A.V.M. SALES CORPORATION versus M/S. ANURADHA CHEMICALS PVT. LTD.

Citation: [2012] 1 S.C.R. 318 · Decided: 17-01-2012 · Supreme Court of India · Bench: ALTAMAS KABIR · Disposal: Case Allowed
Cited by 1 judgment(s) · see the full citation network in Lexace
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

A 
B 
[2012] 1 S.C.R. 318 
A.V.M. SALES CORPORATION 
v. 
MIS. ANURADHA CHEMICALS PVT. LTD. 
(Special Leave Petition (C) No.10184 of 2008) 
JANUARY 17, 2012 
[ALTAMAS KABIR AND CYRIAC JOSEPH, JJ.] 
Contract Act, 1872: 
c 
ss. 23 and 28 - Two courts having jurisdiction to try a suit 
- Parties to an agreement mutually agreeing to exclude the 
jurisdiction of one court in preference to the other -
Permissibility of, and if the same is violative of the provisions 
of ss. 23 and 28 - On facts, contract for supply of goods 
0 
between the parties and agreement to the effect that dispute 
between the parties would be subject to jurisdiction at place 
'C' - Suit for recovery filed by petitioner at place 'C' - On 
receiving summons, respondent filed a separate suit at place 
'V' - Recovery suit by respondent decreed and upheld by the 
E High Court - On appeal, held: Though the courts at place 'V' 
along with the courts at place 'C' would have jurisdiction u/s. 
20 CPC to entertain and try a suit relating to and arising out 
of the agreement and the mutual understanding as part of the 
cause of action of the suit had arisen within the jurisdiction of 
both the said courts, such jurisdiction of the courts at place 
F 
'V' would stand ousted by virtue of the exclusion clause in the 
agreement - Decree passed by the civil judge at place 'V' and 
the judgment of the High Court set aside - Trial court at place 
'V' directed to return the plaint to the respondent to present 
G 
H 
the same before the appropriate court at place 'C'. 
ss. 23 and 28 - Contract in violation of ss. 23 and 28 -
Permissibility of - Held: Parties to an agreement cannot 
contract against the statutory provisions. 
· 
318 
A.V.M. SALES CORPORATION v. ANURADHA 
319 
CHEMICALS PVT. LTD. 
Jurisdiction - Court having no territorial or pecuniary A 
jurisdiction - If parties to an agreement, can confer jurisdiction 
on such court - Held: Parties cannot confer jurisdiction on a 
court which has no territorial or pecuniary jurisdiction to 
entertain a matter. 
B 
Cause of action - Meaning of - Held: Comprises a bundle 
of facts which are relevant for the de!ermination of the /is 
between the parties. 
Parties entered into an agreement at place 'C' for 
supply of goods by respondent to petitioner. The parties C 
also entered into an agreement that the dispute between 
the parties would be subject to jurisdiction at place 'C' 
only. Dispute arose between the parties. The petitioner 
filed a recovery suit in the High Court at place 'C'. Upon 
receiving summons, the respondent filed a separate suit D 
at place 'V' and the respondent's suit was decreed. 
Aggrieved, the petitioner filed a first appeal and the High 
Court dismissed the same. Therefore, the petitioner filed 
the instant Special Leave Petition. 
Allowing the Special Leave Petition, the Court 
HELD: 1.1 Section 23 of the Contract Act, 1872 
indicates what considerations and objects are lawful and· 
what are not, including the considerations or objects of 
E 
an agreement, if forbidden by law. Section 28 of the Act, 
F 
clearly spells out that any agreement in restraint of legal 
proceedings is void. Basically, what Section 28 read with 
Section 23 makes it very clear that if any mutual 
agreement is intended to restrict or extinguish the right 
of a party from enforcing his/her right under or in respect G 
of a contract, by the usual legal proceedings in the 
ordinary Tribunals, such an agreement would to that 
extent be void. In other words, parties cannot contract 
against a statute. [Paras 9 and 10] [326-D; 327-D] 
H 
320 
SUPREME COURT REPORTS 
[2012] 1 S.C.R. 
A 
A.B.C. Laminart Pvt. Ltd. & Anr. Vs. A.P. Agencies, 
Sa/em AIR 1989 SC 1239: (1989) 2 sec 163: 1989 (2) SCR 
1; Angile Insulations vs. Davy Ashmore India Ltd. & Anr. 
(1995) 4 SCC 153: 1995 (3) SCR 443 ; Hanil Era Textiles 
Ltd. Vs. Puromatic Fillers (P) Ltd. AIR 2004 SC 2432: 2004 
B 
(1) Suppl. SCR 333 - referred to. 
1.2. As regards, the question as to whether the 
parties to an agreement can contract in violation of 
Sections 23 and 28 of the 1872 Act, the parties cannot 
C 
contract against the statutory provisions. The question 
whether the parties to an agreement can confer 
jurisdiction on a court which has no territorial or 
pecuniary jurisdiction to entertain a matter, is answered 
in negative. As regards the question, whether if two 
courts have jurisdiction to try a suit, can the parties to 
D an agreement mutually agree to exclude th
Excerpt shown. Read the full judgment & AI analysis in Lexace.