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Judgment
R.N. Misra, J.—This is a Plaintiff''s application u/s 25 of the Provincial Small Cause Courts Act directed against the order of the learned S.C.C. Judge, Berhampur, refusing to pass a decree on the ground of lack of territorial jurisdiction.
Defendant carries on business of manufacturing multi-coloured quality calendars in the name and style of ''Calendar Printing Works'' at Sivakasi within the State of Tamil Nadu. Under an agreement to which Plaintiff and Defendant are parties, Plaintiff worked as agent of the Defendant. It is conceded that the terms are as printed in the application form (Ext. 4). According to the Plaintiff he secured certain orders and became entitled to commission, but Defendant in spite of demands, failed to pay the same. Therefore, he filed a suit in the Court of the learned S.C.C. Judge at Berhampur, claiming recovery of a sum of Rs. 358. 92.
Defendant joined issue refuting its liability to make any payment and contended that the Court at Berhampur had no jurisdiction in view of Clause 11 of the terms of agency vide Ext. 4.
The learned Trial Judge found that the Defendant owed some amount to the Plaintiff, but dismissed the suit upholding the defence contention that he had no jurisdiction to entertain the suit.
Section 20 of the Code of CPC provides:
Subject to the limitation aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction
(a) ...
(b) ...
(c) the cause of action, wholly or in part, arises.
Explanation....
Admittedly the cause of action in the instant case arose partly at Sivakasi within the jurisdiction of the Civil Court at Sattur and partly within the jurisdiction of the trial Court., Therefore, in the terms of Section 20(c) of the Code, the suit could, be filed at Sattur or at Berhampur. According to the Defendant, parties having agreed to submit their disputes exclusively to the, jurisdiction of the Court at Sattur, the jurisdiction of the Court at Berhampur was excluded and, therefore, the trial Court had no jurisdiction to entertain the suit.
Clause 11 of the terms of agency provides:
Any claim by the Agent or any suit which may be instituted by the Agent in regard to the agency agreement shall be filed only at the Courts at Sattur in Ramanathapuram District.
It is too well-known that by consent of parties, jurisdiction cannot be invested or excluded, but where on account of the cause of action partly arising at one place and partly at another place, more than one Court would have territorial jurisdiction to entertain a litigation, it is open to parties to agree to the exclusive jurisdiction of one Court. See S. Manuel Raj and Co. Vs. J. Manilal and Co., , N.I. Assurance Co. v. T.K. Nanjunda A.I.R 1964 Mys. 147 C. C. Satyanarayana and Others Vs. Kanumarlapudi Lakshmi Narasimham, , Jhun Jhunwala Brothers Vs. N.K.M. Subbaramier, , and Kanpur Sugar Supply Co. Vs. Harsukh Lal, .
Mr. Sen for the Petitioner, however, seeks to rely upon a recent decision of the Gujarat High Court in the case of Snehalkumar Sarabhai Vs. Economic Transport Organisation and Others, . It is appropriate to put the reasoning of the learned Judge in his own language:
While parties can lawfully enter into an agreement to restrict a dispute to a particular Court having jurisdiction, that stipulation though valid cannot take away the jurisdiction of the Court which admittedly has jurisdiction. The ouster clause can operate as estoppel against the parties to the contract. It cannot tie the hands of the Court and denude it of the power to do justice. It is no doubt true that ordinarily Courts would respect the agreement between the parties which is born out of the meeting of their minds and out of considerations of convenience. But the Courts are not obliged to do so in every case. In a case like the present where the claim is of Rs. 1,207.92 to oblige the Plaintiff to go to Calcutta merely for the pleasure of respecting the stipulation embedded in the contract between the parties is to deny justice. A new approach to this question deserves to be made, for the ouster clause is calculated to operate as an engine of oppression and as a means to defeat the ends of justice for in a case like the present it would be oppressive to drive the Plaintiff all the way to Calcutta to recover a small sum of Rs. 1, 208/ -. The costs of travelling and litigation will far exceed the stakes involved, and even a rightful claimant would be obliged to abandon his claim rather than incur greater expenditure than the sum involved in order to seek redress. In this backdrop the question assumes importance whether the stipulation to confine the jurisdiction in one of the Courts robs the excluded Court of its power to try the suit. Now such a stipulation may be legal and binding to parties. That, however, does not mean that it divests the Court of its jurisdiction. The Plaintiff cannot insist that a Court other than the stipulated Court should try the suit. But the Court on its part is not bound by the stipulation. The stipulation can be ignored by the excluded Court which otherwise possesses jurisdiction if it is considered to be oppressive having regard to the surrounding circumstances including the stakes involved. More particularly so when the Defendant firm has its office and is doing business within the local limits of the Court and it would be unjust to enforce the stipulation against the Plaintiff whilst it would not cause any real prejudice to the other side....
The claim involved in the present suit is very much less. Undoubtedly if the Plaintiff was required to proceed to Sattur for institution of the suit, his expenses would be more than the amount claimed. By way of costs of the litigation, Plaintiff is not entitled to reimbursement of expenses made on the heads like travelling and other incidental expenses which would not be passed as expenses for litigation.
The approach of the learned Single Judge in the Gujarat decision is very reasonable and I am inclined to agree with the principle indicated. The authorities referred to above have not considered such an aspect. India is a large country and of late trade between distant parts has been growing up. Very often the clause contained in the contract confining the litigation to an exclusive jurisdiction between the parties is not brought to the notice of the contracting party and the principal takes advantage of the same. What appeared oppressive to the learned judge in the Gujarat case is a normal event in cases of this type and I think it is appropriate that Courts should exercise jurisdiction in accordance with the Code and not according to contract ousting jurisdiction when it transpires that the agreement contracting out of jurisdiction is oppressive.
The Civil Revision must accordingly succeed. I set aside the order of the learned S.C.C. Judge and remit the matter to the trial Court for computation of the Plaintiff''s claim as I find that there has been no clear determination of the same. On the evidence already on record, the learned S.C.C. Judge shall fix the quantum for which the Plaintiff''s claim is to be decreed. There was no appearance for the opposite party at the time of hearing. I think it appropriate that there should be no order for costs in this Court, but Plaintiff shall have costs proportionate to the decree obtained by him in the trial Court.