Q. Where two courts have jurisdiction to try a suit, an agreement is made between the concerned parties that the suit should be filed in one of those courts alone and not in the other—Decide.
West Bengal Judicial Service Exam. 1991
Himachal Pradesh Judicial Service Exam. 2004 (Similar question)
Civil Services (I.A.S.) Main Exam. 2003 (Similar question)
Ans: The agreement between ‘A’ and ‘B’ is valid—Supreme Court in Hukum Chand v. Gammon (India) Ltd., AIR 1971 SC 740.
Reasons: As a general rule consent of parties can neither confer nor take away the jurisdiction of a competent court.
But Supreme Court in famous case of Hukum Chand v. Gammon (India) Ltd., referred above recognised an exception of aforesaid law. In this case Supreme Court held that when two or more courts have jurisdiction to entertain a suit, an agreement by the parties to submit to the jurisdiction of one of such courts to the exclusion of the rest is valid, binding and enforceable.
In view of the decision given by Supreme Court in Hukum Chand v. Gammon (India) Ltd., it can be said that in this question the agreement between parties to file a suit in case of dispute in only one court out of two courts having jurisdiction to try the suit is valid.
Note: In Civil Services (I.A.S.) Exam. 2003 this question was asked in following manner—
“Jurisdiction of a court to decide disputes arising out of the contractual relations cannot be ousted by an agreement between the parties. Discuss.”
Source: Kishor Prasad