Exclusive jurisdiction clauses are enforceable when they select one competent court and clearly exclude other forums.

A contractual forum-selection clause is enforceable when it chooses one among multiple courts that already have jurisdiction, but it cannot create jurisdiction where none exists. Reading the consignment note together with Section 20 of the Code of Civil Procedure, the Court found that the wording clearly and specifically selected Udaipur as the exclusive forum and excluded other competent courts. The clause was therefore valid, and Barnala lacked jurisdiction. The appeal succeeded and the High Court judgment was set aside.

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Issues: Whether the parties had validly conferred exclusive jurisdiction on the Court at Udaipur, thereby excluding the jurisdiction of the Court at Barnala, when both courts were otherwise capable of attracting jurisdiction under the civil procedure rules.

Analysis: A contractual clause selecting one among more than one competent courts is valid and enforceable, but parties cannot by agreement confer jurisdiction on a court which otherwise has none. Under Section 20 of the Code of Civil Procedure, 1908, jurisdiction may lie where the defendant carries on business or where the cause of action arises. The Explanation to that provision and the contractual language in the consignment note had to be read together. The words used in the consignment note showed a clear intention to choose the Udaipur court alone, and the exclusion of other competent forums was expressed in clear and specific terms.

Conclusion: The clause validly restricted jurisdiction to Udaipur, and the Court at Barnala lacked jurisdiction. The appeal succeeded and the judgment of the High Court was set aside.

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