Madan B. Lokur, J.
1. Leave granted.
2. While I agree with the conclusion arrived at by my learned Brother Justice Lodha, this judgment has been penned down to raise the question – is it really necessary for this Court to repeatedly affirm the legal position ad nauseam? I believe the law on the subject is well settled and it is to nobody’s advantage if the same law is affirmed many times over.
3. The clause in the agreement that is sought to be interpreted reads as follows:
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“The agreement shall be subject to jurisdiction of the Courts at Kolkata.”
4. In my opinion, the very existence of the exclusion of jurisdiction clause in the agreement would be rendered meaningless were it not given its natural and plain meaning. The use of words like “only”, “exclusively”, “alone” and so on are not necessary to convey the intention of the parties in an exclusion of jurisdiction clause of an agreement. Therefore, I agree with the conclusion that jurisdiction in the subject matter of the proceedings vested, by agreement, only in the Courts in Kolkata.
5. The facts of the case have been detailed by my learned Brother and it is not necessary to repeat them.
6. Reference has been made to several decisions rendered by this Court and I propose to briefly advert to them.
One set of decisions:
7. There is really no difficulty in interpreting the exclusion clause in the first set of decisions. The clause in these decisions generally uses the word “alone” and, therefore, it is quite obvious Civil Appeal No. of 2013 Page 25 of 36 25 (Arising out of SLP(C) No.5595/2012) Page 25 that the parties have, by agreement, excluded the jurisdiction of courts -
other than those mentioned in the agreement. These decisions, along with the relevant clause, are as follows:
1. Hakam Singh v. Gammon (India) Ltd., (1971) 1 SCC 286:
“Notwithstanding the place where the work under this contract is to be executed, it is mutually understood and agreed by and between the parties hereto that this Contract shall be deemed to have been entered into by the parties concerned in the city of Bombay and the court of law in the city of Bombay alone shall have jurisdiction to adjudicate thereon.” (emphasis given) It was held that only the courts in Bombay and not Varanasi had jurisdiction over the subject matter of dispute.
2. Globe Transport Corpn. v. Triveni Engg. Works, (1983) 4 SCC 707:
“The Court in Jaipur City alone shall have jurisdiction in respect of all claims and matters arising (sic) under the consignment or of the goods entrusted for transportation.” (emphasis given) It was held that only the courts in Jaipur and not Allahabad had jurisdiction over the subject matter of dispute.
3. Angile Insulations v. Davy Ashmore India Ltd., (1995) 4 SCC 153:
“This work order is issued subject to the jurisdiction of the High Court situated in Bangalore in the State of Karnataka. Any legal proceeding will, therefore, fall Civil Appeal No. of 2013 Page 26 of 36 26 (Arising out of SLP(C) No.5595/2012) Page 26 within the jurisdiction of the above court only.” (emphasis given) -
It was held that only the courts in Karnataka and not Dhanbad had jurisdiction over the subject matter of dispute.
4. New Moga Transport Co. v. United India Insurance Co. Ltd., (2004) 4 SCC 677:
“The court at head office city [Udaipur] shall only be the jurisdiction in respect of all claims and matters arising under the consignment at the goods entrusted for transport.” (emphasis given) It was held that only the courts in Udaipur and not Barnala had jurisdiction over the subject matter of dispute.
5. Shree Subhlaxmi Fabrics (P) Ltd. v. Chand Mal Baradia, (2005) 10 SCC 704:
“Dispute under this contract shall be decided by the court of Bombay and no other courts.” (emphasis given) It was held that only the courts in Bombay and not Calcutta had jurisdiction over the subject matter of dispute.
6. Rajasthan State Electricity Board v. Universal Petrol Chemicals Limited, (2009) 3 SCC 107:
“The contract shall for all purposes be construed according to the laws of India and subject to jurisdiction only at Jaipur in Rajasthan courts only.” (emphasis given) Civil Appeal No. of 2013 Page 27 of 36 27 (Arising out of SLP(C) No.5595/2012) Page 27 It was held that only the courts in Jaipur and not Calcutta had jurisdiction over the subject matter of dispute.
7. A.V.M. Sales Corporation v. Anuradha Chemicals Private Limited, (2012) 2 SCC 315:
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“Any dispute arising out of this agreement will be subject to Calcutta jurisdiction only.” (emphasis given) It was held that only the courts in Calcutta and not Vijaywada had jurisdiction over the subject matter of dispute.
8. The exclusion clause in the above cases is explicit and presents no difficulty in understanding or appreciation.
Another set of decisions:
9. In the second set of decisions, the exclusion clause is not specific or explicit in as much as words like “only”, “alone” or “exclusively” and so on have not been used. This has apparently presented some difficulty in appreciation.
10. In A.B.C. Laminart v. A.P. Agencies, (1989) 2 SCC 163 the relevant clause read as follows:
“Any dispute arising out of this sale shall be subject to Kaira jurisdiction.”
11. Despite the aforesaid clause, proceedings were initiated by the respondent in Salem (Tamil Nadu). The appellant challenged Civil Appeal No. of 2013 Page 28 of 36 28 (Arising out of SLP(C) No.5595/2012) Page 28 the jurisdiction of the Court at Salem to entertain the proceedings since the parties had agreed that all disputes shall be subject to the jurisdiction of the Courts in Kaira (Gujarat). The Trial Court upheld the objection but that was set aside in appeal by the Madras High -
Court which held that the Courts in Salem had the jurisdiction to entertain the proceedings.
12. The Civil Appeal filed by the appellant challenging the decision of the Madras High Court was dismissed by this Court thereby affirming the jurisdiction of the Court in Salem notwithstanding the exclusion clause.
13. While doing so, this Court held that when a certain jurisdiction is specified in a contract, an intention to exclude all others from its operation may be inferred; the exclusion clause has to be properly construed and the maxim “expressio unius est exclusio alterius” (expression of one is the exclusion of another) may be applied.
14. Looking then to the facts and circumstances of the case, this Court held that the jurisdiction of Courts other than in Kaira were Civil Appeal No. of 2013 Page 29 of 36 29 (Arising out of SLP(C) No.5595/2012) Page 29 not clearly, unambiguously and explicitly excluded and therefore, the Court at Salem had jurisdiction to entertain the proceedings.
15. In R.S.D.V. Finance Co. (P) Ltd. v. Shree Vallabh Glass Works Ltd., (1993) 2 SCC 130, the exclusion clause read as follows :
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“Subject to Anand jurisdiction.”
16. Proceedings were initiated by the appellant in the Ordinary Original Civil Jurisdiction of the Bombay High Court. The respondent questioned the jurisdiction of the Bombay High Court in view of the exclusion clause. The learned Single Judge held that the Bombay High Court had jurisdiction to entertain the proceedings. However, the Division Bench of the High Court took the view that the Bombay High Court had no jurisdiction in the matter and accordingly dismissed the proceedings.
17. In appeal, this Court noted in paragraph 9 of the Report that the endorsement “Subject to Anand jurisdiction” had been made unilaterally by the respondent. Accordingly, there was no agreement between the parties to exclude the jurisdiction of the Civil Appeal No. of 2013 Page 30 of 36 30 (Arising out of SLP(C) No.5595/2012) Page 30 Bombay High Court. Clearly, this decision turned on its own special facts.
18. In Hanil Era Textiles Ltd. v. Puromatic Filters (P) Ltd., (2004) 4 SCC 671 the exclusion clause read as follows:
“Any legal proceeding arising out of the order shall be subject to the jurisdiction of the courts in Mumbai.”
19. On a dispute having arisen, proceedings were instituted by the respondent in the Courts in Delhi. This was objected to by the -
appellant but neither the Additional District Judge, Delhi nor the Delhi High Court accepted the contention of the appellant that the Courts in Delhi had no territorial jurisdiction in the matter.
20. In appeal, this Court referred to A.B.C. Laminart and after considering the facts and circumstances of the case inferred that the jurisdiction of all other Courts except the Courts in Mumbai was excluded. This inference was drawn from the fact that the purchase order was placed by the appellant at Mumbai and was accepted by the respondent at Mumbai. The advance payment was made by the respondent at Mumbai and as per the case of Civil Appeal No. of 2013 Page 31 of 36 31 (Arising out of SLP(C) No.5595/2012) Page 31 the respondent itself the final payment was to be made at Mumbai.
21. In Balaji Coke Industry Private Limited v. Maa Bhagwati Coke Gujarat Private Limited, (2009) 9 SCC 403, the exclusion clause read as follows:
“In case of any dispute or difference arising between the parties hereto or any claim or thing herein contained or the construction thereof or as to any matter in any way connected with or arising out of these presents or the operation thereof or the rights, duties or liabilities of either party thereof, then and in every such case the matter, differences or disputes shall be referred to an arbitrator in Kolkata, West Bengal, India in accordance with and subject to the provisions of the Arbitration and Conciliation Act, 1996, or any other enactment or statutory modifications thereof for the time being in force. The place of arbitration shall be Kolkata.”
22. Notwithstanding the aforesaid clause, proceedings were instituted by the respondent against the appellant in Bhavnagar (Gujarat). The petitioner in this Court then moved a Transfer Petition under Article 139-A(2) of the Constitution of India for transfer of the proceedings to Kolkata. While allowing the Transfer Petition, this Court drew an inference, as postulated in A.B.C. Laminart that the intention of the parties was to exclude the jurisdiction of Courts other than those in Kolkata.
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23. Finally, in Shriram City Union Finance Corporation Ltd.
v. Rama Mishra, (2002) 9 SCC 613, the exclusion clause read as follows:
“Subject to the provisions of clause 32 above it is expressly agreed by and between the parties hereinabove that any suit, application and/or any other legal proceedings with regard to any matter, claims, differences and for disputes arising out of this agreement shall be filed and referred to the courts in Calcutta for the purpose of jurisdiction.”
24. Proceedings were initiated by the respondent in Bhubaneswar (Odisha). An objection was taken by the appellant that the Court in Bhubaneswar had no jurisdiction to entertain the proceedings. However, the objection was not accepted by the Trial Judge, Bhubaneswar. In appeal, the District Judge accepted the contention -
of the appellant that only the Courts in Kolkata had jurisdiction in the matter. In a Civil Revision Petition filed before the Orissa High Court by the respondent, the order passed by the Trial Court was affirmed with the result that it was held that notwithstanding the exclusion clause, the Civil Judge, Bhubaneswar (Odisha) had jurisdiction to entertain the proceedings.
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25. In the Civil Appeal filed by the appellant in this Court, it was held that the exclusion clause left no room for doubt that the parties expressly agreed that legal proceedings shall be instituted only in the Courts in Kolkata. It was also held that the parties had agreed that the Courts in Kolkata “alone” would have jurisdiction in the matter and therefore, the Civil Court, Bhubaneswar ought not to have entertained the proceedings. A reading of the exclusion clause shows that it does not use the word “alone” but it was read into the clause by this Court as an inference drawn on the facts of the case, in line with the decision rendered in A.B.C. Laminart and the relief declined in A.B.C. Laminart was granted in this case.
26. It will be seen from the above decisions that except in A.B.C. Laminart where this Court declined to exclude the jurisdiction of the Courts in Salem, in all other similar cases an inference was -
drawn (explicitly or implicitly) that the parties intended the implementation of the exclusion clause as it reads notwithstanding the absence of the words “only”, “alone” or Civil Appeal No. of 2013 Page 34 of 36 34 (Arising out of SLP(C) No.5595/2012) Page 34 “exclusively” and the like. The reason for this is quite obvious. The parties would not have included the ouster clause in their agreement were it not to carry any meaning at all. The very fact that the ouster clause is included in the agreement between the parties conveys their clear intention to exclude the jurisdiction of Courts other than those mentioned in the concerned clause. Conversely, if the parties had intended that all Courts where the cause of action or a part thereof had arisen would continue to have jurisdiction over the dispute, the exclusion clause would not have found a place in the agreement between the parties.
27. It is not necessary to refer to the decisions rendered by this Court in Harshad Chimanlal Modi v. DLF Universal Limited, (2005) 7 SCC 791 and InterGlobe Aviation Limited v. N. Satchidanand, (2011) 7 SCC 463 since they deal with an issue that does not at all arise in this case. In this context it may only be mentioned that the appellant in the present case did not dispute -
that a part of the cause of action arose in Kolkata, as observed by my learned Brother Justice Lodha.
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Conclusion:
28. For the reasons mentioned above, I agree with my learned Brother that in the jurisdiction clause of an agreement, the absence of words like “alone”, “only”, “exclusive” or “exclusive jurisdiction” is neither decisive nor does it make any material difference in deciding the jurisdiction of a court. The very existence of a jurisdiction clause in an agreement makes the intention of the parties to an agreement quite clear and it is not advisable to read such a clause in the agreement like a statute. In the present case, only the Courts in Kolkata had jurisdiction to entertain the disputes between the parties.
29. The Civil Appeal is dismissed, as proposed, leaving the appellant to pursue its remedy in Kolkata.
. J.
New Delhi (Madan B.
Lokur)
July 3, 2013
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