Case Note & Summary
The Supreme Court considered a reference arising from a suit for recovery filed by the respondent against the appellant based on a franchise agreement dated 24.03.2004. The agreement contained an exclusive jurisdiction clause (Clause 16B) stipulating that only courts in Delhi shall have jurisdiction. Despite this, the respondent instituted the suit before the Civil Judge (Sr. Division) at Gurgaon on 06.01.2011. The appellant filed an application under Order VII Rule 10 CPC on 26.08.2011 contending lack of territorial jurisdiction, but initially did not raise the exclusive jurisdiction clause. The Civil Judge rejected the objection on 12.03.2015, framing jurisdiction as a preliminary issue. On 06.09.2016, the Civil Judge again rejected the objection regarding exclusive jurisdiction. The High Court in revision on 05.09.2017 set aside this order, holding that in view of Clause 16B, the Gurgaon court lacked territorial jurisdiction, and directed return of the file under Order VII Rule 10 and 10A CPC. The suit had made substantial progress at Gurgaon, with evidence closed and fixed for final arguments. Thereafter, the respondent moved an application for transfer of the entire judicial file to Delhi, which was allowed by the Civil Judge on 14.02.2018. The High Court by the impugned order dated 13.03.2018 upheld this, holding that the suit at Delhi shall proceed from the stage at which it was pending at Gurgaon and not de novo. Aggrieved, the appellant appealed to the Supreme Court. The legal issue was whether upon return of plaint under Order VII Rule 10 and 10A CPC, the suit proceeds de novo or continues from the earlier stage. The appellant argued that the suit must proceed de novo as the Gurgaon court lacked jurisdiction, rendering proceedings void. The respondent contended that the suit should continue from the advanced stage to avoid travesty of justice. The Supreme Court held that the suit must proceed de novo. It reasoned that a court lacking jurisdiction is coram non judice and its proceedings are void ab initio. Order VII Rule 10A does not provide for continuation of the suit; it only prescribes procedure for return of plaint and issuance of fresh summons. The Court distinguished Joginder Tuli v. S.L. Bhatia as decided on its own facts and affirmed Oil and Natural Gas Corporation Ltd. v. Modern Construction & Co. as laying down the correct law. The Court also noted the appellant's conduct in not raising the exclusive jurisdiction clause earlier but held that this did not affect the legal position. The appeal was allowed, the impugned order set aside, and the suit directed to proceed de novo before the competent court at Delhi.
Headnote
A) Civil Procedure - Return of Plaint - Order VII Rule 10 and 10A CPC - De Novo Trial - Where a plaint is returned for presentation to the proper court due to lack of jurisdiction, the suit must proceed de novo before the competent court and cannot continue from the stage at which it was pending before the court without jurisdiction - The proceedings before a court lacking jurisdiction are void ab initio and cannot be saved by Order VII Rule 10A - Held that the suit shall commence afresh upon presentation of the plaint in the correct court (Paras 13-20). B) Civil Procedure - Precedent - Conflict Resolution - Joginder Tuli v. S.L. Bhatia (1997) 1 SCC 502 and Oil and Natural Gas Corporation Ltd. v. Modern Construction & Co. (2014) 1 SCC 648 - The decision in Modern Construction lays down the correct law that the suit must proceed de novo; Joginder Tuli was decided on its own facts and does not lay down any proposition of law - Held that there is no conflict requiring resolution by a larger Bench (Paras 14-18). C) Civil Procedure - Jurisdiction - Exclusive Jurisdiction Clause - Agreement between parties conferring exclusive jurisdiction on a particular court ousts jurisdiction of all other courts - Where parties agree that only courts in Delhi shall have exclusive jurisdiction, a suit filed in Gurgaon is coram non judice and the plaint must be returned - Held that the court lacking jurisdiction cannot proceed with the suit (Paras 13, 19).
Issue of Consideration
Whether a suit proceeds de novo or continues from the stage at which it was pending before the court at the time of returning of the plaint under Order VII Rule 10 and 10A of the Code of Civil Procedure, 1908
Final Decision
The Supreme Court allowed the appeal, set aside the impugned order of the High Court dated 13.03.2018, and directed that the suit shall proceed de novo before the competent court at Delhi upon presentation of the plaint. The Court held that the suit cannot continue from the stage at which it was pending before the Gurgaon court, as that court lacked jurisdiction and its proceedings were void ab initio.
Law Points
- Return of plaint under Order VII Rule 10 CPC for lack of jurisdiction renders proceedings before the court without jurisdiction void ab initio
- suit must proceed de novo before the competent court
- Order VII Rule 10A does not provide for continuation of suit from earlier stage
- Joginder Tuli v. S.L. Bhatia distinguished as decided on facts
- Oil and Natural Gas Corporation Ltd. v. Modern Construction & Co. lays down correct law
