' This is a suit for recovery of Rs,116.80 million as damages against the defendant/corporation in which leave to appear and defend was granted on 10-9-1997 whereafter, written statement was filed by the defendant. In the written statement, the foremost objection raised by the defendant was that this Court had no jurisdiction to entertain and adjudicate upon the matter in view of clause 10.06 of agreements admittedly executed by the plaintiff at Karachi. Issues were framed including as to whether this Court lacks territorial jurisdiction to try the suit. Evidence has been led by the parties thereafter. The learned counsel for the parties have addressed arguments on the issue as to the territorial jurisdiction of this Court in the matter.
2. The learned counsel for the defendants contends that in view of a specific clause having been agreed to between the parties and incorporated in the agreements, dated 19-5-1993 (Exh. D.W.1/1) and, dated 20-5-1993 (Exh. D.W.1/2) that a Court of appropriate jurisdiction at Karachi shall be the proper Court to entertain all matters arising out of or under the agreements, the parties are bound by these agreements and the suit could be filed only at Karachi before the proper Court. Reliance is placed by him on State Life Insurance Corporation of Pakistan v. Rana Muhammad Saleem (1987 SCMR 393), Messrs Kadir Motors (Regd.), Rawalpindi v. Messrs National 'Motors Ltd. Karachi and 3 others (1992 SCMR 1174) Messrs E.F.U. General Insurance Limited and others v. Fahimul Haq (1997 CLC 1441) and Bankers Equity Ltd. v. Iqas Weaving Mills (Pvt.) Ltd. (2001 CLC 169).
3. The learned counsel for the plaintiffs contrarily contends that since the finance facility was recalled from the Lahore office of the defendants, cause of action arose at Lahore, therefore, this Court has got jurisdiction in the matter. It is contended that even the account was transferred to Lahore, therefore, Lahore Court will have jurisdiction in the matter. As to the content and import of clause 10.06 of the agreement, it is contended that parties cannot by agreement confer jurisdiction upon a Court, which otherwise it lacks in the matter. It is further contended that a Court in whose jurisdiction, the contract is breached has the jurisdiction in the matter and that even such a stipulation as is clause 10.06 of the agreement can be ignored by the Court. Relies on Messrs Rupali Polyester Ltd. v. Dr. Nael G. Buni and others (PLD 1994 Lahore 525), Standard Insurance Co. v. Pak Garments Ltd. (1997 SCMR 1239), Faqir Muhammad Arif v. Mst. Haneefa Bano (1998 CLC 205), 'Sardar Muhammad Sarwar Khan v. Shaukat Zaman Khan (1999 CLC 954), Messrs Businet International (Pvt.) Ltd. v. Messrs Aramex International (Pvt.) Ltd. (2001 CLC 104), Messrs Snehalkumar Sarabhai v.
Messrs Economic Transport Organization and others (AIR 1975 Gujarat 72), The Paradeep Port Trust v. Messrs Hindustan Mercantile Transport Corporation and another (AIR 1985 Orisss 106), Messrs Sponge Iron India Ltd. v. Messrs Andhra Steel Corporation Ltd. (AIR 1989 A.P 206) and Periwal Packing Industries (Pvt.) Ltd. v. The Fertilizer and Chemicals Travancore Ltd. (AIR 1982 Calcutta 350).
4. There is no denial of the fact that agreement, dated 19-5-1993 (Exh D.W.1/1) for financing locally manufactured machinery was executed between the parties at Karachi whereas agreement, dated 20-5-1993 (Exh.D.W.1/2) for financing Raw Materials, Finished goods, stores and Spares, Plant & Machinery and other Assets etc. On Marked up basis was also executed at Karachi. Both these agreements contain common clause i.e, clause 10.06, which reads like this; ' That a Court of appropriate jurisdiction at Karachi shall be the proper Court to entrain all matters arising out of or under this agreement.
' The suit for recovery of damages undoubtedly arises out of the abovementioned agreements.
Paragraph No,9 of the Plaint makes mention of these agreements in quite clear words that "the plaintiffs and the defendant executed and signed the Finance Agreements, dated 19-51993 and 20- 5-1993 (copies enclosed herewith as Annexurs '0' and 'P'). Cancellation of these agreements has been made the basis for the cause of action for filing the suit for damages. Treating the cancellation of the abovementioned facilities and that letters, dated 5-4-1995 (P.W.2/6), dated 14- 6-1995 (P. W .2/7) and, dated 3-8-1995 (P.W.2/8) were issued from the Lahore Office of defendant, it is pleaded that Lahore Court has jurisdiction in the matter. The plea of cancellation of agreements and issuance of letters from Lahore Office of defendant would at the most show that a part of cause of action arose at Lahore also. It would only mean that both the Courts at Karachi where the agreements were executed between the parties and Court at Lahore would have jurisdiction in the matter. It is thus that a clause in the agreement about the choice of forum would come into play to bind down parties thereto to the forum selected by them. It does not mean that parties by their agreement were conferring jurisdiction on Karachi Court, which otherwise was not possessed by it.
Undoubtedly the parties by their agreement or consent cannot confer jurisdiction on a Court, which it otherwise lacks. In Musa Ji Lukman Ji v. Durga Das (AIR 1946 Lahore 57) a suit for damages had been filed on account of breach of contract at Lahore instead at Karachi ignoring a clause in the agreement. The question, which came up for consideration before the Full Bench was whether an agreement between parties to a contract to the effect that a suit concerning disputes arising between them on the basis of that contract would be instituted in one of the two competent Courts having territorial jurisdiction over the subject-matter of that suit is a valid. And an enforceable agreement or is void under the provisions of section 28, Contract Act. It was held that "this section in my view, prevents parties from divesting Courts of their inherent jurisdiction, but it does not in any vitiate an agreement between the parties by which a person who has the choice of the forum agrees to a limitation of that choice or agrees to the curtailment of the unlimited choice which law has conferred upon him. An agreement to that effect is not hit by the language of this section. The view that I have taken of this matter is supported by a considerable body of judicial opinion". It was further observed that" there is nothing against public policy in an agreement arrived at between the parties that where several Courts have territorial jurisdiction to hear a case they may limit their choice to one of those Courts". The agreement thus, entered into between the parties was held to be valid and enforceable and to be given effect by the Court. In Hukam Singh v. Messrs Gammon (India) Ltd. (AIR 1971 Supreme Court 740). It was held that it is not open to the parties by agreement to confer by their agreement jurisdiction on a Court, which it does not possess under the Code. But where two Courts or more have under the Code of Civil Procedure jurisdiction to try a suit of proceedings, an agreement between the parties that the dispute between them shall be tried in one of such Courts is not contrary to public policy. Such an agreement does not contravene section 28 of the Contract Act." In Messrs Hindustan Tiles Corporation, v. Kisanlal Mataprasad Agrawal (AIR 1979 Bombay 69), it was observed that "it is by now well-settled that where more than one Courts have jurisdiction to try a suit the parties can by agreement restrict a forum to try the suit". In Messrs National Tar Products, Calcutta v. Himachal Pradesh State Electricity Board, Simla (AIR 1979 Delhi 255) also such a clause as to choice of Court was given effect. In E.I.D. Parry (India)
Limited v. Messrs Savani Transport (Pvt.) Ltd. Secunderabad (AIR 1980 Andhra Pradesh 30), it was observed that "it is now well-settled by a catena of decisions which it is unnecessary to refer that where there are two competent Courts, which can deal with the subject-matter of the litigation, it is open to parties to a contract to agree that the dispute in respect thereof should be adjudicated upon by one of the two competent Courts and it is not contrary to section 28 of the Contract Act; only the parties by agreement cannot confer jurisdiction on Court not possessed by it under the Code. In this case, admittedly, Bombay Court had jurisdiction to try the suit, because the defendants has his Head Office at Bombay. The parties are at liberty to agree that only Bombay Court should have jurisdiction to try the suit." In Kirloskar Bros. Ltd. Indore v. Engineering Machinery Mart, Narsinghpur, M.P. (AIR 1982 Madhya Pradesh 75), despite the termination of the agreement relationship between the parties were regarded to be governed by the. Terms incorporated therein including the clause about the choice of jurisdiction. In Patel Roadways (Pvt.) Ltd. v. Bata India Ltd.
(AIR 1982 Calcutta 575), again such an issue arose in the context of section 20, C.P.C. And section 28 of the Contract Act in a suit for damages for breach of agreement, it was held that "where the" parties had agreed and chosen a forum as between several Courts of concurrent jurisdiction, such a contract binds them. In Chandeshwar Singh and others v. Dahu Mahto and others (AIR 1983 Patna 257), a Full Bench of that Court regarded it a well-settled proposition that" where there are two or more competent Courts which can entertain a suit parties to the concerned transaction can contract to vest jurisdiction in one of such Courts to try their disputes. If such contract is clear, unambiguous and explicit, it is not hit by section 28 of the Contract Act either." In Biswanath Chowdhury v. U.P. Forest Corporation (AIR 1986 Calcutta 334), it was held that "when the parties select a forum where the litigation should be instituted, it is not necessary for the parties to agree that only that particular Court will have jurisdiction. If the two Courts have jurisdiction and the parties choose by their agreement one of them, that is sufficient". In this case the view earlier taken in Periwal Packing Industries (Pvt.) Ltd. v. Fertiliser and Chemicals Travancore Ltd. (AIR 1982 Calcutta 350) was dissented from wherein stress was laid as to the language used in the relevant clause in which the word 'only' was not used. In Messrs Angile Insulations v. Messrs Davy Ashmore India Ltd.
And another (AIR 1995 Supreme Court 1766), in the context of a suit for recovery on the basis of breach of contract where there was a clause as to choice of Court, it was held that "where there may be two or more competent Courts which can entertain a suit consequent upon a part of the cause of action having arisen therewith, if the parties to the contract agreed to vest jurisdiction in one of such Court to try the dispute which might arise as between themselves, the agreement would be valid. If such a contract is clear, unambiguous and explicit and not vague, it is not hit by sections 23 and 28 of the Contract Act. This cannot be understood as parties contracting against the statute. Mercantile law and practice permit such agreement." It was accordingly held that parties were bound by such a clause of the contract.
5. The position in Pakistan as well is also almost settled as to the point that when two or more Courts have jurisdiction to try a lis, the parties can mutually agree to any of the Courts. In State Life Insurance Corporation of Pakistan v. Rana Muhammad Saleem (1987 SCMR 393), a suit had been filed in a Court at Lyallpur (now Faisalabad) for the reason that premiums had been paid at that place, the State Life Insurance Corporation had its sub-offices there and that the insured had also died there. An objection to the territorial jurisdiction of that Court was taken on the basis of a clause that Courts at Karachi and Lahore will have the jurisdiction in the matter. The objection was overruled by the learned trial Court, which order was maintained by the High Court in revision. Their lordships, however, relied upon the case of Musa Ji Lukman Ji (supra) and it was held that "civil Courts exercise their jurisdiction under the Code of Civil Procedure. 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". The principle abovementioned was reiterated in the case of Messrs Kadir Motors (Regd.), Rawalpindi (supra) that such a clause in the contract was legal and the parties were bound to follow the same. In the case of Messrs E.F.0 General Insurance Limited and others (supra) a Division Bench of Balochistan High Court also took a similar view. This Court was also taken such a view and held that parties having agreed and chosen a particular Court out of two or more they were bound by such a stipulation. Reference may he made to Reliance Insurance Company Ltd.
And others v. Messrs Chohan Vegetable Ghee Mills Ltd. (1999 YLR 2201), Bankers Equity Ltd. v. Iqas Weaving Mills (Pvt.) Ltd. (2001 CLC 169) and a Division Bench Judgment in R.F.A. No,377 of 1998. The legal position thus in respect of such clauses/agreements and the contracts between the parties is fairly settled there is no obscurity left as to the efficacy and their legal effect. Undoubtedly the parties by their agreement or consent cannot invest the Court with a jurisdiction where it does not exist in law nor can they divest a Court of its jurisdiction by such methodology. However, where more than one Court can have jurisdiction in a matter, the parties can make choice by their agreement or consent of any one of them. Having adopted such a course and agreed by their conduct, the parties are to be bound by their agreement and to honour their commitments,
6. The contention of the learned counsel for the plaintiffs that since the words 'only' or 'alone' have not been used in clause 10.06 of the agreements, it would not be of any effect, has not impressed me. The intention of the parties while incorporating such a clause was quite clear. The content and reading of clause 10.06 of the agreements would leave no doubt that the parties did agree in unambiguous terms that Court of appropriate jurisdiction at Karachi shall be the proper Court to entertain all matters arising out of or under the agreement. Thee language is quite clear, certain and specific. Even if words 'only' or 'alone' have not been used, that would not make any difference.
7. Reliance of the learned counsel for the plaintiffs on the case of Messrs Rupali Polyester Ltd.
(supra) is not apt which case arose in entirely different context in a matter of International Arbitration having arisen out of I.C.0 Rules, which judgment was maintained by their lordships of Supreme Court with certain modification in 1998 SCMR 1618. Likwise reliance of the learned counsel for the plaintiff on the case of Standard Insurance Co. (Supra) is of no help to the plaintiff inasmuch as it was an order granting leave in view of the law laid down in the case of State Life Insurance Corporation of Pakistan (supra). In view of the preponderance of judicial approach and precedents mentioned above, it is plain that agreements of the instant nature bind the parties in the context discussed above. Issue No,1 is thus decided accordingly.
8. In view of the above, this Court lacks territorial jurisdiction. The plaint is thus liable to be returned to the plaintiff for presentment before the appropriat Cour. No order as t costs.
Plaint returned.