In this case the parties agreed on certain construction works and Bombay as center place for the enterprise. Under Article 13 of the offer, it was strikingly pointed out that in the event of a dispute, only the Bombay court has jurisdiction to review the procedure. In the case, the appeal judge filed a petition with the Varanasi court. In A.B.C. Laminart Pvt. Ltd- Anr vs. A.P. Agencies, Salem [1989 SCR (2) 1], the contract between the parties provided that Kaira`s courts were competent to deal with contract disputes. The applicant opened an action for restitution of money in the Salem court. The Madras High Court upheld the simultaneous jurisdiction of the Salem Court, as the contract was partially executed in Salem.
The Departmental Bank of the Supreme Court of Special Leave to Appeal found that with respect to the design of the eviction clause, if words such as “alone,” “only” exclusive and similar were used, there can be no difficulty in constructing the fall unless it is established that there is no ad ditto consensus. However, the tacit exclusion of other jurisdictions in the absence of such conditions should be inferred from the facts and circumstances of the case and would not be automatic. The Court added that jurisdictions other than Kaira related to the contract are not excluded by the use of certain terms and that the terms and conditions of the contract also do not indicate exclusion from other jurisdictions. Despite the validity and application of the clause, the Court pierced the clause and found that the Salem court had jurisdiction. According to ABC Laminart, the courts were therefore required to conduct a factual inquiry into the implicit exclusion of a court`s jurisdiction. It provided considerable leeway for the party wishing to depart from an exclusive jurisdiction clause. The exclusive jurisdiction clauses contain a decision by the parties to limit the place of use to a single forum. Section 23 of the Indian Contract Act, 1872 (the “Contract Act”) provides, among other things, that there can be no contract prohibited or contrary by a provision. Section 28 renders an absolute restriction on a recourse or ability to assert rights under a contract non-applicable.
However, the common interpretation of Section 20 of the Code of Civil Procedures and Sections 23-28 of the Contracts Act allows for a partial restriction by limiting the parties` recourse to a forum.