Saturday, September 20, 2014

Objections to Jurisdiction of Court Under Section 21, Code of Civil Procedure, 1908

Section 21 of the Code of Civil Procedure, 1908 (“Code”) provides the grounds for objecting the jurisdiction of a court. There are three forms of objections stipulated under the section: (i) Objection as to the place of suing, (ii) objection as to the competence of a Court with reference to the pecuniary limits of its jurisdiction, and (iii) objection as to the competence of the executing Court with reference to the local limits of its jurisdiction. According to the section, such objections to jurisdiction should be taken at the earliest possible opportunity. In order that an objection to the place of suing may be entertained by an appellate or revisional court, the fulfilment of the following three conditions is essential[1]:

“(1) The objection was taken in the Court of first instance.
(2) It was taken at the earliest possible opportunity and in cases where issues are settled, at or before such settlement.
(3) There has been a consequent failure of justice.”

The principle underlying section 21 is the same principle that has been adopted in Section 11 of the Suits Valuation Act with reference to pecuniary jurisdiction, i.e., when a case had been tried by a court on the merits and judgment rendered, it should not be liable to be reversed purely on technical grounds, unless it had resulted in failure of justice.[2] Objections to the jurisdiction of a court are distinct from the objections to the competency of a court; the latter goes to the very root of the jurisdiction.[3] Whereas in the former case, the appellate court may not interfere with the decree unless prejudice is shown, ordinarily the second category of the cases would be interfered with.[4]

Thursday, September 18, 2014

Suits for Compensation for Wrongs to Person or Movables: Section 19, CPC, 1908

Section 19 of the Code of Civil Procedure, 1908 (“Code”) allows a court to entertain a suit for ‘compensation’ where wrong is done to the person or to movable property.  At the outset, it should be understood that if a suit is regulated by the provisions of section 19, the provisions of section 20 of the Code would not come into operation.[1] For the applicability of section 19, two conditions needs to be satisfied: (i) wrong is done within jurisdiction a one court, and (not ‘or’) (ii) defendant resides (or carries on business, or personally works for gain) within the jurisdiction of other court. The conjunction "and" in the qualifying clause leaves aside the cases  where both the conditions  together are not available; in such matters, suits are governed by other provisions of the Code.[2] When these conditions are satisfied, at the option of the plaintiff, either of the courts can entertain the suit for compensation.

For the purpose of interpretation of the section, one of the most important issues is the meaning of the phrase ‘wrong done’, i.e., when can it be said that some wrong is done by the defendant? According to the Bombay High Court (Nagpur Bench), phrase ‘wrong done’ take in not only the initial action complained but also the resultant effect.[3] The Court  within whose  local  jurisdiction  damage  was  caused  or  suffered  or  sustained  would  clearly  answer  the requirements  of  Section  19  for  the  purpose  of  suits  mentioned  therein. For instance, when wrongful action of defendant takes place within the jurisdiction of one court, and the plaintiff is affected by that action for all purposes in his business within the jurisdiction of other Court.

Tuesday, September 16, 2014

Section 16 of the Code of Civil Procedure, 1908: An Overview

Section 16 of the Code of Civil Procedure, 1908 (“Code”) provides that suits relating to immovable property shall be instituted in the Court within the local limits of whose jurisdiction the property is situated. However, there is also a proviso which provides that where relief (respecting, or compensation for wrong to, immovable property) can be ‘entirely obtained’ through defendant’s personal obedience, suit can be instituted in the court within the local limits of whose jurisdiction the defendant actually and voluntarily resides, or carries on business, or personally works for gain (The underlined part can also be found in clause (a) and (b) of section 20 of the Code). Explaining the scope of section 16, the Supreme Court of India (“Supreme Court”), in Harshad Chiman Lal Modi v. DLF Universal Ltd.,[1] opined that:

“16. Section 16 thus recognises a well-established principle that actions against res or property should be brought in the forum where such res is situate. A court within whose territorial jurisdiction the property is not situate has no power to deal with and decide the rights or interests in such property. In other words, a court has no jurisdiction over a dispute in which it cannot give an effective judgment. 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 relief sought can be obtained through the personal obedience of the defendant. The proviso is based on a well-known maxim “equity acts in personam”, recognised by the Chancery Courts in England. The Equity Courts had jurisdiction to entertain certain suits respecting immovable properties situated abroad through personal obedience of the defendant. The principle on which the maxim was based was that the courts could grant relief in suits respecting immovable property situate abroad by enforcing their judgments by process in personam i.e. by arrest of the defendant or by attachment of his property.”

Where the main part of section 16 is applicable, section 20 of the Code would have no application in view of the opening words in section 20 “subject to the limitations thereof”.[2] Where a suit is filed for recovery of immovable properties or determination of any right or for interest in immovable properties, only the Court within whose local limits the properties are situated shall have the jurisdiction.[3] In other words, the language of section 16 is very wide and all cases, in which prayer for declaration of any right or interest in immovable property is made or its sale is asked for, must be filed in the Court which has territorial jurisdiction over such immovable property.[4]

Sunday, September 14, 2014

'Res Judicata' under Code of Civil Procedure, 1908 (Section 11)

Section 11 of the Code of Civil Procedure, 1908 (“Code”) restricts a court from trying “any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a Court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such Court”. The section enunciates the principle of res judicata, an essential condition of which is that there must be a formal adjudication between the parties after full hearing; that is, the matter must be finally decided between the parties.[1] The question of res judicata has got to be decided with reference to the final decision in the earlier litigation because the words in para 1 of Section 11 of the Code are that the matter directly and substantially in issue in the second suit has been directly and substantially in issue in a former suit and “has been heard and finally decided”.[2]In Syed Mohd. Salie Labbai v. Mohd. Hanifa,[3] the Supreme Court of India (“Supreme Court”) had laid down the following conditions to prove res judicata:

“(1) that the litigating parties must be the same;
(2) that the subject-matter of the suit also must be identical;
(3) that the matter must be finally decided between the parties; and
(4) that the suit must be decided by a court of competent jurisdiction.”

The principle is based on two maxims derived from Roman jurisprudence: firstly, interest reipublicae ut sit finis litium — it concerns the State that there be an end to law suits; and, secondly, nemo debet bis vexari pro una et eadem cause — no man should be vexed twice over for the same cause.[4] In other words, the principle of res judicata is based on the need of giving finality to judicial decisions.[5]As the doctrine of res judicata (which is a branch of the law of estoppels) is based on public policy and justice, section 11 of the Code is not exhaustive of it. The reason for the specific provisions of Section 11 is not that the legislature intended to bar the application of the general principles of res judicata to suits when the ‘previous decision’ is arrived at in proceedings other than suits.[6]Hence, in Gulabchand Chhotalal Parikh v. State of Gujarat (Constitutional Bench),[7] while opining that the decision of a High Court in a writ petition on the merits on a matter would operate as res judicata in a subsequent suit, the Supreme Court held that:

Tuesday, September 9, 2014

Jurisdiction of Civil Court under section 9, Code of Civil Procedure, 1908

Section 9 of the Code of Civil Procedure, 1908 (“CPC”) provides that a court “shall have jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred”. Hence, as per section 9, civil courts have the inherent jurisdiction in all types of civil disputes unless a part of that jurisdiction is carved out, expressly or by necessary implication, by any statutory provision and conferred on any other tribunal or authority.[1] A party which seeks to oust the jurisdiction of an ordinary civil court shall establish the right to do so, such ouster being express or implied.[2] And the provision, which ousts the jurisdiction of a civil court, must be strictly construed.[3]For instance, Order 7 Rule 11(d) of CPC (rejection of a plaint where suit appears to be barred by law) shall be construed strictly.[4]Where a statute provides for ouster of civil court’s jurisdiction, conditions leading to such ouster should occur on the date of the institution of proceeding and not otherwise.[5]

The question of jurisdiction is to be determined primarily on the averments made in the plaint.[6] It does not depend upon the defence taken by the defendants in the written statement. [7] Moreover, any application filed under the provisions of different statutes cannot be treated as a suit or plaint unless otherwise provided in the said Act.[8]A court having no jurisdiction cannot decide on the merits of the case but only the question of jurisdiction.[9] It is well settled that a civil court has inherent power to decide the question of its own jurisdiction, although, as a result of its enquiry, it may turn out that it has no jurisdiction over the suit.[10] The test of jurisdiction over the subject matter is whether the court or Tribunal can decide the case at all and not whether the court has authority to issue a particular kind of order in the course of deciding the case.[11] Where a court does not have jurisdiction, the same cannot be conferred by the consent of the parties.[12]

A special procedure provided in the Act, by necessary implication, may prohibit the Civil Court under Section 9 of the Civil Procedure Code 1908 to take cognizance of the objections arising under the Act for determination of certain question, for e.g., compensation for land acquired.[13] In such cases, there would not be repugnancy between § 9 of the Code and the special law. [14] Hence, where a tribunal is created by a special statue, it is assumed that it has ‘exclusive jurisdiction’ to decide the disputes entrusted by the statute.[15] Justice M. Hidayatullah had, while dealing with the question of civil court’s jurisdiction in relation to Madhya Bharat Sales Tax Act, 1950 (Dhulabhai v. State of M.P.), [16] laid down the following guidelines for determining the jurisdiction of civil court:

Tuesday, September 2, 2014

Persons Employed in Statutory Canteens (Maintained by a Contractor) are not Principal Employer's Employees

In a recent three-judge bench decision (Balwat Rai Saluja & Anr. v. Air India Ltd. & Ors.; Civil Appeals No. 10264-10266 of 2013), the Supreme Court of India (“Supreme Court”) has dealt with an important question under Labour Law jurisprudence – “whether the workmen engaged in statutory canteens, through a contractor, could be treated as employees of the principal establishment”? The question was with respect to the obligation of the occupier of a factory, under § 46 of the Factories Act, 1948 (“Factories Act”), to provide a canteen in case more than 250 workmen are ordinarily employed.

In the appeal, Hotel Corporation of India (“HCI or Respondent No. 2”), a wholly owned subsidiary of Air India (“Respondent No.1”) to establish refreshment rooms, canteen etc., had employed appellants-workmen on a ‘causal or temporary basis’ for rendering canteen services on Air India’s premises. Both HCI and Air India are companies registered under Companies Act, 1956 (“Companies Act”). In 1996, the Central Government referred an industrial dispute between Air India and the appellants-workmen (“Appellants”) to the Central Government Industrial Tribunal (“CGIT”). It was Appellants’ contention that by virtue of them being employed in a statutory canteen established on the premises of Air India, they are its ‘deemed employees’. The contention was sought to be substantiated by reference to the applicability of Rules 65-70 of Delhi Factory Rules, 1950 (“Delhi Rules”) to Air India’s Ground Services Department. CIGT accepted the plea of the workmen and held that they are Air India’s employees. However, on appeal, a single-judge bench of the High Court of Delhi (“High Court”) reversed the CGIT’s order and held that workmen could not be treated as Air India’s deemed employees. It was held that the responsibility to run canteen was that of HCI, and its relationship with Air India was contractual. On second appeal, judgment of the single-judge bench was affirmed by a division bench of the High Court.