Decided on October 27,1972

Steel Plant Private Ltd. Appellant
The Republic Forge Co. Ltd. Respondents


Nain, J. - (1.) THIS Motion appears to be misconceived as well as mala fide. The Motion is for stay of the suit on the ground that by an agreement between the parties they have excluded the jurisdiction of Courts in Bombay and conferred exclusive jurisdiction on Courts at Hyderabad in Andhra Pradesh in respect of the subject -matter of the suit. It is undoubtedly correct that by an agreement the parties can confer exclusive jurisdiction on one of the Courts1 of competent jurisdiction and exclude jurisdiction of the other Court of competent jurisdiction. Even if this has been done in this case, in my opinion, this would be a defence to the suit on the ground that this Court has no jurisdiction. If the Court so holds the plaint will have to be returned to the plaintiff for presentation to the proper Court. In my opinion, stay of the suit is not the proper remedy. Even if it were, I would not grant a stay because stay would only put the plaintiffs' suit in cold storage and prevent him from getting the relief he seeks from the Court of competent jurisdiction.
(2.) THE plaintiffs have filed the present suit for recovery of a sum of Rs. 3,00,705.25, interest and costs as balance of price of goods sold and delivered under a contract or in the alternative as damages for breach of the said contract or in the further alternative as quantum meruit payment for goods supplied and work done under a contract contained in the correspondence annexed to the plaint. The contract was for supply of materials and erection of certain works by the plaintiffs for the defendants at Hyderabad. According to the plaintiffs, their letter of acceptance dated June 9, 1967 provided that all disputes and questions whatsoever which may arise between the parties out of or in connection with the contract shall always be deemed to have arisen in Bombay and no other Courts except the civil Courts in Greater Bombay shall have jurisdiction to entertain or try the same. On the other hand, the defendants contend that the purchase orders placed by them with the plaintiffs expressly stipulated that all disputes relating to the order or the price of the goods supplied thereunder shall be subject to the Court of competent jurisdiction in Hyderabad and that neither party shall take any legal proceedings to enforce any claim against the other relating to the said order in any Court other than the Court of competent jurisdiction in Hyderabad. It appears that the defendants are counter -claiming certain amounts from the plaintiffs in respect of the suit contract. The rival contentions of the parties, viz. the plaintiffs' contention that the contract between the parties provides that Courts in Bombay shall have jurisdiction to the exclusion of the Courts in Hyderabad and the contention of the defendants that the contract provides that the Courts in Hyderabad shall have jurisdiction to the exclusion of the Courts in Bombay can only be determined in the suit by framing issues arising from the rival contentions of the parties and answering them. The Court may have to decide the issues on evidence. Each party has a right to have these issues decided by the Court. It will be unjust to prevent the plaintiffs from having these issues decided in the suit. If the issues are decided against the plaintiffs they will have the right to have the plaint returned to them for presentation to the Court of competent jurisdiction in Hyderabad, IE the issues are decided in their favour the plaintiffs will have the right to proceed with the suit and get the relief prayed for from this Court. An order o:: stay of the suit can only compel them to accept the defendants' contention that the Courts in Hyderabad alone have jurisdiction without a trial of that issue. The stay of the suit will result in the abuse of the process of the Court.
(3.) ON behalf of the defendants reliance has been placed on the judgment of a Division Bench of the Calcutta High Court in the case of Lakhinarayan Ramniwas v. : AIR1960Cal155 . In that case a contract entered into in Italy by two Italians contained a1 term to the effect that a suit arising out of and based on the contract should be instituted in Italy in. accordance with Italian law. The Calcutta High Court held that even though such a term in the contract may be valid, it cannot be pleaded as a bar to the jurisdiction of an Indian Court which otherwise has jurisdiction to try a suit instituted before it and that parties cannot by a private agreement whether such an agreement has been entered into in India or outside India take away jurisdiction which is vested in the Indian Court to try the suit just as the parties cannot by such agreement cornier upon it jurisdiction to try a case which it has otherwise no jurisdiction to try. In such a case the Court in India may in the exercise of its jurisdiction stay its hands and refuse to try the suit until competent judicial authority to whose decision the parties have agreed to submit disputes has pronounced its decision. The Court acts upon the principle that in general the Court will compel the parties to abide by their contracts and if on a consideration of all the circumstances of the case the Court comes to the conclusion that it will be unjust or unfair to stay the suit, it may refuse to grant the stay asked for but not otherwise. In the case before the Calcutta High Court G.K. Mitter J. sitting singly directed stay of the suit instituted in India. The Division Bench dismissed the appeal.;

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