Hakam Singh v. M/s Gammon (India) Ltd (1971)

Issues

• Do the Bombay courts alone have jurisdiction over the dispute?
• Does Explanation II to Section 20(a) CPC include companies registered under the Companies Act, or only statutory corporations?

Rules

• Arbitration Act, 1940 — S.41 CPC applies to arbitration proceedings.
• CPC — S.20(a) & Explanation II A company can be sued where it has its principal office.
• Parties cannot confer jurisdiction on a court that lacks it under the CPC.
• If two or more courts have jurisdiction, parties may pick one by agreement; this is not against Contract Act — S.28.

Arguments

Judgment

The Supreme Court upheld the forum-selection clause. Since the Bombay courts already had jurisdiction under Section 20 CPC (the company’s principal office was there), the agreement selecting Bombay was valid and binding. The appeal was dismissed with costs.

Ratio

• Parties cannot give a court jurisdiction that it does not have under the CPC.
• When multiple courts have jurisdiction, a clause picking one court is valid and not opposed to public policy or Section 28 of the Contract Act.
• “Corporation” in Explanation II to Section 20 includes Companies Act companies, not just statutory corporations.

Why It Matters

Drafting and litigation often turn on where you can file a case. This judgment gives a clean formula: first check CPC jurisdiction; if more than one court qualifies, a forum clause can narrow it down. It keeps forum choice fair and predictable.

Key Takeaways

• Forum clause is valid only among courts that already have CPC jurisdiction.
• Explanation II: companies can be sued where their principal office is located.
• Section 41, Arbitration Act brings the CPC into arbitration proceedings.
• Clause selecting Bombay courts in this case was enforceable; appeal dismissed.

Mnemonic + 3-Step Hook

Mnemonic: “BOM — Both courts OK, One chosen, Must be valid.”

1. Check CPC: Does more than one court have power?
2. Read the Clause: Does it pick one of those courts?
3. Enforce: If yes, the clause stands; if not, it fails.

IRAC Outline

Glossary

Jurisdiction

A court’s legal power to hear a case.

Forum-Selection Clause

A contract term that chooses a specific court among competent courts.

Principal Office

Main office of a company; relevant for Section 20 CPC.

FAQs

Related Cases

• ABC Laminart Pvt. Ltd. v. A.P. Agencies (forum selection)
• Swastik Gases Pvt. Ltd. v. Indian Oil Corp. (exclusive jurisdiction clause)
• Patel Roadways Ltd. v. Prasad Trading Co. (Section 20 CPC)