1. ' WALI MUHAMMAD KHAN, J.---Messrs Kadir Motors, Rawalpindi appellant has challenged the order, dated 21-3-1990 passed by a learned Single Judge of the Lahore High Court, whereby their FA.O.
2. No,183 of 1980 against the order of Civil Judge 1st Class, Rawalpindi dated 22-3-1980, was dismissed. `Leave granting order is as follows:-- "After hearing the learned counsel in support of this petition, we have come to the conclusion that the main question involved in this case is the interpretation of clause 27 of the agreement which relates to the ouster of jurisdiction of the Courts by consent and thus the extent and scope of section 28 of the Contract Act regarding the ouster of jurisdiction by consent of the parties needs consideration. As further contended that ouster of jurisdiction clause in the agreement is controlled by section 20 of the C.P.0 and as held in the case reported in 1981 SCMR 494 that jurisdiction of the Civil Courts are subject to section 20 of the C.P.C. And the parties by consent cannot take away the same.
3. ' Since the case in hand involves the interpretation of a. Legal question of great public importance, therefore, we grant 'leave to, appeal."
4. ' We have heard Mr. MA. Siddiqui, Advocate, for the appellant, Mr. Bashir Ahmad Ansari, Advocate for respondent No,1, and have perused the record of the case. As is apparent from the leave granting order, the sole question for determination in the instant appeal is whether the controversy between the parties could only he adjudicated upon by the Karachi Courts and the Courts at Rawalpindi had no jurisdiction in the matter. Section 20 of the Civil Procedure Code deals with the jurisdiction of the Court and for convenience sake it is being reproduced as under:- "20. Other suits to be instituted where defendants reside or cause of action arises. -- 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 the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or
(b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business; or personally work for gain, as aforesaid, acquiesce in such institution; or
(c) the cause of section, wholly or in part, arises."
5. Section 28 of the Contract Act is relevant for the determination of the plea of jurisdiction as raised in the written statement and as such the same is also reproduced as follows:- "28. Agreements in restraint of lead proceedings void.- Every agreement, by which any party 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, The bare reading of the section 20 of the Civil Procedure Code makes it amply clear that all suits shall have to be instituted in a Court within the local limits of whose jurisdiction the defendant, or any of the defendants, actually and voluntarily resides, or carries on business, or personally works for gain, at the commencement of the suit, or if there are more defendants then, one of them resides, or carries on business, or personally works for gain, subject to the leave of the Court, or the acquiescence of other defendants, or where the cause of action, wholly or in part, arises. According to Explanation II appended to the said section, a corporation shall be deemed to carry on business at its sole or principal office in Pakistan or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place.
6. ' According to the contents of the plaint, defendant No,1, namely, Messrs National Motors Limited, the successor-in-interest of Ghandhara Industries Limited, reside at Karachi and their principal office is also located at Karachi as is admitted in the heading of the plaint. The original contract between the parties which has given rise to the filing of the present suit for recovery of Rs,52,24,086.27 was negotiated and entered into at Karachi. As such primarily the Courts at Karachi, undoubtedly, have jurisdiction to try the suit according to section 20, sub-clauses (a) and (c) of the Civil Procedure Code.
7. ' However, the learned trial Judge in his judgment, dated 22-3-1980, without proper discussion, has noted that Civil Courts at Rawalpindi also had the jurisdiction, presumably on the ground that the part of the cause of action arises at Rawalpindi because the delivery is to be made here and also because defendant No, 1 maintains a sub-office here as well. This finding was not questioned before us by the respondents' side and we do not consider it advisable at this stage to record our definite finding whether the Courts at Rawalpindi too, have the jurisdiction in the matter or not.
8. ' The defendant/respondent-1 relied on clause 27 of the agreement (Exh.D./1) between the parties which confers exclusive jurisdiction on the Karachi Courts in the event of any dispute arising between the parties. Clause 27 of the agreement is in the following terms as incorporated in the judgment of the High Court (page 16 of the paper book):-- "27. The place of payment of all sums due by The Dealer to The Company is at the Company's Office in Karachi. The parties hereby agree that any suit to enforce the rights of either party under this agreement shall be instituted in and tried by the Courts of ordinary original civil jurisdiction in the City of Karachi and the Dealer expressly agrees to submit to the jurisdiction of such Courts."
9. To wriggle out of this agreement, the learned counsel for the appellant placed reliance on section 28 of the Contract Act which provides that every agreement in restraint of legal proceedings is void. We have minutely read the said provision of law and could not find anything therein 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 the said provision of law 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.
10. ' The learned counsel for the appellant placed reliance on the judgments of this Court in the cases of Messrs Brady & Co. (Pakistan) Ltd. v. Messrs Sayed Saigol Industries Ltd. 1981 SCM R 494, WAPDA and 2 others v. Mian Ghulam Bari PLD 1991 SC 780 and State Life Insurance Corporation of Pakistan v. Rana Muhammad Saleem 1987 SCM R 393. The case of Messrs Brady & Co., is not much relevant because it deals with question of jurisdiction in cases against corporations having head office at one place and branch office at another place. Even the dictum in this case, being reproduced below, does not advance the case of the appellant in any way.
11. "Explanation II (of section 20, C.P.C.) can be sub-divided into two parts; one dealing with the principal office and other with subordinate office -- a limitation has been placed regarding subordinate office only; which would mean that a party choosing to institute a suit at a place where the corporation has only a subordinate office would have initially to show that the cause of action arose there. Thus, it would appear that the location of the subordinate office does not give the plaintiff a choice to institute the suit at that place. The law did not recognise that the location of a subordinate office of a corporation can be converted, through a deeming clause, into a place where the corporation carries on business. It would be so only under a limitation namely, that where cause of action arose and the corporation has also a subordinate office at that place. The combination of these two facts would become equal to the 'carrying on business'. The underlying idea seems to be that regarding corporation, it would not be correct to assume that it 'carries on business', as envisaged in section 20, at a subordinate office. Thus, looked at from this angle as well, the entire Explanation II would appear to be relateable to the phrase 'carries on business' used in clauses (a) and (b) of section 20 and clause (c) remains independent thereof."
12. ' The case of WAPDA and 2 others v. Mian Ghulam Bari also relates to the place where the cause of action partly arose and where also Explanation II of section 20 has been dealt with. The concluding para of the judgment is to the following effect:-- "It is true that in the second part of the explanation a scope has been left for filing of the suit at a place where a corporation has a subordinate office provided any cause of action arose at that place. But this part of explanation is preceded by another alternative; namely, that a corporation shall be deemed to carry on a business at its sole or principal office. The use of the word 'or' between the two is very significant. It means that the corporation shall be deemed to carry on business at its sole or principal office as well as at any place where it has a subordinate office but in the latter case the cause of action should have arisen at that place. Thus, the argument of the learned counsel being too wide to be accepted and the same also being in negation of the statutory explanation, has no force. Leave tO appeal, accordingly is refused."
13. ' The case of State Life Insurance Corporation of Pakistan v. Rana Muhammad Saleem clinches the matter against the appellant as in the said case, sections 9 and 20 of the Civil Procedure Code and section 28 of the Contract Act came up for consideration to determine whether any agreement which restricts the trial of suits between the parties by Courts of competent jurisdiction at a particular place is void or not. Their Lordships, on reviewing the precedent cases held as follows:-- "We have considered the arguments of the learned counsel for the parties: Under section 9 of the Code of Civil Procedure the Civil Courts have jurisdiction to try all suits of a civil nature excepting the suit of which their cognizance is either expressly or impliedly barred. Under section 20 of the Code of Civil Procedure every suit is to be instituted in a Civil Court within the local limits of whose jurisdiction the defendant resides or carries on business or where the cause of action wholly or in part. Arose. Under section 28 of the Contract Act 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. It is. Evident from a plain reading of these provisions that there is no absolute exclusion of jurisdiction under section 9 or section 20 of the Code of Civil Procedure nor there is any violation of the provisions of section 28 of the Contract when two or more Courts have jurisdiction to try a suit and the parties mutually agree to choose or take their dispute to one of them. The Civil Courts exercise their jurisdiction under the Code of Civil Procedure.
14. If they do not possess such jurisdiction under the Code it cannot be conferred on them through a mutual agreement of the parties to a dispute. But in a situation where two or more Courts have jurisdiction to try a suit under the Code of Civil Procedure, then an agreement between the parties that any dispute, arising between them shall be tried only by one of such Courts could not be considered contrary to public policy as it would neither contravene the provisions laid down in section 28 of the Contract Act nor would it violate in any manner the provisions of section 9 or section 20 of the Code of Civil Procedure."
15. ' As stated earlier the two cases of Messrs Brady and WAPDA though throw much light on the questions of determination of territorial jurisdiction of Courts, they are not much relevant in the instant case because we have already decided not to embark upon the same question inasmuch as the lower forums have not considered this aspect of the case. The main argument regarding clause 27 of the agreement has been sufficiently explained above and in view of the dictum of this Court in case of State Life Insurance Corporation of Pakistan v. Rana Muhammad Saleem 1987 SC MR 393 the matter is clinched, the agreement is legal and not hit by section 28 of the Contract Act and the parties are bound to follow it.
16. Consequently, the judgments of the lower two forums do not suffer from any legal infirmity and by maintaining them, the instant appeal is dismissed with no order as to costs.