STANDARD INSURANCE CO. vs PAK GARMENTS LTD.

ORDER

1. ' SAIDUZZAMAN SIDDIQUI, J.---The petitioner company is seeking leave to appeal against the judgment of a learned Judge in Chambers of Peshawar High Court dated 12-12-1994 whereby the learned Judge dismissed Civil Revision No,256 of 1994 filed by the petitioner-company challenging the order of a Senior Civil Judge, Haripur dismissing an application under Order VII, Rule 10, C.P.C.

2. Filed by the petitioner-company in a pending suit.

3. ' In seeking leave to appeal, the learned counsel for the petitioner company contended that the suit against the petitioner company could be filed only at Karachi in a Court having jurisdiction in the matter as according to Clause 21 of Policy of Insurance issued by the petitioner company, the parties had agreed that such a claim can only be agitated in a Court of competent jurisdiction at Karachi and nowhere else. The learned counsel contends that such a clause in the Policy is neither contrary to the provisions of C.P.C. Nor it offends against the provisions of the Contract Act. In support of this contention, the learned counsel has placed reliance on the following observations in the case of State Life Insurance Corporation of Pakistan v. Rana Muhammad Saleem (1987 SCM R 393):-- "We have considered the arguments of the learned counsel for the parties. Under section 9 of the Code of Civil Procedure the Civil Courts have jurisdiction to try all suits of a civil nature excepting the suit of which their cognizance is either expressly or impliedly barred. Under section 20 of the Code of Civil Procedure every suit is to be instituted in a civil Court within the local limits of whose jurisdiction the defendant resides or carries on business or where the cause of action wholly or in part arose. Under section 28 of the Contract Act every agreement by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary Tribunals or which limits the time within which he may, thus, enforce his rights, is void to that extent. It is evident from a plain reading of these provisions that there is no absolute exclusion of jurisdiction under section 9 or section 20 of the Code of Civil Procedure nor there is any violation of the provisions of section 28 of the Contract Act when two or more Courts have jurisdiction to try a suit and the parties mutually agree to choose or take their dispute to one of them. The civil Courts exercise their jurisdiction under the Code of Civil Procedure.

4. If they do not possess such jurisdiction under the Code it cannot be conferred on them through a mutual agreement of the parties to a dispute. But in a situation where two or more Courts have jurisdiction to try a suit under the Code of Civil Procedure, then an agreement between the parties that any dispute arising between them shall be tried only by one of such Courts could not be considered contrary to public policy as it would neither contravene the provisions laid down in section 28 of the Contract Act nor would it violate in any manner the provisions of section 9 or section 20 of the Code of Civil Procedure."

5. ' The contention raised by the learned counsel requires examination and we, accordingly, grant leave to appeal to consider the same. The proceedings before the trial Court are stayed. However, we direct that in view of the stay granted in the case, the appeal will be fixed for regular hearing on reopening of the Court after summer vacations.