A.B.C. LAMINART PVT. LTD. & ANR. versus A.P. AGENCIES, SALEM

Citation: [1989] 2 S.C.R. 1 · Decided: 13-03-1989 · Supreme Court of India · Bench: G.L. OZA · Disposal: Dismissed

Cited by 6 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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A.B.C. LAMINART PVT. LID. & ANR. 
v. 
A.P. AGENCIES, SALEM 
MARCH 13, 1989 
A 
[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: 
Section 9-Civil Procedure Code-Civil court-Jurisdiction-
Ouster of-Interpretation of clauses of contract. 
Statutory Interpretation 'Ouster clause'~onstruction of. 
c 
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 
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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 
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the appellants were to supply 5000 bobbins of Ruplon Metallic Yarn to 
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· 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-
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1 
2 
SUPREME COURT REPORTS 
I 1989) 2 S.C.R. 
nary objection and found that it had, in view of clause (11) of the 
-f., 
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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 
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and dispose of the suit on merits and on other issues. 
Hence this appeal by the appellants. Dismissing the appeal, this " 
Court, 
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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 
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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 
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their contract ousted the jurisdiction of the court. ISG I 
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Where the parties to a contract agreed to submit the disputes 
arising i'rom it to a particular jurisdiction which would otherwise also 
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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 
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to submit to would not otherwise be proper, jurisdiction to decide dis- -1--
pules arising out of the contract it must be declared void being against 
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 
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arisen there-within if the parties to the contract agreed to vest jurisdic-
f,i.. 
lion on 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 & 28 
of the Contract Act. This cannot be understood as parties contracting 
against the Statute. Mercantile Law and Practice permit such agree-
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ments. [ l lB-C I 
A.B.C. LAMINART v. A.P

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