Exclusive jurisdiction clauses are enforceable when they choose one competent forum and do not absolutely oust court jurisdiction.

A contractual clause conferring jurisdiction on a specified court is valid where more than one court is otherwise competent under Section 20 CPC. Parties may, by a clear, unambiguous and explicit agreement, choose one among the competent forums for disputes arising from the contract, and such a clause is not void under Sections 23 and 28 of the Indian Contract Act unless it amounts to an absolute ouster of jurisdiction. The clause here made the Bangalore court the exclusive forum for proceedings arising out of the work order, so the Dhanbad court lacked jurisdiction to entertain the suit and the appeal failed.

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Issues: Whether a contractual clause conferring jurisdiction on courts at a specified place excluded the jurisdiction of another court which otherwise had territorial jurisdiction because part of the cause of action arose there.

Analysis: Section 20 of the Code of Civil Procedure permits institution of a suit where the defendant resides or where the cause of action, wholly or in part, arises. However, where more than one court is otherwise competent, parties may by a clear, unambiguous and explicit agreement choose one among such competent courts as the forum for disputes arising out of the contract. Such an agreement is not contrary to public policy merely because it restricts the available forum, and it is not hit by Sections 23 and 28 of the Indian Contract Act unless it amounts to an absolute ouster of jurisdiction. The contractual clause in question stated that the work order was subject to the jurisdiction of the High Court situated in Bangalore and that legal proceedings would fall within that jurisdiction only, making the clause specific and exclusive.

Conclusion: The contractual jurisdiction clause was valid and enforceable, and the court at Dhanbad had no jurisdiction to entertain the suit. The appeal failed.

Ratio Decidendi: Where two or more courts are otherwise competent, parties to a contract may validly confer exclusive jurisdiction on one of them by a clear and unambiguous clause, and such a clause is not void unless it absolutely ousts jurisdiction or offends Sections 23 and 28 of the Indian Contract Act.

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