# HAKAM SINGH v. MIS. GAMMON (INDIA) LTD

- **Citation:** [1971] 3 S.C.R. 314
- **Court:** Supreme Court of India
- **Decided:** 1971-01-08
- **Bench:** J. C. Shah, K. S. Hegde
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/hakam-singh-v-mis-gammon-india-ltd-5193
- **Pages:** 5

## Headnote

Contract Act 1872, s, 28-Code of Civil Procedure, 1908, s. 20(a) Ex_planation /I-Arbitration Act 1940, s. 41-Defendant a company registered under the Indian Companies Act having its principal place of business at
Bombay-Contract providing for arbitration of disputes and further pro-
.vidlng that disputes were to be adjudicated only in Bombay Courts-Restric-
.tion whether binding or against public policy.
On October 5, 1960 the appellant agreed to do certain construction
work for the responden•-a company registered under the Indian Com-
,panies Act and having its principal place of business at Bombay-on the
terms and conditions of a written tender.
Clause 12 of the tender provided for arbitration in case of dispute. Clause 13 provided that notwithstanding the place where the work under the contract was to be executed
the contract shall be deemed to have been entered into by the parties
at Bombay and the court in Bombay alone shall have jurisdiction to
adjudieate thereon.
On disputes arising between the parties the appellant
. submitted a petition to the court at Varanasi for an order under s. 20
of the Arbitration. Act, 1940 that the agreement be filed and an order
of reference be made to an arbitrator or arbitrators appointed by the
·Court. The respondent contended that in view of cl. 13 of the arbitration
agreement only the courts at Bombay had jurisdiction.
The trial court
held that the entire cause of action had arisen at Varanasi and the parties
could not by agreement confer jurisdiction on the courts
of Bombay
which they did not otherwise possess. The High Court at Allahabad in
exercise of its revisional jurisdiction held that the courts at Bombay had
jurisdiction under the general law and henoe could entertain the petition.
It further held that in view of cl. 13 of the arbitration agreement the
petition could not be entertained at Varanasi.
Against the order of the
High Court directing the petition to be returned for presentation to the
proper court, the appellant appealed to this Court by special leave. The
questions that fell for consideration were : (i) whether the courts at
Bombay alone had jurisdiction over the dispute; (ii) whether Explanation
II to s. 20(a) of the Code of Civil Procedure refers only to Government
corporations and not to companies registered under the. Indian Companies
Act.
HELD : (i) The Code of Civil Procedure in its entirety applies to
proceeding;; under the Arbitration Act by virtue of s .. 41 of the latter
Act. The jurisdiction of the courts under the Arbitration Act to entertain
a proceeding for filing an award is accordingly governed by the provisions
cf the Code of Civil Procedu're. By the
1terms of s. 20(a) of the Code
of Civil Procedure read with Exp. II thereto, the respondent company
which had its principal place of business ·at Bombay, was liable to be
·sued at Bombay. [316 GJ
·
It is not open to the parti°' by agreenient to confer juri.sdiction on any
•court which it did not otherwise possess un<!er the Code. But where two
·courts hape under the Code of Civil Procedure jurisdicti<ll) to try a suit
<Ol' proceeding an agreement between the parties that the jlispute between
B
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E
F
G
H
.
--"-"j
..
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HAKAM SINGH v. GAMMON INDIA LTD. (Shah, C.J.)
315
them shall be tried in one of S\!~' courts is not contrary to public pulicy.
Such an agreement does not contravene s. 28 of the Contract Act.
[316 HJ
Since in the present case the courts at Bombay had jurisdiction under
the Code of Civil P\"ocedure the agreement between the parties that the
courts in Bombay alone shall have jurisdict.ion to try the proceedings relating to arbitration was binding between them. [318 A]
(ii)
Order 29 of the Code of Civil Procedure deals with suits by or
against a corporation and there is nothing in the Code to suppolrt the
contention that a Corporation referred to under s. 20 means only a statutory corporation and not a company registered under the Indian Companies Act. [317 G-H]
C1v1L A,PPBLLATB JURISDICTION

## Text

314
HAKAM SINGH
v.
MIS. GAMMON (INDIA) LTD.
January 8, 1971
[J. C. SHAH, C.J. AND K. S. HEGDE, J.]
Contract Act 1872, s, 28-Code of Civil Procedure, 1908, s. 20(a) Ex_planation /I-Arbitration Act 1940, s. 41-Defendant a company registered under the Indian Companies Act having its principal place of business at
Bombay-Contract providing for arbitration of disputes and further pro-
.vidlng that disputes were to be adjudicated only in Bombay Courts-Restric-
.tion whether binding or against public policy.
On October 5, 1960 the appellant agreed to do certain construction
work for the responden•-a company registered under the Indian Com-
,panies Act and having its principal place of business at Bombay-on the
terms and conditions of a written tender.
Clause 12 of the tender provided for arbitration in case of dispute. Clause 13 provided that notwithstanding the place where the work under the contract was to be executed
the contract shall be deemed to have been entered into by the parties
at Bombay and the court in Bombay alone shall have jurisdiction to
adjudieate thereon.
On disputes arising between the parties the appellant
. submitted a petition to the court at Varanasi for an order under s. 20
of the Arbitration. Act, 1940 that the agreement be filed and an order
of reference be made to an arbitrator or arbitrators appointed by the
·Court. The respondent contended that in view of cl. 13 of the arbitration
agreement only the courts at Bombay had jurisdiction.
The trial court
held that the entire cause of action had arisen at Varanasi and the parties
could not by agreement confer jurisdiction on the courts
of Bombay
which they did not otherwise possess. The High Court at Allahabad in
exercise of its revisional jurisdiction held that the courts at Bombay had
jurisdiction under the general law and henoe could entertain the petition.
It further held that in view of cl. 13 of the arbitration agreement the
petition could not be entertained at Varanasi.
Against the order of the
High Court directing the petition to be returned for presentation to the
proper court, the appellant appealed to this Court by special leave. The
questions that fell for consideration were : (i) whether the courts at
Bombay alone had jurisdiction over the dispute; (ii) whether Explanation
II to s. 20(a) of the Code of Civil Procedure refers only to Government
corporations and not to companies registered under the. Indian Companies
Act.
HELD : (i) The Code of Civil Procedure in its entirety applies to
proceeding;; under the Arbitration Act by virtue of s .. 41 of the latter
Act. The jurisdiction of the courts under the Arbitration Act to entertain
a proceeding for filing an award is accordingly governed by the provisions
cf the Code of Civil Procedu're. By the
1terms of s. 20(a) of the Code
of Civil Procedure read with Exp. II thereto, the respondent company
which had its principal place of business ·at Bombay, was liable to be
·sued at Bombay. [316 GJ
·
It is not open to the parti°' by agreenient to confer juri.sdiction on any
•court which it did not otherwise possess un<!er the Code. But where two
·courts hape under the Code of Civil Procedure jurisdicti<ll) to try a suit
<Ol' proceeding an agreement between the parties that the jlispute between
B
c
D
E
F
G
H
.
--"-"j
..
B
HAKAM SINGH v. GAMMON INDIA LTD. (Shah, C.J.)
315
them shall be tried in one of S\!~' courts is not contrary to public pulicy.
Such an agreement does not contravene s. 28 of the Contract Act.
[316 HJ
Since in the present case the courts at Bombay had jurisdiction under
the Code of Civil P\"ocedure the agreement between the parties that the
courts in Bombay alone shall have jurisdict.ion to try the proceedings relating to arbitration was binding between them. [318 A]
(ii)
Order 29 of the Code of Civil Procedure deals with suits by or
against a corporation and there is nothing in the Code to suppolrt the
contention that a Corporation referred to under s. 20 means only a statutory corporation and not a company registered under the Indian Companies Act. [317 G-H]
C1v1L A,PPBLLATB JURISDICTION : Civil Appeal No. 646 of
c 1967 . .
Appeal by special leave from the judgment and order dated
December 1, 1966 of the Allahabad High Court in Civil Revision
No. 721 of 1964.
1. P. Goyal and G. S. Chatterjee, for the appellant.
V. S. Desai and B. R. Agarwala, for the respondent.
The Judgment of the Court was delivered by
Shah, C.J. On October 5, 1960 the appellant agreed to do
certain construction work for the respondent on the terms and
conditions of a "written tender".
Clauses 12 & 13 of the tender
E
were:
F
G
IH
"12. In the event of any dispute, arising out of this
sub-contract, the parties hereto agree that the matter
shall be referred to arbitration
by
two
Arbitrators
under the Arbtration Act of 1940 and such amendments thereto as may be enacted thereafter.
13. Notwithstanding the place where
the
work
under this contract is to be executed, it is mutually
understood and agreed by and between the parties
hereto that this Contract shall be deemed to have been
entered into by the parties concerned in the City of
Bombay and the Court of law in the City of Bombay
alone shall have jurisdiction to adjudicate thereon."
Disputes arose between the parties and the appellant submitted
a petition to the Court of the Subordinate Judge at Varanasi for
an order under s. 20 of the Indian Arbitration Act 10 of 1940
that the agreement be filed and an order of reference be made to
an Arbitrator or Arbitrators appointed by the Court to settle the
dispute between the parties in respect of the construction works
done by him.
The respondent contended that the Civil Courts
in Bombay alone had because of the terms contained in cl. 13
316
SUPREME COURT REPORTS
[1971] 3 S.C.R.
jurisdiction to entertain the petition.
The Trial Judge rejected A
that contention observing that the condition in cl. 13 . that "the
contract shall be deemed to have been entered into by the parties
~ncemed in the city of Bombay has no meaning unless the contract is actuall~ritered into in the city of Bombay", and that
.there was no evidence to establish that it was entered into in the
·-
city of Bombay.
The Trial Judge concluded that the entire
Jl
cause of action had arisen at Varanasi and the parties could not
by agreem~t confer jurisdiction on the Courts at Bombay, which
they did. not otherwise possess.
The High Court of Allahabad in exercise of its revisional
jurisdiction set aside the order passed by the Subordinate Judge c
and declared that the Courts in Bombay had jurisdiction un3er
the general law to entertain the petition, and by virtue of the
covenant in the agreement the second branch of cl. 13 was applicable and binding betwe~n the parties and since the parties had
agreed that the Courts in Bombay alone hr.d jurisdiction to adjudicate. upon the contract, the petition to file the arbitration agree-
\,,
ment could not be enterta:ned by the Courts at Varanasi. Against D
the order of the High Court directing that the petition be returned
for presentation to the proper Court, the appellant has appealed
to this Court'With special leave.
Section 41 of the Arbitration Act 1940 provides in so far as it
is relevant :
E
"Subject to the provisions of this Act and of rules
made thereunder :
(a) the provisions of the Code of Civil procedure,
1908, shall apply to all proceedings before the
court, and to all appeals under this Act."
F
The Code of Civil Procedure in its entirety applies to proceedings
under the Arbitration Act.
The jurisdiction of the Courts under
the Arbitration Act to entertain a proceeding for filing an award
is accordingly governed by the provisions of the Code of Civil
Procedure.
By cl. 13 of the agreement it was expressly stipulated between the parties that the contract shall be deemed to have G
been entered into by the parties concerned in the City of Bombay.
In any event th_e respondent have their principal office in Bombay and they were liable in respect of a caii8e of action arising
under the terms of the tender to be sued in the Courts at Bombay.
It is not open to the parties by agreement to confer by their
agreement jurisdiction on a Court which it does not possess under
H
the Code.
But where two courts or more have under the Code
of Civil Procedure jurisdiction to try a suit or proceeding an
agreement between the parties that the dispute between them shall
HAKAM SINGH v. GAMMON INDIA LTD. (Shah, C.J.)
317
A
be tried in one of such Courts is not contrary to public policy.
Such an agreement does not contravene s. 28 of the Contract
Act.
..
Counsel for the appellant contended that merely because the
B
respondent carried on business in Bombay the Courts at Bombay
were not invested with jurisdiction to entertain any suit or a par-
'"
tition for filing an arbitration agreement.
Section 20 of the Code
of Civil Procedure provides :
"Subject to the limitations aforesaid, every suit shall
be instituted in a Court within the local limits of whose
c
jurisdiction-
(a) the defendant, or each of the defendants where
""'
there are more than one, at the time of the commencement of the suit, actually and voluntarily
resides, or carries on business, or perSonallv
works for gain; or
~~
D
(b)
(c) the cause of action, wholly or in part, arises.
E
"Explanation II.-A corporation shall be deemed
to carry on business at its sole or principal office in
India, or, in respect of any cause of action arising at
any place where it has also a suhordinate office, at such
place."
Plainly by the terms of s. 20(a) read with Explanation II, the
respondent Company was liable to be sued at Bombav where it
F
had its principal place of business.
The argument of counsel for the appellant that the expression "corporation" in Explanation II includes only a- statutory
corporation and not a company registered under the Indian Companies Act is, iii our judgment, without substance.
The Code of
Civil Procedure uses the expression "corporation" as meanin~ a
G
legal person and includes a company registered under the Indian
Companies Act.
Order 29 of the Code of Civil Procedure deals
with suits by or against a corporation and there is nothing-. in the
Code of Civil Procedure that a corporation referred to under s. 20
means· only a statutory corporation and not a company registered
under the Indian Companies Act.
H
Since an application for filing an award in respect of a dispute
,~:,
arising out of the terms of the agreement could be filed in the
-~;n
Courts in the City of Bombay, -both because of the terms of cl. 13
"''
~\
318
SUPREME COURT REPORTS
[1971] 3 s.c.R.
of the agreement and because the respondents had their. Head
A
Office where they carry on business at Bombay, the agreement
between the parties that the Courts in Bombay alone shall have
jurisdiction to try the proceeding relating to arbitration was bind·
ing between them.
The appeal fails and is dismissed with costs.
B
G.C.
Appeal dismissed.
.J
. ·"··.
,·,