V.C. Daga, J.
1. Rule. Rule made returnable forthwith by consent of parties.
Heard rival parties. Perused petition, affidavits and counter affidavits.
2. This petition takes exception to the order dated 7th February, 2004 passed below Exh.58 by the Civil Judge, Senior Division, Palghar ('trial Court' for short) in Special Civil Suit No. 9 of 2002, and gives rise to a short question in the peculiar facts and circumstances of the present case as to on whom burden to oust jurisdiction of the Court lies.
THE FACTUAL SCENARIO :
3. The factual scenario is straight forward.
M/s. Neon Laboratories Limited, respondent herein is the original plaintiff (hereinafter referred to as 'plaintiff' for short), filed suit for specific performance of the agreements and for injunction against the petitioners herein, the original defendants (hereinafter referred to as 'defendants' for short) being Special Civil Suit No. 9 of 2002.
4. The plaintiff is a company incorporated under the provisions of the Indian Companies Act, 1956 having its registered office at Mumbai. The defendant Nos. 1 and 3 are the English Public Limited Companies incorporated under the English Law, whereas defendant No. 2 is an Indian Company having its office at Mumbai.
5. The plaintiff in the plaint claims that it is engaged in the business of manufacture, sale, marketing and distribution of pharmaceutical products having its manufacturing units located at various places; one of such units is at Palghar. The parties agreed to give exclusive right to the plaintiff to market and distribute the products, Isoflurane and Halothane, in the territories of India, Sri Lanka, Bangladesh and Nepal for an initial period of three years at 23% margin of the price by 'Isoflurane and Halothane Distribution Agreement in India' ('Distribution Agreement' for short) dated 1st August, 1997.
6. The effective date under the agreement was the first day of the following month during which the plaintiff was granted Product Licence. According to the defendants, the effective date was 1st January, 1998. For the purpose of deciding the question that arises in the present case, it will be useful to advert Article 15 of the said 'Distribution Agreement', which reads thus:
'ARTICLE 15 - GOVERNING LANGUAGE AND LAW.
15.1 : The governing language of this Agreement shall be English. This agreement shall in all respects, including the formation thereof and performance thereunder, be governed by and construed in accordance with the English Law.
15.2 : All difference on the interpretation or performance of this Agreement which will not be settled by amicable means, will be settled by the English Courts.'
7. It is common ground that, subsequent to the above agreement, on 30th November, 1998, the parties entered into another agreement known as 'Amendment 1: Mohit Project' whereunder the defendants agreed to supply Isoflurane and Halothane exclusively to the plaintiff in bulk for bottling and packaging and sale in India, Sri Lanka, Bangladesh and Nepal. Article 8 of this latter agreement dated 30th November, 1998 is verbatim and identical with that of Article 15 of the former agreement referred to above. The entire controversy revolves around interpretation and construction of the aforesaid two clauses in the agreements which pertain to the governing language and the law of the subject agreements. To complete the factual scenario, there was some disagreement between the parties for which defendant No. 2, vide notice dated 21st December, 2000, informed the plaintiff that the contractual relationship concerning distribution of the Isoflurane and Halothane was terminated with effect from 31st December, 2000. As a consequence to the said intimation, the parties exchanged correspondence asserting their respective stands which, ultimately, resulted in institution of a suit in the trial Court being Special Civil Suit No. 9 of 2202 praying for the reliefs set out therein.
8. This suit came to be filed on 22nd January, 2002. On the same day, plaintiff filed application for interim injunction (Exh.5). The prayers in the said application read thus:
'a) the defendants be restrained by an order of injunction from committing breaches of the Distribution Agreement dated 1-8-1998 and MOHIT Agreement dated 30-11-1998 and from appointing any distributor in the territory of India, Sri Lanka, Bangladesh and Nepal and from filing or instituting any proceedings for recovery of US $ 176,013 + L 818 + interest under the invoice of Defendant No. 2 for supply of Halothane by the Defendants to the Plaintiff.
b) Such further and other orders be passed as this Hon'ble Court may feel proper and expedient to grant.'
9. The defendants came to be served with the said application for injunction along with suit - plaint. The defendants appeared before the trial Court on 11th February, 2002 when the injunction application was posted or hearing. On the subsequent date i.e. on 28th February, 2002, defendants moved an application (Exh.1) under Section 9A of the Code of Civil Procedure, 1908 ('C.P.C.' short) as applicable to the State of Maharashtra, requesting for determining preliminary issue as to the jurisdiction of the trial Court to entertain and try the suit in question. Besides filing this application, defendants simultaneously filed reply on merits opposing the injunction application. It is not necessary to advert to the contents of the said reply.
10. It was averred in para-4 of the application moved under Section 9A of C.P.C. on behalf of the defendants that the suit as filed by the plaintiff was not maintainable against the defendants and that the plaintiff was not at all entitled to any relief whatsoever as claimed in the suit or in the application for interim relief. In para-5, it was further averred that the court had no territorial jurisdiction to entertain or try the suit in question against the defendants. In para-8, the defendants have further averred, without prejudice to their other contentions, that the parties have agreed by choice to be governed by the English law and that the Courts in England alone have jurisdiction to entertain and grant the reliefs claimed in the present suit. The buttress this plea reliance was placed on Articles 15 and 8 of the respective agreements. It was further stated in the same para-8 that the English Courts have jurisdiction to entertain this suit since the specified acts were performed in England under the 'Distribution Agreement'. In para-9, the defendants have further averred that in any case no part of the cause of action has arisen within the jurisdiction of the trial Court. For that purpose, reference has been made to various events, which according to the defendants, the cause of action had arisen at best in Mumbai. In para-13, the defendants have further averred, without prejudice to their earlier stand, that in any event the forum convenient in India for the parties to the suit including the plaintiff is only the High Court of Judicature at Bombay as the plaintiff and defendant No. 2 have their offices in Mumbai. It is, however, relevant to point out that although these pleas had been taken in paras-9 and 13 in the application, during the course of argument before this Court, the only contention pressed before this Court was that: the Indian Courts have no jurisdiction to try and entertain the suit as the issues raised in the suit could only be tried and adjudicated by applying the English law and exclusively by the English Courts, having regard to the purport of Article 15 and Article 8 of the respective agreements.
11. Be that as it may, it is strongly asserted that 'Distribution Agreement', amended by 'Amendment 1 : Mohit Project' was signed by defendant No. 1 in England and defendant No. 2 and the plaintiff in Mumbai as such none of these agreements were signed at Palghar, consequently, trial Court has no jurisdiction to entertain and try the suit in question. This application was resisted by the plaintiff by filing its written reply.
12. The trial Court, in absence of any evidence either in the shape of affidavit or oral evidence in support of their respective stands in respect of jurisdiction had decided the said application on the basis of the oral arguments and documents already placed on record along with plaint. The trial Court, in essence, amongst others had held that the plaintiff's plant being within the jurisdiction of the Palghar Court it had jurisdiction to entertain and try the suit. The trial Court, however, applying the provisions of Section 20(C) of C.P.C., had held that the suit could be filed in the Court within whose jurisdiction the cause of action wholly or in part arises. The trial Court had placed emphasis on the fact that the plaintiff's plant was situated within its jurisdiction as well as the activities of processing and bottling were also carried out within its jurisdiction. According to the trial Court the cause of action had arisen either in 'England' where the agreements were signed by defendant Nos. 1 and 3 and/or in Mumbai where the agreements were signed by defendant No. 2 and the plaintiff as well as where the determination of the contract took place at Mumbai and/or at Palghar where the plant was situated and processing and bottling and distribution activities under the subject agreements were being carried out. The trial Court had also held that under the agreements the plaintiff was entitled to distribute within the territories of India, Bangladesh, Nepal and Sri Lanka and, therefore, in such a situation, laws of the respective countries would apply to the transaction. according to the trial Court, in the fact situation of the present case, the Indian laws in addition to the English laws will prevail. For all these reasons, it had held that the Indian Courts would also have jurisdiction. In so far as the construction of the relevant clauses of the said agreements, the trial Court was of the view that since the agreements did not specifically mention the expression(s) 'only', 'exclusively', 'specific bar of the other courts', 'alone', there would be no question of ouster of jurisdiction of the Indian Courts. For this purpose, the trial Court has mainly placed reliance on the decision of the Apex Court in the case of A.B.C.Laminart Pvt. Ltd. and Anr. v. A.P. Agencies, Salem, : [1989]2SCR1a . The trial Court had held that on reading the entire plaint as a whole, part of the cause of action did arise within its jurisdiction. Accordingly, the trial Court had answered the issue of jurisdiction of the Court against the defendants and held that the Indian Courts also have jurisdiction to adjudicate the issues arising out of the subject agreements by applying the India laws. In this view of the matter, the trial Court decided application for interim relief (Exh. 5) as filed by the plaintiff vide its order dated 6th April, 2003.
13. Both the above orders were challenged by the defendants before this Court by way of Civil Revision being C.R.A. No. 710 of 2002 and Appeal from Order being A.O. No. 452 of 2002 respectively.
14. The question of jurisdiction, which was decided by the trial Court, came up for consideration before the learned single Judge of this Court (Khanvilkar, J.) who, by his judgment and order dated 15th July, 2002 allowed the said revision application filed by the defendants and restored the application (Exh. 1) to the file of the trial Court for re-examination in accordance with the observations made in the said judgment. In so far as the appeal from order is concerned, by an order dated 6th April, 2002, hearing of that appeal was deferred sine die awaiting order on the application challenging jurisdiction of the trial Court.
15. The aforesaid order of the learned single Judge of this Court, passed in Civil Revision Application No. 710 of 2002 dated 15th July, 2002 is a subject matter of appeal before the Apex Court at the instance of the plaintiff by way of S.L.P. which is now registered as Civil Appeal No. 991 of 2003. It is stated that the Apex Court declined to grant any interim relief and instead directed the trial Court to proceed with the suit. The order passed by the Apex Court dated 5th May, 2003, which is placed on record, reads thus:
ORDER
Heard learned senior counsel for the parties.
Let the proceedings of the Suit may go on, but that shall be subject to any order that may be passed subsequently.
List this matter for further order in October, 2003. The question of hearing this appeal shall be considered at that time.
16. Be that as it may, the trial Court, in the meanwhile, proceeded to hear and decide the application (Exh. 58) and called upon the parties to lead evidence on the issues which were framed by the learned single Judge of this Court while disposing of the civil revision application vide his order dated 15th July, 2002 referred to hereinabove. The said issues framed by the learned single Judge while disposing of the civil revision application read as under:
(a) Whether the intention of the parties is expressed bonafide and is not opposed to public policy as per the 'proper law' of the Agreements?
(b) Whether the purport and interpretation of Articles 15.2 and 8.2 of the respective agreements in accordance with the 'proper law' of the Agreements (i.e. the English law) is that the English Courts have exclusive jurisdiction over the subject matter in this suit?
17. When the trial Court called upon the respective parties to lead their respective evidence, the plaintiff moved an application (Exh. 58) seeking direction against the defendants either to lead evidence in support of their contention that jurisdiction of the trial Court is ousted or in alternative to file purshis that they do not want to lead evidence in support of their contention. The said application was grounded on the pleadings that the plaintiff has filed suit in the trial Court contending, 'International Standards Certifications' alia, that the trial Court has jurisdiction to entertain and try the suit. The plaintiff has alleged that the law is well established I as much as in case of jurisdictional challenge there is always a presumption that the plaint allegations are correct. In the event of the jurisdiction being called in question by the adversary party viz. the defendants, it is essential for the defendants to prove that the Courts are devoid of jurisdiction to entertain and try the suit. According to the plaintiff, in view of plaint allegations there is obviously a presumption that the Civil Judge, Senior Division, Palghar has jurisdiction to entertain, try and dispose of the suit in question. it is the defendants, who on the basis of the interpretation of proper law, have taken out an application at Exh. 22 calling in question the jurisdiction of the trial Court, as such it was essential for the defendants to lead evidence in support of their contention that the said Court sans jurisdiction. The plaintiff had sought an order from the trial Court on the principle that it is for the party, who seeks to oust the jurisdiction of the trial Court, to establish its contention. The plaintiff contended that in view of the remand and specific direction given by this Court to dispose of application (Exh. 22) in any case preferably within three months from the date of receipt of writ from this Court, it became necessary to issue appropriate directions to the defendants as sought in the said application.
18. The said application was opposed by the defendants by their elaborate reply dated 16th November, 2002 contending that the contention that the jurisdiction of the trial Court is ousted is based upon the terms of the said 'Distribution Agreement' dated 1st August, 1997, amended by 'Amendment 1 : Mohit Project' duly executed by the plaintiff and the defendants. The plaintiff has filed the instant suit against the defendants in the trial Court on the agreed terms of the said 'Distribution Agreement' dated 1st August, 1997, as amended by the 'Amendment 1 : Mohit Project' duly executed by the plaintiff and the defendants. It was submitted that the plaintiff by filing the instant suit in the said Court has deviated from the agreed terms and acted contrary thereto. The plaintiff has also acted contrary to the rules laid down by the C.P.C. as regards the place of instituting the suit, the plaintiff has, in fact, instituted this suit within the jurisdiction of the said Court; wherein no cause of action has accrued to the plaintiff to claim any relief against the defendants. Therefore, the contention was that it is the plaintiff who should first prove its contention as regards the vesting of jurisdiction in the said Court, which to the plaintiff's knowledge and belief is contrary to the agreed terms between the parties as well as the rules laid down by the C.P.C.
19. It was further reiterated that the C.P.C. provides for the place for instituting suits. The instant suit falls within the ambit of Section 20 of C.P.C. and more particularly within the ambit of Section 20(b) or Section 20(c) of the C.P.C. The plaintiff has not complied with the principles laid down by Section 20 of C.P.C. The plaintiff has filed the instant suit against three companies, two of whom are based in and carry on business in the United Kingdom and one of which is an Indian Company having its address at Mumbai. Alternatively, it was submitted that assuming without admitting that the instant suit could be instituted in India, then also the plaintiff would be required to obtain the leave of the Court which the plaintiff has not obtained. It was further submitted that the plaintiff has filed the instant suit on the basis of the provisions of Section 20(c) of C.P.C. pertaining to the occurrence of the cause of action in its favour having arose upon the alleged illegal termination of the said 'Distribution Agreement' amended by 'Amendment 1 : Mohit Project', as more particularly set out in para-47 of the plaint; wherein the plaintiff has specifically pleaded the following:
'The cause of action for filing this suit first arose on 27th June 2000 when the Defendant No. 2 illegally and highhandedly sought termination of the Distribution Agreement by serving the notice to that effect. The plaintiff submits that the cause of action also arose on 01st March 2001 when the Defendant No. 2 wrongly and deliberately mixed up the Distribution Agreement and the Mohit Agreement and contended that the Mohit Agreement has also been terminated by the alleged notice of termination. The Plaintiff submits that finally the cause of action arose during the last week of December 2001, when from reliable sources the Plaintiff learnt that the Defendants would soon appoint a new agent distributor for the territory, which have been exclusively assigned to the Plaintiff already by the legally valid and enforceable the Distribution Agreement as well as by the Mohit Agreement.'
In the instant case, the letters dated 27th June, 2000 and 1st March, 2001 by defendant No. 2, referred to in para-47 of the plaint and annexed as Exh. 'G' and 'O' respectively thereto were addressed to and received by the plaintiff in Mumbai as such it was contended that at the highest, the High Court at Bombay in India would have the jurisdiction to entertain and try the present suit. In no case Palghar Court could have jurisdiction to entertain and try the suit in question. According to the defendants, no part of the cause of action for the relief claimed in the above suit has arisen within the territorial jurisdiction of the trial Court. The contention of the plaintiff that damages are suffered at Palghar as such part of the cause of action has arisen within the jurisdiction of the said Court was untenable in law. The defendants contended that the alleged damages cannot be a part of the cause of action in the suit for specific performance; as the claim in the suit is not for damages alone. The damages are consequential. No acts required to be established to succeed in a suit have arisen within the jurisdiction of the said Court. Therefore, the defendants contended that the trial Civil Court had no jurisdiction to entertain and try the suit.
20. The defendants had further submitted before the trial Court that the English Courts could alone have jurisdiction to entertain the aforesaid suit in view of the fact that the plaintiff and the defendants have pursuant to Article 8 of 'Amendment 1 : Mohit Project', thereby amending the amending the 'Distribution Agreement', (Article 15 prior to amendment) expressly agreed that the agreement shall in all respects, including the formation thereof and performance thereunder be governed by and construed in accordance with the English Law and that all differences on the interpretation or performance of this agreement, which will not be settled by amicable means, will be settled by the English Courts. According to the defendants, it was for the plaintiff to satisfy the trial Court that it has filed suit in the Court which has jurisdiction. It was contended that it is for the plaintiff to justify and support the averments made by it to show that the trial Court has jurisdiction. The burden being on the plaintiff to prove the jurisdictional facts, it would rather more pertinent for the plaintiff to lead evidence in support of its contention that the jurisdiction to entertain and try the instant suit vest with the trial Court than for the defendants to lead evidence in support of their contention that the said Court sans jurisdiction because it is the plaintiff who has deviated from the agreed terms of the said 'Distribution Agreement', amended by 'Amendment 1 : Mohit Project', duly executed by the plaintiff and the defendants and acted contrary thereto as well as contrary to the rules of the C.P.C. by filing the instant suit in the trial Court. The defendants, therefore, contended that it is the plaintiff who should first prove its contention as regards the jurisdiction of the Court, which the plaintiff's own knowledge and belief is contrary to the agreed terms between the plaintiff and the defendants, as well as contrary to the rules of the C.P.C.
21. The defendants further contended that the jurisdiction of the said Court already stands ousted by virtue of the agreed terms in terms of Clause- 15 of the said 'Distribution Agreement', amended by Clauses 8 of 'Amendment 1 : Mohit Project', duly executed by the plaintiff and the defendants. According to the defendants, they cannot be said to incorrectly seek to oust the jurisdiction of the said court.
22. It was further urged that the learned single Judge of this Court, vide his order dated 15th July, 2002 passed in Civil Revision Application No. 710 of 2002 held that the proper law for the suit agreements is the English law and remanded the matter back to the trial Court for hearing the application under Section 9A of C.P.C. subject to the direction therein. the defendants had, therefore, contended before the trial Court that once it was held that the proper law for the suit agreements is the English law, then, all differences on the interpretation or performance thereof, which could not be settled by amicable means, have to be referred to the English Courts as, according to the defendants, it is the English Courts which will be the best interpreters of the English law. It was, thus, contended that it is the plaintiff who has acted contrary to the terms of the said 'Distribution Agreement', amended by 'Amendment 1 : Mohit Project', by instituting the present suit in the trial Court, in whose jurisdiction, no cause of action has accrued to the plaintiff to claim any relief against the defendants. According to the defendants, the plaintiff has not only defied the terms agreed upon with the defendants but only defied the terms agreed upon with the defendants but also the rules laid down by the C.P.C. as regard the place of instituting the suit. It was, thus, prayed in the peculiar facts and circumstances of the case that it is necessary to issue appropriate directions to the plaintiff to prove its contention that trial Court has jurisdiction to entertain and try this suit, contrary to the forum agreed upon and contrary to the rules laid down by the C.P.C. as regards the place of instituting the suit.
23. With the aforesaid rival pleadings, the trial Court proceeded to hear the application (Exh. 58) and by its reasoned order dated 7th February, 2004, held that since the defendants are challenging the jurisdiction of the trial Court, the burden of proof lies upon the defendants as such defendants were called upon to first adduce evidence in respect of two questions rather issues framed by the learned Single Judge while disposing of the civil revision application.
24. That is how the application moved by the plaintiff came to be allowed. The defendants were directed to adduce evidence on the said issues/questions to be adjudicated and determined by the trial Court in the light of the observations made by the learned single Judge in his order dated 15th July, 2002 referred to hereinabove.
25. The above order of the learned trial Court dated 7th February, 2004 passed below Exh. 58 in Special civil Suit No. 9 of 2002 is a subject matter of challenge in the present petition filed under Article 227 of the Constitution of India.
RIVAL SUBMISSIONS :
26. Mr. Devitre, Learned senior counsel appearing for the petitioners/defendants urged that the impugned order is bad and illegal and is contrary to the well settled principles of law. According to the petitioners/defendants the plaintiff must satisfy that it has filed suit in the Court which has jurisdiction to entertain and try the same. It is for the plaintiff to justify and support the averments made by them to show that the trial Court has jurisdiction. The burden is on the plaintiff to prove the jurisdiction in favour of the trial Court based on the facts.
27. Mr. Devitre submitted that the proper law for the suit agreements is the English law. Once it is held that the proper law for the suit agreements is English law, then all differences on the interpretation or performance thereof, which cannot be settled by amicable means, have to be referred to the English Courts as the English Courts alone shall be the best interpreters of the English law.
28. Mr. Devitre urged that it is the plaintiff who has acted contrary to the terms of the Distribution Agreement dated 1st August, 1977, amended by 'Amendment 1 : Mohit Project', by instituting the suit in the trial Court, within whose jurisdiction, no cause of action has accrued to the plaintiff to claim any relief against the defendants. He, therefore, urged that the burden to establish jurisdiction in favour of the trial Court lies on the plaintiff and not on the defendants. He pressed into service the judgment of the Supreme Court in the case of Modi Entertainment Network and Anr. v. WSG Cricket PTE Ltd., : [2003]1SCR480 . In his submission, as per the law laid down by the Apex Court in para-11, by mutual agreement the parties cannot confine jurisdiction, where none exists, on a court to which C.P.C. applies, but this principle does not apply when the parties agree to submit to the exclusive or non-exclusive jurisdiction of a foreign court; indeed in such cases the English courts do permit invoking their jurisdiction. In his submission, it is thus clear that the parties to a contract may agree to have their disputes resolved by a foreign court termed as a 'neutral court' or 'court of choice' creating exclusive or non-exclusive jurisdiction in it. He, thus, urged that the parties to the contract having specifically agreed in the agreement known as 'Distribution Agreement', amended by 'Amendment 1 : Mohit Project', that in all respects, including the formation thereof and performance thereunder be governed by and construed in accordance with the English law and that all differences on the interpretation or performance of this agreement, which will not be settled by amicable means, will be settled by the English Courts as such it is for the plaintiff to establish as to why he does not want to invoke jurisdiction of the English Court. He, thus, urged that the burden to prove jurisdiction in favour of the trial Court is on the plaintiff and not on the defendants.
29. Per Contra, Mr. Tulzapurkar, appearing for the respondent/plaintiff urged that the impugned order passed by the trial Court is correct in law and on facts. it does not suffer from any infirmity as such there is no occasion for this Court to interfere with the impugned order, especially, under Article 227 of the Constitution of India. he submits that the defendants contention is that by reason of the provisions in the agreements which state that the agreements will have to be governed by English law, the question whether or not the English Courts will have exclusive jurisdiction has to be determined not by applying the law of India but by applying the law of England alone.
30. Mr. Tulzapurkar would submit that the question, whether the trial Court has jurisdiction to entertain and try the suit, is no longer open to contest. According to him, the trial Court has answered this specific issue in the affirmative in its earlier order dated 19th March, 2002. This finding of the trial Court has not been disturbed by this Court while deciding revision application. According to him, this Court, in fact, has affirmed the said finding in para-20 of its judgment. He submits that the said finding operates as res-judicata as such the defendants are now barred from contending to the contrary, on the principle of 'res-judicata' or principles analogous thereto. He placed reliance on the judgment of the Supreme Court in the case of Satyadhan Ghoshal and Ors. v. Smt. Derajan Devi and Anr., : [1960]3SCR590 in support of his contention; wherein the Apex Court held that the principle of 'res-judicata' is based on the need to give finality to judicial decisions; when a matter, whether on a question of fact or of law has been decided between the two parties in a suit or proceeding and the decision is final, neither party is allowed in a future suit or proceeding between the same parties to canvass it again; this principle of res-judicata is embodied in Section 11 of C.P.C., but even where Section 11 does not applied by the Court to achieve finality in litigation. As per the said judgment, the principles of res-judicata has been applied by the Courts to achieve finality in litigation. As per the said judgment, the principles of res-judicata apply also in between two stages in the same litigation to the extent that a court, whether the trial Court or a higher Court, having at an earlier stage decided the matter in one way will not allow the parties to reagitate the matter again at a subsequent stage of the same proceedings. Mr. Tulzapurkar also placed reliance on the judgment in the case of Ratanlal Kisandas v. Bajirao Ganpat Mahalasne and Ors., 1975 M. L.J. 60 in support of his submission. It is, thus, urged that the trial Court otherwise has jurisdiction is conclusive and binding on the defendants and now they are not entitled to reagitate the same issue either in this petition or before the trial Court.
31. Mr. Tulzapurkar further submits that the trial Court has jurisdiction to entertain and try the suit, inter-alia, because the performance of the contract which is the subject matter of the suit, was to be within the territorial jurisdiction of the Palghar Court. From Article 2.1 of the Agreement dated 30th November, 1998, it is clear that the plaintiff has suffered loss and damage by the wrongful termination of the agreements by the defendants. Mr. Tulzapurkar relied upon the judgment of the Supreme Court in the case of A.B.C. Laminart (supra); wherein it is laid down that the performance of a contract is part of cause of action and a suit in respect of its breach could always be filed at the place where the contract should have been performed. He also placed reliance on the judgment dated 10th February, 1998 delivered by the Division Bench of this Court in the case of AB Petro Products Ltd. and Anr. v. Unimark Remedies Ltd.; wherein it was held that the plaintiffs suffering damages is definitely a part of cause of action and if damages are suffered at a place, the Court of that place has jurisdiction to entertain and try the suit for recovery of damages. He, therefore, submits that both on the principles of res-judicata; or principles analogous thereto; or even otherwise on admitted facts based on documents, the trial Court has territorial jurisdiction to entertain and try the suit in question.
32. Mr. Tulzapurkar would submit that the contention of the defendants that the trial Court does not have territorial jurisdiction to entertain and try the suit under English law has to be proved as a fact. According to him, since the determination of these questions depends upon what the English law is, it is necessary for the party relying upon the English law to prove what the English law is, which, according to him, is a question of fact. He, thus, submits that the burden squarely lies upon the defendants so asserting, to prove the said fact.
33. Mr. Tulzapurkar, relying on the judgment of the Supreme Court in the case of A.B.C. Laminart Pvt. Ltd. (supra), submitted that more than one court may have jurisdiction to entertain and try a particular suit, and a specific provision in a contract providing for jurisdiction of courts at one place does not ipso facto taker away the jurisdiction of the Court at another place. He further submits that if the Indian law is held to be not applicable to the contract but the English law is held applicable, then what the English law is, is a question of fact and has to be proved as a fact by the defendants who rely on the same. If it is found that under the English law a clause in a contract which does not contain words like 'only', 'exclusive,' 'alone' or the like would still amount to conferring exclusive jurisdiction on the nominated Courts, then only the jurisdiction of the trial Court would be ousted and not otherwise. To decide this question, the burden is obviously on the defendants to prove as a fact what the English law is. He, therefore, submits that the trial Court has rightly directed the defendants to adduce evidence on the preliminary issue of jurisdiction.
34. Mr. Tulzapurkar submits that the reliance placed by the defendants on the judgment of the Supreme Court in the case of Modi Entertainment Network (supra) is misplaced. He submits that the facts of that case disclose that there was a clause in the contract conferring non-exclusive jurisdiction on the English Court in the matter of disputes between the parties. Secondly, in the said case the Supreme Court held that the parties had conferred jurisdiction on a foreign court and it was not open to one of the parties to claim anti-suit injunction to restrain the other side from filing and prosecuting an action in the Court agreed upon, unless the party seeking such relief showed that it would be oppressive and vexatious if an action were commenced against it in the foreign court. He, therefore, submits that the said judgment has no application to the facts of the present case. He submits that in the present case no anti-suit injunction has been sought. In the instant case, a suit has already been filed in the trial Court and this Court while deciding the civil revision application held that the said Court has jurisdiction to try and entertain the suit. The only ground, on which the trial Court's jurisdiction is sought to be ousted by the defendants, is on the basis of clauses in the agreement providing for application of English law to the contract and a clause providing for jurisdiction of English Courts. It is, thus, contended that in the case of Modi Entertainment Network (supra), the question of what the foreign law is, and proving the foreign law as a question of fact, did not arise for consideration; which is the moot question in this case. He, therefore, submits that in the circumstances the burden of proving what the English law, is a fact, lies exclusively upon the defendants and, therefore, it is for them to lead evidence to establish their contention, so as to discharge their burden. He, however, submits that there is no compulsion on the defendants to lead evidence. If they do not want to lead any evidence, they can make a statement to that effect in the trial Court in black and white.
35. Mr. Tulzapurkar would further submit that reliance of the defendants on Order 18 Rules 1 and 2 of C.P.C. is misplaced. He submits that reference to Order 18 Rule 1 shows that it speaks of only a right to begin and does not deal with the question of who is first bound to lead evidence. The answer to the question of who is first bound to lead evidence depends not upon Order 18 Rules 1 or 2 but on whom the burden lies to prove the fact in issue.
36. Mr. Tulzapurkar submits that having regard to the provisions of Sections 101 and 102 of the Evidence Act, the burden of proof of a fact lies on the party who would fail if no evidence were led in regard thereto. According to him, defendants' contention is that by reason of the English law the trial Court's jurisdiction is ousted. In the present case there is only one issue to be tried by the trial Court, the fate of which depends on the English law, if proved as a fact. If what the English law is, is not proved by leading positive evidence, the jurisdiction of the trial Court would not be ousted. In this view of the matter, according to Mr. Tulzapurkar, in this case, on the sole issue; which presently arises for decision under Section 9A of C.P.C., the burden of proof lies solely on the defendants as such it is for the defendants first to open their evidence. Mr. Tulzapurkar reiterates that having regard to the matter in issue before the trial Court the burden of proof clearly lies on the defendants. The trial Court has rightly decided the question by the impugned order and judgment. The trial Court is seized of the matter and has passed the impugned order on a consideration of all relevant material and the law on the point. It has exercised its discretion in a judicious manner and that there is no warrant for interfering with the same. He, therefore, submits that the petition is devoid of any substance and is liable to be dismissed.
ISSUE
37. The submission advanced by the rival parties give rise to the following issue:
In the facts and circumstances of the case, who should begin with the evidence, first, on the two questions framed by this Court (see para-10) while deciding civil revision application, to be adjudicated and determined by the trial Court?
CONSIDERATION :
38. Having heard the rival parties, the contentions of the defendants is that by reason of the provisions in the agreements which state that the agreements will have to be governed by English Law, the question whether or not the English Court will have exclusive jurisdiction has to be determined not by applying the law of India but by applying the law of England alone. In nutshell, the contention is that under the English law, a provision of the nature found in Articles 15 and 8 of the respective agreements, results in ouster of the jurisdiction of all the Courts except English Courts as such the English Courts alone will have jurisdiction to entertain and try the suit arising out the said agreements. In my view, this question is open for consideration to a limited extent, in the sense, the learned single Judge while deciding Civil Revision Application No. 710 of 2002 vide his order dated 15th July, 2002 in para-19 thereof has considered the question of applicability of law and recorded a positive finding that the parties have expressly agreed that subject agreements to be governed by and construed in accordance with the English law. The finding recorded in this behalf reads as under:
'19. In the ultimate analysis, I hold that by virtue of Article 15.1 and 8.1 of the respective agreements, the parties have expressly intended the subject Agreements to be governed by and construed in accordance with the English law.'
(Emphasis supplied)
39. The learned single Judge on the above premises went on to observe that by virtue of Articles 15.2 and 8.2 of the respective agreements the parties have expressly agreed as such they would be bound by the condition that all differences on the interpretation or performance of the subject agreements, which will not be settled by amicable means, will be settled by the English Courts. While framing issue as to whether the English Courts will have exclusive jurisdiction, learned single judge found it necessary to construe the Articles 15.2 and 8.2 of the respective agreements by applying English law. In this view of the matter, learned single judge found it necessary to find out two relevant questions, firstly, as to whether the intention of the parties is expressed bonafide and is not opposed to public policy as per the 'proper law' of the agreements and, secondly, as to whether the purport and interpretation of Articles 15.2 and 8.2 of the respective agreements in accordance with the 'proper law' of the agreements (i.e. the English law) is that the English Courts have exclusive jurisdiction over the subject matter in the suit. The learned single Judge after recording necessity of debating the said questions went on to observe that the above questions can be decisively answered only upon leading evidence on the question: whether the English Courts will have exclusive jurisdiction? He further went on to observe that if the answer were to be in affirmative then, obviously, the trial Court, which is otherwise a court of competent jurisdiction to try and decide the suit, albeit by applying the 'proper law' of the agreements will have no jurisdiction as it would mean that the jurisdiction of Indian Courts is ousted. In that case, the suit filed by the plaintiff would not proceed. Since the parties had not led any evidence on the basic question as to what the foreign law is, the learned single judge found it necessary to relegate the parties to the trial Court to enable them to adduce necessary evidence on relevant question so as to enable the trial Court to examine it based on evidence.
40. On the aforesaid backdrop, when the issues were set for leading evidence, the question arose as to who should first lead evidence. The plaintiff wants that the defendants should open the evidence, whereas defendants want that the plaintiff should first enter the witness box.
41. The basis of the plaintiff to throw burden on the pleadings of the plaintiff in the plaint and not on the averments made in the written statement. By the defence put forward, the defendants cannot force the plaintiff to go to a forum no of plaintiff's choice. The plaintiff based its submission on the further well recognized principle that the burden lies on who asserts that a particular Court has no jurisdiction to establish that fact. The burden of proof lies on the person who has to prove the fact.
42. Against above, the defendants want the plaintiff to open its evidence on the basis of the judgment of the Apex Court in the case of Modi Entertainment Network (supra); wherein the Apex Court observed that it is a well-settled principle that by agreement the parties cannot confer jurisdiction, where none exists, on a court to which C.P.C. applies, but this principle does not apply when the parties agree to submit to the exclusive or non-exclusive jurisdiction of a foreign court; indeed in such cases the English courts do permit invoking their jurisdiction. Thus, parties to the contract may agree to have their disputes resolved by a foreign court termed as a 'neutral court' or 'court of choice' creating exclusive or non-exclusive jurisdiction in it.
43. Learned counsel for the petitioner/defendants, as already recorded, urged that the plaintiff is avoiding jurisdiction of the English Courts, termed as 'neutral court' or a 'court of choice' and, therefore, the plaintiff should establish why it does not want to invoke jurisdiction of the English Courts. He further urged that if any party wants to displace the claim under the contract, then it is for that party to lead evidence and establish its case.
44. At this juncture, it will not be out of place to mention that under the principle of Private International Law the parties are bound by the jurisdiction clause to which they have agreed unless there is some reason contrary thereto to apply it to municipal contracts. In Lee v. Showmen's Guild,(1952) 1 ALL 1175 Lord Denning said:
'Parties cannot by contract oust the ordinary courts from their jurisdiction. They can, of course, agree to leave question of law, as well as question of fact, to the decision of the domestic tribunal. They can, indeed, make the tribunal the final arbiter on questions of fact, but they cannot make it the final arbiter on question of law. They cannot prevent its decisions being examined by the courts. If parties should seek, by agreement, to take the law out of the hands of the courts and put it into the hands of a private tribunal, without any recourse at all to the courts in cases of error of law, then the agreement is to that extent contrary to public policy and void.'
Under Section 23 of the Contract Act, the consideration or object of an agreement is lawful, unless it is opposed to public policy. So long as the parties to the contract do not oust the jurisdiction of the Courts, which would otherwise have jurisdiction to decide the cause of action under the law it cannot be said that the parties have by their contract ousted the jurisdiction of the Court. If under the law several Courts would have jurisdiction and the parties have agreed to submit to one of these jurisdictions and not to other or others of them it cannot be said that there is total ouster of jurisdiction. In other words, where the parties to a contract agreed to submit the disputes arising from it to a particular jurisdiction which would otherwise also be a proper jurisdiction under the law their agreement to the extent they agree not to submit to other jurisdictions cannot be said to be void as against public policy. If on the other hand the jurisdiction they agreed to submit to would not otherwise be proper jurisdiction to decide disputes arising out of the contract it must be declared void being against public policy. In this backdrop, 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. In the present case, in order to construe the said clause and in view of the conclusive finding recorded by the learned single Judge of this Court in the earlier round of litigation, the said clause will have to be construed in accordance with the English law? how it should be determined? The English law is a foreign law so far as the Courts in India are concerned. While dealing with the similar question, the Supreme Court in the case of Hari Shanker Jain v. Sonia Gandhi, : AIR2001SC3689 held that under Section 57(1) of the Indian Evidence Act, 1872, the Courts in India are required to take judicial notice of, inter alia, all laws in force in the territory of India. Foreign laws are not included therein. Under Order 6 Rule 2 of C.P.C., every pleading shall contain a statement in concise form of the material facts relied on by a party but not the evidence nor the law of which a Court may take judicial notice. But the rule against pleading law is restricted to that law only of which a Court is bound to take judicial notice. As the Court does not take judicial notice of foreign law, it should be pleaded like any other fact, if a party wants to rely on the same. The Supreme Court further went on to observe that it has no manner of doubt that in the Courts in India, a point of foreign law is a matter of fact and, therefore, a plea based on a point of foreign law must satisfy the requirement of pleading a material fact in the petition fact in the petition filed before the Court. If foreign law is a matter of fact and is required to be proved as any other fact, then the question is who should establish that fact. In my considered view, obviously, the person who is alleging or seeking ouster of the jurisdiction of the Court based on the interpretation of the clauses in the agreements applying the English law. So far as the judgment of the Apex Court in the case of Modi Entertainment Network (supra) is concerned, the said judgment unequivocally recognizes one solitary principle that by an agreement parties to the agreement can agree to submit to the exclusive or non-exclusive jurisdiction of the foreign Court which other wise the parties to the agreement cannot confer, where none exists, on a court to which C.P.C. applies. In other words, in the vary same judgment, the Apex Court has ruled that exclusive or non-exclusive jurisdiction of the foreign Court can be accepted by the parties to the agreement. In other words, more than one Court can have inherent jurisdiction to try the dispute and the parties to the agreement can agree to oust the jurisdiction of any one Court if they are governed by C.P.C. and can also agree to accept exclusive or non-exclusive jurisdiction of foreign Court where non exists. It means parties to the agreement can also confer exclusive or non-exclusive jurisdiction in favour of the English Court or foreign Court even it has no inherent jurisdiction. Whether on foreign Court exclusive jurisdiction has been conferred or not would again be a question of fact requiring interpretation of the agreement applying English law. What is English law would always be a question of fact. Therefore, even if the law laid down by the Apex Court in the case of Modi Entertainment Network (supra)is applied to the facts of the present case, even the burden would lie upon the defendants to establish what is English Law and based on such proof will have to further establish that exclusive jurisdiction has been conferred on the English Court. Ouster of jurisdiction has to be proved as any other fact and, therefore, I do not see any infirmity in the order passed by the trial court.
In the result, petition is dismissed. Rule is discharged with no order as to costs.