Tekno Exports vs Jagdeep Processors

Honourable Mr. Justice J.B. Pardiwala

By way of this petition under Article 227 of the Constitution of India, petitioner - original defendant seeks to challenge the order dated 22.01.2004 passed by learned Civil Judge (S.D.), Gondal below Ex. 8 in Special Civil Suit No.79 of 2000.

The brief facts for the purpose of deciding this petition can be summarized as under.

2.1. The petitioner herein is the original defendant in Special Civil Suit No.79 of 2000 filed by the respondent - original plaintiff in the Court of Civil Judge (S.D.), Gondal for recovery of money based on a purchase contract between the parties.

Record reveals that written statement was filed by the petitioner - original defendant and in the written statement an objection has been raised as regards territorial jurisdiction of the trial Court, Gondal to try the suit. The Civil Court then proceeded to frame issues as it is evident from the statement made by Learned Counsel Mr.A. R.Thacker appearing for the respondent. The evidence of the original plaintiff has already been lead by way of affidavit under the provision of Order-18, Rule 14 of Civil Procedure Code.

However, the petitioner - original defendant preferred an application Ex. 8 in Special Civil Suit No.79 of 2000 requesting the Court to frame a preliminary issue as regards the territorial jurisdiction of the Court. This application was preferred by the petitioner - original defendant relying on the purchase order dated 23.05.1997 at Annexure -"A" to this petition which provides that all or any disputes in transaction shall be subject to Mumbai jurisdiction only. However, there is some dispute raised as regards the purchase order and the terms and conditions stipulated in the same.

I have heard Learned Counsel Mr.N. K. Pahwa appearing for Thakkar Associates for the petitioner and Learned Counsel Mr.A. R. Thacker appearing for the respondent.

Learned Counsel Mr.N. K. Pahwa for the petitioner submitted that the impugned order is contrary to the provisions of Order 14 Rule 2(2) of the Civil Procedure Code. He would submit that the learned Judge has wrongly held that issue regarding jurisdiction cannot be raised as a preliminary issue as it is necessary to led oral evidence for deciding the said issue. He would submit that from the contents of the documents produced in the suit, learned Civil Judge could have easily decided the issue of jurisdiction as raised as a preliminary issue. He heavily relied on the purchase order dated 23.05.1997 at Annexure - A page No.11 and invited the attention the Court to clause 19 which deal the jurisdiction. Clause 19 reads as under.

Jurisdiction :-All or any disputes in above transaction shall be subject to Mumbai jurisdiction only

He would submit that it is not open to the parties to confer by their agreement jurisdiction on a Court which it does not possess under the Code. But where two courts or more have under the CPC jurisdiction to try a suit or a proceeding, an agreement between the parties that the dispute between them shall be tried in one of such courts is not contrary to public policy. Such an agreement does not contravene Section 28 of the Contract Act. Learned Counsel Mr.Pahwa relied upon ruling of the Supreme Court in the case of Hanil Era Textiles Ltd. Vs. Puromatic Filters (P) Ltd.,

Per-contra, Learned Counsel Mr.A. R. Thacker submitted that the learned Judge has not committed any error muchless an error of law warranting any interference by this Court under Article 227 of the Constitution of India. He vehemently submitted that there are disputed questions of facts involved in the matter. Relying upon the averments made in the plaint he submitted that the purchase order dated 23.05.1997 produced by the defendant is not in the name of the plaintiff. He submitted that it is in the name of one Mr.Rajesh I. Patel who has nothing to do with the proprietary concern. He submitted that a reply was filed opposing application Ex. 8 and in the said reply it has been categorically stated that there was a talk with the defendant as regards the jurisdiction of the Court in the event if any dispute arises and at that point of time, the defendant had assured the plaintiff that the jurisdiction would be that of Jetpur Court in Gujarat and not at Bombay. He would submit that in good faith at that point of time relying upon the word necessary correction was not effected in the purchase order.

Prima facie I am of the view keeping in mind reply at page No.16 filed by the plaintiff to the application Ex. 8 that purchase order has not been disputed. However, plaintiff has raised dispute of a very peculiar nature saying that since he was assured by the defendant as regards the place of jurisdiction which would be Jetpur in Gujarat, the plaintiff did not effect necessary correction in the purchase order which provides the place of jurisdiction. I am of the view, without going into any further controversy that the Civil Court can be directed to frame preliminary issue as regards the territorial jurisdiction of the Court. After framing the preliminary issue, the trial Court shall lead evidence and decide the same in accordance with law. This appears to be inconsonance with Order 14, Rule 2 of the Civil Procedure Code. Order 14, Rule 2 reads as under :

Court to pronounce judgment on all issues. -(1) Notwithstanding that a case may be disposed of on a preliminary issue, the Court shall, subject to the provisions of sub-rule (2), pronounce judgment on all issues.

(2) Where issues both of law and of fact arise in the same suit, and the Court is of opinion that the case or any part thereof may be disposed of on an issue of law only, it may try that issue first if that issue relates to

(a) the jurisdiction of the Court, or

(b) a bar to the suit created by any law for the time being in force.

And for the purpose may, if it thinks fit, postpone the settlement of the other issues until after that issue has been determined, any may deal with the suit in accordance with the decision on that issue.

From the above it is clear that under Rule 2, Order 14 of CPC, where the issues both of law and of fact arise in the same suit, and the Court is of opinion that the case or any part thereof may be disposed of on an issue of law only, it shall try those issues first and for that purpose may, if it thinks fit, postpone the settlement of other issues of fact until after those issues of law have been determined.

Further a comparative reading of Order 14, Rule 2, as it existed earlier to 1976 Amendment and the one after Amendment, would clearly indicate that the consideration of an issue and its disposal as a preliminary issue has, after the 1976 Amendment, been made permissible only in a limited case. Those issues are of law relate to (I) the jurisdiction of Court, or (ii) a bar to the suit created by any law for the time being in force. Apart from this, no issue can be tried as a preliminary issue.

Thus, where the Court came to the conclusion that there is a pure question of law to be decided as a preliminary issue, the Order, refusing to decide the preliminary issue on the mere ground that the Court did not favour dispose of the suits on preliminary points is not justified and is liable to be interfered with under appropriate provisions of law.

Issue at jurisdiction of a Court could not be said to be purely an issue of law, some cases issue involved mixed questions of fact and law. Merely because some evidence was required to be taken an issue could not be refused to be tried as preliminary issue such as an issue regarding jurisdiction or maintainability of suit or Court-fee. However, Courts could try issue as preliminary issue only if the facts are independent and self-contained and do not have any bearing on the facts which may arise for consideration of the suit.

In the above view of the matter, the Court having civil jurisdiction must entertain the suit and prior to settling all the other issues involved in the suit, based on the facts and circumstances, shall frame the legal issue regarding maintainability of the suit as a preliminary issue and allowing parties to place evidence on record in the manner required under law, shall decide that issue, which will resolve the question of maintainability and shall proceed according to the result arrived at for the said issue.

I could have decided this issue relying on the Supreme Court ruling in the case of Hanil Era Textiles Limited v. Puromatic Filters (P) Ltd. (Supra) in which the judgment in the case of A.B.C. Laminart Pvt. Ltd. and Another Vs. A.P. Agencies, Salem, has also been considered. However, in view of some dispute being raised by the plaintiff in this regard, I deem it fit and proper to direct the Civil Court to frame preliminary issue of jurisdiction and allow both the parties to lead evidence on this limited issue. In the above view of the matter, the petition is disposed of by issuing following directions:

(1) Civil Court is directed to frame preliminary issue as to whether it has got territorial jurisdiction to decide the Civil Suit or not.

(2) Afterframing the preliminary issue, Civil Court shall permit both the parties to lead evidence only to this limited extent of territorial jurisdiction and pass appropriate orders in this regard giving finding on the preliminary issue.

(3) Since this Court has directed the Civil Court to frame preliminary issue as regards the jurisdiction, the Civil Court shall postpone the settlement of other issues until the issue as regards the territorial jurisdiction is finally determined.

(4) Civil Court shall deal with the suit i.e. other issues in accordance with the decision on the preliminary issue.

(5) Civil Court shallundertake exercise within 15 days from the date of receipt of this order and shall pass final order in this regard on or before 31.12.2011.

(6) Both the parties are directed to cooperate and see to it that the order passed by this Court is in its true effect.

The petition stands disposed of with no order as to costs.