Soumen Sen, J
 This appeal is arising out of a judgment and order dated 5th September 2016 passed in an application filed by the respondent for revocation of leave
granted under Clause 12 of the Letters Patent, being G.A. No. 359 of 2014.
The basis of the application appears to be the existence of a forum selection clause in the relevant contract giving exclusive jurisdiction to the courts at
Mumbai.
There are two contracts which are of relevance in this case. One is a contract dated 14th April 2010 (hereinafter referred to as the “first work
orderâ€) and the other is a contract dated 22nd July 2010 (hereinafter referred to as the “second work orderâ€). The appellant was to supply goods
to the first respondent for construction of roads. The first work order was in respect of State Highway No. 69 in Bihar and the second work order
was in respect of a project in Kodarma at Jharkhand.
A Memorandum of Understanding was entered into between the parties on 22nd April 2010 (hereinafter referred to as the “MoUâ€). The
appellant states that the MoU was concluded at its offices in Kolkata. This MoU contained, in clause 8, a provision for a performance bank guarantee
to be furnished. The said bank guarantee was furnished, pursuant to the terms of the MoU, on 17th May 2010. Subsequently, the MoU was cancelled
on 24th May 2010. However, the bank guarantee continued to be renewed from time to time â€" until it was encashed by the respondent no. 1 on 21st
October 2013.
The appellant was aggrieved by the respondent’s alleged wrongful invocation of a bank guarantee which had been furnished; and this dispute led
to the appellant filing a suit in this Court. The plaint does not, however, clearly indicate whether the claim made therein pertains exclusively to the first
work order or exclusively to the second work order or to both. This is relevant since the first work order contained a forum selection clause whereas
the second work order did not. The forum selection clause in the first work order is reproduced below:
“k. Jurisdiction: All disputes between the GIL and CTS under this work order shall be deemed to have arisen in Site and only the Mumbai Court
alone shall have jurisdiction to determine the same. The work order shall be governed by the law of India and the language for communication shall be
English.â€
The appellant contends that their claim is a “composite†money claim. Mr. Jishnu Saha, the learned senior counsel appearing on behalf of the
appellant, submitted that the claim in the suit is under two contracts for recovery of money realised by the respondent by wrongful invocation of the
bank guarantee furnished by the appellant. It is stated that C.S. 11 of 2014 has been filed, for recovery of a sum of a sum of Rs. 1,44,00,548, a
consolidated amount arrived at by appropriating intermittent payments received against both the orders. It is stated in the plaint that in view of non-
payment of the said sum, the appellant had referred the matter to the Disputes Committee of the respondent no. 1 and the Dispute Committee had
expressed an opinion that there was a difference of only 1% between the figures provided by the appellant and those provided by the Respondent no.
1. It is submitted that a bare reading of paragraphs 12 to 16 of the plaint would make it clear that the appellant’s case is a composite claim for
moneys due and owed to it under both the orders.
The appellant’s core submission is that there is some cause of action that is made out in the plaint in respect of the second work order. It is
immaterial if this is a miniscule cause of action since the language in Clause 12 of the Letters Patent as well as section 20 of the CPC refers to the
whole or a part of the cause of action arising within jurisdiction. The appellant’s contention is that, at this stage, it is not open for the Court to look
into the plaint as well the contentions put forth by the other side to determine if there really is some cause of action which gives jurisdiction to this
court. It is submitted that ordinarily it would be presumed that the court has the jurisdiction to hear the matter and the test to be used to determine
whether the suit would be rejected or leave granted ought to be rejected is on the basis of the averment made in the plaint. It is submitted that on a
prima facie reading of the plaint, particularly paragraphs 12, 13, 14, 15 and 16, since a cause of action has been made out in relation to the second
work order, which does not have a jurisdiction clause and could otherwise be filed in this court, the application for revocation for leave ought to be
rejected. In this context, the discussion in Mayar (H.K.) Ltd. &Ors.Vs. Owners & Parties, Vessel M.V. Fortune Express & Ors. (2006) 3 SCC 10,0
especially paragraphs 3, 6, 9, 19, 31 and 32 which state that for the purpose of cause of action, it is not necessary for the appellants to plead the ouster
of the jurisdiction of the Calcutta Court has been emphasised and urged to be relevant for the present purpose.
It is further submitted that Order II Rule 3, Order I Rule I and Order I Rule 3 make it clear that the intention of the legislature is that where right to
relief arises between the same persons in respect of transactions between them which would give rise to a common question of fact or law, a single
suit should be filed. It is submitted that the appellant as dominus litus was entitled to, at its discretion, join two causes of action â€" in relation to the
first and the second work order â€" and file a single suit. It is submitted that bifurcation of the two causes of action, in relation to the two work orders,
ought not to be done especially when it could be open to parties, under Order VIII Rule 6 and Rule 6A, to claim set-offs and counter-claims in respect
of unrelated transactions. For the policy against bifurcation of suits, reference is made to Sukanya Holdings v. Jayesh H. Pandya (2003) 5 SCC 531.
In this context, it is also submitted that it is settled law that even if a part of the cause of action, howsoever miniscule, arises within the jurisdiction of
the court, the court is empowered to receive the suit and try it, by granting leave under Clause 12. Reliance for this proposition is placed on State of
West Bengal v. National Dairy Development Board (2011) 1 CHN 553 (para 17) and Tata Iron and Steel Co. v. Himani Alloys (2008) 2 CHN 28
(para 16). Reliance is also placed on Jaintia Highway Pvt Ltd. v. National Highways Authority of India 2014 SCC Online Cal 5716, Maheswari
Brothers v. Airports Authority of India 2006 SCC Online Cal 170, Bidyut Kumar Bannerjee v. Parasrampuria Plantations Ltd. 2018 SCC Online Cal
3506 and Jaytee Exports v. Navtar Parikh Industries Ltd 2018 SCC Online Cal 1160 for the proposition that causes of action could be joined together
in one suit and when they are joined, if there is some jurisdiction in this court, the court could entertain the whole matter and lean in favour of its
jurisdiction.
The appellant has also submitted that it has been specifically stated in the plaint that the MoU dated 22nd April 2010 which contained a specific forum
selection clause had been cancelled by the parties and had been substituted by the second work order which does not contain a forum selection
clause. It is submitted that a specific case in relation to the second work order has been made out in paragraphs 12 to 16 of the plaint. Therefore, the
attempt on the part of the respondent no. 1 to contend that the demand made by the appellant for payment is confined to the work order containing the
purported forum selection clause is of no consideration, irrelevant and without substance at this stage since in an application under Order VII Rule 10
or 11, only the averments in the plaint are germane. In this context, reliance is placed on SNP Shipping Services Pvt Ltd v World Tanker Carrying
Corporation AIR 2000 Bom 34 (para 17) where it has been held that averments made in the plaint as well as contents of the documents which may
constitute part of the plaint can be looked into on the face value thereof and the question relating to the validity or invalidity of the document cannot be
considered at the stage of an application under Order VII Rule 11.
It is submitted that it is well settled that for the purposes of an application in the nature of Order VII Rule 10 or Rule 11, only the averments in the
plaint can be looked into. Reliance is placed on Sopan Sukhdeo Sable v. Assistant Charity Commissioner (2004) 3 SCC 137 . It is also submitted that it
is well settled that while considering a plea for rejection of the plaint no amount of evidence can be looked into and no mixed questions of fact and law
can be decided. Reliance for this proposition is placed on Kamala v. KT Eshwaran SA (2008) 12 SCC 661( para 21, 22 and 25). It is submitted the
principle enunciated in Sopan Sukhdeo Sable (supra) is that there cannot be any compartmentalisation, dissection and segregation of the various
paragraphs of the plaint. It is also submitted that no portion of the pleadings in the plaint can be struck out under Order VII Rule 11 and the plaint has
to be read as a whole. Reliance is placed on D. Ramachandran v. RV Janakiraman (1999) 3 SCC 267 (para 10) for this proposition.
The learned senior counsel has submitted that while the demand notice dated 26th September 2013, issued by them prior to the filing of the suit, does
not contain any averment relating to the second work order, the same ought to be treated as immaterial since the respondents have not, in their
application for revocation of leave, referred to the demand notice either. Additionally, it is contended that it was never the respondent’s case in its
application for revocation of leave that the plaint over-reached the demand notice.
The appellant also contended that the forum selection clause was vague and uncertain as it does not identify which court in Mumbai will have
jurisdiction. In this context, reference is made to Mayawati v. Kaushalya Devi (1990) 3 SCC 1 (para 17) and Kovuru Kalappa Devara v. Kumar
Krishna Mitter AIR 1945 Mad 10. They also contended that the clause is illegal since the deeming provision therein is contrary to law. They state that
the forum selection clause at one hand contemplated that any dispute was deemed to have arisen at the site of work (that is, Bihar) and on the other
hand proceeded to confer jurisdiction on courts in another place (Bombay). It is submitted that it is trite law that no part of a contract or a clause
therein can be treated as surplusage; and reliance for this proposition is placed on National Agricultural Cooperative Marketing Federation India Ltd.
v. Gains Trading Ltd. (2007) 5 SCC 691 (para 9). It is contended that the clause is a contradiction and the two parts of the clause is irreconcilable.
Mr. Saha argued that this makes the clause unworkable as one of the parts could not be segregated by the respondent, at its choosing, from the other
and independently enforced. In this regard, reference is made to Tata Iron and Steel Co v. Himani Alloys (2008) 2 CHN 28 (para 18, 20) and RLJ
Ferro Alloys Pvt Ltd v. Steel Authority of India Ltd (2011) 3 CHN 708 (para 12, 13).
The respondent’s primary contention for the revocation of leave under Clause 12 is that the main reliefs claimed in the plaint, that is, the recovery
of certain sums that the appellant believes is due to it, all relate to the first work order. The respondent contends that as the reliefs claimed related to
the first work order, it is the jurisdiction clause in that work order that ought to be taken note of. The work order contains the aforementioned forum
selection clause, by which the parties have contracted that “only the Mumbai Court alone shall have jurisdiction to determine†any and all disputes
that arise between the parties “under this work orderâ€.
Mr. Jayanta Mitra, the learned Senior Counsel appearing on behalf of the respondents, has argued that the work orders dated 14th April 2010 and
22nd July 2010 are distinct, separate and independent contracts. In the plaint no claim has been made for supply under the work order dated 22nd July
2010. The Performance Bank Guarantee dated 17th May 2010 did not relate to the subsequent work order dated 22nd July 2010. None of the said
work orders make any reference to the other and are not related to the other. The two work orders relate to different sites. The letter of demand
dated 26th September, 2013 does not refer to the supply order of 22nd July 2010. Any claim said to have arisen under these two separate and
independent work orders for different sites are to be treated as different causes of action which are incapable of being joined in one suit. Any issue or
dispute arising under these work orders could not have constituted a composite money claim inasmuch as these are independent transactions by and
between the parties. The only court which can decide as to whether any part of the claim in the suit has arisen out of the work order dated 14th April
2010, is the court at Mumbai which has been exclusively conferred with the jurisdiction to decide any dispute arising out of the work order dated 14th
April, 2010 by agreement of the parties.
Mr. Mitra submits that even the MoU which precede the work order and was admittedly cancelled contains a Forum Selection Clause in Clause 15
which reads:
“Any dispute arising out during execution of this contract shall (be) deemed to have arisen at site and only Mumbai Court alone shall have
jurisdiction to determine the same. The MOU shall be governed by the law of India and the language for communication shall be Englishâ€
The learned Senior Counsel has also submitted that the work order dated 14th April, 2010, in Clause (k), also contains a Forum Selection Clause which
confers exclusive jurisdiction to the Mumbai Courts. The said clause reads:
“Jurisdiction â€" All disputes between GIL and CTS under this work order shall be deemed to have arisen in Site and only the Mumbai courts alone
shall have jurisdiction to determine the sameâ€
The attention of this Court is also drawn to Clause (f) of the Performance Bank Guarantee, which states:
“The jurisdiction in relation to this guarantee shall be the Courts at Mumbai and the laws of India shall be applicableâ€
Mr. Mitra referring to the said clauses submits that the parties have clearly agreed and intended to have their disputes arising either out of MoU or the
performance bank guarantee or the work order dated 14th April, 2010 would be resolved by the Mumbai Courts alone. The plaint explicitly refers to
the work order dated 14th April, 2010 and not to any claim arising out of supply order dated 22nd July, 2010. In view thereof, this Court does not have
the jurisdiction to try and determine the suit. As the Courts in Mumbai have been conferred the exclusive jurisdiction by agreement of the parties, the
suit cannot be filed before this Court. In this regard, Mr. Mitra has placed reliance upon the judgment of Hon’ble Supreme Court in Swastik Gases
Private Limited Vs. Indian Oil Corporation Limited (2013) 9 SCC 32 (paragraphs 32-37, 57).
Mr. Mitra submits that by artful and clever drafting, the plaintiffs have tried to create an illusion of a cause of action in respect of supply order dated
22nd July, 2010. In the plaint, the plaintiffs have alleged that the bank guarantee dated 17th May, 2010 was issued in respect of MoU dated 22nd April,
2010, whereas in its affidavit-in-reply filed in the present proceeding, the appellant has alleged that although the bank guarantee was issued under
work order dated 14th April 2010 but subsequently it had been agreed by the parties that the same would cover the work order of 22nd July 2010,
although, no basis or correspondence or any document has been referred to or disclosed in the pleadings to substantiate the latter allegation.
Mr. Mitra refuted the argument of Mr. Saha that the forum selection clause is ambiguous. The learned Counsel submits that the work order dated
14th April 2010 as well as the performance bank guarantee dated 17th May, 2010 are clear and unambiguous and has referred to Paragraphs 32 to 37
and 57 of Swastik Gases (supra) to substantiate his argument that where two or more Courts have jurisdiction to determine the suit, an agreement
between the parties that dispute between them shall be tried in one of such Courts should be upheld.
Mr. Mitra submits that the forum selection clause contained in Clause (k) of the Work Order dated 14th April, 2010 expressly record the agreement of
parties to submit to the exclusive jurisdiction of Mumbai Courts and, thus, the forum selection clause is categorical, certain and capable of being acted
upon by the parties.
In respect of the cross-objection filed by the respondent it is submitted that the plaint as a whole should be dismissed as it does not disclose any cause
of action in respect of the supply order dated 22nd July, 2010. Mr. Mitra has taken us though the averments made in the plaint and the documents
annexed to the plaint to show that the alleged claim has been made solely in respect of work order dated 14th April, 2010.
Mr. Mitra submits that there is no pleading nor has any document been disclosed in the plaint which would show that the plaintiff has any cause of
action in respect of the work order dated 22nd July, 2010 inasmuch as the notice of demand dated 26th September, 2013 issued before the initiation of
the suit are in relation to the supply made under the work order dated 14th April, 2010. It is submitted that a bare perusal of the plaint together with the
documents annexed to the plaint make it abundantly clear that any alleged cause of action which the plaintiff could have in the suit relates solely to the
work order dated 14th April, 2010 which has a forum selection clause by virtue of which only the courts in Mumbai are capable of adjudicating
disputes between the parties.
It is, thus, submitted that since the entire cause of action emanates from the work order dated 14th April, 2010, which has a forum selection clause,
the law requires it to be tried only in the Court agreed by the parties and hence, the leave granted under Clause 12 of the Letters Patent, 1965, is
required to be revoked in its entirety. The plaint does not otherwise disclose of any supply of material transaction related to the work order dated 22nd
July, 2010. Mr. Mitra submits that the plaintiff has not even alleged in the plaint that it had raised an invoice on the respondent No.1 in connection with
the purported work order dated 22nd July, 2010.
In distinguishing the cases cited by Mr. Saha, it is submitted that there cannot be any quarrel with the proposition of law that even with a small part of
cause of action arising within its jurisdiction, the Court would be entitled to receive, try and determine the suit but this would only happen provided that
there is no forum selection clause by which the parties have intended to confer exclusive jurisdiction to a particular Court.
It is submitted that irrespective of the place where disputes would have deemed to have arisen, it is a definite, categorical and certain agreement of
the parties to confer jurisdiction to the Courts at Mumbai and this consistent decision of the parties is reflected in three agreements, namely, Work
Order dated 14th April, 2010, MoU dated 22nd April, 2010 and Performance Bank Guarantee dated 17th May, 2010 respectively. Hence, there is no
confusion whatsoever in ascertaining the intention of the parties to submit to the exclusive jurisdiction of Mumbai Courts in respect of the Work Order
dated 14th April, 2010. The demand notice dated 26th September, 2013 forms an integral part of the plaint and has been disclosed with the plaint. This
document forming part of the plaint is not any external evidence adduced by the respondents but forms the very basic and foundation of the suit. The
suit as a whole has to go and is required to be dismissed as no claim or allegation has been made in the plaint with regard to supply order of 22nd July,
2010 which is not governed by forum selection clause and consequently the suit is devoid of any cause of action with regard to such supply order of
22nd July, 2010. In respect of in Work Order dated 14th April, 2010, in view of existence of the forum selection clause conferring exclusive
jurisdiction of Mumbai Courts, this court cannot try the suit. The said suit founded on the work order dated 14th April, 2010 cannot be continued in this
favour.
Accordingly, it is submitted that the instant suit is liable to be dismissed as a whole. The ordinary place of business of the appellant is at Kolkata. The
ordinary place of business of the respondent no. 1 is at Mumbai. The MoU dated 22nd April 2010 contain a forum selection clause which gives
jurisdiction to the courts in Mumbai. But the MoU has since been cancelled by the parties. Both, orders, were issued by the respondent no. 1 at
Mumbai and were received by the respondent at Mumbai, duly signed by the appellant at its office in Kolkata as token of acceptance and
communicated its acceptance to the respondent at Mumbai. The first work order dated 14th April 2010 contained a forum selection clause which
gives jurisdiction to the courts in Mumbai. The second supply order dated 22nd July, 2010 does not, however, contain a forum selection clause. On a
perusal of the bank guarantee, whose invocation â€" wrongfully or otherwise â€" is at the genesis of this case, it can be seen that the bank guarantee
also contains a forum selection clause which gave jurisdiction to the courts in Mumbai.
The parent judgment on a forum selection clause is Hakam Singh v. M/s. Gammon (India) Limited (1971) 1 SCC 28.6 Paragraph 4 of the judgment
captures the essence of the legal principle:
4. The Code of Civil Procedure in its entirety applies to proceedings under the Arbitration Act. The jurisdiction of the Courts under the Arbitration
Act to entertain a proceeding for filing an award is accordingly governed by the provisions of the Code of Civil Procedure. By Clause 13 of the
agreement it was expressly stipulated between the parties that the contract shall be deemed to have been entered into by the parties concerned in the
City of Bombay. In any event the respondents have their principal office in Bombay and they were liable in respect of a cause of action arising under
the terms of the tender to be sued in the Courts at Bombay. 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 or
proceeding 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.
The law with regard to the ouster of jurisdiction is well-settled. In ABC Laminart (P) Ltd. Vs. A.P. Agencies 1989 (2) SCC 16,3 the Hon'ble
Supreme Court held that 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 agreed not to submit to other jurisdictions cannot be said to be void as
being 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. It was further held that even when words like 'alone', 'only', 'exclusive'
and the like have been used in the contract if the Court is of the view that the parties intended to have their dispute resolved by a particular court or
forum, the Court shall refer the dispute to have particular court and may refuse to exercise its jurisdiction to decide the dispute. This view has been
recently followed and clarified in Swastik Gases (supra).
In Hanil Era Textiles Ltd. v. Puromatic Filters Private Ltd. (2004) 4 SCC 67,1 the Supreme Court has held that once a party chose a forum which
otherwise had jurisdiction the parties must be held to their bargain. In Hanil Era Textiles (supra) the Supreme Court held that where two or more
courts have jurisdiction under the Code of Civil Procedure to try a suit or a proceeding and agreement between the parties that the dispute between
them shall be tried in one of such courts is not contrary to public policy inasmuch as when words 'alone', 'only', 'exclusive' are used and when certain
jurisdiction is specified in a contract, an intention to exclude all other for a from its operation may in such cases be inferred. This view has been
reiterated in Mayar (H.K.) Ltd. (supra), where the Supreme Court has stated, in para 6:
If the parties have chosen a particular forum and a particular set of laws in the world to govern them, then they are, in the large majority of ordinary
cases, to he held to their bargain and not to be allowed to depart therefrom only because one party finds it convenient and, therefore, chooses to do
so.
It is trite law that a Forum Selection Clause contained in an agreement is binding on the parties to the agreement. It has been judicially held in several
decisions that when the parties with their eyes open had entered into an agreement whereby they have agreed to settle their disputes in a manner as
indicated in the agreement, the forum mentioned in the agreement becomes the natural forum to adjudicate such disputes. (See: Gujarat NRE Coke
Ltd. &Anr.Vs. Jindal Steel & Powers Limited &Ors.2016 (2) CLJ 442 (Cal), Paragraph. 7).
In McNally Bharat Engineering Company Limited Vs. Maharashtra State Power Generation Company Ltd. AIR 2015 Cal 207, a Single Judge of this
Court had occasion to consider a case with a very similar factual scenario. In McNally too, the matter related to an alleged wrongful invocation of a
bank guarantee with the chosen forum between the parties being the Mumbai courts. McNally was decided at the stage of rejection of the plaint and
in the alternative for presentation of the plaint before the appropriate Court having jurisdiction. The present case is at the stage of revocation of leave
under Clause 12. In McNally, the Court held:
“14 . There cannot be any quarrel with the proposition of law that the parties by agreement cannot confer jurisdiction on a Court which does not
otherwise have the jurisdiction to try and determine the suit. Under the Code of Civil Procedure as well Clause 12 of the Letters Patent, save and
except, disputes relating to immovable properties outside the jurisdiction of the Calcutta High Court, a Court would have jurisdiction to try a suit if the
entirety of the cause of action arises within its jurisdiction irrespective of whether the Respondent may dwell or carry on business or personally work
for gain or if a part of the cause of action arises within the jurisdiction of this Court. The jurisdiction of the High Court to try and determine the suit is
by virtue of Clause 12 of the Letters Patent. The circumstances under which a suit under Clause 12 of the Letters Patent would lie has been
elaborately discussed in ChainrupSampatram Vs. Punjab & Sind Bank reported at 2009 (1) CHN 346 at Paragraph 24 which reads:-
24. There are three limbs to Clause 12 of the Letters Patent: the first limb covers suits for land or other immovable property, which is not germane
for the present purpose; the second limb speaks of the place of accrual of the cause of action in the suit, requiring no previous leave if the cause of
action arises wholly within jurisdiction but requiring previous leave if only a part - however infinitesimal or significant - of the cause of action arises
within jurisdiction; and, the third is the situs of the Respondent at the time of commencement of the suit. A suit for land (or other immovable property)
stands on a different pedestal and it is unnecessary to go into that aspect of Clause 12 here. But in a suit which is not a suit for land (or other
immovable property) the appellant has a choice of invoking the jurisdiction of this Court on either of the two remaining limbs of Clause 12. If there is a
solitary Respondent in a suit which is not a suit for land (or other immovable property), the appellant may unquestionably institute it on the Original
Side of this Court if the entirety of the cause of action arises within the original jurisdiction of the Court and irrespective of where the Respondent may
dwell or carry on business or personally work for gain. If there is a solitary Respondent in a suit which is not a suit for land (or other immovable
property), the appellant may institute it on the original side of this Court if a part of the cause of action arises within the original jurisdiction of this
Court irrespective of where the Respondent may dwell or carry on business or personally work for gain, subject, however, to obtaining prior leave
under Clause 12 to institute the suit. If there is a solitary Respondent in a suit which is not a suit for land (or other immovable property), the appellant
may institute it on the original side of this Court if the Respondent, at the time of the commencement of the suit, dwells or carries on business or
personally works for gain within the original jurisdiction of this Court, irrespective of where the cause of action may be arisen. The second and third
limbs of Clause 12 that cover suits other than suits for land (or other immovableproperty) are, in a sense, mutually exclusive; in that the appellant has
the choice of either founding territorial jurisdiction on situs of cause of action or on location of the Respondent at the time of commencement of the
suit. In a suit other than a suit for land (or other immovable property) where the appellant sues more than one Respondent, either of the last two limbs
of Clause 12 of the Letters Patent has to be satisfied in respect of each Respondent in the suit for the action to be launched on the Original Side of
this Court.
In so far as the Courts not governed by Letters Patent, provisions of the Code of Civil Procedure 1908 would apply. Any agreement between the
parties containing a Forum Selection Clause for adjudication of the dispute would certainly have to be considered at the time of granting leave under
Clause 12 of the Letters Patent. If an issue of jurisdiction is raised by a party on the basis of a forum selection clause as a ground for revocation, the
court is bound to consider such objection.
In the instant case, in both the work order dated 14th April, 2010 as well as the performance bank guarantee, jurisdiction is clearly vested in the
Mumbai courts. If the parties have contracted, time and again, to confer exclusive jurisdiction on a court that is otherwise competent to receive the
case, that court will have jurisdiction to try the matter. But what is equally important to consider here is that the forum selection clause is a contractual
term that the parties have willingly entered into. Parties have thereafter acted on the contract and created expectations based on the terms of the
contract. In such situations, it is important for courts to “give due importance to such ouster clause†(See: para 21 of McNally) in order to respect
the will and intention of the parties.
A similar situation arose in SPML Infra Ltd. v. South Bihar Power Distribution Co. Ltd. and Ors. 2015(3) CHN 441(Cal).
In Church of Christ Charitable Trust & Education vs. Ponniamman Trust (2012) 8 SCC 80,6 which was a case under Order VII Rule 11 â€" the law
on considering documents annexed to the plaint is laid down as follows â€
“13.In the light of the controversy, we have gone through all the averments in theplaint. In paragraph 4 of the plaint, it is alleged that the 2nd
Respondent as agreementholder of the 1st Respondent and also as the registered power of attorney holder of the1st Respondent executed the
agreement of sale. In spite of our best efforts, we couldnot find any particulars showing as to the documents which are referred to as""agreement
holder"". We are satisfied that neither the documents were filed alongwith the plaint nor the terms thereof have been set out in the plaint.
Theabovementioned two documents were to be treated as part of the plaint as being thepart of the cause of action. It is settled law that where a
document is sued upon and its terms are not set out in the plaint but referred to in the plaint, the said document gets incorporated by reference in the
plaint. This position has been reiterated in U.S. Sasidharan v. K. Karunakaran and Anr. (1989) 4 SCC 482 and Manohar Joshi v. Nitin BhauraoPatil
and Anr.(1996) 1 SCC 169.â€
The documents annexed to the plaint, which are deemed to be “incorporated by referenceâ€, include the demand notice dated 26th September
2013. The demand notice was the precursor to the suit. It raised a demand for Rs. 1,44,00,548. It is true that this is the exact sum for which relief has
been prayed in the suit and the demand notice only refers to the first work order, however, it is equally of importance that the plaint refers to the reply
to the demand notice in which the defendant has denied its liability on account of supplies made under the second supply order dated 22nd July, 2010
which admittedly does not have a forum selection clause and it is undisputed that for any claim on such work order, a suit can be filed before this court
after obtaining leave under Clause 12 of the Letters Patent. On a constructive reading of the demand notice along with the averments made in the
plaint and the reply to such demand notice, it cannot be said that the claim in the suit is only in respect of the work under dated 14th April, 2010. The
defendant has joined issue here by contending that the paragraphs in the plaint relating to the second work order do not lead to any specific relief being
claimed on its basis. However, while the demand notice made the claim for a specific sum only on the basis of the first work order, the plaint has
sought to make the same demand for the same sums of money on the basis of a consolidated claim on the basis of both the first and the second work
order.
At a first glance, it would appear that if the portions of the plaint relating to the second work order were to be considered deleted for the limited
purpose of this analysis, the cause of action emanating from the remaining paragraphs in the plaint would still entitle the plaintiff to all its prayers and
thus, those portions relating to the second work order would be superfluous. But on a careful reading of the averments made in the paragraphs 11, 14,
15 and 16 of the plaint read with the reply of the defendant dated 7th October, 2013 to the demand notice, the claim in the suit as against the second
work order dated 22nd July, 2010 still survives.
The said paragraphs of the plaint are stated below:
“11. In the meantime that the defendant no.1 also approached the plaintiff to undertake the work of supply of further 1,00,000 M.T. of crushed
aggregates of diverse specifications at agreed prices tone of its other work sites at SH: 69, Bihar. It was agreed by and between the parties that such
crushed aggregates would be as per MORTH specifications at the agreed rate of 500 per M.T. for aggregates sizes of 40, 20 and 10 mm and GBS at
Rs.475/- per M.T. The entire quantity of 1,00,000 M.T. was agreed to be supplied within a period of four months from the date of such agreement and
it was further agreed that the defendant no.1 would make payment within 30 days of raising of bills by the plaintiff. In terms of the such agreement a
work order dated 14th April, 2010 was issued by the defendant no.1 in favour of the plaintiff, a copy whereof is annexed hereto and marked “Gâ€.
The said work order was also issued by the defendant no.1 from its office at Mumbai, outside aforesaid jurisdiction to the plaintiff at its office at
Kolkata, within the aforesaid jurisdiction.
14. The last of such payments, being a sum of Rs.10 lac was received by the plaintiff on 23rd July, 2012. With such payment, against invoices of
Rs.10,11,71,313/- raised by the plaintiff the defendant no.1 mad and aggregate payment of only Rs.8,67,70,765/- to it, leaving unpaid a sum of
Rs.14400548/-. Such payment has been received by the plaintiff at its office at Kolkata within the jurisdiction aforesaid.
15. As despite several requests and reminders the defendant failed and/or neglected to make payment of the said sum of Rs.14400548/- or any part or
portion thereof to the plaintiff, the plaintiff to refer the matter to a Dispute Committee of the defendant no.1 by letters written by it on 12th December,
2011 and 6th February, 2012. The said Dispute Committee of the defendant no.1 delivered its verdict on 3rd July, 2012, inter alia, holding that there
was a difference of only 1% that between the figures provided by the plaintiff and the defendant no.1 for supplies made by the plaintiff. Although the
defendant no.1 and/or its officials accepted such finding of the Dispute Committee, it failed and/or neglected to make payment of the sum of
Rs.14400548/- due to the plaintiff on account of goods sold and delivered by it. A copy of the verdict of the Dispute Committee of the defendant no.1
is annexed hereto and marked “Hâ€.
16. In such circumstance, way as letter dated 26th September, 2013 the plaintiff demanded payment of the outstanding sum of Rs.14400548/- from the
defendant no.1 along with interest thereon. Despite having accepted the verdict of the Dispute Committee, upon receipt of the plaintiff’s letter of
demand the defendant no.1 by a letter dated 7th October, 2013 surprisingly denied its liability and demanded certain documents and papers from the
plaintiff. This the defendant no.1 obviously did with the object of further delaying the payment of the legitimate dues of the plaintiff. Copies of the
letters dated 26th September, 2013 and 7th October, 2013 are annexed hereto and marked “I†and “J†respectively. The said letters were
exchanged between the offices of the plaintiff at Kolkata, within the aforesaid jurisdiction and the defendant no.1 at Mumbai, outside the aforesaid
jurisdiction.â€
The plaintiff may not in the suit be able to make any claim in respect of the work order dated 14th April, 2010 in view of the forum selection clause
but can certainly proceed to establish its claim in respect of work order dated 22nd July, 2010 as it does not have a similar forum selection clause.
In view of the averment made in paragraphs 11, 14, 15 and 16 of the plaint and keeping in mind the reply of the defendant dated 7th October, 2013,
where the defendant had referred to the supply of crush aggregates of various sizes supplied under the work order dated 22nd July, 2010, we feel that
plaintiff can proceed with the said claim in this court.
When the applicant invites the court for rejection of plaint on the ground of non-disclosure of a cause of action under Order 7 Rule 11(a) of the Code
of Civil Procedure, it is trite law that only the pleadings and averments of the plaintiff can be looked into, even if it is at the stage of the trial of
preliminary issues under Order 14 Rule 2(2) (See: Kuldip Singh Pathania vs. Vikram Singh Jaryal (2017) 5 SCC 345).
In the instant case, in view of the averments indicated above together with the reply dated 7th October, 2013, we are unable to hold at this stage that
the plaint does not disclose any cause of action in relation to the work order dated 22nd July, 2010.
The suit still can survive against any claim in relation to the work order dated 22nd July, 2010; and accordingly, in our view, the learned Single Judge
was justified in allowing the plaint to remain on file for the purpose of assessment on merits of the claim of the plaintiff in relation to the supply order
of 22nd July 2010.
The cross objection accordingly fails.
The appellants have placed reliance on SNP Shipping Services Pvt Ltd v World Tanker Carrying Corporation AIR 2000 Bom 34 (para 17), where it
has been held that averments made in the plaint as well as contents of the documents which may constitute part of the plaint can be looked into on the
face value thereof and the question relating to the validity or invalidity of the document cannot be considered at the stage of an application under
Order VII Rule 11. It establishes further what has been stated in Church of Christ Charitable Trust that documents annexed do form part of the plaint.
In the present case, the demand notice as well as the reply forms part of the plaint. In studying the demand notice to gather whether the pleadings in
the plaint are wholly accurate, the demand notice is itself not being questioned on its validity or invalidity. It is treated as a valid document so as the
reply for the limited purpose of understanding the basis of the averment made in the plaint and to find out if the plaint discloses a cause of action.
The appellant contended that the suit arose out of both the work orders. They contended that the bank guarantee related to both contracts. They also
contended that the bank guarantee arose out of the MoU. There is no doubt that the MoU came into being in Calcutta as the contract was finally
signed and came into effect in Calcutta. For the purpose of the cause of action, it was not necessary for the appellants to plead the ouster of the
jurisdiction of the Calcutta Court. In fact, it was for the Respondents to plead and prove the ouster of the jurisdiction of the Calcutta Court and
conferment of the jurisdiction in the Mumbai courts alone. The objection to pecuniary and territorial jurisdiction can always be waived.
However, in the present case, the jurisdictional clauses in the Bank Guarantee as well as the first work order are unambiguous. We agree with the
observation made in the judgment by Justice Sanjib Banerjee that the forum selection clause is not ambiguous. The relevant observations are:
“The plaintiff contends that the forum selection clause is vague and, in any event, illegal since the deeming provision therein is contrary to law. The
plaintiff also suggests that the appropriate court in Mumbai is not identified by the clause.
The most fundamental principle in interpreting contracts is to give effect to the agreement between the parties, to the extent it is not impermissible.
The corollary to such rule is that to the extent the agreement or a clause in the agreement can be upheld by reading down or ignoring that part thereof
that may be illegal, such an attempt should be made. Even if the plaintiff’s argument as to the first limb of the opening sentence in clause
‘k’ of the work order dated April 14, 2010 is accepted, it will not impinge upon that part of the sentence that provides that “only the Mumbai
Court alone shall have jurisdiction to determine the … disputes between the GIL and CTS under this work orderâ€.
It is also a basic tenet of interpretation of contracts that the purpose of the interpretation is to further the consensus between the parties reflected in an
agreement; and not to pick faults therein to render the same inapplicable or unenforceable. It is true that there could be several courts in Mumbai
which may be capable of receiving an action in respect of the relevant work order, though the plaintiff has not indicated the several courts in such
regard. Even if the plaintiff’s contention is accepted at face value, what is inescapable is that the parties mandated that only some court in
Mumbai would have the jurisdiction to determine the disputes pertaining to the relevant work order. The choice of courts could be on account of
pecuniary consideration; for, it cannot be said that a claim that could only have been carried to the Small Causes Court in Mumbai on the basis of its
pecuniary value had to be carried to the original side of the Bombay High Court just because the agreement had provided for the Bombay High Court
to be the only forum of choice. It is the underlying consensus of the parties which has to be respected and given effect to; even if a specific court is
not identified by the forum selection clause in a particular case, once the venue is indicated, it is an appropriate court otherwise entitled in law to
receive the action which has to be regarded as the forum of choice.â€
In view of the aforesaid we are of the firm view that any claim based on the work order dated 14th April, 2010 cannot be tried before this Court and
the plaintiff would be at liberty to proceed with its claim before the appropriate Civil Court at Mumbai in relation to work order dated 14th April, 2010.
In the event the plaintiff files the suit before the appropriate Civil Court at Mumbai in relation to its claim arising out of the work order dated 14th
April, 2010 within a period of 4 weeks from date, the plaintiff shall be entitled to get the benefit of Section 14 (2) of the Limitation Act, 1963.
However the cross appeal fails and stands dismissed.
There shall be no order as to costs.
The order of the learned Single Judge stands modified to the aforesaid extent.
I agree
