TAJ IRON AND STEEL WORKS P LIMITED Vs. MORVI IRON SYNDICATE P LIMITED

JUDGEMENT

(1.) This revision application filed by the original defendant arises out of Small Civil Suit No. 93 of 1961 the cause of action for which arose both at Surendranagar as well as Bombay but the parties by their contract agreed that all disputes arising out of the contract between them shall be referred to a Court of competent jurisdiction in Bombay alone and at no other place. The learned Judge held that this term in the contract was not in contravention of sec. 28 of the Contract Act. But he held that in view of the provisions of sec. 23 of the Contract Act and sec. 20 of the Civil Procedure Code such an agreement would defeat the provisions of sec. 20 C.P.Code and he therefore held that that agreement could not be given effect to. He therefore held that the suit could be filed in Surendranagar Court Hence this revision application.

(2.) If the parties to a contract provide in the contract that legal proceedings if any should be started a one of the two places having jurisdiction then such a term would not clearly contravene the provisions of sec. 28 of the Contract Act and this point is well settled and need not be argued before me. But it is contended by the learned counsel for the opponent that the lower Court was right in holding that the agreement could not be given effect to in view of sec. 20 C.P.Code and sec. 23 of the Contract Act. The lower Court also placed reliance on Dwarka Rubber Works v. Chhotelal A.I.R. 56 Madhya Bharat 120 where it has been observed as follows:-

(3.) With this view so far it interprets section 28 Contract Act I find myself in accord but with respect and diffidence I venture to strike note of discord in the ultimate decision on the point. I find that in considering this question attention was almost entirely riveted on the construction of section 28 Contract Act though in one or two cases a passing reference was also made touching the aspect of public policy under section 23 Contract Act.