Is an agreement to oust the territorial jurisdiction of court valid?

Question: Is an agreement to oust the territorial jurisdiction of court valid? [HP J.S. 2004]

Find the answer to the mains question only on Legal Bites. [Is an agreement to oust the territorial jurisdiction of court valid?]

Answer

As per Section 9 of the Code of Civil Procedure 1908, all Courts have jurisdiction to try all suits of civil nature unless the jurisdiction is either expressly or impliedly barred. Further, section 20 states that a suit may be instituted either at the place where the defendant ordinarily resides or carries on business or where any part of the cause of action arises. Consent can neither confer nor take away the jurisdiction of a competent court.

But Supreme Court of India in Hukum Chand v. Gammon (India) Ltd, AIR 1971 SC 740, held that when two or more courts have jurisdiction to entertain a suit, an agreement by the parties to submit to the jurisdiction of one of such courts to the exclusion of the rest is valid, binding and enforceable.

This case has been affirmed in more recent cases, one of them is Swastik Gas (M/S Swastik Gases Pvt. Ltd v. Indian Oil Corp. Ltd (2013) 9 SCC 32, where the Supreme Court affirmed that “… 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 three-judge bench held that 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.

The judgment also noted that the principle of Expressio unius est exclusio alterius (expression of one is an exclusion of the other) would be applicable to such cases. It was observed that “where the contract specifies the jurisdiction of the courts at a particular place and such courts have jurisdiction to deal with the matter, we think that an inference may be drawn that parties intended to exclude all other courts.”

Important Mains Questions Series for Judiciary, APO & University Exams

1. CPC Mains Questions Series: Important Questions Part – I of X
2. CPC Mains Questions Series: Important Questions Part – II of X
3. CPC Mains Questions Series: Important Questions Part – III of X
4. CPC Mains Questions Series: Important Questions Part – IV of X
5. CPC Mains Questions Series: Important Questions Part – V of X
6. CPC Mains Questions Series: Important Questions Part – VI of X
7. CPC Mains Questions Series: Important Questions Part – VII of
8. CPC Mains Questions Series: Important Questions Part – VIII of X
9. CPC Mains Questions Series: Important Questions Part – IX of X
10. CPC Mains Questions Series: Important Questions Part – X of X