In the case of Hakam Singh v. Gammon (India) Ltd., (1971) 1 SCC 286, the Supreme Court has held that:
“It is not open to the parties by agreement to confer by their agreement jurisdiction on a Court which it does not possess under the Code. But where two courts or more have under the Code of Civil Procedure jurisdiction to try a suit or proceeding an agreement between the parties that the dispute between them shall be tried in one of such Courts is not contrary to public policy. Such an agreement does not contravene Section 28 of the Contract Act.”
In the case of A.B.C. Laminart (P) Ltd. v. A.P. Agencies, (1989) 2 SCC 163 : AIR 1989 SC 1239, the Supreme Court observed as under:
“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. …”
“…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 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 cases the maxim “expressio unius est exclusio alterius” — expression of one is the exclusion of another — may be 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 intention to exclude all others from its operation may in such cases be inferred. It has therefore to be properly construed.”
In the case of Shriram City Union Finance Corpn. Ltd. v. Rama Mishra, (2002) 9 SCC 613 : AIR 2002 SC 2402, the Supreme Court has held as under:
“…there is difference between inherent lack of jurisdiction of any court on account of some statute and the other where parties through agreement bind themselves to have their dispute decided by any one of the courts having jurisdiction. … A party is bound either by provision of the Constitution, statutory provisions or any rule or under terms of any contract which is not against the public policy. It is open for a party for his convenience to fix the jurisdiction of any competent court to have their dispute adjudicated by that court alone. In other words, if one or more courts have the jurisdiction to try any suit, it is open for the parties to choose any one of the two competent courts to decide their disputes. In case parties under their own agreement expressly agree that their dispute shall be tried by only one of them then the parties can only file the suit in that court alone to which they have so agreed. In the present case, as we have said, through clause 34 of the agreement, the parties have bound themselves that in any matter arising between them under the said contract, it is the courts in Calcutta alone which will have jurisdiction. Once parties bound themselves as such it is not open for them to choose a different jurisdiction as in the present case by filing the suit at Bhubaneshwar. Such a suit would be in violation of the said agreement.”
In your case, from the facts stated in the question, Ludhiana is one of the places which has territorial jurisdiction for any dispute between the two parties. And, as per your agreement, it is specifically mentioned that “All disputes shall be resolved subject to jurisdiction of Ludhiana courts only”. In view of this, a civil suit in such a dispute can be filed only in Ludhiana and not in Delhi, as held in the above Supreme Court judgments. Therefore, you can oppose the civil suit filed by the opposite party in Delhi on the ground that this suit cannot be filed in Delhi but can be filed only in Ludhiana as per the specific agreement.
Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles. List of his Quora Answers. List of his YouTube Videos.
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