Civil Procedure Code- Test Preparation
Basic DefinitionsJurisdiction
The District Court or Additional District court exercises jurisdiction both on original
and appellate side in civil and criminal matters arising in the District. The territorial
and pecuniary jurisdiction in civil matters is usually set in concerned state enactments
on the subject of civil courts. On the criminal side jurisdiction is almost exclusively
derived from code of criminal procedure. This code sets the maximum sentence,
which a district court may award which currently is capital punishment.
The court exercises appellate jurisdiction over all subordinate courts in the district on
both civil and criminal matters.
Appeals from the district courts lie to the High court of the concerned state.
3 types- Pecuniary or Monetary, Territorial and Subject Matter
How Is Territory Decided?
Territory of a court is decided after taking into account several factors. They are:
In Case Of Immovable Property: If the suit is with regard to recovery, rent,
partition, sale, redemption, determination of right of immovable property, it shall be
instituted in the court within the local limits of whose jurisdiction the property is
situated
Immovable Property Situated Within The Jurisdiction of Different Courts: In
such a case the suit may be instituted in any court within the local limits of whose
jurisdiction any portion of the property is situated.
In Case Of Dispute Between Two Or More Persons With Respect To Movable
Property, Business Or Any Other Wrong Done: Where a wrong has been caused to
1
@lawkhabar
a person, or any damage has been caused to a movable property, then the suit may be
instituted
Either in the place, where wrong or damage has been caused, or
In the place, where defendant (the person who caused the loss) resides
Where there is a dispute in business, agreement or any other kind of civil dispute,
except matrimonial matter, then the suit may be instituted eitherIn a place, where the defendant resides, or carries on business, or
In a place, where the cause of action has arisen, i.e. where the dispute or wrong took
place
In Case Of Matrimonial Dispute: Where a dispute arises between Husband and
wife in regard to their marital life then the case may be filed either:
In the place where marriage was solemnized, or
In the place, where opposite party is residing, or
In the place, where Husband and Wife last resided together, or
In the place, where person filing the case is residing, provided that opposite party has
not been heard of as alive for the last seven years.
Jurisdiction Of Civil Court Under Civil Procedure Code
Section 9 of CPC deals with the jurisdiction of civil courts in India. It says that the
courts shall (subject to the provisions herein contained) have jurisdiction to try all
suits of a civil nature excepting suits of which their cognizance is either expressly or
impliedly barred
Explanation I- a suit in which the right to property or to an office is contested is a suit
or a civil nature, notwithstanding that such right may depend entirely on the decision
of questions as to religious rites or ceremonies.
Explanation II- for the purpose of this section, it is immaterial whether or not any fees
are attached to the office referred to in explanation 1 and whether such office is
attached to a particular place.
2
@lawkhabar
Conditions
A civil court has jurisdiction to try a suit if two conditions are fulfilled: The suit must
be of a civil nature; and the cognizance of such a suit should not have been
expressly or impliedly barred.
Suits expressly barredA suit is said to be ‘expressly barred ’ when it is barred by any enactment for the time
being in force. It is open to a competent legislature to bar jurisdiction of civil courts
with respect to a particular class of suits of a civil nature, provided that, in doing so, it
keeps itself within the field of legislation conferred on it and does not contravene any
provision of the constitution. But every presumption should be made in favor of
the jurisdiction of a civil court and the provision of 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. Thus, matters falling within the exclusive jurisdiction of
revenue courts or under the code of criminal procedure or matters dealt with by
special tribunals under the relevant statutes, e.g. by industrial tribunal, income tax
tribunal, revenue tribunal, electronic tribunal, rent tribunal, cooperative tribunal,
motor accident claims tribunal, etc. or by domestic tribunals, e.g. Bar Council,
Medical Council, university, club etc. are expressly barred from the cognizance of a
civil court. But if the remedy provided by a statute is not adequate and a special
tribunal cannot decide all questions, the jurisdiction of a civil court is not barred.
Similarly, when a court of limited jurisdiction prima facie and incidentally states
something, the jurisdiction of a civil court to finally decide the time is not ousted.
Suits impliedly barredA suit is impliedly barred when it is barred by general principles of law. Where a
statute gives a specific remedy, it thereby deprives the person who insists upon a
remedy of any other form than that given by the statute. Where an act creates an
3
obligation and enforces its performance in a specified manner, that performance
cannot be enforced in any other manner. Similarly, certain suits, though of a civil
nature, are barred from thee cognizance of a civil court on the ground of public
policy. “The principle underlying is that a court ought not to countenance matters
which are injurious to and against the public weal.” Thus, no suit shall lie for recovery
of costs incurred in criminal prosecution or for enforcement of a right upon a contract
hit by section 23 of the Indian Contract Act, 1872; or against any judge for acts done
in the course of his duties. Likewise, political questions belong to the domain of
public administrative law and are outside the jurisdiction of civil courts. A civil court
has no jurisdiction to adjudicate upon disputes of a political nature.
The party, which seeks to oust the jurisdiction of a civil court, needs to establish it.
Also, it is well settled that a statute ousting the jurisdiction of a civil court must be
strictly construed (Firm of Illuri Subbayya Chetty & Sons v. State of AP).
Note: during the exclusion of jurisdiction, even if the jurisdiction of a court is barred
expressly or impliedly, this does not mean that the jurisdiction of the court is
completely excluded. The court is allowed to examine whether the provisions of the
Act and the Rules have been complied with, or the order is contrary to law, mala
fide, ultra vires, perverse, arbitrary, violative of the principles of natural justice,
based on no evidence, etc. Such actions of the court are not said to be under the Act,
but de hors the Act and the jurisdiction of the court stands (given in Secy Of State v
Mask & Co).
From various decisions of the SC, the following general principles relating to the
jurisdiction of a civil court emerge:
1. A civil court has jurisdiction to try all suits of a civil nature unless their
cognizance is barred either expressly or impliedly.
2. Consent can neither confer nor deny the jurisdiction of a court.
4
3. A decree passed by a court without jurisdiction is a nullity and the validity
thereof can be challenged at any stage of the proceedings, in execution
proceedings or even in collateral proceedings.
4. There is a distinction between want of jurisdiction and irregular use of it.
5. Every court has the inherent power to decide a question of its own jurisdiction.
6. Jurisdiction depends on the averments in the plaint, and not in the averments
in the written statement of the defendant.
7. For deciding jurisdiction of a court, the substance of a matter and not its form
is important.
8. Every presumption should be made in favor of jurisdiction of a civil
court.
9. A statute-ousting jurisdiction of a court must be strictly construed.
10. The burden of proof to disprove a court’s jurisdiction is on the party who
questions it.
11. Even when the jurisdiction of a civil court is barred, it can still decide whether
the provisions of an Act have been complied with or whether an order was
passed dehors the provisions of law.
Res judicata and Stare Decisis
Stare decisis means to stand by decided cases; to uphold precedents – those things
which have been so often adjudged ought to rest in peace.
Res judicata and stare decisis are members of the same family. Both relate to
adjudication of matters; final determination of contested questions and have binding
effects in future litigation. Both the doctrines are the result of decisions of a
competent court of law and are based on public policy.
However, the differences between the two are as follows:
o Res judicata is based on conclusiveness of judgment and adjudication
of prior findings but stare decisis rests on legal principles.
5
o Res judicata binds parties and privies while stare decisis operates
between strangers also and binds courts from taking a contrary view on
the point of law already decided.
o Res judicata relates to a specific controversy and stare decisis touches
legal principles.
o Res judicata presupposes judicial finding upon the same facts as
involved in subsequent litigation between the same parties, whereas
stare decisis applies the same principle of law to all parties.
Who may decide?
It is well settled that a civil court has inherited power to decide its own jurisdiction.
Presumption as to 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 favor of the jurisdiction of a 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 the nature.
Burden of proof
It is well settled that it is for the party who seeks to oust the jurisdiction of a civil
court to establish it. It is equally well settled that a statute ousting the
jurisdiction of a civil court must be strictly construed. Where such a contention is
raised, it has to be determined in the light of the words used in the statute, the scheme
of the relevant provisions and the object and purpose of the enactment. In the case of
a doubt as to jurisdiction, the court should lean towards the assumption of jurisdiction.
A civil court has inherent power to decide the question of its own jurisdiction;
although as a result of such inquiry it may turn out that it has no jurisdiction to
entertain the suit.
6
Exclusion of jurisdiction: limitations
A litigation having a grievance of a civil nature has, independent of any statute, a
right to institute a suit in a civil court unless its cognizance is either expressly or
impliedly barred. The exclusion of the jurisdiction of a civil court is not to be readily
inferred and such exclusion must be clear. Again, even when the jurisdiction of a civil
court is barred, either expressly or by necessary implication, it cannot be said that the
jurisdiction is altogether excluded. A court has jurisdiction to examine whether the
provisions of the act and the rules made thereunder have or have not been complied
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 de hors
the act and the jurisdiction of a civil court is not ousted. In the leading decision of
Secretary of State v. Mask & Co., the Privy Council rightly observed: “it is settled
law that the exclusion of the jurisdiction of the civil court is not to be readily inferred,
but that such exclusion must either be explicitly expressed or clearly implied. It is also
well established that even if jurisdiction is so excluded the civil courts have
jurisdiction to examine into cases where the provisions of the act have not been
complied with, or the statutory tribunal has not acted in conformity with the
fundamental principles of judicial procedure.”
Exclusion of jurisdiction of civil court: principles
From the above discussion it is clear that the jurisdiction of civil courts is allembracing except to the extent it is excluded by law or by clear intendment arising
from such law. In the classic decision of Dhulabhai v. State of M.P., after considering
a number of cases, Hidyatullah, C.J. summarized the following principles relating to
the exclusion of jurisdiction of civil courts:
a. Where a statute gives finality to orders of 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 a provision, however, does not exclude
those cases where the provisions of a particular act have not been complied with or
7
@lawkhabar
the statutory tribunal has not acted in conformity with fundamental principles of
judicial procedure.
b. Where there is an express bar of jurisdiction of a court, an examination of the
scheme of a particular act to find the adequate or sufficiency of the remedies provided
may be relevant but this is not decisive for sustaining the jurisdiction of a civil court.
Where there is no express exclusion, the examination of the remedies and the scheme
of a 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 a statute creates a
special right or a liability and provides for the determination of the right or liability
and further lays down that all questions about the said right and liability shall be
determined by tribunals so constituted, and whether remedies normally associated
with actions in civil courts are prescribed by the said statute or not.
c. Challenge to the provisions of a 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 decisions of tribunals
d. When a provision is already declared unconstitutional or the constitutionality of
any provisions 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
e. Where the particular act contains no machinery for refund of tax collected in excess
of constitutional limits or is illegally collected, a suit lies.
f. Questions of the correctness of an assessment, apart from its constitutionality, are
for the decision of the authorized 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 a particular act.
In either case, the scheme of a particular act must be examined because it is a relevant
enquiry
g. An exclusion of jurisdiction of a civil court is not readily to be inferred unless the
conditions above set down apply. The above principles enunciated are relevant in
8
deciding the correctness or otherwise of assessment orders made under taxing
statutes.
Res JudicataRes Judicata as a concept applies to both civil and criminal systems and stands for
‘the thing has been judged’ meaning that the sane issue has been decided by another
court between the same parties. In order to preserve the effect of the first judgment
the doctrine of res judicata is applied by the judges.
Section 11 of Code of Civil Procedure deals with this concept. It embodies the
doctrine of Res Judicata or the rule of conclusiveness of a judgment, as to the points
decided either of fact, or of law, or of fact and law, in every subsequent suit between
the same parties. It enacts that once a competent court finally decides a matter; no
party can be permitted to reopen it in a subsequent litigation. In the absence of such a
rule there will be no end to litigation and the parties would be put to constant trouble,
harassment and expenses.
The doctrine of Res Judicata is based on three Roman maxims:
(a) No man should be vexed (annoyed) twice for the same cause
(b) That it is in the interest of the state that there should be an end to a litigation; and
(c) The meaning as a judicial decision must be accepted as correct
The pre-requisites, which are necessary for Res Judicata, are:
1) There must be a final judgment;
2) The judgment must be on the merits
3) The claims must be the same in the first and second suits
4) The parties in the second action must be the same as those in the first, or have
been represented by a party to the prior action.
9
Conclusion
The Doctrine of Res Judicata can be understood as something which restrains the
either party to “move the clock back” during the pendency of the proceedings. The
extent of Res Judicata is very-very wide and it includes a lot of things, which even
includes Public Interest Litigations. This doctrine is applicable even outside the Code
of Civil Procedure and covers a lot of areas, which are related to the society and
people. The scope and the extent have widened with the passage of time and the
Supreme Court has elongated the areas with its judgments.
CriticismsRes Judicata does not restrict the appeals process, which is considered a linear
extension of the same lawsuit as the suit travels up (and back down) the appellate
court ladder, appeals are considered the appropriate manner by which to challenge a
judgment rather than trying to start a new trial. Once the appeals process is exhausted
or waived, Res Judicata will apply even to a judgment that is contrary to law.
There are limited exceptions to Res Judicata that allow a party to attack the validity of
the original judgment, even outside of appeals. These exceptions—usually called
collateral attacks—are typically based on procedural or jurisdictional issues, based
not on the wisdom of the earlier court's decision but its authority or on the
competence of the earlier court to issue that decision. A collateral attack is more
likely to be available (and to succeed) in judicial systems with multiple jurisdictions,
such as under federal governments, or when a domestic court is asked to enforce or
recognize the judgment of a foreign court.
In addition, in matters involving due process, cases that appear to be Res Judicata
may be re-litigated. An example would be the establishment of a right to counsel.
People who have had liberty taken away (i.e., imprisoned) may be allowed to be retried with a counselor as a matter of fairness.
10
Res-Subjudice
Section 10 of the Civil Procedure Code provides the doctrine of Res Subjudice or the
rule with regard to stay of suit where things are under consideration by court. It
provides that no court shall proceed with the trial of any suit in which the matter in
issue is also directly and substantially in issue in a previously instituting suit between
the same parties where such suit is pending in the same or any other court in India.
For applicability of Res-Subjudice the following conditions must be present:
1. The matter in issue subsequent suit must be the same, which is directly and
substantially in issue in previously instituted suit.
2. The previously instituted suit must be pending in the same Court or in any other
Court in India, or in any Court beyond India established with the authority of the
Federal Government.
3. The previously instituted suit must be pending in a competent Court of civil
jurisdiction.
4. The parties in both suits must be the same. If these conditions are fulfilled the
subsequently further instituted suit shall be stayed by applying Res-Subjudice.
Differences Between Res Judicata and Res Subjudice
1. The doctrine of Res Judicata is contained in section (11) of C.P.C, which provides
when and how it can apply, while the doctrine of Res Subjudice is contained in
section (10) of C.P.C, which provides when and how it can apply.
2. In Res Judicata the Court shall not try at all a case, which has previously tried,
while in Res Subjudice the Court shall not proceed with a case, in-respect of which a
suit is already pending.
11
3. Res-judicata deals with cases, which have already been decided by a Court of
competent jurisdiction, but Res Subjudice deals with cases which are pending before
the Court of competent jurisdiction.
4. Res Judicata prohibits second trial of the same dispute between same parties, while
Res Subjudice prohibits proceedings of two parallel suits between same parties.
Conclusion
So it can be concluded that by applicability of Res- judicata the Court shall not try a
suit, which has already been tried, on the other side by applicability of Res Subjudice
the Court shall not proceed-with a suit which is already pending before the Court of
competent jurisdiction. The main spirit behind these two principles is that no person
should be call in question twice for the same cause of action.
Constructive Res Judicata and Res Judicata- Explained with Case Law
There are two kinds of Res Judicata namelyActual Res Judicata and Constructive Res Judicata.
Actual Res Judicata:
It means a matter actually resolved by Court, between the parties in earlier suit cannot
be reopened through subsequent suit. In-other words an issue has been alleged by one
party and either denied or admitted, (expressly or impliedly) by other party in earlier
suit, second suit in respect of the same matter can not be filed, and if any is filed, the
same would be hit by actual Res Judicata.
Constructive Res Judicata:
It means a matter, which might and ought to have been made ground of claim or
defense in a former suit, but a party ignores it, then that issue shall be deemed to have
12
been a matter directly and substantially in issue in such suit. In other words if a party
had an opportunity that he ought to have taken a plea (as a plaintiff or defendant) if he
fails to do so, and the matter is decided, the decision will operate as Res-judicata inrespect of all issues, which were taken, and which ought and might have taken/ and
second suit would not lie for such issue.
In a recently reported decision [Ramchandra Dagdu Sonavane (Dead) by L.Rs. v.
Vithu Hira Mahar (Dead) by LRs. & Ors, AIR 2010 SC 818], the Supreme Court has
explained the doctrine of constructive res judicata as applicable in Indian law. A subset of the doctrine of res judicata, emanating from Section 11 of the Code of Civil
Procedure, the doctrine of constructive res judicata sets to naught any claims being
raised in a subsequent proceeding where in an earlier proceeding such claim should /
ought to have been raised and decided. A rule of prudence, thus, the doctrine seeks to
bar determination and enforcement of claims which have not been raised at an
appropriate juncture in judicial proceedings.
The Supreme Court explained the meaning and ambit of the doctrine of constructive
res judicata as under31) Res-judicata and Code of Civil Procedure: - It is well known that the doctrine of
res- judicata is codified in Section 11 of the Code of Civil Procedure. Section 11
generally comes into play in relation to civil suits. But apart from the codified law,
the doctrine of res-judicata or the principle of the res-judicata has been applied
since long in various other kinds of proceedings and situations by courts in
England, India and other countries. The rule of constructive res-judicata is
engrafted in Explanation IV of Section 11 of the Code of Civil Procedure and in
many other situations also Principles not only of direct res-judicata but
of constructive res-judicata are also applied, if by any judgment or order any matter
in issue has been directly and explicitly decided, the decision operates as res-judicata
and bars the trial of an identical issue in a subsequent proceedings between the same
parties. The Principle of res judicata comes into play when by judgment and order a
decision of a particular issue is implicit in it, that is, it must be deemed to have
been necessarily decided by implications even then the Principle of res judicata on
that issue is directly applicable. When any matter which might and ought to have
13
been made a ground of defence or attack in a former proceeding but was not so
made, then such a matter in the eye of law, to avoid multiplicity of litigation and to
bring about finality in it, is deemed to have been constructively in issue and,
therefore, is taken as decided [See AIR 1978 SC 1283].
32) In Swamy Atmandanda vs. Sri Ramakrishna [(2005) 10 SCC 51], it was held by
this court:
“26. The object and purport of the principle of res judicata as contended in Section 11
of the Code of Civil Procedure is to uphold the rule of conclusiveness of judgment, as
to the points decided earlier of fact, or of law, or of fact and law, in every subsequent
suit between the same parties. Once the matter, which was the subject matter of lis,
stood determined by a competent court, no party thereafter can be permitted to reopen
it in a subsequent litigation. Such a rule was brought into the statute book with a view
to bring the litigation to an end so that the other side may not be put to harassment.
27. The principle of res judicata envisages that a judgment of a court of
concurrent jurisdiction directly upon a point would create a bar as regards a plea,
between the same parties in some other matter in another court, where the said plea
seeks to raise afresh the very point that was determined in the earlier judgment.”
33) When the material issue has been tried and determined between the same parties
in a proper suit by a competent court as to the status of one of them in relation to the
other, it cannot be again tried in another suit between them as laid down in Krishna
Behari Roy vs. Bunwari Lal Roy reported in [1875 ILR (IC-144)], which is followed
by this Court in the case of Ishwar Dutt Vs. Land Acquisition Collector & Anr.
[(2005) 7 SCC 190] wherein the doctrine of `cause of action estoppel’ and
`issue estoppel’ has been discussed. It is laid down by this Court, that if there
were an issue between the parties that is decided, the same would operate as a res
judicata between the same parties in the subsequent proceedings.
34) So far as the finding drawn in the suit for injunction in O.S. No.104 of 1953,
regarding adoption would also operate as a res-judicata in view of the judgment of
this Court in the case of Sulochana Amma Vs. Narayanan Nair [(1994) 2 SCC 14]. It
14
@lawkhabar
is observed: “The decision in earlier case on the issue between the same parties or
persons under whom they claim title or litigating under the same title, it operates as a
res-judicata. A plea decided even in a suit for injunction touching title between the
same parties, would operate as res judicata. It is a settled law that in a Suit for
injunction when title is in issue, for the purpose of granting injunction, the issue
directly and substantially arises in that suit between the parties when the same is put
in issue in a later suit based on title between the same parties or their privies in
a subsequent suit, the decree in injunction suit equally operates as a res-judicata.”
38) Reference may be made to the decision of this court in the case of Sulochana
Amma vs. Narayanan Nair, [(1994) 2 SCC 14 Para 9] on the issue between the same
parties or persons under whom they claim title or litigating under the same title, it
operates as a res-judicata. A plea decided even in suit for injunction touching the title
between the same parties, would operate as res judicata: “It is a settled law that in a
suit for injunction when title is in issue, for the purpose of granting injunction the
issue directly and substantially arises in that suit between the parties. When the same
is put in issue in a later suit based on title between the same parties or their
privies in a subsequent suit, the decree in injunction suit equally operates as a
res judicata.”
39) To the same effect, the judgment of this court in the case of Sulochana Amma vs.
Narayanan Nair, [(1994) 2 SCC 14 Para 9] in which it has been held that the issue
between the same parties or persons under whom they claim title or litigating under
the same title, it operates as a res-judicata. A plea decided even in suit for injunction
touching the title between the same parties, would operate as res judicata.
Estoppel
Estoppel is a principle of law by which a person is held bound by the
representation made by him or arising out of his conduct, it is a rule of equity.
Estopple is wider than just evidence. If, for example, a person made a
statement intending that some other person should act upon it, he will be estopped,
15
that is, will be prevented, from denying the truth of his statement once the other
person has altered his position on the basis of the statement. A person, while booking
his consignment with a railway company declared its value to be one hundred rupees.
He was not permitted when the packet was lost, to claim that its value was much more
than that. A person sold certain property on the presence of his mother, the mother
was not afterwards permitted to say that the property belonged to her and therefore,
her son had no right to sell. By remaining silent she had made a representation that
her son had the right to sell and the purchaser having acted on that representation, it
was too late to deny the seller’s right to sell. The foundation of the doctrine is that a
person cannot approbate and reprobate at the same time. Where a party refused to
invoke the arbitration clause in the agreement saying that the matter in dispute was
not arbitable. He was not allowed subsequently to seek reference of the matter to
arbitration. Refusal to refer parties to arbitration was held to be proper.
Doctrine of estoppel is embodied in S.115 of Indian Evidence Act.
S.115. Estoppel - When one person has by his declaration, act or omission,
intentionally caused or permitted another person to believe a thing to be true and to
act upon such belief, neither he nor his representative shall be allowed, in any suit or
proceeding between himself and such person or his representative, to deny the truth of
that thing.
Illustration: A intentionally and falsely leads B to believe that certain land belongs to A, and
thereby induces B to buy and pay for it. The land afterwards, becomes the property of
A, and A seeks to set aside the sale on the ground that, at the time of the sale, he had
no title. He must not be allowed to prove his want to title.
Three conditions are to be satisfied to attract estoppel.
16
1. Representation by a person to another
2. The other shall have acted upon the said representation; and
3. Such action shall have detrimental to the interests of the person to whom the
representation has been made
The differences between res judicata and estoppel are as follows-
•
Res judicata flows from the decision of a court, but estoppel flows from an act
of parties.
•
Res judicata is based on the principles of public policy (that there should be an
end to litigation) but estoppel is based on principles of equity (that one who,
by his conduct, has altered the position of another party to his disadvantage,
cannot turn around and use this alteration to his advantage). Res judicata
prevents multiplicity of litigations, but estoppel prevents multiplicity of
representations.
•
Res judicata ousts the jurisdiction of a court to try a case whereas estoppel is
only a rule of evidence and shuts the mouth of the party.
•
Res judicata prevents a party from claiming the same thing twice in successive
litigations, while estoppel prevents him from saying one thing at one time and
the opposite at another.
Cause of ActionThe expression cause of action is facts, which show the infringement of the rights of a
person. Literally cause means reason or right, and action means suit, "reason for filing
a suit". In-other words it means causes in shape of facts which give rise to a party to
17
file a suit. Cause of action is a factual situation that entitles one person to obtain a
remedy in court from another person. It is in fact a group of essential facts, which it is
necessary for the plaintiff to prove before he can succeed in the suit. A bundle of
essential facts, which is necessary for the plaintiff to prove before he can succeed,
it is the foundation of a suit, and must be antecedent to the institution of the suit – and
on the basis of it a suit must have been filed. If a plaintiff does not disclose the cause
of action of a suit then the court will reject the plaint.
Forum Non Convenience and Anti-Suit Injunction
Indian courts explain Forum non-convenience (Latin: "inconvenient forum" or
"inappropriate forum") (“FNC”) as a discretionary power of the courts to not
entertain a matter on the grounds that there exists a more appropriate court of
competent jurisdiction, which would be in a better position to decide the matter.
Conversely, an anti suit injunction is granted by a court preventing the parties
before it from instituting or continuing with proceedings in another court.
The 188th Report (December 2003) by the Law Commission of India on ‘Proposals
for Constitution of Hi Tech Fast Track Commercial Divisions in High Courts’ has
pointed out a disturbing trend in the judgments of UK and US courts of selectively
applying the principle of ‘FNC’ and staying actions filed by foreigners in their
country and refusing to apply the same norm when actions are filed in these countries
against foreigners, primarily on the generalization that cases filed in India would take
a minimum of ‘twenty five years’ for disposal.
The Indian perspective
As per the judgment of the Delhi High Court in the case of GlaxoSmithKline and
Horlicks Limited v Heinz India (MANU/DE/0011/2009) (“Horlicks”), the doctrine of
FNC requires a two-stage enquiry:
• Whether there is an alternative competent forum, which is appropriate.
18
• Whether it is in the interest of justice to relegate the parties to the alternative forum.
An important point to be noted is that a court must have jurisdiction before rejecting a
matter on the ground of FNC. The observations of the Delhi High Court in the case of
Horlicks are worth noting and are as follows:
1. The principle of 'FNC’ flows from a desire to avoid multiplicity of proceedings and
conflicting or confusing judgments.
2. Each case has to be decided on its own circumstances, which include economic
strength of the parties, expenses, availability of evidence etc.
3. FNC is applied rarely, when advantages and justice clearly outweigh proceedings
before a court, which in law has jurisdiction, but another court having
concurrent jurisdiction is the more 'natural' and the plaintiff has deliberately
avoided the said forum.
4. There should be a distinct disadvantage to deny the right of the plaintiff to decide
his court.
5. Balance of convenience is a material consideration, but not the sole criteria
justifying FNC. Notwithstanding the appropriateness of a particular forum,
courts in general give primacy to the governing law contractually chosen by
the parties, particularly in commercial transactions. For instance, in August
2010, the Delhi High Court in the case of Piramal Healthcare v DiaSorin
S.p.A (MANU/DE/2099/2010) held that circumstances such as comparison of
litigation expenses in England and in India or the hardship of taking the
witnesses to the English Court, is insufficient to render a contractually agreed
forum as a FNC as they were foreseeable at the time of entering into the
contract.
The Supreme Court in the case of Modi Entertainment v. W.S.G. Cricket (AIR
19
2003 SC 1177) stated that only in exceptional circumstances, a contractually agreed
court (court of choice) can be declared as a ‘FNC’ through an anti suit injunction by
the court of natural jurisdiction. This anti suit injunction can be granted by the court
to prevent injustice if the scenario is such that it permits a contracting party to be
relieved of the burden of the contract. The exceptions include events since the date of
the contract which have made it impossible for the party seeking injunction to litigate
the case because the essence of the jurisdiction of the contractually chosen court no
longer exists, or the court does not exist at a later point of time or because of force
majeure (unforeseen events beyond the control of the parties).
International perspective
US and UK courts have traditionally recognized FNC, though it does not have
legislative backing. The courts generally evaluate whether a satisfactory alternate
court exists, which court has a greater connection to the case and factually analyze
how the convenience of the alternative court to one party weighs against the burden
placed on the other party.
Civil law countries, in general do not recognize the doctrine of FNC primarily due to
the lack of certainty of its application and the discretionary power given to the
judiciary. The case of Owusu v Jackson ([2005] QB 801 Case C 281/02) (“Owusu”) ,
is noteworthy since the Court held that the doctrine of FNC is incompatible with the
mandatory system of jurisdiction (wherein person may only be sued in the state in
which he or she is domiciled) established by the Brussels Convention.
The case of Owusu discussed above, has severely limited the power of the English
courts to apply FNC in the context where the Brussels Convention and EC Regulation
would apply. While responding to European Commission’s Report and Green Paper
on the EC Regulation, the United Kingdom has officially stated that it regrets the
inflexibility inherent in the ECJ’s decision in Owusu which it feels has to a great
extent disabled the valuable procedural mechanism of FNC which facilitates the
transfer of cases which would be more appropriately dealt with by the courts in
another jurisdiction.
20
Conclusion
An analysis of the doctrine of FNC is significant in the context of cross border
transactions.
Though FNC is primarily an equitable relief, valid concerns such as a lack of
predictability and clarity in the decisions of the courts do exist. Critics of FNC would
also argue that it aids forum shopping and protracting the litigation through
interlocutory applications. In the context of transnational cases, clear and simple rules
might reduce time and expense for the parties concerned rather than hoping for courts
to exercise the right amount of judicial discretion.
On the other hand, rules however comprehensive, cannot anticipate the vast range of
situations, which might arise, which necessitates some degree of judicial flexibility
and discretion. FNC can ensure fairness by coming to the aid of a poor defendant in a
third world country who is faced with litigation in a first world country, say by a
multinational corporation.
Lis alibi pendens is a Latin term that means an action on the same cause of action is
pending elsewhere. When two courts are hearing the same dispute they can reach
inconsistent decisions. Res judicata provides that a once a case is determined as final
only appeal can rise from the case. No party to the case can commence another case
on the same dispute in another court. When a case is pending, no other case on the
same issue can be commenced in another court. Lis alibi pendens arises from
international comity and it permits a court to refuse to exercise jurisdiction when there
is parallel litigation pending in another jurisdiction. However, when a case is filed
about materially different issues, documents, and parties, lis alibi pendens can not
apply to terminate the proceedings.
21
22
23
Anti-Suit Injunction
In a recently reported decision the Delhi High Court has taken stock of the various
decisions of the Supreme Court and English, American, Canadian and Australian
courts on the issue to elaborate upon the doctrine of anti-suit injunction as meaning
one wherein a court can direct a party not to pursue the matter before another
court.
The High Court inter alia explained the principles relating to anti-injunction suit in its
decision in HORLICKS LTD. AND ANR. v. HEINZ INDIA (PVT.) LIMITED in
the following terms;
17. The doctrine of anti suit injunction as applicable to international forums is not
disputed by the learned counsel for the parties; however, this doctrine has to be
applied with care and caution as it involves the issue of respect for corresponding
international forums.
24
18. The aforesaid legal position is abundantly clear in view of the judgment of the
Supreme Court in Modi Entertainment Network and Anr. v. W.S.G. Cricket Pte.
Ltd.; AIR 2003 SC 1177. It was observed in the said judgment that the courts in India
like the courts in England are courts of both law and equity and thus the principles
governing grant of injunction an equitable relief by the court would also govern grant
of anti suit injunction, which is a species of injunction. However, the rule of Comity
of Courts require this power to be exercised sparingly because such an injunction
though directed against a person in effect causes interference in exercise of
jurisdiction by another court. The test adopted by the House of Lords in Castanho v.
Brown and Root (U.K.) Ltd and Anr; (1981) AC 557 'to avoid injustice' was noted. A
reference was also made to SNI Aerospatiale v. Lee Kui Jak and Anr; (1987) 3 All
ER 510 and it was noticed that in recent cases the test is whether the foreign
proceedings are “oppressive or vexatious”.
20. The principles governing anti suit injunction were set out in Para 23 of the
Modi Entertainment Network and Anr. v. W.S.G. Cricket Pvt. Ltd case (supra),
which are as follows:
“From the above discussion the following principles emerge:
(1) In exercising discretion to grant an anti-suit injunction the court must be satisfied
of the following aspects: (a) The defendant, against whom injunction is sought, is amenable to the personal
jurisdiction of the court
(b) If the injunction is declined the ends of justice will be defeated and injustice will
be perpetuated; and
(c) The principle of comity -- respect for the court in which the commencement or
continuance of action/proceeding is sought to be restrained -- must be borne in mind;
(2) In a case where more forums than one are available, the Court in exercise of its
discretion to grant anti-suit injunction will examine as to which is the appropriate
forum (Forum conveniens) having regard to the convenience of the parties and may
grant anti-suit injunction in regard to proceedings which are oppressive or vexations
25
or in a forum non-conveniens;
(3) Where jurisdiction of a court is invoked on the basis of jurisdiction clause in a
contract, the recitals therein in regard to exclusive or non-exclusive jurisdiction of the
court of choice of the parties are not determinative but are relevant factors and when
a question arises as to the nature of jurisdiction agreed to between the parties the
court has to decide the same on a true interpretation of the contract on the facts and
in the circumstances of each case;
(4) A court of natural jurisdiction will not normally grant anti-suit injunction against
a defendant before it where parties have agreed to submit to the exclusive jurisdiction
of a court including a foreign court, a forum of their choice in regard to the
commencement or continuance of proceedings in the court of choice, save in an
exceptional case for good and sufficient reasons, with a view to prevent injustice in
circumstances such as which permit a contracting party to be relieved of the burden
of the contract; or since the date of the contract the circumstances or subsequent
events have made it impossible for the party seeking injunction to prosecute the case
in the court of choice because the essence of the jurisdiction of the court does not
exist or because of a vis major or force majeure and the like;
(5) Where parties have agreed, under a non- exclusive jurisdiction clause, to
approach a neutral foreign forum and be governed by the law applicable to it for the
resolution of their disputes arising under the contract, ordinarily no anti- suit
injunction will be granted in regard to proceedings in such a forum conveniens and
favored forum as it shall be presumed that the parties have thought over their
convenience and all other relevant factors before submitting to non-exclusive
jurisdiction of the court of their choice which cannot be treated just an alternative
forum;
(6) A party to the contract containing jurisdiction clause cannot normally be
prevented from approaching the court of choice of the parties as it would amount to
aiding breach of the contract; yet when one of the parties to the jurisdiction clause
approaches the court of choice in which exclusive or non-exclusive jurisdiction is
created, the proceedings in that court cannot per se be treated as vexatious or
26
oppressive nor can the court be said to be forum non-conveniens; and
(7) The burden of establishing that the forum of the choice is a forum non- conveniens
or the proceedings therein are oppressive or vexatious would be on the party so
contending to aver and prove the same.”
21. We may notice that the aforesaid judgment is relies on the earlier judgment of the
Supreme Court in Oil and Natural Gas Commission v. Western Company of North
America; (1987) 1 SCC 496. The said judgment was almost the first case where
exercising jurisdiction under Section 151 of the said Code, the power of anti suit
injunction was exercised.
The High Court, relying upon the decision of the Supreme Court in Cotton
Corporation of India Limited v. United Industrial Bank Limited and Ors; (1983) 4
SCC 625 went on to declare that the principles for grant of anti-suit injunction applied
in respect of domestic courts as well but only in a limited sense and thus even though
the court had inherent power to direct a party not to pursue remedies before another
Indian court as well, it cannot do so when the other court is one of co-ordinate or
superior jurisdiction in view of the provisions of Specific Relief Act wherein the
Parliament has provided otherwise.
Foreign Judgment
Foreign Court: Court situated outside India and not established or continued by the
authority of the Central Govt.
Foreign Judgment: Adjudication of a foreign court upon a matter before it.
Section 13 Embodies principle of Res Judicata in Foreign Judgments
Common rules adopted to adjudicate upon disputes with a foreign element, judgments
of foreign courts or as a result of international conventions.
Jurisdiction on a Foreign Court:
27
Foreign court must have jurisdiction, or else will not ne recognized or enforced in
India.
Jurisdiction- Territorial Competence of Courts
Foreign Judgments are binding except:
a. Where it has not been pronounced by a court of competent jurisdiction
b. Where it has not been given on the merits of the case
c. Where proceedings are founded on incorrect view of intl. law/ lack of
recognition of Indian law
d. Where proceedings are against natural justice
e. Where it has been obtained by fraud
f. Where it is sustained based on a breach of Indian law.
Foreign Judgment not by a competing court: Section 13(a)
Judgment passed by a court, which has no jurisdiction, is null and void. In case of
foreign judgments, a competent court both must make it by the law of the constituting
state and in an international sense it must have directly adjudicated upon the matter.
If suit dismissed in foreign country, fresh suit in India cannot be filed. If suit decreed
in foreign country, defendant precluded from putting in issues of same matters of
direct and substantial issue.
Gurdyal Singh v. Rajah of Faridkot:
28
Suit filed by A when B was neither residing nor domiciled in Faridkot. Hence
Faridkot had no jurisdiction, bases on mere personal claim. Had B resided at F, the
court would have full jurisdiction.
Court has no jurisdiction to pass a decree in respect of immovable property I a foreign
state.
Foreign Judgment not on merits: section 13 (b)
Merits- When judge looks at evidence and based on that decides the case therefore
judgments that take place due to lack of evidence or non-appearance of a party does
not equal to judgment on merits. Foreign judgment must be given on merits to operate
as res judicata.
Foreign Judgment against Intl. Law or Indian Law: section 13(c)
Judgments based on incorrect view of intl. law or refusal to recognize Indian law is
not conclusive. The mistake must be apparent prima facie.
Foreign judgment opposed to natural Justice: section 13 (d)
Judicial process needs to be observed without irregularities in procedure- impartial
persons, fair action, without bias etc.
Any judgment based on bias or partiality etc. is null and void.
Foreign Judgment obtained by fraud: section 13 (e)
Will not operate as res judicata
A.V. Papayya Sastry v. Govt. of A.P:
Defined fraud. Said that decree obtained by playing fraud is a nullity.
29
Satya v. Teja Singh:
Husband obtained decree of divorce from an American court claiming he was
domiciled there. On realizing that he was not S.C. declared decree to be null.
Foreign Judgment founded on breach of Indian law: section 13 (f)
Not enforced in India. Foreign law and judgment cannot offend our public policy.
Presumption as to Foreign Judgment: Section 14
Court presumes that judgment was pronounced by a competent court on the
production of any document claiming to be a certified copy of a foreign judgment
unless the contrary appears on record.
Narsimha Rao v. Venkata Laksmi:
Mere Photostat copy of judgment not admissible needs to be certified by a
representative of America’s central Govt.
Submission to Jurisdiction of Foreign Court:
Voluntary submission of party to jurisdiction of foreign court may be express or
implied. Question of submission is a question of facts and must be decided in light of
facts and circumstances.
If a court having jurisdiction in the matter delivers a foreign judgment, it would
operate as res judicata. It is conclusive as to matter adjudicated upon between same
parties subject to exceptions enumerated in Section 13 clause (a) to (f).
Difference between irregularities and not affecting foreign Judgment:
30
@lawkhabar
Former: decree passed by court is null
Latter: decree passed is merely irregular or wrong but not without jurisdiction and
cannot be ignored.
Enforcement of Foreign Judgment:
1. By instituting a suit on the judgment: court cannot go into the merits of the
original claim and is conclusive. Should be filed within 3 years of date of
Judgment.
2. By instituting execution proceedings: in specified cases mentioned in
SECTION 44-A, which states that if a decree of a superior foreign court has
been filed, the decree should be executed as if it had been passed by the Indian
court.
An award passed by a foreign arbitrator and enforceable in a country where it was
made is enforceable in India. Taking out execution proceedings in India may enforce
a conclusive foreign judgment.
Order and Decree
Decree – decision of the court with 5 elements:
(i)
There must be an adjudication (i.e. judicial determination of the matter in
dispute) the judicial determination must be made by a court. Thus an order
passed by an officer who is not a court is not a decree;
(ii)
Such adjudication must have been done in a suit (there is no definition of
suit in the Code, but in Hansraj Gupta v. Official Liquidators of The
Dehra Dun-Mussoorie Electric Tramway Co. Ltd. The word suit is defined
as ‘a civil proceeding instituted by the presentation of a plaint’. Thus,
every suit is instituted by the presentation of a plaint) – when there is no
civil suit, there is no decree;
31
(iii)
It must have determined the rights (substantive rights and not procedural
rights) of the parties (only the parties to the suit) with regard to all or any
of the matters in controversy (the subject matter of the suit with reference
to which some relief is sought – however, it covers any question relating to
the character and status of a party suing, to the jurisdiction of the court, to
the maintainability of the suit and to other preliminary matters which
necessitate an adjudication – interlocutory matters of procedure which do
not decide the substantive rights of the parties are not decrees) in the suit;
(iv)
Such determination must be of a conclusive nature (an order to dismiss an
appeal summarily under Order 41 is a decree inasmuch as it decides the
rights of parties conclusively – the crucial point which requires to be
decided in such a case is whether the decision is final and conclusive in
essence and substance. If it is, it is a decree); and
(v)
There must be a formal expression of such adjudication (the decree
follows the judgment and must be drawn up separately).
Test: To decide whether an order of a court is a decree the Court should take into
account pleadings of the parties and the proceedings leading up to the passing of an
order.
Decree- 1) Preliminary 2) Final 3) Partly Preliminary and Partly Final Decree
Deemed decree – This creates statutory fiction where the adjudication does not fulfill
the requirements of Section 2(2), and therefore is not a decree – but it can be
‘deemed’ to be a decree, and requires to be treated as such. Order 21 Rule 58, Rule
98 – deemed decrees. Also the adjudication under Section 144 (Restitution) is a
deemed decree.
Elements of a decree:
32
1. Adjudication
2. Suit
3. Rights of parties in controversy
4. Conclusive determination
5. Formal expression- all requirements must be complied with.
Deemed Decree: Order 21, Rule 58(3)
Order will have the same force and subject to same conditions of an appeal, as if it
were a decree.
Drawing up of a decree: Rule 6-A
Should be drawn up within 15 days from the date of judgment.
Decrees in special cases: Rules 9-19
Order – The adjudication of a court, which is not a decree, is an order. An order is
founded on objective considerations and as such the judicial order must contain a
discussion of the question at issue and the reasons, which prevailed with the court that
led to the passing of the order.
An order and a decree are similar. The adjudication of a court can be one or the
other, but not both.
The common elements are:
(1) Both relate to matters in controversy
(2) Both are decisions given by a court
(3) Both are adjudications of a court of law; and
(4) Both are formal expressions of a decision.
Differences:
33
•
A decree can only be passed in a suit that is instituted by the presentation of a
plaint – in the case of an order it can be passed even in a suit that originated
from an application or a petition.
•
A decree is an adjudication, which conclusively determines the rights of the
parties regarding the matters at controversy, but an order may not conclusively
determine such rights.
•
There cannot be a preliminary order.
•
In the case of a suit or proceeding, a number of orders can be filed, but in most
proceedings 2 decrees (preliminary and final) or 1 decree is filed;
•
Every decree is appealable unless expressly provided, but every order is not
appealable unless it is specified in the Code; and
•
There may be two appeals in the case of appealable decrees, but no Second
Appeal is possible in the case of appealable orders.
Institution of Suits
Elements of a suit:
1. Opposing parties
2. Subject- matter in dispute
3. Cause of action
4. Relief
ORDER 1:
Parties to a Suit
34
Plaint:
A private memorial tendered to a court in which the person sets forth his cause of
action, in writing.
Rule 1- Joinder of Plaintiffs
All persons may be joined in one suit as plaintiff if the 2 conditions are met:
1. Right to relief in each plaintiff arises out of the same act/ transaction
2. If the persons brought diff. suits, common questions of law/ fact would arise.
Rule 3- Joinder of Defendants
All persons may be joined in one suit as defendant if the 2 conditions are met:
1. Right to relief in each defendant arises out of the same act/ transaction
2. If the persons brought diff. suits, common questions.
Difference between:
Necessary Parties:
One whose presence is indispensible to the constitution of the suit, against which
relief is sought, without whom no effective order can be passed
Proper Parties:
In whose absence an effective order can be passed, but presence is necessary for final
decision.
Two tests to determine if a party is a necessary party:
35
1. Must be a right to relief against this party, in respect of the matter in question
2. Should not be possible to pass an effective decree in absence of this party
Rule 9When a person who is a proper or a necessary party has not been joined to the party to
the suit.
In case of proper parties, suit cannot be dismissed only on the grounds of mis/ nonjoinder. But in case of necessary parties, suit can be dismissed on that ground alone.
BUT in Prabhakar Rao v. State of A.P., S.C. held that interests of necessary parties
who had not been joined were identical with those who were and that they were
sufficiently and well represented and therefore the petition could not be dismissed on
that ground.
Rule 10: Striking out/adding/ substituting parties:
RULE 10(1) of Order 1: Adding or Substituting Plaintiffs
To bring a case within this, 3 conditions:
1. Filed under name of wrong person as plaintiff
2. Mistake is bona fide
3. Substitution/ addition of plaintiff necessary to determine real matter of dispute
RULE 10(2) of Order 1: Striking out or Adding Parties
On 2 grounds1. Person OUGHT to have been joined as plaintiff/ defendant, and is not
2. Without the presence of the person, the matter of the suit cannot be decided
RULE 10(2) of Order 1: Power and duty of court
36
@lawkhabar
2 considerations kept in mind before the court exercises its powers on joining parties1. Plaintiff is DOMINUS LITIS- best judge of his interest
2. If the court is satisfied that the presence of a particular person is necessary.
If a statue makes a person a necessary party and provides that non- joinder will cause
dismissal of petition, Court cannot use powers of Order 1 Rule 10.
Rule 8: Representative Suit:
It is a suit filed by/against one or more persons on behalf of themselves and
others having the same interest in the suit.
It is an exception to the general principle. When a number of persons are similarly
interested in suit, one/ more, with the court’s permission or order can sue/ or be sued
on behalf of the others. The plaintiff in a representative suit need not take prior
permission of other persons whom he seeks to represent.
ORDER 1 RULE 8- does not compel representation. If a person, himself has no right
to sue, he cannot proceed to sue on behalf of the others. It is merely an enabling
provision.
4 conditions for this rule to apply:
1. Parties must be numerous: Number of persons should be capable of being
ascertained.
2. They must have the same interest in the suit: Common interest, common
grievance. Need not be proprietary, joint or concurrent- they need not have the
same cause of action or interest arising from same transactions.
T. N. Housing Board v. T. N. Ganapathy- it was contended that representative
capacity could not be maintained as separate demand notices were issued
against each of the allottees, giving rise to separate cause of action. S.C. held
that all of them had the same interest.
37
3. The court must have granted permission: If this is not fulfilled, suit does
not become representative. Court has discretion- sufficient community of
interest is essential to adopt procedure laid down in RULE 8.
4. Notice must be issue to parties that are being represented: Duty of court to
ensure that notice is provided, that all persons print it in a newspaper that I
read.
A decree passed in a rep. suit is binding and acts as RES JUDICATA.
Costs may be paid out of the property belonging to the community represented in the
suit and court’s direction.
The decree is the same as is passed in a regular suit.
ORDER II: Framing a Suit
Rule 1-2The suit must include the whole of plaintiff’s claim, and as far as practicable all
matters should be disposed off finally
Rule 2Every suit must include the whole claim, and if the plaintiff omits to sue for or
intentionally gives up a part of his claim, he is not allowed to sue for that part later.
Relinquishment of claim may not be express; there could be implied conduct too. It
applies ONLY to suits.
Before the bar of ORDER 2 RULE 2 is invoked, 3 conditions should be satisfied:
1. Same cause of action in the second suit
38
2. Plaintiff was entitled to more than one relief based on that cause of action
3. Plaintiff, without leave of court, omitted to sue for the relief of second suit: If
omission is with permission of the court, the subsequent suit is not barred.
Rule 3Enables joinder of several causes of actions in one suit in certain circumstances like:
1. 1 Plaintiff, 1 Defendant, and Several causes of actions: Plaintiff can unite
several causes of actions. But if delay or embarrassment is apprehended, court
can separate trials
2. Joinder of Plaintiffs and Causes of actions: 2 or more P and several causes
of actions can be united. Must be read with ORDER 1 RULE 1.
2/ more P and 2/ more cause of actions, only on 2 conditions:
a) Cause of action arises from same act/ transaction
b) Common questions of law/ fact
3. Joinder of defendants and cause of actions: 1 P and 2/more causes, P can
unite only if D are jointly interested in the causes of the action. Should be read
with ORDER 1 RULE 3.
2 or more Ds can be joined on 2 conditions:
a) Relief claimed based on same act/ transaction
b) Common questions of law/ fact
4. Joinder of Ps, Ds, and causes of action: If plaintiffs are not jointly
interested, suit will be barred for misjoinder, if defendants are not jointly
interested, suit will be barred for multifariousness.
Rule 4:
39
Plaintiff cannot join claim, without permission, EXCEPT:
1. Claims for mesne profits or rent in respect of property/ any part claimed
2. Claims of breach of contract under which property/ any part is held
3. Claims involving same cause of action
RULE 5:
Deal with suits by/ against administrators, executors and heirs
No claims shall be joined with them unless:
1. In case of personal claims regarding the estate he represents
2. He was jointly entitled/ liable with the deceased whom he represents.
Order IV:
Institution of Suits
Section 26 Order 4 Rule 1:
•
Plaint must be presented, but plaintiff, advocate or agent.
•
Must be presented to the court of an appointed officer.
•
Plaint is then scrutinized by the Stamp Reporter after, which suits are
numbered
•
Must contain necessary particulars, which will be entered in the register of
civil suits.
Order V:
Sections 27-29: Summons
Summons must be sent to defendant when suit is filed, to intimate that the suit has
been filed, and intimating him to appear before the court. (Section 27 and Order 5)
Rules 1-2:
Every summons to be signed by judge and be sealed with the seal of the Court. Must
also be accompanied by plaint.
40
Section 27, Order 5, Rule 1:
When summons is served, defendant must appear in court 30 days from date of
service of summons and file his written statement. No summons if defendant present
at time of presenting plaint.
Rule 3: Appearance of defendant, where the court requires personal appearance of
the defendant. The court makes the order of appearance.
Exemptions from appearance: Sections 132-33, Rule 4
Rules 5-8:
Contents of summons-sufficient time to appear before court and answer claim;
directions to produce his witnesses; order to produce all documents in his possession,
which he intends to rely on in the case.
Rules 9-30:
Service of summons
Wherever possible, summons must be delivered to defendant in person. Summons
may be served to a family member of the defendant when there is no likelihood of
finding him at his place of residence. Servant is not a family member. Summons may
be served on the agent in charge of immovable property, if suit is for immovable
property, and defendant cannot be reached personally. In case of two defendants,
both of them must be served. Summons may be served to person’s business manager
or agent, when person does not reside in court’s jurisdiction, and suit is against
business. Delivering party must make service of summons. Acknowledge and
delivery both must be recorded.
Rule 9:
41
Service by Court-Summons can be served by approved courier service, registered
post, speed post, acknowledgment due (RPAD), courier service, fax, message, email
or any other possible means of transmission. Refusal of acceptance is valid service.
When defendant outside court’s jurisdiction, summons to be served by an officer of
the court within whose jurisdiction he resides.
Rule 9-A:
Plaintiff could make Service of summons
Rules 17, 19-20: Substituted service of summons.
Rules 21-30: Service of summons in special cases
Order VI:
Pleadings Generally
Rules 1-18
Pleading is a plaint or written statement. Statements drawn up and filed by a party,
stating his contentions, and all relevant details his opponent ought to know.
Plaintiff- Pleading is plaint. Cause of action set out with all the particulars.
Defendant- Pleading is written statement. Every material fact alleged by plaintiff dealt
with, along with new facts and any objections to claims.
Object of pleadings is to bring both parties on the same page insofar as the issues are
concerned. Virendra Kashinath v. Vinayak N Joshi AIR 1999 SC 162-two fold
objective, to appraise the other side about the facts and issues, and allow court to
determine what the issue between the parties is.
Rule 2:
•
Only facts and not law
42
•
Material facts only (facts that are necessary to set up the case of the party)
•
Evidence should not be stated
•
Facts should be stated in concise form with sufficient precision and brevity.
No ambiguity.
Rule 4:
In case of fraud, misrepresentation, breach of trust, etc.; material facts as well as
particulars need to be furnished in pleadings.
Rule 6:
Condition precedent implied in the material facts, no need to specifically state it. Nonperformance of such condition however, needs to be specifically pleaded.
Rule 7:
No departure of pleadings, except by way of amendment.
Rule 8:
Bare denial of contract only denial of fact of contract, not its legality, validity or
enforceability by the defendant
Rule 10:
Malice, Fraudulent intention, knowledge or any other mental condition to be alleged
only as a fact without giving circumstances
Rule 11:
When notice is at stake, only state the giving of such notice, not how or when it was
given.
43
Rule 12:
Implied contracts/relations may be pleaded as a fact, and the circumstances from
which they are inferred are to be pleaded generally.
Rule 13:
Facts presumed or burden of proof need not be stated.
Rules 14-15:
Pleading should contain address, verified and signed.
Rule 16:
Court may strike out unnecessary, vexatious, frivolous, unnecessary pleadings.
Rule 17:
Court may allow amendments to pleadings.
Bharat Singh v. State of Haryana AIR 1988 SC 2181
Pleading should contain material facts as well as the evidence in support
Ram Sarup v. Bishnu Narain Inter College
By and large, Courts should construe pleadings liberally, where they should focused
more on the substance than on the rigor of the form.
Sathi Vijay Kumar v. Tota Singh (2006) 13 SCC 353
Power of Court under rule 16 to strike out pleadings is extraordinary in nature and
caution must be exercised.
44
KC Kapoor v. Radhika Devi AIR 1981 SC 2118
Objection to pleading should be taken at the earliest.
State of AP v. Pioneer Builders AIR 2007 SC 113
Power to amend pleadings under rule 17 not exhaustive of the Court’s power in that
regard. Wide discretion given to Court to allow amendments, however, it must meet
the ends of “justice”.
Sampath Kumar v. Ayyakannu (2002) 7 SCC 559
Merits of amendments not to be discussed at time of discussing the prayer for
amendment, original cause of action should not be completely altered by amendment.
Inconsistent facts or contradictory allegations cannot come in by way of amendment.
Delay should be compensated by costs.
Reasons for allowing/disallowing the amendment must be properly suitably recorded.
Res judicata doesn’t apply. No appeal lies, either. Revision however, is possible.
Time extension granted for amending pleadings may be granted at court’s discretion.
Order VII:
Plaint
Particulars: Rules 1-8
Name of court; Names and addresses of plaintiffs; facts constituting cause of action,
reliefs claimed by plaintiff; details of set-off; precise amount in case of recovery of
money; description of property; interest and liability of defendant; grounds upon
which exemption from limitation is claimed, if any; approximate valuation of
movable parties; statement of value of subject matter; specifying if plaintiff/defendant
is minor or of unsound mind.
45
Rule 8Sadanandan v. Madhavan AIR 1998 SC 3043
Cause of action is the bundle of essential facts that the plaintiff must prove in order to
succeed, every fact necessary to establish in order to obtain a judgment. Time of
cause of action arising must also be specified. Distinct causes of action in respect of
distinct claims must be stated separately.
Amarjit Singh v. Khatoon Quamarain AIR 1987 SC 741
Reasons for jurisdiction must be stated. Relief founded on different claims must be
set forth separately. Once one relief is omitted from the set of reliefs, no ground to ask
for the omitted reliefs later. Reliefs can be asked for either simply or in the
alternative. Relief granted cannot be greater than that claimed by court even if he is
entitled to it. Subsequent events might be taken cognizance of to give plaintiff to
amend his relief, if the Court finds them material.
Rule 10Court can return plaint to the party.
Rule 11Plaint can be rejected on the following grounds-
•
Where there is no cause of action
•
Where the relief claimed is undervalued
•
Where the plaint is insufficiently stamped
•
Where the suit is barred by law
•
Where the plaint is not filed in duplicate
•
Where other statutory provisions are not complied with
46
•
Other grounds- this list is not exhaustive-There is other relevant grounds, like
a vexatious or mischievous claim, for example.
Rule 12Procedure to reject plaint must be followed and reasons must be recorded by court.
Rule 13Effect of rejection of plaint has been discussed. Plaintiff can still present a fresh
plaint after initial rejection. Order is appealable.
Rules 14-17The plaintiff must produce documents that the plaintiff seeks to rely upon at the time
of filing the plaint.
Order VIII:
Written Statement, Set Off and Counter Claim
Rule 1:
Salem Advocate Bar Association (II) v. Union of India (2005) 6 SCC 344
Time limit of 90 days to file written statement is directory, not mandatory. Court has
power to extend the time limit, in cases it deems exceptional.
Rules 1-5; 7-10:
General rules of pleadings apply here in same fashion. Special rules of defence over
and above general rules: New facts that the plaintiff would not expect to be raisedvoid transaction; other grounds of defence etc. must be raised.
47
@lawkhabar
Badat & Co. v. East India Trading Co. AIR 1964SC 538
Denial must be specific. Each allegation must be dealt with specifically. No vague or
evasive denial. Court could construe evasive denial as admittance of a fact.
Balraj Taneja v. Sunil Madan AIR 1999 SC 3381
Court could pass decree in his absence if he does not file Written Statement in given
time. Separate claims of counter-claim and set-off need to be stated distinctly.
However, the Court may not grant decree against the defendant merely because no
WS has been filed. Facts in the plaint also need to be proved and Court needs to be
convinced that a judgment can be passed in favor of the plaintiff.
Rule 6:
Set-off
Set-off is a cross-claim for money that partly offsets the original claim. Available to
DefendantsTwo kinds:
•
Legal set-off, and,
•
Equitable set-off
Rule 6 deals with legal set-off- Not exhaustive provision and does not prevent Court
from allowing independent adjustment of Rule 6.
Conditions:
•
Suit for recovery of money;
•
Sum of money be ascertained;
•
Sum must be legally recoverable, must be recoverable by defendant(s);
•
Must be recoverable by defendants from plaintiffs;
48
•
Must not exceed pecuniary jurisdiction; both parties must fill in defendant’s
claim to set-off
Defendant is put in the position of a plaintiff with respect to the amount claimed as
set-off. Two suits, tried together. Plaintiff’s suit failing for any reason does not affect
defendant’s claim for set-off, which he can still claim by proving.
Equitable set-off also allowed under the law, for an unascertained sum of money,
provided the cross-claims arise out of the same transaction. Even a time-barred claim
may be allowed if there is fiduciary relationship between parties. Order 20, Rule
19(3) allows equitable set-off.
Rules 6A-G: Counterclaim
Counterclaim is a claim made by the defendant in a suit against the plaintiff.
Cross-action, where defendant has to have a claim for a separate suit.
Modes of setting up counterclaim:
i.
Written statement filed under Rule 1
ii.
Amending written statement with Court’s permission
iii.
Subsequent pleading under Rule 9
Rohit Singh v. State Of Bihar AIR 2007 SC 10
•
Counterclaim may be filed against co-defendants as well, but not solely
against co-defendants.
•
Counterclaim of defendant to be treated as plaint. Counterclaim decided on
merits irrespective of fate of plaintiff’s suit. If no reply from plaintiff, then
Court may pronounce judgment against plaintiff in his absence.
49
•
Unlike a set-off, it’s not a defence. It’s a cross-action. Amount must be
recoverable at the date of written statement; unlike set-off, where it must be
recoverable at the date of suit
Order 11:
Discovery
Discovery by Interrogatories (Rules 1-11)
Party to a suit may administer to the other side a series of questions to acquire
information relating to facts. These questions are called interrogatories.
Purpose is to ascertain the nature of the opponent’s case for supporting one’s case or
for destroying the other side. This power should be exercised liberally without the
restrictions of technicalities.
Raj Narain v. Indira Gandhi AIR 1972 SC 1302
A plaintiff to a defendant, or vice-versa may administer interrogatories.
General principles:
Rule 1:
Interrogatories administered with leave of the court and subject to the conditions and
limitations prescribed by the court. (Section 30) May be administered by one plaintiff
to another plaintiff to another or by a defendant to another, provided there is some
issue between them.
More than one set of interrogatories may not be delivered, unless ordered by court,
which might, in special cases, allow more than one set to be administered to the same
party.
Rule 2:
50
Particulars of interrogatories to be submitted to court, which Court shall decide on
within 7 days of filing application
Rule 3:
Costs of interrogatories to be borne by party administering, but party at fault may be
asked to bear cost of interrogatories of the other party.
Rule 5:
Where party is corporation or body of persons, interrogatories may be delivered to an
officer/member of the body.
Rule 6:
Interrogatories must be related to or have a reasonable nexus with any matter in
question in the suit. Interrogatories may be objected to if they are scandalous,
irrelevant, mala fide, privileged, etc. Must be questions of fact.
Interrogatories, which do not relate to any matter in the suit, may be treated as
irrelevant.
Rule 11:
If no answer given to interrogatories, suit could be dismissed, or defence could be
struck off.
Discovery of Documents: Rules 12-14
Rule 12:
A party can apply to the Court to compel the opposite party to disclose any documents
in their position or power relating to any matter in question in the suit.
If court makes order, other party must comply to make an affidavit, failing which
penalties of Rule 21 apply.
51
Two conditions:
•
Necessary for fair disposal of suit,
•
For saving costs
Central Bank of India v. Shivam Udyog AIR 1995 SC 711
Any Document that throws any light on the matter in the proceeding is a document
relevant to the matter in question. Any document, which may be directly or indirectly
enable a party to advance his case, is a relevant document. But if documents are
irrelevant/immaterial, then application could be rejected.
Central India Spg. Wvg. & Mfg. Co. Ltd. v. Gip Rly AIR 1927 Bom 367
Document needs to be admissible in evidence, but it cannot be a document, which is a
part of the other party’s evidence.
Rule 13:
A party against whom discovery of documents has been ordered is bound by the order
to produce documents. He can object on the grounds that he is entitled to legal
protection with respect to the document.
If such an objection is made, Court may inspect the document, for the purpose of
deciding the validity of the claim of privilege, unless it relates to matters of state.
(Rule 19)
Inspection of Documents: Rules 15-19
Two categories: Documents referred to in pleadings/affidavits; other documents in
possession that are not mentioned in pleadings.
Rules 17, 18:
52
Documents referred to in the pleadings can be demanded for inspection without
Court’s intervention. Within 10 days, other party should make documents available
for evidence. If he fails to do so, the Court may make an order of inspection.
Rule 18(2):
The other documents can only be obtained by an application to the Court along with
affidavit outlining the reasons.
Rule 19(2):
Confidential documents: Confidential communications b/w lawyer and client; public
official records relating to affairs of state. If such privilege is claimed, Court may
inspect documents to examine the validity of such a claim.
Rule 20:
The court may classify a discovery as premature and postpone it. It is premature when
the documents relate to an issue or matter that is yet to be decided by the court. The
issue shall be decided before discovery is allowed in this case.
Non-compliance with an order for discovery may result in suit being dismissed or
defence being struck off. However, there needs to be a notice and a reasonable
opportunity to be heard before such order is passed. (Order 21)
Babar sewing Machine Co. v. Triloki Nath Mahajan AIR 1978 SC 1436
This power should be exercised only in the most exclusive cases as a last resort.
Order 12:
Admissions:
53
Rule 1:
A party on notice may give admission
Rule 2, 3, 8:
Post discovery/inspection, any party may be called to admit the genuineness of any
document. In case of refusal/neglect to admit this, costs to prove genuineness shall be
borne by the party neglecting/refusing.
Rule 2A:
Any document, which is required to be admitted is not denied specifically is said to be
admitted against the other party. The Court however, at its discretion, may ask for that
document to be proved otherwise in court.
Rules 4-5:
Notice to admit facts: A party may be asked to admit certain facts for the purpose of
the suit mentioned in a notice to be filed not less than 9 days before date fixed for
hearing. If the party refuses/neglects to admit such facts, then cost of proving the facts
lies on that party. Admission must be accepted or rejected as a whole.
Rule 6:
Judgment on admissions
Court can pronounce a judgment on the admission made by parties, without waiting
for a determination of any other question between the parties.
Razia Begum v. Sahebzadi Anwar Begum AIR 1958 SC 886
This power is however, discretionary, and the Court may choose to ask for clear
proof, even for admitted facts.
54
Order 13
Production, impounding and return of documents
Rule 1:
Production of documents
Rules 1(1), 1(2):
Parties must produce all documentary evidence in original, on or before settlement of
issues. The court must also receive such documents.
Billa Jagan Mohan v. Billa Sanjeeva (1994) SCC 659
The court has the power to receive any document at a later stage if the genuineness is
beyond doubt and it is relevant/material to decide the real issue in controversy. No
documents, public or private, which are above suspicion, should be excluded if they
are necessary for the exclusion of the case.
Rule 4:
Particulars on documents admitted: number and title of suit; name of person
producing document; date on which produced; statement of its having been admitted.
Rules 7:
Documents not admitted in evidence to be returned to person producing them.
Rule 9:
Allows for return of a document to a party producing it after the suit or appeal, or
even during the pendency of suit provided the necessary undertaking to produce
original when required is filled.
55
Rules 3, 6:
Rejection of documents-The court may reject any documents it considers immaterial
or irrelevant after recording the reasons to do so.
Rule 8:
Enables courts to impound a document for sufficient cause, and keep it in the custody
of the court for such conditions and period it deems fit.
Affidavits: Order 19
Essentials: declaration made by a person; must relate to facts; must be in writing;
must be in first person; must have been sworn or affirmed before a Magistrate or any
other authorized officer.
Must state facts that one is able to prove to personal knowledge. Rule 3(1) allows the
deponent to state facts in interlocutory applications, which are based on belief. The
court can, under Rule 1 order for any fact to be proved by way of an affidavit, subject
to the right of the other party to produce the deponent for cross-examination. (Rule 2)
Order 14:
Issues
Rule 1:
Issues are material propositions of fact or law affirmed by one party and denied by the
other.
Rule 2:
Court must pronounce judgment on all issues. Issue regarding jurisdiction must be
tried and heard as a preliminary issue.
56
@lawkhabar
State of Gujarat v. Jaipalsingh Jaswant Singh Engineers and contractors
Issues are the guiding force in the conduct of the trial, from the evidence to the
judgment.
Rule 3: Materials for framing issues-
•
Allegations on oath made by parties through their pleadings or otherwise;
•
Answers to interrogatories;
•
Documents produced by parties.
•
Issues- Fact and Law
Rule 4:
Court may examine witnesses or documents before framing issuesThe court may be compelled to order production of documents or attendance of a
person if it cannot frame proper issues without the above happening.
Rule 5:
The court may amend issues or even strike out issues at any time it deems fit.
Rule 6:
A question of law or fact may by agreement be stated in an issue. Where parties agree
in writing then the court on reaching its judgment can-
•
Sum of money may be transferred
•
Some property over which the dispute arose may be transferred
•
One or more of the parties may abstain from doing something
Rule 7:
57
If the court is satisfied that the agreement was executed in good faith-
•
Agreement was duly executed by the parties
•
They had substantial interest in the question
•
The same is fit to be tried and decided
Order 18:
Hearing of Suit and Examination of Witnesses
Rule 1:
The plaintiff has the write to begin unless the defendant admits the facts as alleged by
the plaintiffs.
Incase the defendant disputes the facts or law alleged by plaintiff, he has the right to
begin.
Rule 2:
The day the case is to be heard the parties to the case that have to begin shall produce
before the court evidence in support of the issues he is bound to prove. Then the other
party does the same.
A copy of arguments shall be furnished to the other party as well. The court can fix
time limits for oral arguments as well as it deems fit.
Rule 3:
Where several issues are involved, rule 3A deals with the situation when a party
himself wishes to appear as a witness he has to appear himself before witnesses on his
behalf appear.
58
Trial in open court- Section 153-B
Evidence of witnesses is taken orally in open court.
Trial in camera- contradictory to trial in opens court, but may be a requirement in
some cases.
Rules 4- 13: Recording of evidence:
After a 2002 amendment, the court commissioner can now record oral evidence. This
is eventually submitted to the court.
In appealable cases, the judge takes down the evidence in the language of the court/
English, which is read to the witness, interpreted and then signed by the judge.
In non- appealable cases, the judge can mechanically record the evidence.
Rule 15: Evidence recorded by another Judge:
Successor may deal with the evidence and proceed with the suit, if the judge cannot
do so.
Rule 16: Examination de bene esse
Examination of a witness before hearing, due to reasons such as if he is leaving the
jurisdiction of the court or reasons established before the court, which can lead it to
believe why the evidence needs to be taken immediately.
Oral Arguments: Rule 2 (3-A, 3-D)
Court may allow parties to orally argue after fixing a time limit at its discretion.
Written Arguments: Rule 2 (3-A, 3-B, 3-C)
Court may allow a party to submit written arguments a copy of which is supplied to
the other side.
59
Order 19
Affidavits:
Essentials: Declaration made by a person; must relate to facts; must be in writing;
must be in first person; must have been sworn or affirmed before a Magistrate or any
other authorized officer.
Rule 2:
Must state facts that one is able to prove to personal knowledge. Rule 3(1) allows the
deponent to state facts in interlocutory applications, which are based on belief.
Rule 1:
The court can, under Rule 1 order for any fact to be proved by way of an affidavit,
subject to the right of the other party to produce the deponent for cross-examination.
Order 20
Judgment and Decree
Rule 12:
Decree for Possession and Mesne Profits
Where the suit is for the recovery of possession of immovable property and rent or
mesne profits then the court may pass a decree-
•
Possession of property
•
Rents arising out of the property
Rule 13:
60
Where a suit is for an account of any property or for its due administration under the
decree of the court, the court shall before passing the final decree pass a preliminary
decree ordering such accounts and inquiries to be made.
Rule 14-16:
•
Decree in pre-emption suit- Where a court decrees a claim to pre-emption in
respect of a particular sale of property
•
Decree in a suit for dissolution of partnership- Dissolution or taking of
partnership accounts then a preliminary decree may be filed.
•
Decree in suit for account between principal and agent- Court directs passing
of a preliminary decree
Rule 18:
Decree in Suit for Partition of property or separate possession of a share thereinIn so far as such decree relates to any other immovable property or to a movable
property, the Court may if the partition or separation cannot be conveniently made
without further inquiry pass a preliminary decree declaring the rights of various
parties.
Order 38Arrest Before Judgment:
Rules 1-4:
Court has the power to issue a warrant to arrest the defendant and bring him before
the court to show cause why he could not furnish security for his appearance. He can
avoid being arrested if he pays the entrusted officer the sum specified in the warrant.
2 conditions to be satisfied before the court exercises it power:
61
1. Plaintiff’s suit must be bona fide & cause of action unimpeachable to his
proving the allegations
2. That unless this power is exercised, the defendant will remove himself or his
property from the ambit of the powers of the court
Rules 2-4:
Security:
Court can order defendant to deposit court money or property sufficient to the claims
against him or furnish security for his appearance at any time when called upon.
Failing to do so, the court can commit him in civil prison until the decision of the suit,
or till when the decree is executed.
An order for arrest of a defendant before judgment cannot be obtained in any suit for
land or immovable property in clauses (a) to (d) of SECTION 16. Thus there can be
no arrest.
An order passed under RULE 2, 3 or of OREDER 38 is APPEALABLE.
Under RULE 1 of ORDER 38, an order of arrest made can be considered to be ‘case
decided’ under SECTION 115, and is REVISABLE.
Arrest on insufficient grounds: Section 95
If an order of arrest of the defendant is obtained on insufficient grounds by the
plaintiff, the court can order the plaintiff to pay a compensation amount not exceeding
Rs. 50, 000 for the expense or injury including injury to reputation caused to him.
Rules 5-13:
Attachment Before Judgment:
To prevent any attempt on the part of the defendant to defeat the realization of the
decree that may be passed against him.
62
Sardar Govindrao v. Devi Sahai- S.C. observed that sole object behind the order
levying attachment before judgment is to give assurance to the plaintiff that his
decree if made would be satisfied.
Rule 5:
Grounds:
The plaintiff can specify the property required to be attached, unless the court directs
otherwise. Court may also direct conditional attachment.
If an order is made not complying with RULE 5(1), it is void.
Provisions of ORDER 21 also apply to attachment before judgment- EXECUTION
PROCEEDINGS.
The court should be satisfied with 2 conditions before passing such an order:
1. That the defendant is about to dispose off whole or part of his property
2. That the disposal is with the intention of obstructing or delaying the execution
of the decree
3. An order passed under ORDER 38 RULE 5 is APPEALABLE.
Rule 7:
Mode of attachment:
In the same manner provided for attachment of property in execution of a decree.
Rule 8:
Adjudication of claims:
Any claims preferred to the property attached before judgment, shall be adjudicated
upon as in case of claims to property attached in execution of a decree for payment of
money.
63
Rule 9:
Removal of attachment:
If the defendant furnishes security or the suit is dismissed
Rule 10:
Rights of third party:
If they are not parties to the suit, rights of persons existing prior to the attachment
does not get affected.
Rule 11:
Reattachment in execution:
Provisions of ORDER 21 apply to an attachment made before judgment, continuing
after judgment.
Rule 12:
Exemption from attachment:
No agricultural land in the possession of an agriculturist.
! The plaintiff DOES NOT get title by effecting attachment before judgment.
! An order guaranteeing or refusing attachment before judgment is a case
decided within the meaning of SECTION 115 and is revisable by the H.C.
A suit for damages is maintainable for wrongful attachment of property.
Attachment on insufficient grounds: Section 95
If an order of attachment before judgment of the property of the defendant is obtained
on insufficient grounds by the plaintiff, the court can order the plaintiff to pay a
compensation amount not exceeding Rs. 50, 000 for the expense or injury including
injury to reputation caused to him.
Order 39
64
Rules 1-5:
Temporary InjunctionsIt is a judicial process whereby a party is required to do or refrain from doing any
particular act or orders him to do a particular act.
They are issued during pendency of proceedings at maintain status quo at the time of
the proceedings.
Types:
1. Temporary: Restrains a party temporarily from doing the specified act and
can be granted only till the disposal of the suit till further orders of the court.
(ORDER 39)
2. Permanent: Restrains a party forever from doing the specified act and can be
granted only on merits at the conclusion of the trial after hearing both parties
to the suit. (SECTIONS 38- 42 of SPECIFIC RELIEF ACT)
Both plaintiff and the defendant can apply for interim injunction against the other and
can be granted against only a party to the suit, no third person or officer etc.
Rule 1:
Grounds:
Temporary injunction can be granted in the following:
1. Property in dispute in danger of being wasted, damaged, alienated or
wrongfully sold
2. Defendant threatens/ intends to remove/ dispose property to defraud his
creditors
3. Defendant threatens to dispossess the plaintiff or cause any injury to them
relating to the property
4. Defendant about to commit breach of contract
5. Interest of justice so requires
65
Principles:
It’s at the discretion of the court. Court must be satisfied about the following to pass a
temporary injunction:
1. Prima Facie Case: Applicant must make out a prima facie case in support of
the right claimed by him.
2. Irreparable injury: Applicant will suffer from irreparable injury if the
injunction is not granted
3. Balance of (in) convenience: Balance of convenience must be in favor of the
applicant; the hardship caused to the applicant by refusing the injunction will
be greater than that which is caused to the opposite party by granting it.
4. Other factors: Injunction may be refused on the grounds of delay, laches or
acquiescence or if the applicant has not come with clean hands or where
monetary compensation is adequate.
Inherent power to grant Injunction: RULE 1 ORDER 39. In case Order 39 does
not cover that, the court in exercise of inherent powers under SECTION 151 can grant
interim injunction.
Rule 3:
Ex parte Injunction:
Requires the plaintiff to issue a notice to the opposite party before the injunction is
granted. Court has the power to grant an ex parte injunction without issuing a notice.
Notice is given to the opposite party by the court before granting an injunction.
! Interim orders have no precedential value
! Res Judicata applies to different stages of the same suit; hence if an interim
injunction is once granted/ refused, the order will operate throughout the
proceeding.
66
! When a court grants interim injunction, which results in injustice to the
opposite party, it is not only the right, but also the duty of the court at the time
of passing the final order to undo the injustice and restore the STATUS QUO.
An order granting/ refusing to grant injunction is subject to appeal, even if it is ex
parte.
An order granting/ refusing to grant injunction is a case decided under SECTION 115
hence giving way to a REVISION.
SECTION 94(c) and RULE 2-A:
Breach of Injunction:
Penalty may be either arrest (Not more than 3 months) or attachment of his property
(not more than one year) or both.
Section 95
Injunction on insufficient grounds:
If an order of temporary injunction has been obtained on insufficient grounds by the
plaintiff, the court can order the plaintiff to pay a compensation amount not exceeding
Rs. 50, 000 for the expense or injury including injury to reputation caused to him.
Interlocutory Orders: Order 39 Rules 6-10
Court has power to order sale of any movable property which is the subject matter of
the suit or attached before judgment which is either perishable or has sufficient case
to be sold at once.
It can also order for detention, preservation or inspection of any property, which is the
subject matter of the suit or as to which any questions may arise.
67
Order 40:
Receiver:
Receiver is one who receives money of another and renders account. An impartial
person appointed by the court AT ITS DISCRETION to collect and receive, pending
the proceedings, the rents, issues and profits of land, or personal estate which it does
not same reasonable to the court that the other party should collect or receive.
Appointment: Rule 1(a)
Principles before appointing a receiver:
1. Its at the discretion of the court
2. It is a protective relief, to preserve the property in dispute.
3. Not unless the plaintiff prima facie proves that his chances of succeeding are
very high.
4. ONLY granted for the prevention of the manifest of a wrong
5. It should be in common interest to appoint a receiver
6. Conduct of party who makes application of appointment of a receiver should
be carefully looked into.
Powers: Rule 1(d)
Powers of the receiver:
1. To institute and defend suits
2. To realize, manage, protect, preserve and improve the property
3. To collect, apply and dispose off the rents and profits
4. To execute documents
5. Such other powers as it thinks fit
He cannot be sued without the leave of the court.
68
Duties: Rule 3
Furnish security as court thinks fit to account for what he shall receive as property.
Has to pay amount due from him as per direction of the court.
He is bound to discharge his duties personally and not delegate work.
Liabilities: Rule 4
Receiver is expected to exercise the same diligence in keeping down expenses and in
caring for the estate in his possession as if it were his own property. If he fails to
submit accounts/ pay the amount due/ causes loss to property, court can direct his
property to be attached and sold and get the money due from him.
The court can even remove the receiver from his post.
Appeal: an order appointing or refusing to appoint a receiver is appealable.
Revision: An order passed on an application appointing or refusing to appoint a
receiver is a case decided under SECTION 115 hence giving way to a REVISION.
Hence where no appeal lies, the revision is maintainable.
Interest: Section 34
Charge that is paid to borrow for use of money
Interests awarded by the court are divided as below:
1. Interest prior to filing of the suit: Only when there is an agreement bet. Parties,
expressed or implied, or under statutory provisions
2. Interest from the date of the suit to the date of the decree: At the discretion of
the court.
3. Interest from date of decree till the payment: Discretion of the court
Rate of interest:
69
Is at the discretion of the court. In case of an agreement, the court awards interest
accordingly.
Compound interest is not allowed by the court under Section 34, but can be altered
if there is an agreement. In some cases, inflation is considered too.
When the decree does not provide for interest, it will deemed to have been refused.
Interest in writs: Under Art. 32, 226, 227, 136
Costs: Section 35, 35-A, 35-B, ORDER 20-A
General costs: Sec. 35- Litigation expenses
Misc. Costs: Order 20-A- Expenses incurred in giving notices, typing charges,
inspection of records etc.
Compensatory costs: 35-A
Costs for causing delay: 35-B- to put a check on delaying tactics of litigating parties.
Appeals
Sections 96, 100, 104, 109-Right of appeal
Sections 96-99, 107: First appeals
Order 41
Essentials of appeal:
! A decision;
! A person aggrieved;
! A reviewing body ready and willing to entertain appeal.
Deep Chand v. Land acquisition Officer AIR 1994 SC 1901
70
Right of appeal not inherent right it is a creation of statute. It is a substantive right, not
a right of procedure. As a creation of statute, conditions can always be imposed on the
exercise of such a right. Vested right, which exists from the date the lis commences
and is to be governed by the law prevailing at the date of the institution of the suit.
Ramankutty v. Awara (1994) 2 SCC 642
An appeal is a continuation of a suit. Decree passed by an appellate court will be
construed as a decree of the court of first instance. Appellate court possesses the same
powers and duties as a court of first instance. The appellate court can come to its own
conclusion on the matter after reviewing the evidence as a whole and conduct the
entire proceedings before the court again.
Difference between Appeal and Revision:
Right of appeal carries with it a right of rehearing of law and fact; right of revision
granted to superior court so that it may satisfy itself that a particular decision has been
decided according to law. The right of revision does not allow the High Court to
substitute its own view for the view of the original court.
First appeal lies against a decree passed by a court exercising original jurisdiction;
while a Second appeal lies against a decree passed by a first appellate court.
First appeal can be filed in a Court, who may or may not be a High Court; Second
appeal is only applied to a High Court. First appeal can be filed in a mixed question of
fact and law whereas second appeal only on a substantial question of law.
Section 96
Under this section, two conditions for appeal:
•
Subject matter of appeal must be a ‘decree’ under Section 2(2);
•
Party appealing must have been a party adversely affected by such a decree.
71
State of Punjab v. Amar Singh AIR 1974 SC 994
Normally, only a party to a suit may be adversely affected by a decree, but another
person who is not a party to a decree may prefer an appeal against the court is he is
prejudicially affected by it.
NoteA plaintiff against another plaintiff can file an appeal if the matter in controversy in
the suit forms subject matter of the dispute between the plaintiffs. Similar principle
applies to appeal filed by defendant against another defendant.
Ameer Ali v. Inderjit Singh (1871) 14 Mia 203 (PC)
A party cannot file an appeal if he waives his right to appeal or agrees not to file an
appeal, provided such agreement is valid in law. However, where there is no statutory
right of appeal, no appeal lies even with agreement of the parties
Section 96(2) allows the defendant to file an appeal against a decree passed ex parte
against him. In such an appeal, the appellate court is competent to go into the question
of propriety or otherwise of the ex parte decree.
Section 96(3) disallows any appeal against a consent decree. Once a decree has been
passed with the consent of both parties, 96(3) becomes operative and binds them,
acting as an estoppel between the parties.
Section 96(4) does not allow any appeal against a decree passed in a petty suit where
the subject matter of the suit is less than ten thousand rupees and suits are cognizable
by courts of small causes.
An appeal lies against a preliminary decree. There is no appeal against a final decree
if the preliminary decree has not been appealed, since the preliminary decree forms
the foundation of the final decree. (Rule 97)
72
An appeal lies only against a ‘decree’ or ‘order’ under the Code. Finding not
amounting to a ‘decree’ or and ‘order’ has no appeal lying against it.
Order 41, Rule 22 explanation allows respondent to file cross-objections against any
finding recorded against him even though the ultimate decree may be in his favor.
Form of Appeal:
Appeal- Judicial examination by a higher court
Memorandum of appeal- Grounds to invite higher judicial examination
Rule 1:
Memorandum of appeal must be filed. Requirements in Rule 1 must be complied
with-grounds of objection to decree appealed from in the form of a memorandum;
must be signed by the appellant/pleader; must be presented to the court/officer; must
be accompanied by a certified copy of decree and judgment; if appeal against money
decree, decretal amount must be deposited or its security thereof.
Rule 2:
No grounds to be urged except the ones set out in the memorandum.
Rule 3:
The Court may return or reject the memorandum for amendment if it’s not in proper
form.
Rule 3-A- where appeal is filed after expiry of period of limitation must be
accompanied by an application that the applicant had sufficient cause for not
preferring the appeal within time.
Rule 4:
73
@lawkhabar
If a decree proceeds upon a ground common to multiple defendants/plaintiffs, any one
may file an appeal, and the Court can reverse or vary the decree in favor of all
plaintiffs/defendants.
Rule 5:
Once appeal has been filed, and sufficient grounds are established for appeal, the
Court may order stay of proceedings under the decree or its execution.
Rule 6:
Staying sale of immovable property
Rule 9:
Court from whose decree an appeal lies shall entertain the memorandum of appeal;
shall make an endorsement, and shall register the appeal in register of appeals.
Rule 10:
Appellant may be required to furnish security for the cost of the appeal or the cost of
the suit or both.
Period of filing appeal: 90 days from date of decree-High Court; 30 days from date if
decree- any other appellate court.
3 conditions for the stay are given under 5(3), (4):
•
Application has been made without unreasonable delay;
74
•
Substantial loss will result to the applicant unless such an order is made;
•
Security for due performance of decree or order has been given by applicant.
Rule 11:
Ranjit Bhagala v. Krishnarao
Power of appellate court to dismiss appeals summarily. This power must however, be
used sparingly. Reasons for doing so must be recorded. Appeal cannot be dismissed
partly. It must be admitted or dismissed wholly.
The rules for abatement of appeal identical to rules for abatement of suits
Rules 12, 14:
If appeal is not summarily dismissed, date of hearing is fixed and notice of date and
copy of memorandum sent to respondent.
Rule 16(1):
Appellant has right to begin.
Rule 16(2):
Appellant entitled to reply once the court hears the respondent against the appeal.
Rule 17(1):
Appeal may be dismissed for default if appellant does not appear for hearing. Cannot
however, be dismissed on merits.
75
Rule 17(2):
No appearance of respondent-appeal heard ex parte.
Rule 19:
An appeal dismissed for default may be restored if it is proved that the appellant was
prevented by any sufficient cause from appearing when the appeal was called. The
Court may then restore the appeal on terms as to costs or otherwise as it sees fit.
Rule 20(2)Court could, at its discretion direct a person to be joined as a respondent if it thinks
that person was a party to the trial in the lower court and would be interested in the
result of the appeal.
Rule 21For application of rehearing of appeal if sufficient cause or lack of notice is
established.
Rule 22Respondent who has not filed an appeal against the decree may object to the said
decree by filing cross-objections in the appeal filed by the opposite party- Optional
and voluntary.
If a decree is passed partly against him and partly for him, he may prefer an appeal
against the part that’s against him. Two appeals now exist, called “cross-appeals”.
76
Cross-objection is like a cross-appeal in almost every way. While cross-objection
forms part of the same record, cross-appeals form two distinct and separate
proceedings.
Rule 22(4)Cross appeals may only be filed when appeal is filed, admitted by appellate court and
notice is issued on the respondent.
Cross-objections- Same form as memorandum of appeal; should be served on party
thereby affected; should be filed within one month of service of notice of hearing of
appeal; period may be extended by the court at its discretion.
Rule 22(1)- Allows cross-objections to be filed against decree and against finding not
amounting to decree.
Rule 22(5)- Appeal and cross-objections to be heard together, to be disposed of by a
common judgment incorporating both.
Superintending Engineer v. B. Subba Reddy (1999) 4 SCC 423 (use this case for any
feature of cross-objection)
Appeal is a substantive right that does not exist unless specifically conferred. Crossobjection has all the trappings of an appeal. Court fee is also payable on crossobjection like on an appeal. Cross-objection is heard even if an appeal is withdrawn or
dismissed.
Powers of Appellate Court
Section 107, Rules 23-29, 33
77
Power to RemandRule 23 – If the trial court has decided the suit on a preliminary point and not decided
the other issues, the appellate court may reverse the decree and send it back to the trial
court to decide on the other issues.
23-A- Case has been decided on merits by trial court, but Appellate court can send it
back for remand in the interest of justice.
Conditions:
•
Suit must have been disposed of by preliminary point,
•
The decree must have been reserved under appeal
Sunder Singh v. Narain Singh
Remand cannot be ordered because the appellate court found the decision of the lower
court unsatisfactory; contrary to law; scanty materials for basis of decision, the appeal
must be decided in accordance with law.
The order of Remand reverses the decision of the lower court, and reopens the case
for retrial by the lower court. Order of remand is appealable.
The power of remand should only be exercised when it is absolutely imperative, and it
should not be taken lightly. Correctness of order of remand can be challenged later on
in an appeal arising out of the final decree.
Section 107(1)(a), Rule 24Sunder Singh v. Narain Singh
78
Enables the appellate court to dispose of a case finally. Where the evidence on record
is sufficient to pronounce judgment, it may do so, regardless of the fact that the trial
court’s judgment may have been on a different matter altogether. Generally, a case
should be disposed of on the basis of the evidence available and not be remanded for
fresh evidence, as far as possible.
Power to frame issues and refer them for trial (Rule 25, 26, Section 107(1)(c)):
When a lower court has omitted to frame any issue; try any issue; or determine a
question of fact essential to the suit, the appellate court may frame issues and refer
them for trial to the lower court and direct that court to take the additional evidence
required.
Rule 26The evidence and findings formed thus shall form part of the record in the suit, and
any party may file a memorandum of objection to any finding of the lower court
within a time fixed by the appellate court.
Differences Between Rule 23-A v. Rule 25-
•
Whole case doesn’t go back to trial court, only some issues are remitted to the
trial court for its consideration;
•
Final order under 23-A, interlocutory order under 25;
•
23, 23-A are appealable, 25 not appealable.
Power to take additional evidence (Section 107(1)(d), Rules 27-29)
Section 107(1)(d) allows the appellate court to take additional evidence or allow it
subject to the provisions of Rule 27.
Conditions:
79
•
Person seeking admission of additional evidence should be able to establish
that the evidence could not have been produced earlier, even with best efforts;
•
The party affected by the addition of evidence should be able to rebut such
evidence;
•
The evidence must be relevant for the determination of the issue
Rule 27Yudistir v. Ashok Kumar
Additional evidence may be admitted when the lower court has improperly refused to
admit evidence; where such evidence was not within the party’s knowledge, and they
could not, with due diligence, produce it at the time of the earlier decree; where the
appellate court itself requires such evidence to either pronounce judgment or for any
other substantial cause.
Rule 27(2)Reasons must be recorded by appellate court for admitting any additional evidence.
Rules 28-29Modes of admitting additional evidence
Rule 33Gives the appellate court the power to pass whatever orders it deems fit, not only
between the appellant and the respondent, but also between two respondents or two
appellants. It allows the court to give whatever relief to any of the respondents as the
case may require.
The wide ambit of Rule 33 allows the Court to step in and make orders where other
Rules like Rule 22 with regard to cross-objections, may fail. The sweep of power
80
under this section is wide enough to allow the appellate court to pass any order to
meet the ends of justice.
Requirements:
•
Parties before lower court must also be there before appellate court;
•
The question must have properly arisen out of the judgment of the lower court.
•
The appellate court by any party can hear any objection against any part of the
appeal to the appeal if these requirements are met.
Section 107(2):
Ramankutty. v. Avara
Appellate court has all the powers of an original court. Since appeal is a continuation
of a suit, an appellate court can do whatever an original court can do, in the pursuit of
justice. It is empowered to appreciate evidence, return a plaint or memorandum of
appeal, allow amendments in pleadings, etc.
Duties of Appellate Court
1. Duty to decide appeal finally in accordance with the law after consideration of
whole evidence. It must establish that its judicial mind to the case as a whole.
State of Tamil Nadu v. Kumaraswami
2. Duty not to interfere with a decree of lower court for technical errors, merely
on account of technical or material defects, when said decree is otherwise
correct on merits. (Rule 99)
3. Duty to re-appreciate evidence, oral as well as documentary, and arrive at its
own conclusion. The finding of the trial court should not be disturbed lightly,
unless the trial court’s appraisal of evidence was so materially erroneous.
(Section 107(2)) Radha Prasad v. Gajadhar Singh
4. Duty to record reasons in support of its judgment, which must be selfcontained with reasons in support of its findings. The evidence in light of its
81
determination must be discussed and it must reach its own conclusion. The
Supreme Court however, has the discretion to record its reasons, since there is
no further appeal from it, and it may exercise that discretion as it wishes to.
State of Punjab v. Surinder Kumar
5. Other duties of an appellate court include that an appeal must not be dismissed
on technical grounds; it cannot be dismissed partly; it cannot grant a stay
against the execution of a decree if the appeal is time-barred; money suits
should not generally be stayed; when other matters involving a common
question or identical points are pending, a summary dismissal is not justified,
etc.
Judgment (Section 98, Rules 30-34)
Rule 30:
The judgment must be announced in open court, and a copy of the whole final
judgment must be made available for the perusal of the parties or their pleaders after
pronouncement.
Rules 31-32:
The judgment of the appellate court must be in writing, and should state-
•
The decision;
•
Reasons for the decision;
•
The points for determination;
•
Relief to which appellant is entitled is decree of lower court is reversed and it
shall be signed by the judge or judges concurring.
Rule 34:
82
Any judge dissenting from the judgment shall state in writing the decision or order
that he thinks should be passed on the appeal, along with his reasons.
Decree (Rules 35-37)
Rule 35:
The decree shall contain date and day of judgment; number of the appeal; names and
descriptions of parties and a clear description of relief granted; costs and who is to
pay, and the signature of the judge who delivered the judgment.
Rules 36-37:
Certified copies of the judgment and decree shall be sent to the lower courts and shall
be furnished to the parties at their own costs.
Letters Patent Appeal
An appeal lies against an order passed by a single judge of the high court to a division
bench of the high court under the Letters Patent of the High Court concerned,
provided such an appeal is not barred by any statute, and provided that the other
conditions of appeal are satisfied. The appeal can be filed within 30 days from the
date of the judgment of the single judge. The provisions of Order 41 apply to Letter
Patent Appeals also.
Appeals to Supreme Court (Sections 109,112)
Sections 109 and 112 provide for an appeal to the Supreme Court under certain
circumstances, and Order 45 prescribes the procedure for such appeals.
Second Appeals
Section 100:
83
Provides for the filing of a second appeal to the High Court from every decree passed
in appeal by any court subordinate to it, if the High Court is satisfied that it involves a
substantial question of law. An appeal may lie ex parte. The memorandum of appeal
shall precisely state the substantial question of law. Where the High Court is satisfied
that a substantial question of law exists, it shall formulate such question. Appeal shall
be heard on such question, and respondent shall be allowed to argue at the hearing,
that no such question is involved.
The term substantial question of law was defined in the case of Chunilal V Mehta v.
Century Spg. & Mfg. Co., where it was held that such a question is one that would be
one that is of general public importance, that directly and substantially affects the
right of parties, and whether it is an open question that has not been settled in law.
Substantial question must be one between the parties involved, and not a question of
general importance. High court formulates the substantial question of law. Duty on
appellant is to precisely state in the memorandum the substantial question of law, and
the duty of the Court is to formulate such a question. The appeal is to be heard on the
substantial question of law formulated by the court.
Section 101There is no second appeal to the High Court except on the ground mentioned in
Section 100.
Section 102There is also no second appeal where the subject matter of the suit for recovery of
money does not exceed 25, 000 rupees.
Section 100-ANo Letters of Patent Appeal lies against a single judge in a second appeal to the High
Court.
84
Second appeal: Period of limitation-90 days.
High Court may determine, when required, to decide any issue of fact necessary for
the disposal of the appeal, where there is sufficient evidence, and such issue has not
been determined by the trial court or appellate court or by both; has been wrongly
determined by such court by reason of its decision on the substantial question of law.
Provisions relating to first appeals also apply to second appeals.
Appeals against Orders
Section 104-108; Order 43
•
Order-formal expression of any decision of a civil court that not a decree. (S.
2(4))
•
Appeals can only be made against those orders that are appealable under S.
104(1)
Section 105Every order whether appealable or not, except an order of remand can be attacked in
an appeal from the final decree on the ground that,
•
There is an error, defect or irregularity in the order;
•
That such error or defect affects the decision of the case.
Res judicata would apply where an interlocutory order has not been challenged, and
no party would later be allowed to challenge such order at a subsequent stage of the
proceedings.
Limitation period: 90 days
85
Section 106:
Appeals from orders in cases where they are appealable, shall lie to the court to which
an appeal would lie from the decree in the suit in which the order is made. Where a
court other than the High Court makes an order like that in its appellate jurisdiction,
an appeal shall lie to the High Court.
Provisions to first appeals apply to appeals from orders also.
Letters Patent Appeal:
Shah Babulal v. Jayaben D. Kania
The Supreme Court held that section 104 applies to the High court from subordinate
courts. If a Single Judge of the High Court exercises original jurisdiction and makes
an order, an appeal is maintainable under Letters Patent Appeal. But if such an order
is passed by a court subordinate to the High Court and a Single judge of the High
Court decides the appeal against that order, no Letters Patent Appeal maintainable.
Review
Section 114; Order 47
Review cannot be confused with the appeal powers of a court, and does not imply
rehearing of a case.
Review is a reconsideration of the judgment by the same court, and by the same
judge.
Section 114, Order 47, Rule 1:
A person aggrieved by a decree or order may apply for a review of a judgment.
Adi Pherozeshah Gandhi v. HM Seervai
86
A person aggrieved is a person who has a genuine grievance because an order has
been made which prejudicially affects his interests.
Circumstances of Review:
•
A decree or order from which no appeal lies is open to review (Section
114(a)). An application for review against a Court of Small Causes is open to
review.
•
Where appeal is provided, but it is not preferred by the aggrieved party. (Rule
1(1)(a)) Mere existence of appeal no ground to reject an application for review
Grounds of Review:
1. Discovery of new or important matter/evidence
It must be established that the new evidence in question could not have been
discovered by the applicant even with all due diligence at the time when the decree
was passed. The party must show that there was no remiss on his part in adducing all
possible evidence before the trial.
Sardar Balbir Singh v. Atma Ram Srivastava; the evidence must also be relevant, and
of such a nature so as to possibly alter the judgment Nundo Lal v. Punchanon
Mukherjee
2. Mistake or error apparent on the face of the record
No error can be said to be evident on the face of it if it requires an argument or
examination to establish it, and is not self-evident.
Delhi Admin, v. Gurdip Singh; Thungabadhra Industries Ltd. v. Govt. of APExamples:
•
Where court decides against a party on matters not in issue;
•
Where judgment is pronounced without notice to the parties;
87
•
Where the want of jurisdiction is apparent on the face of the record, etc.
3. Any other sufficient reason
It must mean a reason sufficient on grounds, at least analogous to those given in the
rule.
Examples:
•
Where the statement in the judgment is not correct;
•
Where a party had no fair notice or opportunity to present his evidence;
•
Where the decree has been passed under a misapprehension of the
circumstances, etc.
The same court may make review, and the same judge that tried the earlier matter. If
the judge who decided the matter is available, he alone has jurisdiction to consider the
case, and review the order passed by him.
The power of Review is no inherent power. Law must confer it either explicitly or by
necessary implication.
Rule 3:
Application of review should be in the form of a memorandum of appeal.
The date for determining if the terms of the code are fulfilled is the date when the
application for review is filed. There is no provision in the Code for a suo moto power
of review of the court. AR Antulay v. RS Nayak, Supreme Court held that it might
exercise suo moto power of review in an appropriate case.
Procedure:
Rule 4(1):
88
The first stage commences with an ex parte application by the aggrieved party. The
Court may reject it at once if there is no sufficient ground or may issue rule calling
upon the opposite party to show cause why review should not be granted.
Rule 5:
The application shall then be heard by the same court and the same judge who passed
the decree or made the order, unless he is no longer attached to the court or precluded
from hearing it by absence or other cause for a period of 6 months.
Rule 8:
At the third stage, the court on merits will rehear the matter either at once or at any
time fixed by it. After rehearing the case, it may either confirm or vary the original
decree.
Limitation period: 30 days
Order granting application for review is appealable, order-rejecting application is not.
No second appeal from an order made in appeal from an order granting review.
An order granting review may amount to judgment and Letters Patent Appeal is
competent.
An application for review is revisable.
Provisions of Order 47 do not apply to writ petitions filed in the High Court filed
under Article 226 of the constitution. There is nothing in article 226, however, to
preclude the High Court from exercising the inherent power of review present in
every court of plenary jurisdiction to prevent a miscarriage of justice to correct grave
and palpable errors committed by it.
Power of Supreme Court to review its judgments not curtailed or affected by the
Code.
89
Appeals to Supreme Court
Articles 132, 133, 134-A of the Indian Constitution; Sections 109, 112; Order 45
Rule 3
Section 109:
Conditions for Appeal:
1. A judgment, decree, or final order must have been passed by the High Court
2. A substantial point or question of law must be involved in the case
3. In the opinion of the High Court, said opinion needs to be decided by the
Supreme Court. It is not enough that there is a substantial question of law
that’s involved; there must be a necessity that such a question needs to be
decided by the Supreme Court. Such a necessity may exist if a different view
has been expressed by another High Court.
Procedure:
An appeal to the Supreme Court must be applied by way of a petition, which should
state the grounds of appeal and pray for the issue of a certificate-
•
That the case involves a substantial question of law of general importance, and
•
That in the opinion of the High Court, the said question needs to be decided by
the Supreme Court.
Amendment to Constitution: Article 134-AEvery high court passing or making a judgment, decree, order or sentence, may if it
deems fit to do so, either suo moto or shall, if an oral application is made, by the party
aggrieved, immediately after the passing of such decree, order, judgment, final order,
or sentence determine if such a certificate is to be awarded or not.
90
Rules 7, 9 and 12:
When certificate is granted, the applicant should furnish security for the costs of the
respondent and also deposit expenses for translating, printing, indexing, etc. within
the stipulated period. The court may revoke acceptance of security, and also has the
power to refund the balance of the deposit after the necessary deductions of expenses.
Rule 8:
Once the directions regarding furnishing of security and making of deposits are
carried out, the court shall declare the appeal admitted, give notice to the respondent
and transmit record to the Supreme Court.
Rules 10, 14:
The Court may order further security to be furnished or costs deposited if the amount
given earlier seems to be inadequate.
The pendency of an appeal to the Supreme Court does not affect the right of the
decree-holder to execute the decree unless the court directs otherwise.
Rules 15 & 16 deal with the execution of a decree by the Supreme Court.
Section 112 saves the powers conferred on the Supreme Court by the Constitution and
declares that nothing in the Code would affect these powers.
Revision
Section 115:
High Court has powers to entertain revision in a case decided by any subordinate
court, wherein the subordinate court:
•
Exercised a jurisdiction not vested in it (CLAUSE a)
91
•
Failed to exercise jurisdiction vested in it (CLAUSE b)
•
Acted in the exercise of the jurisdiction illegally (CLAUSE c)
Revision and Writ:
Revisional power under Section 115(i)(d) to file a writ of CERTIORARI but is not as
wide, since it can be exercised only in the case of a jurisdictional error.
Revision and Power of Superintendence:
•
Revision under Section 115 and petition under Article 227 of the constitution
are 2 separate and distinct proceedings.
•
Revisional power is only judicial; power of superintendence is both judicial
and administrative.
•
Revisional power is only statutory and can be taken away by legislation,
whereas power of superintendence is constitutional and cannot be taken away
or curtailed by a statute.
•
Revisional powers of the high court are restricted and can be exercised on
conditions laid down in Section 115, but not to supervisory powers under Art.
227.
Appeal and Revision:
APPEAL
REVISION
Lies to a court superior to current court
Application lies only to the High Court
Lies only from decrees and appealable Lies from any decision of the High Court
orders
from which no appeal lies
Substantive right
Discretionary right
Abates, if legal reps of a party are not Does not Abate. Can bring parties to
brought on record
record at any time
On the question of fact/ law or fact and Only on the grounds of judicial error
law
Memorandum of appeal must be filed
Filing of appeal not necessary
92
First Appeal and Second Appeal:
FIRST APPEAL
Decree
passed
SECOND APPEAL
by
court
exercising Decree
passed
by
court
exercising
original jurisdiction
appellate jurisdiction
Lies to a superior court
Lies only to the High Court
On grounds of fact/ law/ fact and law
On grounds of substantive question of
law
Decree mount less that Rs. 3000. First Does not lie
appeal is maintainable
Can decide issues of fact
Only in certain cases
Period of limitation: 90 days if H.C., 30 Only 90 days, since only H.C.
days if any other court
A letters patent appeal is maintainable
Not maintainable
Second appeal and Revision:
SECOND APPEAL
REVISION
Substantive question of law
Jurisdictional error
Lies only in the H.C. under SECTION Powers of H.C. only if no appeal lies to
100
the H.C.
H.C. can interfere with subordinate court, Cannot interfere with order passed by
if contrary to law
subordinate court as long as its within its
jurisdiction
Can decide question of fact
Cannot decide question of fact
H.C. Cannot refuse to grant relief merely H.C. may decline to interfere in revision
on equitable grounds
if it satisfied that substantial justice has
been done.
Appeal and reference:
APPEAL
REFERENCE
Right conferred to suitor
Power vested in the court
To a superior court.
Always made to the H.C.
Grounds of appeal are wider
Grounds of reference are narrow
Filed only after decree is passed or Made pending a suit, appeal or execution
appealable order is made
proceeding
93
Appeal and review:
APPEAL
REVIEW
Lies to superior court
Lies to the same court
Heard by diff. Judge
Same subject matter, same Judge
Grounds are wider
Grounds are narrow
2nd appeal lies on substantial question of 2nd review, does not
law
Reference and Review:
REFERENCE
REVIEW
Subordinate court refers the case
Application made by aggrieved party
Only H.C. can decide these matters
The court which passed the decree can
decide
Is made pending a suit, appeal or Filed only after decree is passed
execution proceeding
Grounds are diff.
Grounds are diff.
Review and Revision:
REVIEW
REVISION
Passed by same court that passed the Can be passed only by H.C.
decree
Even when appeal lies
Only in case where no appeal lies to the
H.C.
Application made only by the aggrieved Can be exercised by the H.C. even SUO
party
MOTU
Diff. grounds
Diff. grounds
Order granting review is appealable
Order passed is not appealable
Reference and Revision:
REFERENCE
REVISION
Referred to H.C. by a subordinate court
Jurisdiction of H.C. invoked either by
aggrieved party or SUO MOTU
94
Grounds relate to reasonable doubt on a Grounds relate to jurisdictional errors of
question of law
subordinate court
Conditions before Revisional jurisdiction can be exercised by the H.C.:
1. Case must have been decided
2. The court that has decided the case should be subordinate to the H.C.
3. The order should not be an appealable one
4. Subordinate court must have
a) Exercised jurisdiction not vested in it by law
b) Failed to exercise jurisdiction vested in it
c) Exercise of jurisdiction illegally or with material irregularity: manner in
which decision was reached.
If an alternative remedy is available, the court may not entertain revision.
The period of limitation is 90 days from the decree or order sought to be revised.
Interlocutory Orders:
The fall into 2 classes:
1. Appealable under SECTION 104, hence no revision
2. Non- appealable- and subject to revision under SECTION 115
A revision does not abate on the death of the applicant or on account of failure of
applicant to bring on record the heirs.
Procedure:
No established procedure in the CODE.
Grounds of revision can be expressed as an appeal, involving objections regarding
jurisdiction.
95
Once it is admitted, it has to be decided on merits and should not be dismissed on the
grounds that it should not have been admitted
Commercial Courts Bill
Background
The suggestion for the constitution of hi-tech fast-track commercial divisions in High
Courts in India was first proposed by the Report, which aimed at addressing two
major issues. Firstly, though the radical changes in the policies of the Government
since 1991 for liberalization promoted privatization, globalization and foreign
investment, it also gave rise to a number of commercial disputes involving high
stakes in India. This fortified the need to establish a speedy, cost effective and
efficient dispute resolution mechanism. Secondly, this step was also necessary to
oppose and counter the recent practice of some foreign Commercial Courts assuming
jurisdiction in commercial disputes even where no cause of action arose in those
countries. These courts cited forum non-conveniens as the reason owing to the
dilatory process in India where the courts sometimes take up to twenty years or more
in deciding the cases.
Salient Features of the Bill
(a) Commercial Dispute:
Under the Bill, a comprehensive definition of
“Commercial Dispute” has been provided which means “a dispute arising out of
ordinary transactions of merchants, bankers and traders such as those relating to
enforcement and interpretation of mercantile documents, export or import of
merchandise, affreightment, carriage of goods, franchising, distribution and licensing
agreements, maintenance and consultancy agreements, mercantile agency and
mercantile usage, partnership, technology development in software, hardware,
networks, internet, website and intellectual property such as trademark, copyright,
patent, design, domain names and brands and such other commercial disputes which
the Central Government may notify”.
96
The explanation to the definition clarifies that a dispute, which is inherently
commercial, shall not cease to be a Commercial Dispute merely because it also
involves an action for recovery of immovable property, for realization of monies out
of immovable property given as security or for taking any other action against
immovable property. Further, a dispute will be deemed to be a commercial dispute if
the immovable property involved in the dispute is used for trade or any commercial
use. Also, an application under section 34 or section 36 or an appeal under section 37
of the Arbitration and Conciliation Act, 1996 shall be deemed to be a commercial
dispute if the amount in dispute or claim relates to a Specified Value. Therefore, the
Bill proposes a wide, exhaustive and exclusive definition of Commercial Dispute
which encompasses within its scope disputes not only between tradesmen but
also relating to commercial property, both immovable and movable including
intangible property like patents, copyrights, trademarks, etc. It also empowers
the Central Government to add to the list of Commercial Disputes as and when
necessary.
(b) Jurisdiction:
As per the provisions of the Bill, the Commercial Division of the High Court shall
exercise its jurisdiction in the following cases:
1. Suits relating to Commercial Disputes of Specified Value and any execution
proceedings arising thereof
2. Suits, applications, appeals (including appeals from single judge of High
Court) or proceedings relating to Commercial Disputes of Specified Value
pending in the High Court or the courts subordinate to the High Court and
transferred to the Commercial Divisions
3. Appeals against interim orders passed in suits by subordinate courts to the
High Court where the Commercial Dispute is of Specified Value
4. Applications under Sections 34 and 36 and appeals under Sections 37(1)(a) or
(2) of the Arbitration and Conciliation Act, 1996, provided they are of
Specified Value. Further, the Bill also proposes to amend the Arbitration and
Conciliation Act, 1996 appropriately to include Commercial Divisions within
the definition of Court. However, Commercial Disputes on which other
97
Courts or Tribunals have exclusive jurisdiction will not go before the
Commercial Division.
(c) Procedure: The manner of determination of the Specified Value in a suit, appeal
or application is specified in Section 8 of the Bill which overrides any conflicting
provision for valuation under any law for the time being in force. Depending on the
subject matter of the suit, appeal or application, for determining the specified value
the following shall be taken into account:
• The money sought to be recovered under suit plus interest if any, or
• The market value of the moveable property or immoveable property, or
• The market value of the intangible rights as estimated by the plaintiff, or
• The value of the commercial dispute in the counter-claim
The above values are calculated as on the date of filing of the suit, appeal, application
or counter-claim. The suits, appeals or applications arising under the Bill are to be
adjudicated upon by the judges of High Court and the procedure to be followed by
the Commercial Divisions is the same as specified in the Code of Civil Procedure,
1908 (“CPC”), except to the extent otherwise provided under this Bill. The Bill
specifies the documents to be filed along with the plaint and allows the service of
summons on the defendant through electronic mail. Specific timelines for filing of
written statement, counter claims and rejoinder have been stipulated to speed up the
proceedings. The Commercial Division may also appoint a Commissioner for
conducting the cross-examination and re-examination of witness and parties. The Bill
also empowers a single judge of the Commercial Division to hold case management
conferences, fix schedules for finalization of issues, cross-examination of witnesses,
filing of written statements and oral submissions, record evidence and appoint
Commissioners. All parties must file the written submission before commencement
of oral submissions. The Commercial Division is required to pronounce the judgment
within 30 days of the conclusion of the argument. In case of an application arising
under Section 34 or 36 and appeals under Section 37(1) (a) and (2) of the Arbitration
and Conciliation Act, 1996, the Commercial Division would need to make efforts to
dispose the matter within one year of serving notice on the opposite party. Appeals
against the order and decree passed by the commercial division are to lie before the
98
Supreme Court.
Critical Analysis Advantages:
(i)
The Bill is undoubtedly a step forward to enable fast and efficient delivery
of justice in India and has manifold advantages. This Bill seeks to bring in
uniformity across the country with regard to Commercial Disputes of a
Specified Value as such disputes would be dealt with by the Commercial
Divisions of High Courts. This will help reduce the burden on the District
Courts and facilitate the speedy disposal of cases in India.
(ii)
A laudable provision in the Bill is that it mandates the plaintiff to file
documents like inter alia affidavits containing his as well other witnesses’
statements in examination- in-chief, application for discovery and
production of documents and all other material considered necessary by
him at the time of filing the plaint itself to quicken the process. Under the
normal court procedure, these documents are usually filed at the time of
trial and would add to the delay owing to the several adjournments taken
by the parties to file the same.
(iii)
Further the provision of allowing a single judge of the Commercial
Division to fix schedules for finalization of issues, cross-examination of
witnesses, filing of written statements and oral submissions, record
evidence etc. during case management conferences is a radical change
introduced by this Bill and will help the object of disposing the matter in
an efficient manner within 2 years. Also empowering the same court i.e.
the Commercial Divisions with power to execute its own decrees and
orders would further hasten the process.
(iv)
Another positive step is the provision empowering the Commercial
Division to appoint a Commissioner with considerable experience to
99
conduct the cross-examination and re-examination of parties and
witnesses. Delegating the process of cross-examination and reexamination will speed up the hearing of the case. The Bill also
emphatically mandates the Commercial Divisions to pronounce judgment
within 30 days from the conclusion of arguments, which gives hope of
timely justice to the aggrieved. A direct appeal to the Supreme Court also
avoids the long and often perilous appeals procedure under the CPC.
(v)
The Bill has derived further impetus from revolution in technology and
has allowed the service of summons and issuance of copies of the
judgments via email. Currently, under the CPC only foreigners without an
agent in India could be served via email. However, for Commercial
Disputes, the Bill has broadened the scope and has legalized service of
summons through email on any defendant.
(vi)
Establishment of commercial courts in UK and US (especially London
and New York) are undoubtedly some of the most successful and
enduring instances of judicial administration and have been applauded by
the business community. A step in the same direction by India not only
projects its determination to fast track justice but also to meet the
demanding world standards. This should fortify the trust of foreign
investors in the Indian Judicial system and further encourage foreign
investment.
Disadvantages:
In spite of the aforesaid advantages of the Bill, the said Bill also contains certain
serious lacunas or loopholes, which needs to be addressed before the Bill comes into
force.
(i) It appears from the definition of ‘commercial dispute’ that it covers ‘realization of
100
monies out of immovable property given as security’. In all likelihood, all recovery
of debts due to banks and financial institutions, wherein the amount due exceeds
Rs.5Cr hereafter would be through the Commercial Division of High Courts.
However, in terms of section 18 (Bar of Jurisdiction) of the Recovery of Debts Due
to Banks and Financial Institutions Act, 1993 read with section 6 of the Draft Bill the
jurisdiction of the “Commercial Division” of the High Courts would be ousted, in
view of the statutory bar in both the legislations. This kind of dichotomy will give
rise to enormous confusion in the both the bar and bench and lead to utter confusion.
These conflicts shall need to be addressed accordingly.
(ii) Additionally, in most of the disputes, pending before the courts, government is a
party. Definition of ‘commercial dispute’ should specifically include disputes with
both State and Central Government as well as Public sector enterprises wherein they
are a party to the contract, pursuant to the tender provisions or otherwise. This is
essential to achieve the object of the Bill, which is to resolve disputes involving high
stakes speedily and effectively and thereby facilitating increase in commerce and
trade. (iii) It is pertinent to note that even Specific performance suits with specified
value would be a ‘commercial dispute’, if the immovable property involved in the
dispute is put to commercial use. However, the expression ‘commercial use’ is also
not defined and may lead to further interpretational issues/debates/contradictory
positions being taken by different High Courts.
(iv) When the Debts Recovery Tribunals (DRTs) were set up, we have all witnessed,
in-ordinate delay in setting up of DRTs as well as in getting the matters transferred to
DRTs. Cases which were pending before various courts for quite a long period were
in fact heard afresh by DRTs, as per the new procedures prescribed (insisting on
submission of paper books and hearing the matter afresh etc.,). This has also resulted
in delaying the matter further. Setting up of Commercial Division of High Courts
would also lead to a similar situation. Further wrongful transfer of a matter to the
Commercial Division of a High Court by a court can also lead to unnecessary
delays. Therefore, the issue of transfer of cases to the Commercial Division will have
to be look from technical and logistical perspective to avoid unwarranted delays.
(v) Draft envisages that before the legislation comes into force in a particular state,
101
the Central Government will be consulting the Chief Justice of the concerned High
Court as well as the concerned State Government or State Governments. This may
result in Commercial Division of High Courts being set up in different state at
different point of time and can create confusion in matters wherein the jurisdiction
for dealing with the matters involving ‘commercial dispute’ can lie in either of the
jurisdiction.
(vi) Further, scope of the expression ‘commercial dispute’ needs to be clarified
further, so as to remove the existing ambiguity. What all matters would lay before the
Commercial Division of a High Court needs to be clarified. Otherwise once a matter
gets transferred maintainability would have to be decided first as per Section 8(2) of
the draft Bill and thereafter there is a chance of the matter getting transferred back to
the original court. This also can delay the whole process. On such a decision by
Commercial Division of a High Court, an appeal may lie before Supreme Court as
per section 13(2) of the Bill. Whole scheme of the legislation is based on the
definition of expression ‘commercial dispute’.
(vii) In terms of section 9(3) of the draft Bill for the purpose recording statement in
cross examination and re-examination of parties and witnesses, the Commercial
Division may appoint an advocate of not less than 20 years standing at Bar as
Commissioner. When an advocate can become a High Court judge with a lesser
standing 20 years experience requirement is on the higher side and this will create
dissent amongst the members of the Bar Further, it is recommended that Senior Civil
Judge can act as Commissioner. Already, the lower judiciary is short on manpower,
which is one of the primary reasons for large number of pending cases in the judicial
system. This recommendation in the draft Bill would only increase the workload of
the lower judiciary, which may eventually cause more delay.
(viii) Further, situations wherein cross-examination and re-examination of parties and
witnesses would be permitted also have to be made clear. This cannot be granted as a
routine, as this would only help in delaying the process.
(ix) It is envisaged that commercial dispute with high threshold value would be dealt
on fast track basis. However, consequences of non compliance of the timeframe
stipulated in the legislation/time frame fixed through case management conferences
102
by the judge are not seen provided. What needs to be addressed is proper
identification of reasons for delay and an effective mechanism to address each such
areas of delay.
(x) Section 10 provides for certain decision by bench of two judges. However, there
are no clear provisions for situations to resolve the deadlock, if these two judges
differ.
(xi) The anomalous position that for disputes involving low stakes, there will be a
three-tier dispute resolution, whereas for resolution of disputes, involving high
stakes, there would be only two tier mechanism also needs to be addressed.
Concluding Comments
To conclude, the following important issues needs to be considered seriously before
the draft Bill comes into force:
Whether transferring of “commercial disputes” from the lower courts will, in effect
reduce the burden of the lower courts and lead to speedy disposal of matters?
Whether the suggestion a single judge to manage the volumes of cases be workable
and lead to efficient implementation of the laws and fasten the disposal process or
would be further lead to the clogging of the courts?
Apart from addressing the aforesaid issues, the legislature may consider the following
points:
(i)
Insertion of provisions in the draft Bill similar to the existing practice of
submitting to a dispute resolution mechanism, through arbitration, may be
provided so that if the disputing parties are agreeable, such matters can be
dealt before Commercial Division of a High Court, subject to the
minimum pecuniary limits. This would also help in resolution of
commercial disputes involving high stakes and the clauses submitting to
the jurisdiction of a Commercial Division of a High Court can form part
103
of the contract. This can be by way of separate agreement, once a party in
dispute raises a claim exceeding Rs.5 crs. Limiting the scope of appeal in
cases wherein Parties submitting to the jurisdiction of Commercial
Division of a High Court can also be though of by making the judgment
binding on both the Parties as in the case of dispute resolution by
arbitration.
(ii)
In general, before setting up of Commercial Division of a High Court
thorough assessment of existing cases, which are likely to be transferred,
its status etc., needs to be carried out.
(iii)
Possibility of arranging sitting of Commercial Division of a High Court
Benches at various centers also may be explored, depending upon the
volume of cases that are likely in a particular center.
Limitation Act
The 'Law of Limitation' prescribes the time limit for different suits within, which an
aggrieved person can approach, the court for redress or justice. The law of limitation,
if filed after the exploration of time limit, strikes the suit. It's basically meant to
protect the long and established user and to indirectly punish persons who go into a
long slumber over their rights.
The statutory law was established in stages. The very first Limitation Act was
enacted for all courts in India in 1859. And finally took the form of Limitation Act in
1963.
A citizen is not expected to master the various provisions, which provide for
limitation in different matters but certain basic knowledge in this regard is necessary.
For instance, Section 12 of the Limitation Act lays down certain guidelines regarding
computation of limitation period. It says that in computing the period of limitation for
104
any suit, appeal or application, the day from which such period is to be reckoned,
shall be excluded.
Further, the day on which the judgment complained of was pronounced and the time
requisite for obtaining a copy of the decree, sentence or order appealed from shall be
excluded. However, any time taken by the court to prepare the decree or order before
an application for a copy thereof is made shall not be excluded.
Section 14 of the act, similarly, says that in computing the period of limitation for
any suit, the time during which the plaintiff has been prosecuting in civil
proceedings, whether in a court of first instance or of appeal or revision against the
defendant shall be excluded where the proceedings relate to the same matter in a
court which is unable to entertain it on account of defect of jurisdiction or other cause
of a like nature.
A misjoinder of parties or of cause of action shall be deemed to be a cause of a like
nature mentioned above. Under Section 15 of the act, the time during which an
injunction or restraint order issued by a court remains in force is to be excluded while
computing the period of limitation for any suit or application for the execution of a
degree. In cases, where the previous consent or sanction of the government or any
other authority is required under the law, the time required for obtaining such consent
or sanction shall be excluded. Where a defendant has been absent from India, the
time during which he has been absent can be excluded from the period of limitation.
In case, the prescribed period for any suit, appeal or application expires on a day
when the court is closed, the suit, appeal or application may be instituted on the day
when the court reopens, as provided under Section 4 of the act. This is based on the
principle "actus curial neminem gravabit", which means that an act of court shall not
prejudice any one. The court can condone the delay, if satisfied that it causes were
beyond the control of the plaintiff too.
3. Bar of Limitation.
(1) Subject to the provisions contained in sections 4 to 24 (inclusive), every suit
105
instituted, appeal preferred, and application made after the prescribed period shall be
dismissed although limitation has not been set up as a defence.
(2) For the purposes of this Act,
(a) A suit is instituted(i) In an ordinary case, when the plaint is presented to the proper officer;
(ii) In the case of a pauper, when his application for leave to sue as a pauper is made;
and
(iii) In the case of a claim against a company which is being wound up by the court,
when the claimant first sends in his claim to the official liquidator;
(b) Any claim by way of a set off or a counter claim, shall be treated as a separate suit
and shall be deemed to have been instituted(i) In the case of a set off, on the same date as the suit in which the set off is pleaded;
(ii) In the case of a counter claim, on the date on which the counter claim is made in
court;
(c) An application by notice of motion in a High Court is made when the application
is presented to the proper officer of that court.
4. Expiry of prescribed period when court is closed. Where the prescribed period for
any suit, appeal or application expires on a day when the court is closed, the suit,
appeal or application may be instituted, preferred or made on the day when the court
re- opens. Explanation- A court shall be deemed to be closed on any day within the
meaning of this section if during any part of its normal working hours it remains
closed on that day.
5. Extension of prescribed period in certain cases. Any appeal or any application,
other than an application under any of the provisions of Order XXI of the Code of
Civil Procedure, 1908 (5 of 1908), may be admitted after the prescribed period if the
appellant or
The applicant satisfies the court that he had sufficient cause for not preferring the
appeal or making the application within such period.
Explanation- The fact that the appellant or the applicant was misled by any order,
practice or judgment of the High Court in ascertaining or computing the prescribed
period may be sufficient cause within the meaning of this section.
106
12. Exclusion of time in legal proceedings.
(1) In computing the period of limitation for any suit, appeal or application, the day
from which such period is to be reckoned, shall be excluded.
(2) In computing the period of limitation for an appeal or an application for leave to
appeal or for revision or for review of a judgment, the day on which the judgment
complained of was pronounced and the time requisite for obtaining a copy of the
decree, sentence or order appealed from or sought to be revised or reviewed shall be
excluded.
(3) Where a decree or order is appealed from for sought to be revised or reviewed, or
where an application is made for leave to appeal from a decree or order, the time
requisite for obtaining a copy of the judgment on which the decree or order is founded
shall also be excluded.
(4) In computing the period of limitation for an application to set aside an award, the
time requisite for obtaining a copy of the award shall be excluded. Explanation- In
computing under this section the time requisite for obtaining a copy of a decree or an
order, any time taken by the court to prepare the decree or order before an application
for a copy thereof is made shall not be excluded.
13. Exclusion of time in cases where leave to sue or appeal as a pauper is applied for.
In computing the period of limitation prescribed for any suit or appeal in any case
where an application for leave to sue or appeal as a pauper has been made and
rejected, the time during which the applicant has been prosecuting in good faith his
application for such leave shall be excluded, and the court may, on payment of the
court fees prescribed for such suit or appeal, treat the suit or appeal as having the
same force and effect as if the court fees had been paid in the first instance.
14. Exclusion of time of proceeding bona fide in court without jurisdiction.
(1) In computing the period of limitation for any suit the time during which the
107
plaintiff has been prosecuting with due diligence another civil proceeding, whether in
a court of first instance or of appeal or revision, against the defendant shall be
excluded, where the proceeding relates to the same matter in issue and is prosecuted
in good faith in a court which, from defect of jurisdiction or other cause of a like
nature, is unable to entertain it.
(2) In computing the period of limitation for any application, the time during which
the applicant has been prosecuting with due diligence another civil proceeding,
whether in a court of first instance or of appeal or revision, against the same party for
the same relief shall be excluded, where such proceeding is prosecuted in good faith
in a court which, from defect of jurisdiction or other cause of a like nature, is unable
to entertain it.
(3) Notwithstanding anything contained in rule 2 of Order XXIII of the Code of Civil
Procedure, 1908 (5 of 1908), the provisions of sub- section (1) shall apply in relation
to a fresh suit instituted on permission granted by the court under rule 1 of that Order,
where such permission is granted on the ground that the first suit must fail by reason
of a defect in the jurisdiction of the court or other cause of a like nature. Explanation.For the purposes of this section,(a) In excluding the time during which a former civil proceeding was pending, the day
on which that proceeding was instituted and the day on which it ended shall both be
counted;
(b) A plaintiff or an applicant resisting an appeal shall be deemed to be prosecuting a
proceeding;
(c) Misjoinder of parties or of causes of action shall be deemed to be a cause of a like
nature with defect of jurisdiction.
23. Suits for compensation for acts not actionable without special damage. In the case
of a suit for compensation for an act, which does not give rise to a cause of action
unless some specific injury actually results therefrom, the period of limitation shall be
computed from the time when the injury results.
Specific Relief Act, 1963- A Quick SummarySpecific Relief Act – 14, 15, 16, 26, 34,35,37,38,39 (Important Sections)
108
DISPUTES ARISING IN THE REGULAR COURSE OF ANY BUSINESS
ACTIVITY / TRADE RELATIONSHIP;
IN THE PERFORMANCE / EXECUTION OF CONTRACTS / AGREEMENTS /
OTHER BUSINESS OBLIGATIONS
(i) Where a person, who is entitled to the possession of any specific movable
property, by virtue of being a owner of such specific movable property or by virtue of
having a special or temporary right to possess such specific movable property, and
who is unlawfully refused / denied to the possession of such specific movable
property, may by virtue of Section 7 of the Specific Relief Act, 1963, recover the said
specific movable property, by filing a Suit for the recovery of said specific movable
property. [Movable property will include all kinds of goods, things – valuable and
invaluable]
(ii) The Principal may compel the Agent to deliver any movable property, which is
held by the Agent on behalf of the Principal; or a person who is holding any movable
property as a trustee of another, by virtue of Section 8 of the Specific Relief Act, may
be compelled by that another to deliver that movable property, by filing a Civil Suit in
this regard.
(iii) Where any movable property is wrongly transferred to some other person, the
same may be recovered, by virtue of Section 8 of the Specific Relief Act, by filing a
Civil Suit.
(iv) Where a person against whom a Suit is filed, is making frivolous defences/
defenses untenable in law, he may be stopped / precluded from taking any such
defences, by virtue of Section 9 of the Specific Relief Act, 1963.
(v) Where a party to the Contract is evading in performing his part of the Contract,
thereby seriously prejudicing the other contracting party, the said other contracting
party, by virtue of Sections 10, 12, 14(3), 19, 21, 22, 23, 42 and subject to Sections
14, 16, 17, 18, 20, 24, may by filing a Suit for Specific performance,
109
(a) Cause the said defaulting party to perform his part of the contract; and
(b) May also seek damages in addition to Specific performance; or
(c) May seek damages in lieu of Specific performance; and
(d) Can also seek additional damages for breach of Contract.
(e) The party enforcing specific performance of the contract, by virtue of Section 29
of the Specific Relief Act, in the alternative of specific performance, may seek
rescission (cancellation) of the contract in case the court refuses specific performance.
(vi) Where a person, who has purchased goods / movable property, from a person
who has no title or has imperfect title to the said goods / movable property, the said
purchaser, by virtue of Section 13 of Specific Relief Act, 1963, has a right and he –
(a) May compel the said other person to make good the title where in future the said
other person acquired the title to such goods / movable property;
(b) May compel the said other person to procure the concurrence of a person whose
concurrence will validate the title of the purchaser;
(c) Where in a case, the Seller had filed the Suit for Specific performance of the
contract, and his said Suit is dismissed for want of title or imperfect title, the
purchaser in the said Suit, (a) can claim the refund of his amount paid over said goods
/ movable property and (b) can also recover interest on the said amount paid including
costs of the Suit.
(vii) Where the contracting parties find, that, either due to mutual mistake or due to
fraud of one of the party, the contract entered into between them, in effect and in
scope, does not convey the true purport it was intended and the contract is very
different from what they had really agreed to, then, either of the contracting parties,
by virtue of Section 26 of the Specific Relief Act, may institute a Suit for rectification
of said defective instrument / contract, or the parties may in any existing Suit pray for
such rectification.
The court may in its discretion, direct the rectification of the instrument so as to
express that intention, so far as this rectification can be done without prejudice to the
rights acquired by third party in good faith and for value.
110
Once the instrument is duly rectified by the Order of the Court, then, the said
instrument may be specifically enforced by any of the contracting party.
(viii) Where consent to an agreement is obtained by coercion, fraud or
misrepresentation, the agreement is a contract voidable at the option of the party
whose consent was so obtained; and where both the parties to an agreement are under
a mistake of fact essential to the agreement, the agreement is void. In such situation
the defrauded party, by virtue of Section 27(1), subject to Section 27(2), has three
remedies open to him, namely –
• He may rescind the contract absolutely and sue to recover the consideration parted
with upon the fraudulent contract; or
• He may bring an action to rescind the contract and in that action have full relief; or
• He may retain what he has received and bring an action to recover the damages
sustained.
The rescission of contract can also be sought of unlawful and terminable contracts.
(ix) Where written instruments / contracts, partially or wholly, originally valid,
becomes inefficacious by subsequent events, such as, by satisfaction or payment, or
other causes; and its existence casts either a cloud upon the title of the party or subject
him to the danger of some future litigation; under such and like circumstances, the
said party, by virtue of Section 31 and 32 of the Specific Relief Act, may file a Suit to
declare the said whole or partial of the Written Instrument / contract, as void or
voidable and get it cancelled.
(x) Where a person is entitled to a legal character (Director of a Company) or to any
right as to any property and any person is denying or interested to deny such
entitlement, then, by virtue of Section 34 of the Specific Relief Act, the said
aggrieved person may file a Suit for declaration by the Court that he is entitled for
said legal character or is entitled to that property.
111
(xi) Where a person who has invaded or is threatening to invade the rights, legal or
equitable, of another, the aggrieved person, by virtue of Section 36, 37, and 38 and
subject to Section 41, of the Specific Relief Act, may file a Suit for temporary and
permanent injunction.
By virtue of Section 40 of the Specific Relief Act, 1963, the aggrieved person, in
addition to or in lieu of aforesaid injunction, may seek damages.
Injunction is a form of relief given, to prevent a party from doing which he is under
an obligation not to do, or called upon to do a certain act, which he is under an
obligation to do.
(xii) Where to prevent the immediate and imminent breach of an obligation, the
obligation whether arising from contract or Statute, and where it is necessary to
compel the performance of certain acts, which the court is capable of enforcing its
performance, then, by virtue of Section 39 of the Specific Relief Act, a Suit for
Mandatory injunction may be filed for the issuance of said injunction.
DISPUTES RELATING TO IMMOVABLE PROPERTIES, i.e. Land, flats etc
The obligations of Seller and the buyer of immovable property are set forth in Section
55 of the Transfer of Property Act, 1888.
Under the law, three distinct actions could be brought for the recovery of specific
immovable property, namely –
1. A Suit based on title by Ownership;
2. A Suit based on possessory title;
3. A Suit based on the strength merely of previous possession, in the case of a
wrongful ouster, i.e. without following the due process of law, of a person without his
consent.
I. When a cloud is raised over a person’s title and he does not have a possession, a
112
@lawkhabar
Suit for declaration and possession, with or without a consequential injunction is the
remedy;
II. Where a person’s title is not in dispute but he is out of possession, he has to sue for
possession and consequential injunction;
III. Where there is merely an interference with a person’s lawful possession or where
there is a threat of dispossession, it is sufficient to sue for an injunction simpliciter.
(1) WHERE THE BUILDER / DEVELOPER IS EVADING IN PERFORMING HIS
PART OF THE CONTRACT, thereby seriously prejudicing the interests of the
Purchaser, the Purchaser, by virtue of Sections 10, 12, 14(3), 19, 21, 22, 23, 42 and
subject to Sections14, 16, 17, 18, 20, 24 of the Specific Relief Act, 1963, may by
filing a Suit for Specific performance, cause the said Builder / Developer to perform
his part of the contract and may also seek damages in addition to Specific
performance, or may seek damages in lieu of Specific performance; and can also seek
additional damages for breach of Contract.
Where despite a decree for specific performance, the purchaser fails to pay the
purchase money, or any other sum which the court has ordered him to pay, the
Builder / Developer, by virtue of Section 28 of the Specific Relief Act, may apply in
the same Suit to declare the contract rescinded.
The party enforcing specific performance of the contract, by virtue of Section 29 of
the Specific Relief Act, in the alternative of specific performance, may seek rescission
of the contract in case the court refuses specific performance.
(2) WHERE ONE IS FORCIBLY / UNLAWFULLY DISPOSSESSED FROM HIS
LAWFUL POSSESSION –A civil suit u/s 6 of Specific Relief Act, 1963, may be
filed before the District Court / High Court for immediate restoration of possession to
the person who was in lawful possession.
(3)
WHERE
ONE
IS
ANTICIPATING
FORCIBLE
/
UNLAWFUL
DISPOSSESSION FROM HIS LAWFUL POSSESSION / OR TO PREVENT
113
TRESSPASS OF IMMOVABLE PROPERTY –
(i) A Civil Suit u/s 35 of the Specific Relief Act, 1963 may be filed thereby seeking
declaration to the effect that the person in possession is entitled to the present
possession;
(ii) A Civil Suit u/s 39 of Specific Relief Act, 1963 may be filed for Mandatory
Injunction against the person who intends to unlawfully dispossess.
(4) IN AN AGREEMENT FOR SALE / PURCHASE OF IMMOVABLE
PROPERTY, WHERE ANY PARTY REFUSE TO PERFORM HIS PART OF
PROMISE SO MADE IN THE AGREEMENT / CONTRACT.
(i) Where the Seller is evading in performing his part of the Contract, thereby
seriously prejudicing the interests of the Purchaser, the Purchaser, by virtue of
Sections 10, 12, 14(3), 19, 21, 22, 23, 42 and subject to Sections14, 16, 17, 18, 20, 24
of the Specific Relief Act, 1963, may by filing a Suit for Specific performance, cause
the said Seller to perform his part of the contract and may also seek damages in
addition to Specific performance, or may seek damages in lieu of Specific
performance; and can also seek additional damages for breach of Contract.
Where despite a decree for specific performance, the purchaser fails to pay the
purchase money, or any other sum which the court has ordered him to pay, the Seller,
by virtue of Section 28 of the Specific Relief Act, may apply in the same Suit to
declare the contract rescinded.
The Purchaser enforcing specific performance of the contract, by virtue of Section 29
of the Specific Relief Act, in the alternative of specific performance, may seek
rescission of the contract in case the court refuses specific performance.
(ii) A Suit comprehensive, Suit for the Registration of the Sale Deed and for recovery
of possession, is not barred on the ground that a statutory alternative remedy of
114
registration is available under section 77 of the Registration Act. An Agreement for
transfer of property implies a contract not only to execute the deed of transfer but also
to appear before the Registering Officer and to admit execution thereby facilitating
the registration of the document wherever it is compulsory.
(iii) Where a person, who has purchased goods / movable property, from a person
who has no title or has imperfect title to the said goods / movable property, the said
purchaser, by virtue of Section 13 of Specific Relief Act, 1963, has a right and he –
(a) May compel the said other person to make good the title where in future the said
other person acquired the title to such goods / movable property;
(b) May compel the said other person to procure the concurrence of a person whose
concurrence will validate the title of the purchaser;
(c) Where a mortgaged property is sold as a unencumbered property, the purchaser
may compel the Seller to redeem the mortgage and obtain a valid discharge, and if
necessary, a conveyance from the mortgagee;
(d) Where in a case, the Seller had filed the Suit for Specific performance of the
contract, and his said Suit is dismissed for want of title or imperfect title, the
purchaser in the said Suit, can claim the refund of his amount paid over said goods /
movable property and can also recover interest on the said amount paid including
costs of the Suit.
(iv) Where consent to an agreement is obtained by coercion, fraud or
misrepresentation, the agreement is a contract voidable at the option of the party
whose consent was so obtained; and where both the parties to an agreement are under
a mistake of fact essential to the agreement, the agreement is void. In such situation
the defrauded party has three remedies are open to him, namely –
• He may rescind the contract absolutely and sue to recover the consideration parted
with upon the fraudulent contract; or
• He may bring an action to rescind the contract and in that action have full relief; or
• He may retain what he has received and bring an action to recover the damages
sustained.
(v) Where written instruments / contracts, partially or wholly, originally valid,
115
becomes inefficacious by subsequent events, such as, by satisfaction or payment, or
other causes; and its existence casts either a cloud upon the title of the party or subject
him to the danger of some future litigation; under such and like circumstances, the
said party, by virtue of Section 31 and 32 of the Specific Relief Act, may file a Suit to
declare the said whole or partial of the Written Instrument / contract, as void or
voidable and get it cancelled.
(vi) Where a person is entitled to an immovable property and any person is denying or
interested to deny the such entitlement, then, by virtue of Section 34 of the Specific
Relief Act, the said aggrieved person may file a Suit for declaration by the Court that
he is entitled for said immovable property.
(vii) Where to prevent the immediate and imminent breach of an obligation, the
obligation whether arising from contract or Statute, and where it is necessary to
compel the performance of certain acts, which the court is capable of enforcing its
performance, then, by virtue of Section 39 of the Specific Relief Act, a Suit for
Mandatory injunction may be filed for the issuance of said injunction.
116
CASE BRIEFS
1. Dhulabhai and Ors. Vs. The State of M.P. and Anr, Supreme Court, 1968
[Civil court jurisdiction, s.9]
Facts
Appellants Dealers in Tobacco in Ujjain, they get their tobacco locally or import from
other States. Madhya Bharat State enacted Madhya Bharat Sales Tax Act.
•
Section 3: dealers to pay sales tax on the basis of their turnover. Importers
with taxable turnover of Rs. 5,000 and above taxed under the Act and for other
dealers the limit was Rs. 12,000.
•
Section 5: tax under Act is single point tax and the point was to be specified
by the government.
The government notified the tax point to be the point of import, thus levying tax
on traders importing tobacco from other States and excluding other traders from
tax liability. Appellants filed suit in Dist. Court for refund of tax on the ground
that it was illegally collected from them because the tax violated the prohibition in
Article 301 and is not saved u/A 304(a)
•
S. 9, CPC: The Courts shall (subject to the provisions herein contained) have
jurisdiction to try all suits of a civil nature excepting suits of which their
cognizance is either expressly or impliedly barred.
•
Art. 301. Subject to the other provisions of this Part, trade, commerce and
intercourse throughout the territory of India shall be free.
•
Art. 304. Notwithstanding anything in article 301 or article 303, the
Legislature of a State may by law—
(a) Impose on goods imported from other States 1[or the Union territories]
any tax to which similar goods manufactured or produced in that State are
subject, so, however, as not to discriminate between goods so imported
and goods so manufactured or produced;
117
Issue: Since according to s. 17 of the Act, no assessment made or order passed by
AO, Appellate authority or Commissioner can be called in question in any court, can
the appellants’ case lie in a civil court?
Decision: the government notifications violated free trade provision in the Art. 301
and were not protected under Art. 304 (a) because similar goods manufactured in
Madhya Bharat were not taxed. Therefore, these notifications were struck down by
the SC in Bhailal's case ([1964] 6 SCR 261) on ground that an equal tax was not
levied on similar goods produced in State. In K.S. Venkataraman case ([1966] 601
ITR 112SC) it was held that when provisions of an Act are ultra vires in their
application, the action of authorities, applying those provisions becomes in excess of
jurisdiction. After notifications were struck down taxing authorities had no
jurisdiction to make assessment under those notifications. When a provision is already
declared unconstitutional or constitutionality of any provision is to be challenged a
suit is open. Writ of certiorari may include direction for refund but it is not
compulsory remedy to replace suit. In the present case, even though the Act contained
provisions for appeal, revision, rectification and reference to the HC, the notifications
being declared void, the party could take advantage of the fact that tax was levied
without a complete charging section and file civil suit.
Test for exclusion of Civil Court jurisdiction laid down by SC:
1. If a statute gives finality to the orders of the special tribunals and if there is
adequate remedy to do what the Civil Courts would normally do in a suit, the
Civil Court’s jurisdiction must be held to be excluded. But when the
provisions of the Act have not been complied with or the statutory tribunal has
not acted in conformity with the fundamental principles of judicial process,
Civil courts will have jurisdiction in such cases because in such cases the
order cannot be said to be under the Act but is de hors the Act.
2. 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.
118
3. When a provision is already declared unconstitutional or the constitutionality
of any provision is to be challenged, a civil suit is allowed. 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.
4. Civil suit is open where the particular Act contains no machinery for refund of
tax collected in excess of constitutional limits or illegally collected.
5. Questions of correctness of assessment are to be considered by authority under
statute and cannot lie in a civil court if the orders of the authorities are
declared to be final or there is an express prohibition in the particular Act.
6. An exclusion of the jurisdiction of the Civil Court is not readily to be inferred
unless the conditions above set down apply
GlaxoSmithKline Consumer Healthcare Limited and Horlicks Limited and
Anr.
Vs.
Heinz India (P) Limited
Facts:
Prior to appearing before the Delhi High Court, the parties had filed a series of suits
against each other in three different courts, which were on-going and the suits filed in
the Delhi High Court was the fourth and the fifth suit filed.
The plaintiff(s) filed the first suit in August 2004 in Calcutta High Court for
injunction etc. against the defendant alleging disparaging advertisement depicting two
cups including one cup with the alphabet 'H'. The 'Complan' cup was shown as
growing in height in comparison to the cup with the alphabet 'H'. Injunction order was
passed against the defendant with the direction to show the advertisement without
showing the cup marked with the alphabet 'H'.
The second suit was filed by the plaintiff(s) in Madras High Court against an
advertisement with one cup with the drink 'Complan' growing taller and two other
119
cups remaining stagnant. The Madras High Court allowed the defendant to use a
comparative cup (but without any letter) along with a 'Complan' cup provided color of
the liquid in the two cups was the same.
The third suit was filed by the defendant against the plaintiff(s) in the Bombay High
Court is in respect of a moving advertisement. In the advertisement, the two products
'Complan' and 'Horlicks' are visible in baskets held by two mothers along with their
sons. The maximum retail price of the two products is stated. It is highlighted that the
product of the plaintiff(s) is lower in price. It is alleged by the defendant in the suit
filed before Bombay High Court that the moving advertisement makes disparaging
remarks against the defendant product 'Complan' with regard to nutrients and health
value in comparison to the plaintiffs' products.
In the fourth and the fifth suits filed, GSK and Horlicks filed two suits against Heinz
India Ltd., alleging disparaging advertisements made by the latter. Heinz contended
that the suits should not be heard on the principle of “forum non convenience” and the
parties had already been heard extensively on the matter. GSK contended that the
principle of “forum non convenience” had no application and the Court was bound to
hear this case since it was within the Court’s jurisdiction.
Holding/Reasoning:
•
The Court held that Section 151 of the Code gave it the power to pass any
orders or decisions that it may see fit in the interests of justice. This power is
only limited if there is an explicit prohibition against a certain order that the
court wishes to pass.
•
Further, the Court was of the view that “forum non convenience” did not
confer a jurisdiction on a court contrary to the provisions of section 20, but it
came into effect where a court for valid and sound reasons, does not wish to
entertain a suit that it otherwise has jurisdiction over.
•
Additionally, the court observed that it is accepted that Section 20 of the Code
does not bar or prohibit parties from entering into a contract or mutual
understanding that courts only at a particular location will have exclusive
jurisdiction to decide the disputes and oust jurisdiction of courts located at
120
@lawkhabar
other locations. This interpretation was used by the court to hold that the
principle of forum non-convenience was not barred by, or alien to section 20
of the code.
•
The court also held that while High Courts could not transfer cases to other
high courts under section 24, and that power was reserved only with the
Supreme court under section 25; the plaints of the suit could however be
returned on the grounds of forum non convenience.
•
The court further held that the doctrine of forum non-convenience is invoked
by court to not entertain a matter presented before it in view of the fact that
there exists a more appropriate court of competent jurisdiction, which would
be in a better position to decide the issue between the parties. In this way, it
was distinguished from an anti-suit injunction, where one Court restrains the
parties from approaching another court. “Forum non convenience” however,
allows a court to refuse to exercise its own jurisdiction and directs parties to
approach what it feels is the better, more appropriate forum.
•
The court held that the principle of forum non convenience should not be
exercised unless the court comes to a conclusion that the case can be tried
most suitably in the alternative forum and it is in the interest of all parties, in
the ends of justice and there are grounds not to entertain a party. There should
be a clear, real and a distinct dis-advantage, to negate right of the plaintiff to
decide the forum or the court where he wants to institute a suit.
•
The court finally held that the present case falls within one of those rare cases
where a party has deliberately and intentionally invoked jurisdiction of a
court, which has jurisdiction to entertain a suit under Section 20 of the Code
but the interest of justice and equity requires that the plaintiff(s) should be
asked to approach the court where parties are already litigating. The twin
conditions for applying the principle of 'forum non-convenience' are satisfied
in the present case; any decision on the advertisement of the defendant will
necessarily call for examination and comments on the advertisement of the
plaintiff(s), which is subject matter before the Bombay High Court, and any
comment or observation in the orders passed by the Delhi High Court will
cause confusion, possibility of conflicting decisions, which will cause
prejudice to the parties.
121
•
. It is appropriate to repeat that principle of 'forum non-convenience' can be
applied rarely when there are overwhelming facts and interest of justice
requires that a Court that has jurisdiction should not adjudicate the suit/legal
proceedings. It should only be applied when failure to do so, could result in
abuse of process of Court and cause grave injustice.
GULF OIL CORP. V GILBERT
FACTSThe respondent-plaintiff brought this action in the Southern District of New York, but
resides at Lynchburg, Virginia, where he operated a public warehouse. He alleges that
the petitioner-defendant, in violation of the ordinances of Lynchburg, so carelessly
handled a delivery of gasoline to his warehouse tanks and pumps as to cause [*503]
an explosion and fire which consumed the warehouse building to his damage of $
41,889.10, destroyed merchandise and fixtures to his damage of $ 3,602.40, caused
injury to his business and profits of $ 20,038.27, and burned the property of customers
in his custody under warehousing agreements to the extent of $ 300,000. He asks
judgment of $ 365,529.77 with costs and disbursements, and interest from the date of
the fire. The action clearly is one in tort.
The petitioner-defendant is a corporation organized under the laws of Pennsylvania,
qualified to do business in both Virginia and New York, and it has designated
officials of each state as agents to receive service of process. When sued in New
York, the defendant, invoking the doctrine of forum non conveniens, claimed that the
appropriate place for trial is Virginia, where the plaintiff lives and defendant does
business, where all events in litigation took place, where most of the witnesses reside,
and where both state and federal courts are available to plaintiff and are able to obtain
jurisdiction of the defendant.
ISSUEThe questions are whether the United States District Court has inherent power to
dismiss a suit pursuant to the doctrine of forum non conveniens and, if so, whether
that power was abused in this case.
122
REASONINGThe principle of forum non-conveniens is simply that a court may resist imposition
upon its jurisdiction even when the letter of a general venue statute authorizes
jurisdiction. These statutes are drawn with a necessary generality and usually give a
plaintiff a choice of courts, so that he may be quite sure of some place in which to
pursue his remedy. But the open door may admit those who seek not simply justice
but perhaps justice blended with some harassment. A plaintiff sometimes is under
temptation to resort to a strategy of forcing the trial at a most inconvenient place for
an adversary, even at some inconvenience to himself.
Factors of public interest also have place in applying the doctrine. Administrative
difficulties follow for courts when litigation is piled up in congested centers instead of
being handled at its origin. Jury duty is a burden that ought not to be imposed upon
the people of a community, which has no relation to the litigation. In cases, which
touch the affairs of many persons, there is reason for holding the trial in their view
and reach rather than in remote parts of the country where they can learn of it by
report only. There is a local interest in having localized controversies decided at
home. There is an appropriateness, too, in having the trial of a diversity case in a
forum that is at home with the state law that must govern the case, rather than having
a court in some other forum untangle problems in conflict of laws, and in law foreign
to itself.
Turning to the question whether this is one of those rather rare cases where the
doctrine should be applied, we look first to the interests of the litigants.
The plaintiff himself is not a resident of New York, nor did any event connected with
the case take place there, nor does any witness, with the possible exception of experts,
live there. No one connected with that side of the case save counsel for the plaintiff
resides there, and he has candidly told us that insurance companies interested
presumably because of subrogation retained him. His affidavits and argument are
devoted to controverting claims as to defendant's inconvenience rather than to
showing that the present forum serves any convenience of his own, with one
123
@lawkhabar
exception. The only justification for trial in New York advanced here is one rejected
by the district court and is set forth in the brief as follows:
"This Court can readily realize that an action of this type, involving as it does a claim
for damages in an amount close to $ 400,000, is one which may stagger the
imagination of a local jury which is surely unaccustomed to dealing with amounts of
such a nature. Furthermore, removed from Lynchburg, the respondent will have an
opportunity to try this case free from local influences and preconceived notions which
may make it difficult to procure a jury which has no previous knowledge of any of the
facts herein."
This unproven premise that jurors of New York live on terms of intimacy with $
400,000 transactions is not an assumption we easily make. Nor can we assume that a
jury from Lynchburg and vicinity would be "staggered" by contemplating the value of
a warehouse building that stood in their region, or of merchandise and fixtures such as
were used there, nor are they likely to be staggered by the value of chattels which the
people of that neighborhood put in storage. It is a strange argument on behalf of a
Virginia plaintiff that the community which gave him patronage to make his business
valuable is not capable of furnishing jurors who know the value of the goods they
store, the building they are stored in, or the business their patronage creates.
RATIOAn interest to be considered, and the one likely to be most pressed, is the private
interest of the litigant. Important considerations are the relative ease of access to
sources of proof; availability of compulsory process for attendance of unwilling, and
the cost of obtaining attendance of willing, witnesses; possibility of view of premises,
if view would be appropriate to the action; and all other practical problems that make
trial of a case easy, expeditious and inexpensive. There may also be questions as to
the enforceability of a judgment if one is obtained. The court will weigh relative
advantages and obstacles to fair trial. But unless the balance is strongly in favor of the
defendant, the plaintiff's choice of forum should rarely be disturbed.
HOLDING-
124
We are convinced that the District Court did not exceed its powers or the bounds of
its discretion in dismissing plaintiff's complaint and remitting him to the courts of his
own community.
DISSENTJustice Black.
Neither the venue statute nor the statute, which has governed jurisdiction since 1789
contains any indication or implication that a federal district court, once satisfied that
jurisdiction and venue requirements have been met, may decline to exercise its
jurisdiction.
For any individual or corporate defendant who does part of his business in states other
than the one in which he is sued will almost invariably be put to some inconvenience
to defend himself. It will be a poorly represented multistate defendant who cannot
produce substantial evidence and good reasons fitting the rule now adopted by this
Court tending to establish that the forum of the action against him is most
inconvenient. The Court's new rule will thus clutter the very threshold of the federal
courts with a preliminary trial of fact concerning the relative convenience of forums.
The preliminary disposition of this factual question will, I believe, produce the very
kind of uncertainty, confusion, and hardship.
The broad and indefinite discretion left to federal courts to decide the question of
convenience from the welter of factors which are relevant to such a judgment, will
inevitably produce a complex of close and indistinguishable decisions from which
accurate prediction of the proper forum will become difficult, if not impossible. Yet
plaintiffs will be asked "to determine with certainty before bringing their actions that
factual question over which courts regularly divide among themselves and within
their own membership. As penalty for error, the injured individual may not only
suffer serious financial loss through the delay and expense of litigation, but discover
that his claim has been barred by the statute of limitations in the proper forum while
he was erroneously pursuing it elsewhere."
Modi Entertainment v WSG Cricket AIR SCW 733
125
Modi entered into an agreement with WSG Cricket (WSG) under which it got the
exclusive right to sell the commercial rights of the international cricket series held in
Kenya in October, '00 (event). Under the agreement, WSG granted an exclusive
license to Modi to telecast the event on Doordarshan (Indian channel) and to sell the
advertisement slots, for which Modi agreed to pay a minimum guaranteed amount of
Rs 15 crore (US$ 3,125,000). Modi was based in India and WSG in Singapore.
However, the jurisdiction clause in the agreement provided that English law would
apply and agreed to non-exclusive jurisdiction of the English Courts (without
reference to English conflict of law rules).
As soon as the telecast commenced, WSG alleged breach of the agreement by Modi
and threatened to discontinue the feed given to Doordarshan. Pursuant to this, Modi
filed a suit in the Bombay High Court, inter alia, for damages, alleging that WSG's
threats prevented advertisers from advertising on Doordarshan.
WSG, on the other hand, filed an action against Modi in the high court of Justice
Queen's Bench Division (the English Court) for a money decree to recover the
minimum amount of Rs15 crore and got a writ of summons issued. The writ of
summons called upon Modi to notify the English Court of its intention to contest
jurisdiction and also stated that failure to do so would amount to submitting to the
English Court's jurisdiction. Modi entered appearance in the English Court and sought
three weeks' time. In the meantime, Modi sought an anti-suit injunction in the
Bombay High Court against WSG's suit in the English Court; on the grounds that the
Indian court was the natural forum in respect of disputes between Modi and WSG and
that the proceedings in the English Court would be oppressive and vexatious.
A single bench of the Bombay High Court granted the anti-suit injunction, which,
however, was vacated by a division bench of the Bombay High Court.
When this case came before the Supreme Court the following principals emerged
1) In exercising discretion to grant an anti-suit injunction the court must be
satisfied of the following aspects: -
126
@lawkhabar
(a) The defendant, against whom injunction is sought, is amenable to the personal
jurisdiction of the court;
(b) If the injunction is declined the ends of justice will be defeated and injustice will
be perpetuated; and
(c) The principle of comity -- respect for the court in which the commencement or
continuance of action/proceeding is sought to be restrained -- must be borne in mind;
2) In a case where more forums than one are available, the Court in exercise of
its discretion to grant anti-suit injunction will examine as to which is the
appropriate forum (Forum conveniens) having regard to the convenience of
the parties and may grant anti-suit injunction in regard to proceedings which
are oppressive or vexations or in a forum non-conveniens;
3) Where jurisdiction of a court is invoked on the basis of jurisdiction clause in a
contract, the recitals therein in regard to exclusive or non-exclusive
jurisdiction of the court of choice of the parties are not determinative but are
relevant factors and when a question arises as to the nature of jurisdiction
agreed to between the parties the court has to decide the same on a true
interpretation of the contract on the facts and in the circumstances of each
case;
4) A court of natural jurisdiction will not normally grant anti-suit injunction
against a defendant before it where parties have agreed to submit to the
exclusive jurisdiction of a court including a foreign court, a forum of their
choice in regard to the commencement or continuance of proceedings in the
court of choice, save in an exceptional case for good and sufficient reasons,
with a view to prevent injustice in circumstances such as which permit a
contracting party to be relieved of the burden of the contract; or since the date
of the contract the circumstances or subsequent events have made it
impossible for the party seeking injunction to prosecute the case in the court of
choice because the essence of the jurisdiction of the court does not exist or
because of a vis major or force majeure and the like;
5) Where parties have agreed, under a non- exclusive jurisdiction clause, to
approach a neutral foreign forum and be governed by the law applicable to it
for the resolution of their disputes arising under the contract, ordinarily no
127
anti- suit injunction will be granted in regard to proceedings in such a forum
conveniens and favored forum as it shall be presumed that the parties have
thought over their convenience and all other relevant factors before submitting
to non-exclusive jurisdiction of the court of their choice which cannot be
treated
just
an
alternative
forum;
6) A party to the contract containing jurisdiction clause cannot normally be
prevented from approaching the court of choice of the parties as it would
amount to aiding breach of the contract; yet when one of the parties to the
jurisdiction clause approaches the court of choice in which exclusive or nonexclusive jurisdiction is created, the proceedings in that court cannot per se be
treated as vexatious or oppressive nor can the court be said to be forum nonconveniens; and
(7) The burden of establishing that the forum of the choice is a forum non-conveniens
or the proceedings therein are oppressive or vexatious would be on the party so
contending to aver and prove the same.
The court then further held that the based on the jurisdiction clause the intention of
the parties were to submit themselves to the jurisdiction of the English Courts and
unless good and sufficient reasons are given the intention of the parties must be
respected.
The fact that the parties had subjected themselves to the jurisdiction of the English
courts show that they had reasonably foreseen the breach of contracts and
Circumstances such as comparison of litigation expenses in England and in India or
the hardship and incurring of heavy expenditure on taking the witnesses to the English
Court, would be deemed to have been foreseen by the parties when they agreed to
submit to the jurisdiction of the English Court in accordance with the principles of
English law and the said reasons cannot be valid grounds to interdict prosecution of
the action in the English Court of choice. And the second is that English Court has no
connection with either of the parties or the subject matter and it is not a court of
natural jurisdiction. This reason can be taken note of when strong reasons are shown
to disregard the contractual obligation. It cannot be a good and sufficient reason in
128
itself to justify the court of natural jurisdiction to interdict action in a foreign court of
choice of the parties. Hence appeal dismissed.
Norwich Pharmacal v Custom and Excise Commissioner
Facts: It is a case involving the owner and exclusive licensee of a patent for
an antibacterial called furazolidone. Between 1960 and 1970 unlicensed shipments of
the chemical were imported into Britain, but Norwich Pharmacal were unable to
identify the importers. The Commissioners held information that would identify the
importers, but would not disclose this, claiming that they had no authority to give
such information.
Issue: Whether, the respondents were under an obligation to provide the information,
within the scope of discovery?
Reasoning: The House of Lords held that where an innocent third party had
information relating to unlawful conduct, a court could compel them to assist the
person suffering damage by giving them that information. This is now known as a
"Norwich Pharmacal order".
For this relief to be granted (so that discovery can be made), the victim must
demonstrate to the court:
"
A reasonable basis to allege that a wrong has actually been committed
"
The disclosure of documents or information from the third party is needed to
enable action against the wrongdoer
"
The respondent is not a "mere witness", but is sufficiently mixed up in the
wrongdoing so as to have facilitated it, even if innocently, and therefore be in a
position to provide the information
"
The order is necessary in the interests of justice on the facts of the case
One more condition is, that there is no probability that the concerned party from
whom the discovery is sought could be one of the parties after the discovery has been
given or the party has provided the necessary information. This was given in the case
of Orr. v. Diaper and referred to in this case.
129
@lawkhabar
Holding (Given by Lord Reid): The defendant party was sufficiently mixed up in the
transaction and was not a mere witness to it. However, there was no possibility that by
providing the information they could have been sued. Therefore, they were under an
obligation to provide the necessary information as the appellants could have instituted
the suits against the parties only after the respondents to them would give the
information. So, as a principle of fairness, they were under a duty to do so and
therefore, discovery should be allowed.
Ramchandra Dogdu Sonavane
Facts:
Watandar of a certain property died issueless. Appellants claimed his property
claiming to be his closest living relatives while the respondent claimed the land
alleging to be the adopted son of the deceased Watandar. Respondent filed an
application in 1931 before the mamlatdar to declare himself the new watandar and
allegedly such request was granted. Appellants filed for possession in the revenue
court and filed for an injunction in the civil court both of which were granted in
1953.In the civil court the respondent failed to prove him to be the adopted son of
watandar. Later in 1976 he tried to revive the matter before the state governments
after furnishing certified copies of the mamlatdars order of 1931 pursuant to which
the SDO after an inquiry allowed his application. The appellants contested this on the
basis of res judicata.
Rule: Res judicata S 11 CPC
Held: The court held that res judicata did in fact operate as a bar to the respondent’s
application, as the issue of paternity had already been decided before the civil court.
Even though the suit before the civil court was one of injunction and not title the issue
of whether to grant the injunction of not could not have been decided without
deciding the issue of title/paternity. Therefore the issue of title was not decided
130
merely incidentally but was a substantial part of the previous suit. Therefore even in a
subsequent suit where the issue of title was directly in question the injunction suit
would apply as res judicata. Moreover his right was barred by limitation as 14 years
had passed and under s 27 of the limitation act 12 years is the prescribed limitation
period.
Deputy Commissioner, Hardoi vs Rama Krishna Narain And Others
FACTS: The creditors who could file in the suit for appeal against the landlords, they
did not do it. Only one did go ahead.
ISSUE: Whether all creditors are necessary parties to appeal?
SECTIONS: Order I Rule 1 - All persons may be joined in one suit as plaintiff, in
whom any right to relief in respect of or arising of the same act or transaction or series
of act transactions is alleged to exist, whether severally or in the alternative, where, if
such persons brought separate suits, any common question of law or fact would arise.
Order I Rule 3- All persons may be joined as defendants against whom any right to
relief in respect of or arising out of the same act or transaction or series of acts or
transactions is alleged to exist, whether jointly, severally or in the alternative, where,
if separate suits were brought against such persons any common question of law or
fact would arise.
Order XXI Rule 63 – Omitted
RATIONAL: Benares Bank Ltd., Benares v. Bhagwandas –
Two tests for deciding whether a certain person was a necessary party in a
proceeding: (1) that there must be a right to some relief against such party in respect
of the matter involved in the proceedings in question, and (2) it should not be possible
to pass an effective decree in the absence of such party.
Why creditors are not important parties - in execution proceedings a warrant of
attachment and for delivery of possession can only be issued against the owner, viz.,
the landlord, and not against the creditors. Due to which the existence of the creditor
is not necessary. It is not possible to hold that any right of relief exists in an objector
under section 11 as against the creditors. The creditors may be given notice of those
131
@lawkhabar
proceedings and afforded opportunity to watch those proceedings in order to see that
no property is secreted from them. Persons who have been disclosed as creditor under
section 8, a number of them may not at all be interested in the result of the decision of
the claim. Under the provisions of section 11 of UP encumbered estates act, no
provision has been made for issuing notice to all the creditors.
Under Order XXI, rule 63, it is only the attaching creditor who has the right to file a
suit or of being impleaded as defendant in a suit by the judgment- debtor. The
creditors of the judgment debtor who have not attached the property are not necessary
parties in a suit under Order XXI, rule 63, though after the decision in that suit they
may be entitled to share in the ratable distribution of the property if they make an
application for that purpose.
HOLDING: NOT necessary parties.
Chunilal Mehta v Century Spinning
The Supreme Court, thus, laid, down the following principles to determine whether a
question of law is a substantial question of law.
i)
If the question is of general public importance, or it directly and
substantially affects the right of the parties. It means a substantial question
of law as between the parties and does not mean a question of general
importance.
ii)
Whether it is an open question in the sense that it is not finally settled by
this court or by a federal court.
iii)
If the highest court settles the question or the general principles are applied
in determining the question are well settled then the question would not be
a substantial question of law.
The court held that in the present case the construction of agreement is not only one
of law but is also not simple or free from doubt and a substantial question of law was
involved.
132
Hope Plantations Case
Hope Plantations:
26. It is settled law that principles of estoppel and res judicata are based on public
policy and justice. Doctrine of res judicata is often treated as a branch of the law of
estoppel though these two doctrines differ in some essential particulars. Rule of res
judicata prevents the parties to a judicial determination from litigating the same
question over again even though the determination may even be demonstrated wrong.
When the proceedings have attained finality, parties are bound by the judgment and
are estopped from questioning it. They cannot litigate again on the same cause of
action nor can they litigate any issue, which was necessary for decision in the earlier
litigation. These two aspects are 'cause of action estoppel' and 'issue estoppel'. These
two terms are of common law origin. Again once an issue has been finally
determined, parties cannot subsequently in the same suit advance arguments or
adduce further evidence directed to showing that issue was wrongly determined. Their
only remedy is to approach the higher forum if available. The determination of the
issue between the parties gives rise to, as noted above, an issue estoppel. It operates in
any subsequent proceedings in the same suit in which the issue had been determined.
It also operates in subsequent suits between the same parties in which the same issue
arises. Section 11 of the CPC contains provisions of res judicata but these are not
exhaustive of the general doctrine of res judicata. Legal principles of estoppel and res
judicata are equally applicable in proceedings before administrative authorities as
they are based on public policy and justice.
29. In Arnalds & Ors. v. National Westminster Bank Plc. (1991) 2 AC 93 House of
Lords noticed the distinction between cause of action estoppel and issue estoppel.
Cause of action estoppel arises where the cause of action in the later proceedings is
identical to that in the earlier proceedings, the latter having been between the same
parties or their privies and having involved the same subject matter. In such a case
133
the bar is absolute in relation to all points decided unless fraud or collusion is
alleged, such as to justify setting aside the earlier judgment. The discovery of new
factual matter which could not have been found out by reasonable diligence for use
in the earlier proceedings does not according to the law of England, prevent the
latter to be re-opened. Issue estoppel may arise where a particular issue forming a
necessary ingredient in a cause of action has been litigated and decided and in
subsequent proceedings between the same parties involving a different cause of
action to which the same issue is relevant one of the parties seeks to re-open that
issue. Here also bar is complete to re-litigation but its operation can be thwarted
under certain circumstances. The House then finally observed:
"But there is room for the view that the underlying principles upon which estoppel
is based, public policy and justice, have greater force in cause of action estoppel,
the subject matter of the two proceedings being identical, than they do in issue
estoppel, where the subject matter is different. Once it is accepted that different
considerations apply to issue estoppel, it is hard to perceive any logical distinction
between a point, which was previously raised and decided, and one, which might
have been but was not. Given that the further material which would have put an
entirely different complexion on the point was at the earlier stage unknown to the
party and could not by reasonable diligence have been discovered by him, it is hard
to see why there should be a different result according to whether he decided not to
take the point, thinking it hopeless, or argue it faintly without any real hope of
success. In my opinion your Lordships should affirm it to be the law that there may
be an exception to issue estoppel in the special circumstances that there has become
available to a party further material relevant to the correct determination of a point
involved in the earlier proceedings, whether or not that point was specifically raised
and decided, being material which could not by reasonable diligence have been
adduced in those proceedings. One of the purposes of estoppel being to work
justice between the parties, it is open to courts to recognize that in special
circumstances inflexible application of it may have the opposite result...."
Next question for consideration is whether the further relevant material which a
party may be permitted to bring forward in the later proceedings is confined to
matters of fact, or whether what may not entirely inappositely be described as a
134
change in the law may result in, or be an element in special circumstances enabling
an issue to be re-opened.
Your Lordships should appropriately, in my opinion, regard the matter as entire and
approach it from the point of view of principle. If a Judge has made a mistake,
perhaps a very egregious mistake, as is said of Walton J.'s judgment here, and a
later judgment of a higher court overrules his decision in another case, do
considerations of justice require that the party who suffered from the mistake
should be shut out, when the same issue arises in later proceedings with a different
subject matter, from reopening that issue?
I am satisfied, in agreement with both courts below, that the instant case presents
special circumstances such as to require the plaintiffs to be permitted to reopen the
question of construction decided against them by Walton J., that being a decision
which I regard as plainly wrong."
135
@lawkhabar