1. ' MUNIB AHMED KHAN, J.---This application (C.M.A. No,3919 of 2008) under Order VII, Rules 10 and 11, C.P.C. Has been filed on behalf of Passco, the defendant No,2. Although the office has mentioned that the listed application is fixed for orders but counter-affidavit .Of the said application has been filed and available on record, therefore, both the learned counsel have been heard on the legal objections as it goes to the root of the case. It is worth mentioning that defendant's counsel has only emphasized on Order VII, rule 10 for action of plaint and the plaintiff has responded accordingly.
2. ' Learned counsel appearing for Passco (defendant No,2) has argued that the objection in respect of jurisdiction was raised earlier during the course of hearing on 10-4-2008 but since no specific application was filed in this respect, therefore, direction was issued on that date and in consequence this application has been filed. Learned counsel states that the entire suit is based on the agreement dated 17-1-2004 between the plaintiff and defendant No,2, which has admittedly been executed at Lahore, where the defendant No,2 works permanently, hence the suit would have filed at Lahore. He has further pointed out Clause 17 of the agreement dated 17-1-2004, which agreement has also been relied by the plaintiff and filed with the plaint as Annexure "D" and stated that by virtue of said clause the jurisdiction, if any, lies with the Courts at Lahore and not with any other Court. He further submits that the agreement between the parties for taking a dispute to a particular Court is not contrary to the public policy as the same is not in contravention of section 28 of Contract Act, 1872 nor is in violation of sections 9 and 20 of C.P.C. He submits that in such a situation, the plaint be returned to the plaintiff for its filing in terms of the agreement. In support of his contention, learned counsel has relied upon the case laws reported as (i) State Life Insurance Corporation of Pakistan v. Rana Muhammad Saleem 1987 SCMR 393; (ii) Messrs Kadir Motors (Regd.) Rawalpindi v. Messrs National Motors Ltd. Karachi and 3 others 1992 SCMR 1174 and (iii)
3. Tahir Tariq Textile Mills (Pvt.) Ltd. And others v. National Development Finance Corporation through its Chairman 2003 CLD 1546 on the point that the agreement between the parties in respect of choosing of Court at desired place is not contrary to section 28 of the Contract Act and the parties are at liberty to avail that facility keeping in view their understanding at the time of agreement. He has further relied upon the case laws reported as Maqsood All Khan v. National Bank of Pakistan 2003 PLC (CS) 226 and Messrs Muslim Commercial Bank Limited v. Tahir Edible Oil (Pvt.) Ltd. And others 2003 CLC 416 on the point that once objection to the jurisdiction is raised then it is to be decided first. He has also cited one of the above judgments as reported in 2003 CLD 1546 on the subject that the parties to an agreement have right to confer the jurisdiction upon any one of the Court to the exclusion of others.
4. ' Besides the above arguments, learned counsel has further urged that there is no estoppel against the law and legal points can be taken at any stage. He has further pointed out the preliminary objections in the written statement to the effect that the defendant has challenged the maintainability of the suit on the point of jurisdiction. On the other hand, Mr. M. Shaiq Usmani, learned counsel appearing for plaintiff stated that the suit primarily is based on agreement dated 17-1-2004 but there is a different cause which pertains to rejection of the wheat, the subject goods of the agreement, by the defendant No,1 at Karachi and same was happened due to collusion between the defendants Nos.1 and 2 on the ground that the wheat was not fit for human consumption. He has further submitted that although the agreement might have been signed at Lahore but negotiations were held at Karachi and since defendants Nos.1 and 2 are interlinked, the cause of action to be treated at Karachi. He has further submitted that the listed application is not maintainable under the Sindh Chief Court Rules (SCCR) as it contains two prayers of rejection and return of the plaint.
5. ' His next point is that Clause 17 of the agreement will be effective only when there are some issues out of Clause 15 which deal with the arbitration and since there was no arbitration, Clause 17 has no force and that there are two defendants, out of them, the defendant is a Federal Government, therefore, suit against it can be filed in any province. He further submits that the plaintiff himself has acquiesced by making an application under section 34 of the Arbitration Act with request that the matter be referred to the arbitration but same was dismissed. Against the said order, High Court appeal was filed but that was withdrawn and since this Court has taken the jurisdiction in the matter, the instant application cannot be entertained. In aid of his contention, learned counsel has relied upon the case-law reported as Chokkahnga Pillay v. Velayudha Mudaliar and others 1925 Madras 117 on the point that once the suit has been entertained by a particular Court then the jurisdiction cannot be removed and the remaining proceedings to take place before the same Court, learned counsel further submits that Clause 17 of the said agreement is contrary to section 28 of the Contract Act and is also against the public policy, therefore, it cannot be enforced.
6. ' Having heard the arguments advanced by the learned counsel for the parties, perused the material available on record and thoroughly examined the case laws cited at bar.
7. ' Relevant sections 15 to 20 of C.P.C. Deals with the jurisdiction and in the instant suit the question of movable property is involved, therefore, sections 19 and 20 of C.P.C. Are attracted. Section 19 is in respect of action where the cause of action has accrued or within the limit where the defendant resides or works for gain. Section 20 of C.P.C. Deals with filing of suit by the plaintiff against the defendant on the basis of his residence or at the place of his business activity.
8. ' By virtue of sections 19 and 20 of C.P.C. The plaintiff may have a cause of action at Karachi as according to him the subject goods was rejected at Karachi but keeping in view clause 17 of the agreement dated 17-1-2004 and to assess its validity, it is necessary that section 28 of the Contract Act is to be seen and for convenience same is reproduced as under:-- "28. Every agreement, by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights, is void to that extent. '
9. Exception I.--This section shall not render illegal a contract by which two or more persons agree that any dispute which may arise between them in respect of any subject or class of subjects shall be referred to arbitration, and that only the amount awarded in such arbitration shall be recoverable in respect of the dispute so referred.
10. Exception II. --Nor shall this section render illegal any contract in writing, by which two or more persons agree to refer to arbitration any question between them which has already arisen, or affect any provision of any law in force for the time being as to references to arbitration."
11. The above section prohibits either of the party to the agreement from restricting other from taking the matter to the ordinary tribunals but it does not provide any restriction in A respect of consensus between the parties to refer the matter to arbitration or to take up their dispute in a particular Court or tribunal exclusive to other Courts even if they have jurisdiction.
12. ' The Clause 17 of the said agreement is as under:- "Regarding the issue of jurisdiction in case of litigation between parties hereto the Court at Lahore shall have the exclusive jurisdiction to entertain such dispute."
13. The above said clause cannot be said to have been affected by section 28 of the Contract Act, 1872 nor it can be said that the said clause was forced upon the plaintiff rather it itself imposed the said clause upon it and made it a part of the contract. The said clause does not restrict either of the party to take up the matter to the Court or ordinary tribunals while according to sections 19 and 20 of C.P.C. The suit can be filed at place where the cause of action has arisen or the defendant voluntarily resides or carries on business. By virtue of this clause only the venue of jurisdiction has been chosen but no restriction in respect of legal remedy has been imposed nor there is any limitation in such respect from section 28 of the Contract Act. In the given case, the jurisdiction can be stretched to either place at Karachi or Lahore keeping in view the contention of plaintiff but sanctity of the agreement restricts both the parties to avail the remedy at Lahore by virtue of its Clause 17.
14. ' The authorities cited also support the above findings e.g. 1987 SCMR 393 provides as follows:-- "Civil Procedure Code (V of 1908).--Ss.9 and 20-Contract Act (IX of 1872), S.28---Jurisdiction of Civil Courts---Two or more Courts having jurisdiction to try a suit---Agreement between parties, that any dispute arising between them shall be tried only by one of such Courts, held, coula not be considered contrary to public policy as it would neither contravene provisions laid down in S.28, Contract Act, 1872, nor violate in any manner provisions of S.9 or S.20 of C.P.C.---Appeal allowed and order of Administrative Civil Judge as well as judgment and order of High Court whereby objection of defendant to the jurisdiction of the Court other than the agreed one was overruled, was set aside."
15. ' Another authority of the Honourable Supreme Court reported in 1992 SCMR 1174 has laid down as follows:-- "(c) Contract Act (IX of 1872)-- ' S.28---Object of S.28, Contract Act, 1872---Parties cannot be restrained from entering into an agreement to get their disputes decided by a particular Court of competent jurisdiction to the territorial jurisdiction of Courts---Such an agreement would be legal and not hit by S.28 and parties were bound to follow the same.
16. ' Section 28 of the Contract Act provided that every agreement in restraint of legal proceedings is void. There is nothing in the provision to restrain the parties from entering into an agreement to get their disputes decided by a particular Court of competent jurisdiction for their convenience and avoidance of unnecessary objections to the territorial jurisdiction of Courts. The intention behind section 28 of the Contract Act, 1872 is that all those agreements which restrain a person to enforce his rights under a contract by usual legal proceedings in the ordinary Tribunals are void. It obviously implies that a party cannot be restrained to enforce his right in ordinary Court of law but if by mutual agreement between the parties a particular Court having territorial and pecuniary jurisdiction is selected for the determination of their dispute, there appears to be nothing wrong or illegal in it or opposed to public policy."
17. ' The other authorities cited by the learned counsel for plaintiff also go in his support. The contrary view pointed out by the learned counsel for defendant by referring an authority of Madras Court i,e, 1925 Madras 117 is not attracted as although it is in respect of pointing out that once the jurisdiction is entertained then it cannot be taken away but question arises as to whether a particular legal objection was pressed at the time when the jurisdiction was exercised or not and if that has been done then of course the jurisdiction cannot be taken away while in other situation the legal points can be pressed and entertained irrespective of the fact as to whether the jurisdiction has been assumed or not. One more objection of learned counsel for plaintiff that the application suffers from estoppel as the application under section 34 of the Arbitration Act of defendant No,2 has been dismissed by this Court vide Order dated 4-6-2004 has no force as the said order specifically deals with Clauses 15 and 16 of the agreement as well as section 34 of the Arbitration Act. This Court in the order ibid was of the opinion that the suit cannot be referred to the arbitration as there were two defendants while the agreement was between the plaintiff and defendant No,2 and since rejection of the subject goods was affected by defendant No,1, it was not possible to segregate the cause of action between the parties, therefore, the arbitration was refused. It was for this reason that defendant No,1 was not a party nor agreed for the arbitration: While in the instant application the defendant has prayed for return of the plaint so it may be filed in Lahore High Court and that can be done without any segregation of cause, which allegedly exist in respect to either of the defendant.
18. In the light of above, I am of the view that when the parties do enter into an agreement with certain reservations and restrictions keeping in view for and against prospects and that is not restricted by law then the policy of law require that c the said spirit of the parties should not be disturbed.
19. Agreement between the parties is to be considered as sacrosanct until there is specific legal restriction, hence intention of the parties should not be killed through technicalities. The law of contract has been promulgated with the spirit that there should be some statutory legal lines between which the contracting parties should act and their obligation to each other should not be D violated. Section 37 of the Contract Act, 1872 in this respect is worth mentioning.
20. "37. Obligation of parties to contracts.--The parties to a contract must either perform, or offer to perform, their respective promises, unless such performance is dispensed with or excused under the provisions of this Act, or of any other law.
21. ' Promises bind the representatives of the promisor in case of death of such promisors before performance, unless a contrary intention appears from the contract."
22. The above section binds the parties of contract as well as their representatives to complete the contract in the agreed terms. The Honourable Supreme Court has also emphasized in this respect in the case of Commissioner of Income-Tax v. Messrs Siemen A.G. 1991 PTD 488. The relevant observation of Honourable Supreme Court is as under:-- 'The most important relevant injunctions of the Qur'an are contained amongst others in Chapter Maida Verse (1) and Chapter Alisra'a Verse (34)---to the effect that the contracting parties are bound to fulfil their contracts. And that they would remain liable for any contraventions-obviously both here and hereafter. There are very strong Commands and have been enforced in various legal fields."
23. ' In another case, a Division Bench of this Court in the case of Hafeezullah Khan v. Al-Haj Chaudhri Barkat Ali PLD 1998 Karachi 274 has also given much importance to the agreement entered into between the parties and desired its implementation in the following words:- "While concluding, we would like to re-emphasize the sanctity of contracts. Where parties have, lawfully, entered into mutual commitments, with open eyes and free volition, maturing into contractual obligations, such cannot easily be allowed a unilateral and wilful disclaimer. In cases where a single breach has not undercut the entire contractual obligations, and the matter admits of continuing breaches or a contract has not become impossible of performance or one or other prohibitions of law, including those in section 56 of the Specific Relief Act, do not patently come into play, Courts are to lean in favour of saving rather than discarding contracts."
24. In the light of above authorities as well as observation made by me in the above paras, I allow this F application and order the office to return the plaint to the plaintiff.