HAKAM SINGH versus M/S. GAMMON (INDIA) LTD.

Citation: [1971] 3 S.C.R. 314 · Decided: 08-01-1971 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Dismissed

Cited by 4 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

314 
HAKAM SINGH 
v. 
MIS. GAMMON (INDIA) LTD. 
January 8, 1971 
[J. C. SHAH, C.J. AND K. S. HEGDE, J.] 
Contract Act 1872, s, 28-Code of Civil Procedure, 1908, s. 20(a) Ex-
_planation /I-Arbitration Act 1940, s. 41-Defendant a company register-
ed under the Indian Companies Act having its principal place of business at 
Bombay-Contract providing for arbitration of disputes and further pro-
.vidlng that disputes were to be adjudicated only in Bombay Courts-Restric-
.tion whether binding or against public policy. 
On October 5, 1960 the appellant agreed to do certain construction 
work for the responden•-a company registered under the Indian Com-
,panies Act and having its principal place of business at Bombay-on the 
terms and conditions of a written tender. 
Clause 12 of the tender pro-
vided for arbitration in case of dispute. Clause 13 provided that notwith-
standing the place where the work under the contract was to be executed 
the contract shall be deemed to have been entered into by the parties 
at Bombay and the court in Bombay alone shall have jurisdiction to 
adjudieate thereon. 
On disputes arising between the parties the appellant 
. submitted a petition to the court at Varanasi for an order under s. 20 
of the Arbitration. Act, 1940 that the agreement be filed and an order 
of reference be made to an arbitrator or arbitrators appointed by the 
·Court. The respondent contended that in view of cl. 13 of the arbitration 
agreement only the courts at Bombay had jurisdiction. 
The trial court 
held that the entire cause of action had arisen at Varanasi and the parties 
could not by agreement confer jurisdiction on the courts 
of Bombay 
which they did not otherwise possess. The High Court at Allahabad in 
exercise of its revisional jurisdiction held that the courts at Bombay had 
jurisdiction under the general law and henoe could entertain the petition. 
It further held that in view of cl. 13 of the arbitration agreement the 
petition could not be entertained at Varanasi. 
Against the order of the 
High Court directing the petition to be returned for presentation to the 
proper court, the appellant appealed to this Court by special leave. The 
questions that fell for consideration were : (i) whether the courts at 
Bombay alone had jurisdiction over the dispute; (ii) whether Explanation 
II to s. 20(a) of the Code of Civil Procedure refers only to Government 
corporations and not to companies registered under the. Indian Companies 
Act. 
HELD : (i) The Code of Civil Procedure in its entirety applies to 
proceeding;; under the Arbitration Act by virtue of s .. 41 of the latter 
Act. The jurisdiction of the courts under the Arbitration Act to entertain 
a proceeding for filing an award is accordingly governed by the provisions 
cf the Code of Civil Procedu're. By the 
1terms of s. 20(a) of the Code 
of Civil Procedure read with Exp. II thereto, the respondent company 
which had its principal place of business ·at Bombay, was liable to be 
·sued at Bombay. [316 GJ 
· 
It is not open to the parti°' by agreenient to confer juri.sdiction on any 
•court which it did not otherwise possess un<!er the Code. But where two 
·courts hape under the Code of Civil Procedure jurisdicti<ll) to try a suit 
<Ol' proceeding an agreement between the parties that the jlispute between 
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HAKAM SINGH v. GAMMON INDIA LTD. (Shah, C.J.) 
315 
them shall be tried in one of S\!~' courts is not contrary to public pulicy. 
Such an agreement does not contravene s. 28 of the Contract Act. 
[316 HJ 
Since in the present case the courts at Bombay had jurisdiction under 
the Code of Civil P\"ocedure the agreement between the parties that the 
courts in Bombay alone shall have jurisdict.ion to try the proceedings re-
lating to arbitration was binding between them. [318 A] 
(ii) 
Order 29 of the Code of Civil Procedure deals with suits by or 
against a corporation and there is nothing in the Code to suppolrt the 
contention that a Corporation referred to under s. 20 means only a statu-
tory corporation and not a company registered under the Indian Com-
panies Act. [317 G-H] 
C1v1L A,PPBLLATB JURISDICTION : Civil Appeal No. 646 of 
c 1967 . . 
Appeal by special leave from the judgment and order dated 
December 1, 1966 of the Allahabad High Court in Civil Revision 
No. 721 of 1964. 
1. P. Goyal and G. S. Chatterjee, for the appellant. 
V. S. Desai and B. R. Agarwala, for the respondent. 
The Judgment of the Court 

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