It is vital to properly understand the ousting term or clause when the court resolves the question of jurisdiction based on an ouster clause. The contract is frequently stipulated to be believed to have been formed at a certain location. This would be the linking element for any dispute relating to or arising out of that contract to be heard in the courts of that location. It would not, however, ipso facto deprive other courts of jurisdiction. The judgment was passed by The High Court of Chhattisgarh in the case of Itarasi Oil And Flour Limited A Co. V. And Agro Services Private Limited [MA No. 85 of 2012] by a Single Bench consisting of Hon’ble Shri Justice Sanjay K. Agrawal.
The facts in the case are that this appeal preferred by the Plaintiff under Order 43 Rule 1 (a) of the Code of Civil Procedure, 1908, is the order passed in Civil Suit No.05-B/2009, whereby the trial Court while exercising the powers enumerated under Order 7 Rule 10 of C.P.C., has returned the plaint for its presentation before the Court having its territorial jurisdiction.
Learned Counsel for the Appellant, submitted that since the contract, was made at the registered office of the Plaintiff’s company at Raipur, and, therefore, the part of the cause of action has arisen within the territorial jurisdiction of the Court below and the suit as framed was, therefore, not liable to be returned as such. It is contended further that since the demand notice was made from Raipur, therefore, cause of action has arisen when Defendant’s company has failed to honour the same. It is contended further that merely on the basis of the condition printed on the Bill, it cannot be said that the Court below has no jurisdiction to entertain the suit.
On the other hand, Learned Counsel for the Respondent, while placing its reliance upon the decision rendered in the matter of Swastik Gases Private Limited vs. Indian Oil Corporation Limited has supported the order impugned as passed by the trial Court.
The court while deciding the jurisdiction contention referred to A.B.C. Laminart Pvt. Ltd. and another vs. A.P. Agencies wherein it was held that “when the court has to decide the question of jurisdiction pursuant to an ouster clause it is necessary to construe the ousting expression or clause properly.6 Often the stipulation is that the contract shall be deemed to have been made as a particular place. This would provide the connecting factor for jurisdiction to the Courts of that place in the matter of any dispute on or arising out of that contract. It would not, however, ipso facto take away the jurisdiction of other courts.”
While allowing the appeal the court observed that “It appears that despite issuance of Demand Notice from Raipur, it was not honoured by the Defendant. The cause of action, thus, arises at Raipur and, therefore, by virtue of clause (c) of Section 20 of the CPC the Court below has territorial jurisdiction to entertain the same and it cannot be, in any manner, held to be instituted beyond its jurisdiction merely on the basis of the condition printed in the said Cash Memo, as observed by the trial Court.”