CHOLAMANDALAM INVESTMENTS AND FINANCE CO. PVT. LTD. versus RADHIKA SYNTHETICS AND ANR.

Citation: [1996] 1 S.C.R. 495 · Decided: 16-01-1996 · Supreme Court of India · Bench: A.M. AHMADI · Disposal: Disposed off

Judgment (excerpt)

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CHOLAMANDALAM INVESTMENTS AND 
FINANCE CO. PVT. LTD. 
v. 
RADHIKA SYNTHETICS AND ANR. 
JANUARY 16, 1996 
[A.M. AHMADI, CJ. AND B.P. JEEVAN REDDY, JJ.] 
Code of Civil Procedure, 1908 : 
S.9, 10, 20, 25-Suitfor recovery of money---Jurisdiction-High Courts 
of Bombay and Madras having jurisdiction-Parties agreeing to submit to 
Jurisdiction ~f Madras High Court-Plaintiff .filing suit in Madras High 
Court-field, where two courts have jurisdiction, parties by contract can 
submit to jurij·diction of one court and exclude jurisdiction of other--Another 
suit .filed later in Bombay High Court in respect of same subject matter trans-
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ferred to Madras High Court. 
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... 
Constitution of India : 
Article 139 A(2)-Suit alleging breach of contract-Plaintiff filing suit 
iu Madras High Court-Defendant raising no objection to jurisdiction-Later 
d4endant filing another suit in respect of same subject matter before Bombay 
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Hii(h Court-Petition for transfer of Suit pending in Bombay High Court to 
Madras High Court--Allowed. 
Letters Patent (Bombay High Court). 
Clause 12-Suit arising out of breach of agreement-Parties agreeing to 
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submit to jurisdiction of Madras High Court-Suit for recovery of money filed 
in 
Madras High Court-De.fendant raising no objection to 
jurisdiction-D~fendant later .filing another suit in respect of same subiect 
mailer in Bombay High Court after obtaining leave of Bombay High 
Court-Held, leave granted under clause 12 o.f letters patent cannot exclude 
j!Jrisdiction of High Court o.f Madras in view of agreement between parties. 
The petitioner in Transfer Petition No. 870of1993, had its registered 
office at Madras. It filed a civil suit in the Madras High Court against the 
respondents on the ground that they did not pay the amount due under 
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the hire purchase agreement dated 26.4.1989 and supplemental agree-
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495 
496 
SUPREME COURT REPORTS 
(1996] I S.C.R. 
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ments entered into between the parties. The plaint of the suit state that 
the cause of action for the suit arose partly at Madras where the moneys 
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were due and payable under the agreements. The hire purchase agreement 
also stipulated that only Madras Courts would have jurisdiction to try the 
arbitration or legal proceedings arising out of any dispute regarding the 
agreenient. The respondents did not raise any objection about the juris-
diction. Later, the respondents filed a suit in the Bombay High Court 
against .the petitioner claiming damages for failure on latter's part. to 
comply with the terms of the said hire purchase agreement. The petitioner 
filed a Transfer Petition (T.P. No. 870 of 1993) seeking transfer of suit No. 
6920 of 1992 to Madras High Court. The respondents also filed on T.P. No. 
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96 of 1994. The respondents opposed the Transfer Petition No. 870/93 on 
the grounds that the petitioner also had an office in Bombay, the entire 
documentation was done at Bombay, the payments made by the respond-
ents were made at Bombay and the entire cause of action arose at Bombay; 
and that, the respondents had filed the suit in the Bombay High Court 
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after obtaining leave under clause 12 of Letters Patent from the Bombay 
High Court. 
Allowing Transfer Petition No. 870 of 1993 and rejecting the other 
transfer petition, this Court 
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HELD : 1.1. Where two courts have jurisdiction to adjudicate upon 
any dispute, the parties by a contract can submit to the jurisdiction of one 
and exclude the jurisdiction of the other. In that view, the parties in the 
instant case are bound to submit to the jurisdiction of the High Court of 
Madras. [ 499-F] 
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1.2. Both the High Courts of Madras and Bombay can be said to 
have jurisdiction over th" subject-matter of the dispute although by virtue 
of clause 20 of the hire purchase agreement the parties submitted to the 
jurisdiction of Madras Courts and are bound by that clause. The supple-
mental agreements have not totally superseded the original agreement and 
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therefore the question whether they were executed at Bombay or Madras 
as they purport to be lrn;es significance. [499-H; 500-A-B] 
2. So far as the High Court of Bombay is concerned, the leave . 
granted under clause 12 of the Letters Patent cannot exclude the jurisdic-
tion of the High Court ol' Madras, particularly in view of the agreement 
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between the parties. [500-B) 
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CHOLAMANDALAM INVESTMENT & FINANCE CO., LTD. ~·. RADHIKA SYNTHETICS 
497 
3. Besides the suit at Madras

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