the clause.
B

>;::
The jurisdiction of the Court in matter of a contract will depend
. on the situs of the contract and the cause of action arising through
connecting factors.
c
,. A cause of action means every fact, which, if traversed, it would
be necessary for the plaintiff to prove in order to support his, right to a
judgment of the Court. In other words, it is a bundle of facts which
taken with the Jaw applicable to them gives the plaintiff a right to relief
against the defendant. It must include some act done by the defendant
since in the absence of such an act no cause of action can possibly D
accrue. It is not limited to the actual infringement of the right sued on
but includes all the material facts on which it is founded. It does not
comprise evidence necessary to prove such facts, but every fact neces-
sary for the plaintiff to prove to enable him to obtain a decree. Every-
-i" thing which if not proved would give the defendant a right to
immediate judgment must be part of the cause of action. But it has no E
relation whatever to the defence which may be set up by the defendant
nor does it depend upon the character of the relief prayed for by the
plaintiff.

.\ Under section 20( c) of the Code of Civil Procedure subject to the
limitation stated therebefore, every suit shall be instituted in a court F
·"*. within the local limits of whose jurisdiction the cause of action, wholly
or in part arises. It may be remembered that earlier section 7 of Act 7
of 1888 added Explanation III as under:

"Explanation III- In suits arising out of contract the cause
;.. __ of action arises within the meaning of this section at apy of G
the following places, namely:

(1) the place where the contract was made;

(2) the place where the contract was to be performed or
performance thereof completed; H
8 SUPREME COURT REPORTS [1989) 2 S.C.R.

(3) the place where in performance of the contract any
A 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.
B
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
c suit on a contract, therefore, can be filed at the place where it was
made. The dete;mination 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
D a contract and hence a suit can be filed in a court within whose jurisdic-
tion the acceptance was communicated. The performance of a contract
is part of cause of action and a suit in respect of the breach can always
be filed at the place where the contract should have performed or its
performance completed. If the contract is to be performed at the place
where it is made, the suit on the contract is to be filed there and
E nowhere else. In suits for agency actions the cause of action arises at
the place where the contract of agency was made or the place where
actions are to be rendered and payment is to be made by the agent. _;...
Part of cause of action arises where money is expressly or impliedly
payable under a contract. In cases of repudiation of a contract, the
place where repudiation is received is the place where the suit would
F lie. If a contract is pleaded as part of the cause of action giving jurisdic-
tion to the Court where the suit is filed and that contract is found to be
invalid, such part of cause of the action disappears The above are some
of the connecting factors.

So long as the parties to a contract do not oust the jurisdiction of
G all the Courts which would otherwise have jurisdiction to decide the
cause of action under the law it cannot be said that the parties have by ....
their contract ousted the jurisdiction of the Courts. If under the law
several Courts would have jurisdiction and the parties have agreed to
submit to one of these jurisdictions and not to other or others of them
it cannot be said that there is total ouster of jurisdiction. In other
H words, where the parties to a contract agreed to submit the disputes
A.B.C. LAMINART v. A.P. AGENCIES [SAIKIA, J.[ 9
;,./
arising from it to a particular jurisdiction which would otherwise also
A
be a proper jurisdiction under the law their agreement to the extent
they agreed not to submit to other jurisdictions cannot be said to be
void as against public policy. If on the other hand the jurisdiction they
agreed .to submit to would not otherwise be proper jurisdiction to
decide disputes arising out of the contract it must be declared void
...., being against public policy. Would this be the position in the instant
case?
B

-'

- In S. Manuel Raj & Co. v. J. Mani/al & Co., AIR 1963 Guj. 148
where one of the parties to the contract signed an order form printed
by the other party containing the words "subject to Madras jurisdic-
tion" and sent the order form to the other party it was held that the
party must be assumed to have agreed that Madras was the place for c
'-<
settlement of the dispute and it was not open to that person who signed
the order 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 D
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.LR. 1970 Cal. 342 where there was a contract between the
plaintiff and defendant No. 1 under which the parties agreed that all E
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
x arose in part in both the places and it was therefore a case where two
J:- Courts had concurrent jurisdiction and, in such a case, it was open to F
the parties to make a chaise restricting the Court in which the suit
under or upon the contract could be instituted. In other words, both
the Courts having territorial jurisdiction, the parties by their agree-
,. ment waived their right, to institute any action, as aforesaid except at
Salem. It was observed that under those circumstances it was not open
j._ to the plaintiff to object to the order for return of the plaint for presen- G
talion to the Court at Salem as the choice of forum in case of alterna-
live forums lies with the plaintiff and the plaintiff having debarred or
precluded itself from going to any other Court except at Salem which
would be a proper Court as against the defendants it would not be just
to allow the plaintiff at the instance of any other party or under cover
of its objection to institute the suit except in,the Court at Salem. H
10 SUPREME COUR'r REPORTS (1989) 2 S.C.R.

A In Hakam Singh v. M/s. Gammon (India) Ltd., (1971) 3 S.C.R.
314 where the appellant agreed to do certain construction work for the
respondent who had its principal place of business at Bombay on the
terms and conditions of a written tender. Clause 12 of the tender
provided for arbitration in case of dipute. Clause 13 provided that
notwithstanding the place where the work under the contract was to be
B executed the contract shall be deemed to have been entered into by the ' \ __
parties at Bombay, and the Court in Bombay alone shall have jurisdic-
tion to adjudicate upon. On dispute arising between the parties the
appellant submitted a petition to the Court at Varanasi for an order
under section 20 of the Arbitration Act, 1940 that the agreement be •
filed and an order of reference be made to an arbitrator or arbitrators
C appointed by the Court. The respondent contended that in view of the
Clause 13 of the arbitration agreement only the Courts at Bombay had
jurisdiction. The Trial Court also held that the entire cause of action
had arisen at Varanasi and the parties could not by agreement confer
jurisdiction on the Courts at Bombay which they did not otherwise
possess. The High Court in re vision· held that the Courts at Bombay
D had jurisdiction under the general law and hence could entertain the
petition and that in view of Clause 13 of the arbitration agreement the
petition could not be entertained at Varanasi and directed the petition
to be returned for presentation to the proper Court. On appeal there-
from one of the questions that fell for consideration of this Court was
whether the Courts at Bombay alone had jurisdiction over the dispute.
E 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 enter-
tain 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 II thereto
F the respondent company which had its principal place of business at
Bombay was liable to b.e sued at Bombay. It was held that it was not
open to the parties to agreement to confer by their agreement jurisdic-
tion 011 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
G 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. With-
out referring to this decision a Division Bench of the Madras High
H Court in Nanak Chand v. T. T. Elect Supply Co., A.LR. 1975 Madras
A.B.C. LAMINART v. A.P. AGENCIES [SAIKIA, J. J 11
-\'"
103 observed that competency of a Court to try an action goes to the
root of the matter and when such competency is not found, it has no A
jurisdiction at all to try the case. But objection based on jurisdiction is
a matter which parties could waive and it is in this sense if such juris-
diction is exercised by Courts it does not go to the core of it so as to
make the resultant judgment a nullity. Thus it is now a settled princi-
..... pie that where there may be two or more competent Courts which can B
entertain a suit consequent upon a part of the cause of action having
/~
arisen therewithin, if the parties to the contract agreed to vest jurisdic-
!ion in one such court to try the dispute which might arise as between
... themselves the agreement would be valid. If such a contract is clear,
unambiguous and explicit and not vague it is not hit by sections 23 and
28 of the Contract Act. This can not be understood as parties contract-
~ ing against the Statute. Mercantile Law and Practice permit such c
agreements.

In Nazirrudin v. V.A. Annamalai & Ors., [1978] 2 M.L.J. 254
where the question was whether Rule 35 of U .P. State Lottery Rules,
1969 confined the jurisdiction only to Lucknow. The Rule said: "35. D
Legal jurisdiction in all matters concering the State lottery shall be
Lucknow." The sole question for consideration therefore was whether
the above Rule had the effect of vesting exclusive jurisdiction only in
-\-" the Courts in Lucknow and thereby taking away the jurisdiction which
the subordinate judge court at Vellore could have if it was established
that the lottery ticket was stolen within the jurisdiction of that Court E
from the first respondent. Held, it was well established that the jurisd-
iction of a Civil Court can be taken away only by an express provision
or by necessary _implication and ousting of a jurisdiction of Civil Court
should not and ought not be inferred from· an ambiguous provision. In
'\ that particular case it was common case of the parties that Rule 35 did
not expressly take away the jurisdiction of any other Court, and vest
--1: the exclusive jurisdiction only in the Courts at Lucknow. A note of
F
caution was sounded by M.P. Thakkar, J. as he then was, in Snehal
Kumar Sarabhai v. E.T. Orgn., A.LR. 1975 Guj. 72 observing that the
ouster clause could operate as estoppel against the parties to the con-
tract, 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 G
respect the agreement between the parties which was borne out of the
meeting of their minds out of consideration of convenience, but the
Co.urts were not obliged to do so in every case; and that a new
approach to the question deserved to be ni!'de 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 H
12 SUPREME COURT REPORTS [1989] 2 S.C.R.

A 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
B 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 Chemicallndustries v. Bird & Co., A.I.R. 1979 Madras
16 where the terms and conditions attached to the quotation contained ,..
an arbitration clause provided that: "any order placed against this
quotation shall be deemed to be a contract made in Calcutta and any
C dispute arising therefrom shall be settled by an Arbitrator to be jointly
appointed by us", it was held that it merely fixed the situs of the
contract at Calcutta and it did not mean to confer an exclusive jurisdic-
tion on the Court at Calcutta, and when a part of the cause of action
had arisen at Salem, the Court there had also jurisdiction to entertain
D the suit under section 20(c) of the Code of Civil Procedure.

From the foregoing decisions it can be reasonably deduced that
where such an ouster clause occurs, it is pertinent to see whether there
is ouster of jurisdiction of other Courts. When the clause is clear,
unambiguous and specific accepted notions of contract would bind the
E parties and unless the absence of ad idem can be shown, the other
Courts should avoid exercising jurisdiction. As regards construction of
the ouster clause when words like 'alone', 'only', 'exclusive' and the
like have been used there may be no difficulty. Even without such
words in appropriate cas~es the maxim 'expressio unius est exclusio
alterius' -expression of one is the exclusion of another may be
F applied. What is an appropriate case shall depend on the facts of the
case. In such a case mention of one thing may imply exclusion of +-
another. When certain jurisdiction is specified in a contract an inten-
tion to exclude all others from its operation may in such cases be
inferred. It has therefore to be properly construed.

G Coming to clause 11 we already found that this clause was
included in the general terms and conditions of sale and the order or
confirmation No. 68/59 dated 2. 10.1974 with the general terms and
conditions was sent from Udyognagar, Mohmadabad, Gujarat to the
respondent's address at 12 Suramangalam Road Salem, Tamilnadu.
The statement made in the Special Leave Petition that Udyognagar,
H Mohamadabad, Gujarat is within the jurisdiction of the Civil Court of
A.B.C. LAMINART v. A.P. AGENCIES [SAIKIA, J.J 13
~-
Kaira has not been controverted. We have already seen that making of A
the contract was a part of the cause of action and a suit on a contract
therefore could be filed at the place where it was made. Thus Kaira
court would even otherwise have had jurisdiction. The bobbins of
metallic yam were delivered at the 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 B
"'""· excluded by Clause 11 it would not absolutely oust the jurisdiction of
~
' the Court and, therefore, would not be void against public policy and
woqld 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 c
words like 'exclusive', 'alone', 'only' and the like. Can the maxim
~ 'expressio unius est exclusio a/terius' be applied under the facts and
circumstances of the case? The order of confirmation is of no assis-
lance. 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 D
was ensured by fixing the situs of the contract within Kaira, other
jurisdictions having connecting factors were not clearly, unambig-
uously 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 E
infirmity in the impugned judgment of the High Court.

In the result, this appeal fails and is dismissed. We, however,
leave the parties to bear their own costs.

~. YL. Appeal dismissed.

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