2013 PLP 2769 (YLR)

MEHMOOD MAQBOOL BAJWA, J.

Suit for Specific Performance, perpetual injunction as well as damages was instituted by the respondents against the present petitioners before the learned Civil Court at Lahore for specific performance of contract of dealership, with further claim of damages to the tune of Rs.8,42,226,156 as compensation, alternatively claiming damages to the tune of rupees five hundred million with costs of the suit.

2. An application under Order VII Rule 10 of The Code of Civil Procedure, 1908 was made at the instance of petitioners questioning the jurisdiction of civil court at Lahore while banking upon Clause 28 of the agreement executed between Pakistan State Oil Company Limited and Malik Fazal Din (since dead) now represented by both the respondents. After calling written reply, the application was declined by the learned trial Court vide order dated 25-7-2011 which order has been called in question at the instance of petitioners by filing present revision petition.

3. Contended that in view of enabling and permissive provision contained in Clause-28 of the agreement mutually agreed between the parties conferring jurisdiction upon the competent court at Karachi, the respondents were estopped and debarred to invoke the jurisdiction of any court except the courts at Karachi. Referring to the order impugned, the learned counsel for the petitioners contended that the said agreement is not against the mandate of section 28 of The Contract Act, 1872 and opinion formulated by learned trial Court is result of misinterpretation of provision of law.

4. On the other hand, the learned counsel for the respondents at the very outset maintained that the agreement relied upon at the instance of petitioners is not complete and certain pages are missing from it and as such no implicit reliance can be placed upon the terms and conditions of agreement dated 16-3-1977. Referring to the contents of the plaint, it was contended that the sales tax receipts were issued at the instance of petitioners at Lahore and notice impugned was also issued by the Pakistan State Oil to the respondents within the territorial limits of Lahore, therefore, the civil court at Lahore got jurisdiction to adjudicate upon the suit.

5. When asked to place on record the complete agreement mutually agreed between the parties, the learned counsel for the respondents showed his inability to produce the same. He was also unable to satisfy the query of this court whether there is any clause overriding Clause-28 of the agreement relied upon at the instance of petitioners.

6. The learned counsel for the respondents was unable to question the genuineness, terms and conditions of mutual agreement placed on record at the instance of petitioners. Admittedly Clause-28 of the said agreement creates mutual understanding between the parties that any suit in respect of the agreement entered into to enforce the rights of either party under the agreement shall be instituted and tried by the courts of Karachi and the licensee expressly agreed to submit the jurisdiction of said court.

7. Section 28 of The Contract Act, 1872 (Act IX of 1872) declares any contract to be void restricting "absolutely" the parties from enforcing their rights under or in respect of any contract by approaching ordinary tribunals or which limits the time within which any of the party to the agreement may enforce his rights. The word "absolutely" used in section 28 of The Act IX of 1872 is of significance and as such the provision under discussion will come into play only if any of the parties to the agreement has been absolutely debarred to have recourse to the ordinary tribunal or court or otherwise limit the time in which a party can enforce his rights.

8. Similar proposition was moot point before the Hon'ble Supreme Court of Pakistan and while dealing with it, it has been held in "STATE LIFE INSURANCE CORPORATION OF PAKISTAN v. Rana MUHAMMAD SALEEM"(1987 SCMR 393), that agreement between the parties agreeing to refer their disputes arising between them to one court having jurisdiction could not be considered contrary to the public policy as the same does not contravene the provisions of section 28 of The Contract Act, 1872. Again dealing with the proposition in the case of "Messrs KADIR MOTORS (REGD.), RAWALPINDI v. Messrs NATIONAL MOTORS LTD., KARACHI and 3 others" (1992 SCMR 1174), it was held by the apex Court that the parties cannot be restrained from entering into an agreement to get their disputes decided by a particular court of competent jurisdiction for their convenience and avoidance of unnecessary objection to the territorial jurisdiction of the courts. Further held that any such agreement would be considered lawful and would not be against the spirit of the provisions of section 28 of The Contract Act, 1872 and in such eventuality parties to the agreement would be bound to follow the same.

9. No exception can be taken to the well settled proposition of law as referred to.

10. It is not the case of the respondents that courts at Karachi have no jurisdiction and as such being a court of competent jurisdiction and keeping in view the Clause-28 of the agreement admittedly the courts at Karachi had the jurisdiction to entertain and decide the lis in order to settle the dispute between the parties regarding which suit was instituted before the civil Court at Lahore.

11. In view of the above state of law and facts opinion formulated by learned trial Court declaring the Clause-28 as offensive to the provisions of section 28 of The Contract Act, 1872 is against the spirit of the provision under reference and as such the learned trial Court failed to exercise jurisdiction vested in it, subject to correction by this court while exercising revisional jurisdiction.

12. Pursuant to above discussion, while setting aside the order impugned and accepting the revision petition, the application under Order VII Rule 10 of The Code of Civil Procedure, 1908 is hereby accepted with the direction to the learned trial Court to return the plaint to the respondents for its presentation before the court of competent jurisdiction, if so advised and desired, subject to all just and legal exceptions.

13. There shall be no order as to costs. MWA/P-20/L Petition allowed.