JUDGMENT
K.S. Radhakrishnan, J.
1. This appeal arises out of the order dated 13.02,2003 in O.S. No. 267 of 2001 of the Sub Court, Ernakulam holding that the court has no jurisdiction to entertain the suit in view of Clause 18 of Ext.A1 agreement dated 16.09.1998 entered into between the parties.
2. For disposal of this appeal, we may refer to the parties according to their status before the court below. Plaintiff, M/s. Castrol India Limited, is engaged in the manufacture of marketing of various lubricants and greases for automobiles. First defendant is the partnership firm of which second defendant is the Managing Partner and other defendants are its partners. First defendant was appointed as the distributor of the plaintiff company as per agreement dated 16.09.1998. Agreement was executed at Chennai. Office of the first defendant situates at Vyttila at Cochin and defendants 2 to 5 are natives of Kottayam. Suit was instituted for realisation of money on account of value of castrol products supplied to the defendants. It was stated that cause of action for the suit has arisen at Vyttila, Poonithura within the jurisdiction of Sub Court, Ernakulam. Along with the plaint, plaintiff has also filed I.A. No. 2341 of 2001 for interim injunction restraining the defendants from alienating or creating encumbrance over the stocks of castrol products kept in their godown at Muttom, Alwaye and from withdrawing any amount from their Bank accounts. They also filed I.A. No. 6138 of 2001 for auction sale of the articles.
3. Defendant filed objection to the interlocutory applications contending that as per the agreement dated 16.9.1998, court below has no jurisdiction to entertain the suit. I.A. No. 6138 of 2001 was however disposed of on 19.6.2002 allowing the plaintiff to sell the articles by auction with the assistance of the advocate commissioner. It was also held that the court has got jurisdiction to entertain the suit. Against that order defendants preferred C.R.P. No. 1152 of 2002 before this Court in which the finding on the maintainability of the suit was set aside and left the issue open to be decided as per order dated 11.10.2002. Defendant then filed I.A. No. 4969 of 2002 to consider the question of jurisdiction as a preliminary issue. The court allowed the application and held that Ext.A1 would reveal that the parties actually intended the plaintiff to exercise jurisdiction to institute the suit at Chennai only or else to refer the parties to arbitration. It was therefore held that courts at Chennai alone have got the jurisdiction. The court therefore directed the plaint to be returned for presentation before proper court having jurisdiction.
4. Counsel appearing for the appellant however submitted that the court below has committed an error in holding that the court below has no jurisdiction to entertain the suit. Counsel submitted that the court below has misunderstood Clause 18 of Ext.A1 agreement as well as various judicial pronouncements. Counsel placed reliance on certain decisions before us which we will deal with later. Counsel appearing for the respondents reiterated his contentions that only courts at Chennai alone have got jurisdiction to entertain the suit. Before dealing with the rival contentions, we may refer to Clause 18 of Ext.A1 agreement. The said clause reads as follows:
“Clause 18: In case, any dispute or difference shall at any time arise between the company and the distributor as to the construction, meaning or effect of this agreement, or any clause or thing contained herein or the rights and liabilities of the parties hereto in relation to the premises hereunder, the company alone shall have the right to exercise any of the following two options-
(i) to approach the Court of competent jurisdiction in the city where the agreement is entered into to entertain and try such dispute or difference; or (ii) to refer such dispute or difference to the arbitration of the Managing Director of the company. The arbitration proceedings will be conducted in accordance with the provisions of the Arbitration and Conciliation Act, 1996 and the venue of arbitration will be Mumbai."
A reading of the abovementioned clause would show that it confers right of option to the company and not to the other party to the agreement to exercise any of the two options either to approach the court of the competent jurisdiction in the City of Chennai or to refer such dispute or difference to the arbitration of the Managing Director of the company and that the arbitration proceedings would be conducted in accordance with the provisions of the Arbitration and Conciliation Act, 1996 and the venue of arbitration would be at Mumbai. Both the parties to the agreement have not by Clause 18 agreed that their disputes shall be tried by the court of competent jurisdiction in the City of Chennai. It gives exclusive option to the company to approach the court having jurisdiction in the City of Chennai.
5. Plea of jurisdiction of courts is considered in accordance with Sections 16 to 20 of the Code of Civil Procedure. Section 20 provides that subject to the limitations aforesaid, every suit shall be instituted in a court within the local limits of whose jurisdiction (a) the defendant, or each of the defendants where there are more than one, at the time of commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain. The court below also has jurisdiction where cause of action wholly or in part arises, subject to the terms of the contract entered into between the parties. Therefore the entire question rests upon C1.18 of the agreement the meaning of which we have already explained earlier.
6. The Privy Council in Secretary of State v. Mask & Co. (AIR 1940 PC 105) held that the exclusion of the jurisdiction of the civil courts is not to be readily inferred; but such exclusion must either be explicitly expressed or clearly implied. Even if jurisdiction is so excluded, the Civil Courts have jurisdiction to examine into cases where the provisions of the Act have not been complied with, or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure. The decision in A.B.C. Laminart Pvt. Ltd. v. A.P. Agencies, Salem (AIR 1989 SC 1239) was followed by the Apex Court in R.S.D.V. Finance Co. Pvt. Ltd. v. Vatlalbh Glass Works Ltd. (AIR 1993 SC 2094) wherein the Apex Court held that the maxim “expressio unius est exclusio alterius” cannot be applied under the facts and circumstances of that case and it cannot be held that merely because the deposit receipt contained the endorsement “Subject to Anand Jurisdiction” it does not contain the Ouster clause using the words like “alone”, “only”, “exclusive” and the like.
7. The Apex Court in A.B.C. Laminart Pvt. Ltd. v. A.P. Agencies, Salem (AIR 1989 SC 1239) 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. Often the stipulation is that the contract shall be deemed to have been made at 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 jurisdiction of other courts. Where an ouster clause occurs, it is pertinent to see whether there is ouster of jurisdiction of other courts. When the clause is clear, unambiguous and specific accepted notions of contract would bind the parties and unless the absence of ad idem can be shown, the other courts should avoid exercising jurisdiction. As regards construction of the ouster clause when words like “alone”, “only”, “exclusive” and the like have been used there may be no difficulty.
8. Both the parties to the agreement have by Clause 18 agreed that dispute or difference shall be tried by court of competent jurisdiction in the City of Chennai. It only gives exclusive option to approach the court of competent jurisdiction in the City of Chennai. Defendant in the suit admittedly carries on business within the jurisdiction of civil courts at Ernakulam. Major part of the cause of action arose in Kalamassery. Bank guarantee was executed by State Bank of Trayancore, Vyttila. Mortgaged property is situated in Kalamassery. Further Clause 8(i) provides for furnishing collateral security in which event suit could be instituted in a court where the mortgaged property situates. Clause 18 does not prescribe jurisdiction of others has been excluded expressly or impliedly. The maxim “expressio unius est exclusio alterius” that is, express mention of one person or thing is the exclusion of another, would not apply. In Clause 18 emphasize is on the option and not on exclusion of other jurisdiction and conferment of exclusive jurisdiction to the courts in the City of Chennai only.
9. In a recent decision in Shriram City Union finance Corporation Limited v. Rama Mishra (2002 (9) SCC 613) the Apex Court held, in case parties under their own agreement expressly agree that their dispute shall be tried by only one of the specified courts then the parties can only file the suit in that court alone to which they have so agreed. In that case Apex Court examined the scope of Clause 34 of the agreement by which parties have bound themselves that any matter arising between them under the said contract, it is the courts in Calcutta alone which will have jurisdiction. Once parties bound themselves as such, it is not open for them to choose a different jurisdiction as in that case by filing the suit at Bhubaneshwar. Such a suit would be in violation of the said agreement. As far as this case is concerned, we have already indicated no exclusive jurisdiction has been conferred for the courts in the City of Chennai, but only exclusive option to the company to file suit in the City of Chennai or go for arbitration at Mumbai. Emphasis we have already indicated is made on the option and not on exclusive jurisdiction to other courts.
10. In view of the aforementioned circumstances, we are inclined to set aside the finding of the court below on the issue of jurisdiction. The order passed returning the plaint is set aside. The court below would take back the suit to file and dispose of the same in accordance with law. The appeal is allowed.