1. ' MUHAMMAD ALI MAZHAR, J.---The plaintiff has filed this suit for Recovery of Outstanding Claims and Damages with the following prayer:-- "It is most humbly and respectfully prayed on behalf of the plaintiff above named that this honourable Court may graciously be pleased to direct the defendants for the settlement of the claims of the plaintiff and the defendants may also be directed to pay the total amount receivable amounting to Rs,16,57,867.05 and damages amounting to Rs,1,00,000,00 totaling to Rs,26,057,867.05 severally or jointly."
2. ' Brief facts of the case are that plaintiff was appointed Distributor of Rafhan Best Foods Limited and a Distributor's Sale Agreement was executed on 21-1-2002. The business/distribution work was smoothly carried out by the plaintiff but some hurdles and the problems were brought to the notice of the defendants by the plaintiff vide letter, dated 1-7-2002. Apropos of the correspondence, dated 31-7-2003, the Finance Secretary of the defendants informed the plaintiff that on their behalf, representative of Ford Rhodes Sidat Hyder and Co. Will be participating in the stock checking. The plaintiff was called upon to allow the physical stock verification and provide inventory of stock. The said directions were complied with by the plaintiff. Thereafter, the defendants sent a termination notice of agreement on 24-2-2004, which was replied by the plaintiff. The plaintiff also sent account statements and pending claims to the Company Secretary of the defendants but no response was received. Consequently, the plaintiff had served a legal notice for recovery of outstanding claims and also provided a breakup but the same was also not responded by the defendants. Having no alternative the plaintiff filed the suit for recovery of outstanding claims along with damages of Rupees One Crore against the defendants for cancellation of the Distributor's Sales Agreement and badly damaging the reputation of the plaintiff in the eyes of its competitors, well-wishers etc. The cause of action said to have accrued on 21-1-2002 when the Distributor's Sales Agreement was executed, then on 24-2-2004 when the notice of termination was received and when the letters and accounts were submitted on different dates and lastly on 30-5-2005 when the legal notice was served upon the defendants.
3. ' The defendants have filed C.M.A. No, 9829 of 2005 under Order VII, Rules 10 and 11, C.P.C. With the prayer that the plaint be returned on the ground that this Court has no territorial jurisdiction in the matter. In the supporting affidavit, the Secretary of the defendant No,1 has stated that the very basis of this suit is distributor's sales agreement, dated 21-1-2002. Clause 46 of the agreement clearly provides that the agreement shall be governed by the laws of Pakistan and any actions shall be instituted in the Courts at Lahore, therefore, this Court does not have any territorial jurisdiction to adjudicate upon the matter.
4. ' Heard the learned counsel. The bone of contention between the parties is whether in view of Distributor's Sales Agreement this Court has territorial jurisdiction to decide the case or not. For ready reference, it would be advantageous to reproduce the Clause 46 of Distributor's Sales Agreement as under:- "(46) This agreement shall be governed by the laws of Pakistan and actions shall be instituted in the Courts at Lahore."
5. ' Learned counsel for the defendants argued that in view of clear agreement regarding the mutual choice of territorial jurisdiction of the Court at Lahore, this Court has no jurisdiction to entertain the present suit. It is clear from the Clause 46 that the parties had mutually agreed that the agreement shall be governed by the laws of Pakistan and any actions shall be instituted in the Courts at Lahore. Learned counsel for the defendants relied upon a judgment reported in 1992 SCM R 1174 (Messrs Kadir Motors (Regd.), Rawalpindi v. Messrs National Motors Ltd. Karachi. In this judgment, the Hon'ble Supreme Court has considered section 28 of the Contract Act which provides that every agreement, by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual proceedings in the ordinary tribunal, or it limits the time within which he may thus enforce his rights is void to that extent. The Hon'ble Supreme Court has held that there is nothing in the provision to restraint the parties from entering into an agreement to get their dispute decided by a particular Court of competent jurisdiction for their convenience and avoidance of necessary objections to the territorial jurisdiction of Courts. The intention behind section 28 of the Contract Act is that all those agreements which restraint 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 retrained to enforce his rights in the ordinary court of law that if by mutual agreement between the parties a particular Court having territorial and pecuniary jurisdiction is selected for determination of their dispute, there appears to be nothing wrong or illegal in it or oppose to public policy. Such an agreement is legal and not hit by section 28 of Contract Act and parties are bound to follow it. The judgment of Hon'ble Supreme Court is primarily based on its own earlier dictum laid down in case of (State Life Insurance Corporation v. Rana Muhammad Saleem) which is reported in 1987 SCM R 393. In the State Life Insurance case, the Hon'ble Supreme Court has held that if two or more Courts having jurisdiction to try a suit, agreement between the parties that any dispute arising between them shall be tried by one of such Courts could not be considered contrary to public policy as it was neither contravened to provision laid down in section 28 of the Contract Act nor violate in any manner to section 9 or section 20 of C.P.C. The similar view has also been followed by learned Division Bench of Balouchistan High Court in the judgment reported in 1997 CLC 1441 (E.F.0 General Insurance Ltd. v.
6. Fahimul Haq). Learned counsel for the defendant has also relied upon another judgment of this Court reported in 2004 M LD 662 (Chaudhry Mehtab Ahmed and another v. Mir Shakil ur Rehman and 4 others,) In this judgment also, the issue was related to distribution agency of newspapers at Rawalpindi and in the Agency Agreement it was clearly provided that in case of any dispute, only the Court at Rawalpindi shall have the jurisdiction to decide the cases. In spite of clear clause opted by the parties by their free-will, the plaintiff had filed the case for declaration, mandatory injunction, permanent injunction, recovery of amount and compensation at Karachi. The defendants in that case also filed an application under Order VII, Rule 10, C.P.C. Which was allowed by this Court with clear findings that parties were required to abide by terms of their agreement and submit their dispute Courts mutually agreed in the agreement. Resultantly, the plaint was returned to the plaintiff for its presentation before the proper Court.
7. ' Learned counsel for the plaintiff has argued that in spite of clear clause mutually agreed in the Distributor's Sales Agreement, dated 21-1-2010, this Court has jurisdiction as the distribution network of the plaintiff was established in the Province of Sindh and its office is situated at P.E.C.H.S. Karachi as well as Company Head Office is also situated at Karachi where the Chairman, Executive Director and C.F.O. Are also sitting. Therefore, the lack of jurisdiction does not arise and this Court has ample power and jurisdiction to entertain the case. Though the plaintiff in his counter-affidavit has not denied the execution of agreement but it has been mentioned in the counter-affidavit and also argued that the plaintiff had signed the agreement without going through the contents. The Distributor's Sale Agreement is a one sided agreement and has no force and value in the eyes of law. It was further contended that Clause 46 of the said agreement was deliberately incorporated just to keep the plaintiff out of reach. The plaintiff had signed the said agreement in an opinion that the defendant Company is a subsidiary/sister organization of a multinational and they will not retrain the money due to plaintiff. Learned counsel further argued that this Court has jurisdiction as the plaintiff's office is situated at Karachi within the territorial jurisdiction of this Court. It is an admitted position that Distributor's Sale Agreement was executed at Lahore between the parties and according to Clause 46, it is clear that the parties have mutually agreed to institute legal proceedings in the competent Court situated at Lahore, therefore, parties are bound to abide by the terms and conditions of the agreement and submit their dispute in the competent Court at Lahore. Learned counsel for the plaintiff has failed to justify as to why the suit has been instituted in the territorial jurisdiction of this Court in spite of clear clause opted by the parties in the Distributor's Sale Agreement. It is also worthwhile to mention here that in the suit, Distributor's Sale Agreement is not under challenge.
8. The provisions of Order VII, Rule 10, C.P.C. Are mandatory in nature and adjudication by a Court without jurisdiction is a determination coram non judice and in such case, the plaint is to be returned for presentation to the proper Court and this Court cannot pass any judicial order except that of return the plaint. Where the parties are at issue regarding jurisdiction, it is necessary that Court should decide the question first in order to determine whether the Court has jurisdiction, the suit is rightfully framed and instituted is to be looked into. If the parties have agreed that suit is to be filed in a particular Court and the suit is filed in another Court, the proper course for the Court is to return the plaint for presentation to the Court agreed upon by them. The validity of an agreement by which the parties preferred one of two Courts depends upon the fact that both the Courts must have jurisdiction to decide the matter. Had the parties not chosen the territorial jurisdiction of particular Court in the agreement, the territorial jurisdiction could have been determined in view of section 20(c) C.P.C. Which provides a right to sue at any place on accrual of cause of action in whole or in part but situation in this case is totally different.
9. ' Since parties have already agreed to the institution of action in the competent Court at Lahore, therefore, they are bound by their agreement.
10. ' Learned counsel for the defendants pointed out that due to dishonouring of cheques his client has also lodged an F.I.R. Against the plaintiff under section 489-F, P.P.C. And the plaintiff is on bail. He has also stated that defendants have already filed a suit for recovery which is pending at Lahore in which plaintiff is already being represented by his Advocate. At this stage, learned counsel for the plaintiff states that his client is suffering from Hepatitis and willing to enter into a compromise if the Chief Executive of the defendants will give sometime to have a meeting with him. Learned counsel for the defendants has also agreed that he will apply all best possible efforts to arrange a meeting between the plaintiff and Chief Executive of the defendants at Karachi to re-visit a possibility of compromise.
11. ' Keeping in view the terms and conditions embodied in the Distributor's Sales Agreement and the precedents mentioned above, it is clear that the plaintiff has wrongly instituted his suit in this Court.
12. The plaint is returned to the plaintiff, who may institute the same in the competent Court at Lahore in accordance with law.