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Page 1 of 15 CPC CASE BRIEFS TERRITORIAL JURISDICTION Harshad Modi v. DLF Universal Property is situated in Gurgaon District. But suit for declaration, for specific performance of an agreement for possession of property and for permanent injunction, was filed in Delhi court. Issue:Whether the suit a...

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Page 1  of 15  CPC - CASE BRIEFS TERRITORIAL JURISDICTION Harshad Modi v. DLF Universal Fact:- Property is situated in Gurgaon District. But suit for declaration, for specific performance of an agreement for possession of property and for permanent injunction, was filed in Delhi court. Issue:Whether the suit against the immovable property can be tried by the courts in the Delhi jurisdiction when the property is situated at Gurgaon. Holding:• The apex court held that section 16 recognizes a well-established principle that action against res or property should be brought in the forum where such res or property situate. • A court within whose territorial jurisdiction the property is not situated has no power to deal with and decide the rights or interests in such property. • This Court found that the agreement conferring jurisdiction on a court not having jurisdiction was not legal, valid and enforceable . • The proviso to Section 16, no doubt, states that though the court cannot, in case of immovable property situate beyond jurisdiction, grant a relief in rem still it can entertain a suit where the relief sought can be obtained through the personal obedience of the defendant. • The proviso is an exception to the main part of the section which cannot be interpreted or construed to ‘enlarge’ the scope of the principal provision. • It would apply only if the suit falls within one of the categories specified in the main part of the section and the relief sought could entirely be obtained by the personal obedience of the defendant. • The proviso to section 16 is applicable only when the relief sought is obtainable through the personal obedience of the defendant, i.e., when the defendant has not at all go out of the jurisdiction of the court for such purpose. • It enables a person to file a suit in the court within local limits of whose jurisdiction the defendant actually or voluntarily resides or carries on business or personally works for gain. HAKKAM SINGH V GAMMON FACTS - Arbitration - Jurisdiction - Disputes arose between parties and Appellant submitted a petition to Court of Subordinate Judge for an order under Section 20 of the Indian Arbitration Act 10 of 1940 that agreement be filed and an order of reference be made to an Arbitrator or Arbitrators appointed by Court to settle dispute between parties in respect of construction works done by him . ISSUERespondent contended that Civil Courts in Bombay alone had because of terms contained in Clause 13 jurisdiction to entertain petition - Trial Judge rejected that contention observing that condition in Clause 13 that: • "the contract shall be deemed to have been entered into by parties concerned in the city of Bombay has no meaning unless contract was actually entered into in city of Bombay", • that there was no evidence to establish that it was entered into in city of Bombay - Against order of High Court directing that petition be returned for presentation to proper Court, Appellant appealed to this Court with special leave.

Page 2  of 15  HOLDING • Code of Civil Procedure uses expression "corporation" as meaning a legal person and includes a company registered under the Indian Companies Act • Order 29 of the CPC deals with suits by or against a corporation and there was nothing in CPC that a corporation referred to underSection 20 means only a statutory corporation and not a company registered under Indian • Companies Act - Since an application for filing an award in respect of a dispute arising out of terms of agreement could be filed in Courts in City of Bombay, both because of terms of Clause 13 of the agreement and because Respondents had their - Head Office where they carry on business at Bombay, agreement between parties that Courts in Bombay alone should have jurisdiction to try proceeding relating to arbitration was binding between them • Appeal dismissed. SWASTIK GASES V INDIAN OIL CORPORATION FACTS The Swastik Gas decision was rendered by a division bench of the Supreme Court in relation to the Appellant’s application for appointment of an arbitrator, under Section 11 of the Arbitration Act. The Appellant, whose registered office was in Jaipur, Rajasthan, had entered into an agreement with the Respondent, whose registered office was in Mumbai, Maharashtra for marketing of lubricants in Rajasthan. The jurisdiction clause in the Agreement stated that “The Agreement shall be subject to the jurisdiction of the Courts at Kolkata”. ISSUE :When disputes arose, the Appellant approached the High Court of Rajasthan at Jaipur for the appointment of an arbitrator. The Respondent contested the territorial jurisdiction of the High Court of Rajasthan, and the High Court dismissed the Appellant’s application, granting liberty to the Applicant to approach the Calcutta High Court. The Appellant appealed to the Supreme Court on this issue. HOLDING:In arriving at its decision, the Supreme Court carried out a detailed analysis of the decisions that followed ABC Laminart. In particular, Justice Madan B Lokur in his concurring opinion, separately discussed each of the Supreme Court’s decisions after ABC Laminart regarding contracts that did not use the language of specificity. J ustice Lokur noted that apart from ABC Laminart and one other decision which turned on the lack of consent on part of one party, all the other four decisions eventually concluded that the court named in the contract did have exclusive jurisdiction to entertain the disputes. He also noted that the Supreme Court, in all these cases had inferred, that the parties either implicitly or explicitly intended that the court in question had exclusive jurisdiction Lokur in his final observation stated “… the absence of words like “alone”, “only”, “exclusive” or “exclusive jurisdiction” is neither decisive nor does it make any material difference in deciding the jurisdiction of a court. The very existence of a jurisdiction clause in an agreement makes the intention of the parties to an agreement quite clear and it is not advisable to read such a clause in the agreement like a statute.” The leading judgement authored by Justice R M Lodha and Justice Joseph Kurian, arrived at the same conclusion, but on the basis of the maxim “Expressio unius est exclusio alterius” (expression of one is exclusion of the other). The Supreme Court held that “Where the contract specifies the jurisdiction of the courts at a particular place and such courts have jurisdiction to deal with the matter, we think that an inference may be drawn that parties intended to exclude all other courts.”

Page 3  of 15  In the facts of the case, it was held that only the courts at Kolkata had the jurisdiction to entertain the disputes between the parties, irrespective of the absence of exclusionary language in the jurisdiction clause in the contract between the parties. ABC LAMINART V AP AGENCIES, SALEM FACTS:The case of ABC Laminart related to a contract entered into between the Appellant, who had its registered office within the jurisdiction of the courts at Kaira, Gujarat and the Respondent, who carried on its business from Salem, Tamil Nadu. The jurisdiction clause in their contract read as follows “Any dispute arising out of this sale shall be subject to Kaira jurisdiction”. When disputes arose between the parties, the Respondent filed proceedings before the court at Salem, Tamil Nadu. The first appellant is a manufacturer and supplier of metallic yarn under the name and style 'Rupalon Metallic Yarn' having its registered office at Udyognagar, Mohamadabad, Gujarat within the jurisdiction of the civil Court of Kaira, The second appellant is a sister concern of the first appellant doing business with it. The respondent is a registered partnership firm doing business in metallic yarn and other allied products at Salem.

ISSUE :-The Appellant challenged the jurisdiction of the Salem court, and the matter eventually reached the Supreme Court for resolution of this issue. HOLDING:• The division bench of the Supreme Court noted that while there was no difficulty in construing exclusive jurisdiction clauses that used words such as “only”, “alone” and “exclusive”, in the absence of these words, the maxim “Expressio unius est exclusio alterius” (expression of one is exclusion of the other) may be applied. • However, the Court held that the implied exclusion of the other jurisdiction would have to be inferred from the facts and circumstances of the case, and would not be an automatic exclusion. With regard to the particular facts of the case, the Court held that as the jurisdictions other than Kaira, having a connection with the contract were not “clearly, expressly and unambiguously” excluded, the Salem court would have jurisdiction over the dispute between the parties. The decision in ABC Laminart lead to a situation where even if the parties had expressed a • preference for a particular court for resolution of their disputes, unless they had used language indicating exclusivity, the court would carry out an analysis of the facts surrounding the dispute before recognising the forum choice of the parties. • This was reflected in a series of decisions of the Supreme Court thereafter, in which the lack of specific exclusionary words in the contract lead the Supreme Court to examine facts relating to the actual terms agreed between the parties, the place of execution of the contract and/or the place of making payments under the contract. FROM THE JUDGEMENT Any dispute arising out of this sale shall be subject to Kaira jurisdiction. Disputes having arisen out of the contract the respondent filed a suit, being original suit No. 302 of 1975, against the appellants in the Court of Subordinate Judge at Salem for the recovery of a sum of Rs. 1,63,240, The learned Court treating it as a preliminary issue in its judgment dated 18.4.1978 found that it had no jurisdiction to entertain the suit in view of Clause 11 and accordingly it returned the Plaint for presentation in the proper court. T

Page 4  of 15  The respondent appealed therefrom, in C.M.A. No. 218 of 1978, to the High Court of Madras which by the impugned Judgment and Order dated 4.11.1980 allowed the appeal, setting aside the judgment of the trial court with a direction to take the plaint on file and dispose of the suit on merits on other issues. We are unable to agree. Admittedly the parties have transacted the business on inter alia basis of Clause 11. There is, therefore, no escape from the conclusion that Clause 11 formed part of the agreement and the parties would be bound by it so long as they would be bound by the contract itself, It is not open to the respondent to deny existence of Clause 11, Clause 11 formed part of the agreement it would be valid only if the parties could have validly agreed to If therefore it is found in this case that Clause 11 has absolutely ousted the jurisdiction of the Court it would be against public policy. However, such will be the result only if it can be shown that the jurisdiction to which the parties have agreed to submit had nothing to do with the contract It would also be relevant to examine if some other courts than that of Kaira would also have had jurisdiction in the absence of Clause 11 and whether that would amount to ouster of jurisdiction of those courts and would thereby affect the validity of the clause. Under Section 20(c) of the CPC subject to the limitation stated theretofore, every suit shall be instituted in a court within the local limits of whose jurisdiction the cause of action, wholly or in part arises. It may be remembered that earlier Section So long as the parties to a contract do not oust the jurisdiction of all the Courts which would otherwise have jurisdiction to decide the cause of action under the law it cannot be said that the parties have by their contract ousted the jurisdiction of the Court. If under the law several Courts would have jurisdiction and the parties have agreed to submit to one of these jurisdictions and not to other or others of them it cannot be said that there is total ouster of jurisdiction. Thus it is now a settled principle that where there may be two or more competent Courts which can entertain a suit consequent upon a part of the causes action having arisen there within, if the parties to the contract agree to vest jurisdiction in one such court to try the dispute which might arise as between themselves the agreement would be valid. If such a contract is clear, unambiguous and explicit and not vague it is not hit by Sections 23 and 28 of the Contract Act This can not be understood as parties contracting against the Statute We have already seen that making of the contract was a part of the cause of action and a suit on a contract therefore could be filed at the place where it was made. Thus Kaira court would even otherwise have had jurisdiction. The bobbins of metallic yarn were delivered at the address of the respondent at Salem which, therefore, would provide the connecting factor for Court at Salem to have jurisdiction. If out of the two jurisdictions one was excluded by Clause 11 it would not absolutely oust the jurisdiction of the Court and, therefore, would not he void against public policy and would not violate Sections 23 and 28 of the Contract Act. The other general terms and conditions are also not indicative of exclusion of other jurisdictions. Under the facts and circumstances of the case we hold that while connecting factor with Kaira jurisdiction was ensured by fixing the situs of the contract within Kaira other jurisdictions having connecting factors were not clearly, unambiguously and explicitly excluded. That being the position it could not be said that the jurisdiction of the Court at Salem which Court otherwise had jurisdiction under law through connecting factor of delivery of goods thereat was expressly excluded. We accordingly find no error infirmity in the impugned judgment of the High Court.

Page 5  of 15  SUBJECT MATTER JURISDICTION Dhulabhai v State of MP • A suit is said to be “expressly barred” when it is barred by any enactment for the time being in force. • But every presumption should be made in favour of the jurisdiction of a civil court and the provision for exclusion of jurisdiction of a court must be strictly construed. • If there is any doubt about the ousting of jurisdiction of a civil court, the court will lean to an interpretation which would maintain the jurisdiction. • In dealing with the question whether a civil court’s jurisdiction to entertain a suit is barred or not, it is necessary to bear in mind that every presumption should be made in favour of the civil court. The exclusion of jurisdiction of a civil court to entertain civil causes should not be readily inferred unless the relevant statute contains an express provision to that effect, or leads to a necessary and inevitable implication of that nature. • A court has jurisdiction to examine whether the provisions of the Act and the Rules made thereunder have or have not been compiled with, or the order is contrary to law, mala fide, ultra vires, perverse, arbitrary, purported, violative of the principles of natural justice, or is based on no evidence and so on. • In all these cases, the order cannot be said to be under the act but is outside the Act and the jurisdiction of the civil court is not ousted. Where the statute gives finality to the orders of the special tribunals the Civil Courts' jurisdiction must be held to be excluded if there is adequate remedy to do what the Civil Courts would normally do in a suit. Such provision, however, does not exclude those cases where the provisions of the particular Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure. • (2) Where there is an express bar of the jurisdiction of the court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the civil court. • Where there is no express exclusion the examination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result of the inquiry may be decisive. • In the latter case it is necessary to see if the statute creates a special right or a liability and provides for the determination of the right or liability and further lays down that all ques- tions about the said right and liability shall be determined by the tribunals so constituted, and whether remedies normally associated with actions in Civil Courts are prescribed by the said statute or not. • (3) Challenge to the provisions of the particular Act as ultra vires cannot be brought before Tribunals constituted under that Act. Even the High Court cannot go into that question on a revision or reference from the decision of the Tribunals. • (4) When a provision is already declared unconstitutional. or the constitutionality of any provision is to be challenged, a suit is open. A writ of certiorari may include a direction for refund if the claim is clearly within the time prescribed by the Limitation Act but it is not a compulsory remedy to replace a suit. • (5) Where the particular Act contains no machinery for refund' of tax collected in excess of constitutional limits or illegally collected a suit lies.

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• (6) Questions of the correctness of the assessment apart from its constitutionality are for. the decision of the authorities and a civil suit does not lie if the orders of the authorities are declared to be final or there is an express prohibition in the particular Act. In either case the scheme of the particular Act must be examined because it is a relevant enquiry.

• (7) An exclusion of the jurisdiction of the Civil Court is not readily to be inferred unless the conditions above set down apply. NAHAR INDUSTRIAL ENTERPRISES LTD VS HSBC FACTS:• The case concerned several appeals that had been filed against decisions of various High Courts on this question. • Some had held that an independent suit was not barred, while others had held that it was, and transferred it to the appropriate DRT. • To briefly recapitulate the context, s. 17 of the RDB Act provides that the DRT shall have jurisdiction to “entertain and decide applications from banks and financial institutions for recovery of debts due to such banks and financial institutions”. • S. 18 ousts the jurisdiction of all courts except on writ jurisdiction to hear matters that form the subject of s. 17. • Originally, the RDB Act did not contain any provision that allowed the borrower to raise a counter claim or set off. • S. 19 of the Act was amended, and the law as it stands today allows a borrower to raise those issues as well. • Consequently, some courts began holding that an independent suit may constitute a “counterclaim” for the purposes of s. 19 and is consequently liable to be transferred. ISSUE:• The two main, and conflicting decisions on the point prior to Nahar were Indian Bank v. ABS Marine Products, (2006) 5 SCC 72 and SBI v. Ranjan Chemicals Ltd., (2007) 1 SCC 97. ABS Marine had held that an independent suit cannot be transferred without the consent of the borrower even if it inextricably connected with the bank’s suit and is in the nature of a counter claim. • Ranjan Chemicals had held that the consent of the parties is not a limitation on the power of the court to order a transfer. • The core question which would arise for our consideration is whether by reason of a transfer the jurisdiction of the civil court can be taken away or otherwise conferred upon the Tribunal?

HOLDING :• In Nahar, the Supreme Court held that Ranjan Chemicals could not have departed from the law laid down in ABS Marine, as it was a decision of a coordinate Bench. • The Court also seems to have accepted the argument that s. 31 of the DRT Act is exhaustive of the powers of transfer under the Act. • Substantively, the Court agreed with the reasoning that a DRT is incapable of adjudicating complex issues of law and fact. • It noted that a Tribunal that has the “trappings” of a court is not necessarily a court, and approved decisions that had held that the DRT is not a court. • Moreover, the DRT cannot issue a decree, but only a recovery certificat...