Res judicata and issues of law

"Matter in issue" may be an issue of fact, an issue of law, or one of mixed law and fact.

No estoppel on a pure question of law/statute.

[In Mathura Prasad Bajoo Jaiswal and other vs. Dossibai N.B. Jeejeebhoy, 1970 (1) SCC 613, a
question arose as to whether an erroneous judgment on the jurisdiction of the Small Causes Court in
relation to a proceeding arising out of the Bombay Rents, Hotel and Lodging House Rates Control
Act, 1947 would be Res judicata. This Court laid down:

"5..........A decision of a competent Court on a matter in issue may be Res judicata in another
proceeding between the same parties: the "matter in issue" may be an issue of fact, an issue of law,
or one of mixed law and fact. An issue of fact or an issue of mixed law and fact decided by a
competent Court is finally determined between the parties and cannot be re-opened between them
in another proceeding. The previous decision on a matter in issue alone is Res judicata; the reasons
for the decision are not Res judicata. A matter in issue between the parties is the right claimed by
one party and denied by the other, and the claim of right from its very nature depends upon proof of
facts and application of the relevant law thereto. A pure question of law unrelated to facts which
give rise to a right, cannot be deemed to be a matter in issue. When it is said that a previous decision
is Res judicata, it is meant that the right claimed has been adjudicated upon and cannot again be
placed in contest between the same parties. A previous decision of a competent court on facts which
are the foundation of the right and the relevant law applicable to the determination of the
transaction which is the source of the right is Res judicata. A previous decision on a matter in issue is
a composite decision; the decision on law cannot be dissociated from the decision on facts on which
the right is founded. A decision on an issue of law will be as Res judicata in a subsequent proceeding
between the same parties, if the cause of action of the subsequent proceeding be the same as in the
previous proceeding, but not when the cause of action is different, nor when the law has since the
earlier decision been altered by a competent authority, nor when the decision relates to the
jurisdiction of the Court to try the earlier proceeding, nor when the earlier decision declares valid a
transaction which is prohibited by law. Where the law is altered since the earlier decision, the earlier
decision will not operate as Res judicata between the same parties."]

The principles of Mathura Prasad's case have been reconsidered by Apex Court in the case of
Canara Bank vs. N.G. Subbaraya Setty, 2018(2) RCR (Civil) 962 (SC), and the Apex Court
had re-stated the principles of law as follows:

(1) The general rule is that all issues that arise directly and substantially in a former suit or
proceeding between the same parties are Res judicata in a subsequent suit or proceeding between
the same parties. These would include issues of fact, mixed questions of fact and law and issues of
law.

(2) To this general proposition of law, there are certain exceptions when it comes to issues of law:

(i) Where an issue of law decided between the same parties in a former suit or proceeding relates to
the jurisdiction of the Court, an erroneous decision in the former suit or proceeding is not Res
judicata in a subsequent suit or proceeding between the same parties, even where the issue raised
in the second suit or proceeding is directly and substantially the same as that raised in the former
suit or proceeding. An erroneous decision as to the jurisdiction of a Court cannot clothe that Court
with jurisdiction where it has none.
Illustration: An erroneous decision clothing the Civil Court with jurisdiction to embark upon a suit
filed by a landlord against a tenant, in respect of rights claimed under the Bombay Rent Act, would
therefore, not operate as Res judicata in a subsequent suit filed before the Small Causes Court
between the same parties in respect of the same matter directly and substantially in issue in the
former suit.

(ii) An issue of law which arises between the same parties in a subsequent suit or proceeding is not
Res judicata if, by an erroneous decision given on a statutory prohibition in the former suit or
proceeding, the statutory prohibition is not given effect to. This is despite the fact that the matter
in issue between the parties may be the same as that directly and substantially in issue in the
previous suit or proceeding.

(iii) Another exception to this general rule follows from the matter in issue being an issue of law
different from that in the previous suit or proceeding. This can happen when the issue of law in the
second suit or proceeding is based on different facts from the matter directly and substantially in
issue in the first suit or proceeding. Equally, where the law is altered by a competent authority
since the earlier decision, the matter in issue in the subsequent suit or proceeding is not the same as
in the previous suit or proceeding because the law to be interpreted is different."

Exception to the Principle of Res-judicata

Judgment obtained by Fraud or Collusion (Situations in which Judgment would not operate as Res-
judicata): By virtue of S. 44 of the Indian Evidence Act, 1872

Distinction between Res judicata and Issue Estoppels:

There is a distinction between issue estoppel and Res judicata. Res judicata debars a court from
exercising its jurisdiction to determine the lis if it has attained finality whereas the doctrine of issue
estoppel is invoked against the party. If such issue is decided against him, he would be estopped
from raising the same in the latter proceedings. The doctrine of Res judicata creates a different kind
of estoppel viz. estoppel by record. Bhanu Kumar Jain vs. Archana Kumar, AIR 2005 SC 626.

Distinction between Res judicata and Order 2 Rule 2:

Res judicata relates to the plaintiff's duty to put forth all the grounds of attack in support of his
claim, whereas O. 2, R. 2 of the Code requires the plaintiff to claim all reliefs flowing from the same
cause of action in a single suit. The two pleas are different and one will not include the other. Alka
Gupta vs. Narender Kumar Gupta: 2011 AIR SC 860

Distinction between Res judicata and Estoppel':

1. Definition: Estoppel is a legal principle that prevents a party from taking a position or making a
claim that is inconsistent with their previous actions or statements.

2. Purpose: Prevents unfairness or injustice by stopping parties from changing their positions or
denying previous assertions.

3. Types:
- Estoppel by representation (statement or action).
- Estoppel by conduct (actions or inactions).
- Estoppel by deed (written instrument).
- Estoppel by judgment (previous court decision).

4. Requirements:
- A representation or statement made by one party.
- Reliance on that representation by the other party.
- Detriment or prejudice suffered by the relying party.

5. Effect: Bars a party from asserting a contrary position or claim.

The doctrine of Res judicata operates as a bar on the jurisdiction of a court to try a suit which has
been conclusively decided by the court with same parties, same subject matter and under same title.
It is provided U/s 11 of the CPC.

Whereas the doctrine estoppel as defined in S. 115 of the Indian Evidence Act, 1872 .

Res judicata corresponds to the part of the doctrine of estoppel, which is known as estoppel by
record.

Estoppel as enunciated in S. 115 of the Indian Evidence Act is by conduct or agreement or estoppel
in pais.

Thus, even though Res judicata may be said to be included in the doctrine of estoppel, as
understood in the wider sense of the term, it must be distinguished from estoppel as distinctly
provided for in the Law of Evidence.

The doctrine of Res judicata can be distinguished from estoppel, as generally understood, on the
following grounds:

1. The rule of Res judicata is based on public policy, i.e., it is to the interest of the State that there
should be an end to litigation and belongs to the province of procedure.

Estoppel, on the other hand, is part of the law of evidence and proceeds on the equitable principle
of altered situation, viz., that he who, by his conduct, has induced another to alter his position to his
disadvantage, cannot turn round and take advantage of such alteration of other's position.

2. Res judicata precludes a man from averring the same thing in successive litigations, while estoppel
prevents a party from saying two contradictory things at different times.

3. Res judicata is reciprocal and binds both the parties, while estoppel binds the party who made the
previous statement or showed the previous conduct.

4. Res judicata prohibits the court from entering into an enquiry as well as to a matter already
adjudicated upon;
estoppel prohibits a party, after the inquiry has already been entered upon, from proving anything
which would contradict his own previous declaration or acts to the prejudice of another party who,
relying upon these declarations or acts, has altered his position.
5. Res judicata prohibits an inquiry in limine, and bars the trial of a suit while estoppel is only a piece
of evidence.

6. Res judicata ousts the jurisdiction of the court, while estoppel shuts the mouth of a party.

7. The doctrine of Res judicata results from a decision of the court, while estoppel results from the
acts of the parties themselves.

Bar to Further Suit (Sec. 12)

Where a plaintiff is precluded by rules from instituting a further suit in respect of any particular
cause of action, he shall not be entitled to institute a suit in respect of such cause of action in any
court to which this Code applies.

A files a suit against B for recovery of possession of house X. During the pendency of the suit, B dies.
A fails to bring the legal representatives of B on record. Hence the suit abates and is dismissed. A
now files a fresh suit against the legal representatives of B for recovery of the house X. The suit is not
maintainable because the cause of action is the same.

Over and above the doctrine of res judicata, the following provisions and Rules bar fresh suit in
respect of the same cause of action: [ They bar on the ground of abuse of Process of Law ]
(1) Sec. 21-A: Decree on objection of territorial jurisdiction of the court.
(2) Sec. 144 (2): Where restitution can be claimed under Sec. 144 (1).
(3) Order 2, Rule 2: Omission to sue in respect of part of claim.
(4) Order 9, Rule 9: Decree against plaintiff by default.
(5) Order 11. Rule 21 (2): Dismissal of suit for non-compliance with order of discovery.
(6) Order 22, Rule 9: Abatement of suit.
(7) Order 23, Rule 1: Withdrawal of suit without leave of court.
(8) Order 23, Rule 3-4: Compromise decree on the ground that compromise was not lawful.

Q. "It would be fair and just that the parties to raise all available pleas in the suits or proceedings
when the action is initiated." In the light of the above statement explain the principle of constructive
res judicata.

Foreign Judgement-Sec. 2(6), Sec. 13, Sec. 14

A foreign judgment means an adjudication by a foreign court upon a matter before it.

The judgment of a foreign court is enforced on the principle that where a court of competent
jurisdiction has adjudicated upon a claim, a legal obligation arises to satisfy that claim.

The rules of private international law of each State must in the very nature of things differ, but by
the comity of nations certain rules are recognized as common to civilized jurisdiction. Such
recognition is accorded not as an act of courtesy but on considerations of justice, equity and good
conscience (Satya v Teja Singh AIR 1975 SC 105)

Foreign Judgment when Not Conclusive (Sec. 13)

Sec. 13 provides that a foreign judgment shall be conclusive as to any matter thereby directly
adjudicated upon between the same parties or between parties under whom they or any of them
claim litigating under the same title 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 it appears on the face of the proceedings to be founded on an incorrect view of
international law or a refusal to recognise the law of India in cases in which such law is
applicable;

(d) where the proceedings in which the judgment was obtained are opposed to natural justice;

(e) where it has been obtained by fraud; (f) where it sustains a claim founded on a breach of any law
in force
in India.

Thus, Sec. 13 provides that a foreign judgment may operate as res judicata except in the six cases
[clauses (a) to (f)], and of course, in order to so operate, the other conditions of Sec. 11 must be
satisfied.

(a) Foreign Judgment Not by Competent Court

Such judgment must be by a court competent both by the law of the State which has constituted it
and in an international sense. A 'competent court' implies a court having jurisdiction over the
parties and the subject-matter.

(b) Foreign Judgment Not on Merits

i.e. which involves the application of the mind of the court to the truth or falsity of the plaintiff's
case and a judgment passed after a judicial consideration of the matter by taking evidence may be
a decision on the merits even though passed ex parte. Thus, a judgment given in a case in which the
defendant puts in no appearance, no evidence is called or considered and in which judgment is given
by default by way of summary procedure is not a judgment "on the merits" (Lalji v Hansraj AIR 1971
SC 974).

(c) Foreign Judgment against International or Indian law

A judgment based upon an incorrect view of international law or a refusal to recognise law of India
where such law is applicable is not conclusive. Thus, where in a suit instituted in England on the
basis of a contract made in India, the English Court erroneously applied English law, the judgment of
the court is not conclusive as it is a general principle of Private International Law that the rights and
liabilities of the parties to a contract are governed by the place where the contract is made (lex loci
contractus)

(d) Foreign Judgment Opposed to Natural Justice

The judgment must observe the minimum requirements of natural justice, ie., it must give
reasonable notice to the parties to the dispute and afford each party adequate opportunity of
presenting his case. Thus where a decree is pronounced in the absence of a party, a party is not
properly represented in the proceedings, or where the judge is biased, the foreign judgment is not
conclusive.

(e) Foreign Judgment obtained by Fraud

It is well established principle of Pubic International Law that if a foreign judgment is obtained by
fraud, it will not operate as res judicata. Fraud, in any case bearing on jurisdictional facts, vitiates all
judicial acts (Satya v Teja Singh AIR 1975 SC 105).

Though it is not permissible to show that the court was "mistaken" (an erroneous decision), it might
be shown that it was "misled." There is an essential distinction between mistake and trickery. A
'mistake' of law in a foreign judgment is no ground for vacating it, but it can be set aside if the court
was imposed upon or tricked into giving the judgment.

In Satya v Teja Singh (AIR 1975 SC 105), a husband obtained a decree of divorce against his wife from
American court averring that he was domiciled in America. Observing that the husband was not
bona fide resident or domicile of America, and he had played fraud on foreign court falsely
representing to it incorrect jurisdictional fact, the Supreme Court held that the decree was without
jurisdiction and nullity.

(f) Foreign Judgment Founded on Breach of Indian Law

Where a foreign judgment is founded on a breach of any law in force in India, it would not be
enforced in India. Thus, a foreign judgment for a claim which is barred under the Law of Limitation in
India is not conclusive. Similarly, a decree for divorce passed by a foreign court cannot be confirmed
by an Indian court if under the Indian law the marriage is indissoluble (Narasimha Rao v Venkata
Lakshmi, supra).

Presumption as to Foreign Judgment (Sec. 14)

Enforcement of Foreign Judgments

A foreign judgment which is conclusive can be enforced in India

(i) by instituting a suit on such foreign judgment, for claiming the relief granted by the
foreign judgment. Such a suit must be filed within a period of 3 years from the date of
the judgment;
(ii) by proceedings in execution in certain specified cases only (Secs. 44 and 44-A). The
decree may be executed in India as if it had been passed by an Indian Court.

Pecuniary Jurisdiction- s.6 , Sec. 15

Pecuniary jurisdiction – s.6 CPC provides that a court will have jurisdiction only over those suits the
amount or value of the subject matter of which does not exceed the pecuniary limits of its
jurisdiction. Some courts may have unlimited pecuniary jurisdiction for instance High Courts and
District Courts, whereas the other courts may have jurisdiction to try suits upto a particular amount.
Rule as to Pecuniary Jurisdiction (Sec. 15)

According to Sec. 15 'every suit shall be instituted in the court of lowest grade competent to try it'.

The object behind is that the courts of higher grades shall not be overburdened with suits, and to
afford convenience to the parties and witnesses who may be examined by them in such suits. But
the rule is one of procedure only and not of jurisdiction and, therefore, exercise of jurisdiction by a
court of higher grade that is competent to try the suit is a mere irregularity and the decree passed
by the court is not a nullity. But exercise of jurisdiction by a court of lower grade that is incompetent
to try it (SUBJECT MATTER), is a nullity as being without jurisdiction.

The court must be competent to try the suit 'at the time of filing of the suit'. Subsequent change in
value does not affect the jurisdiction.

Prima facie, it is the plaintiff's valuation in the plaint that determines the jurisdiction of the court
and not the amount for which ultimately the decree may be passed by the court. Thus, if the
pecuniary jurisdiction of the court is Rs. 10,000 and the plaintiff files a suit for accounts and finally
the court finds on taking the account that Rs. 15,000 are due, the court is not deprived of its
jurisdiction to pass a decree for that amount.

However, if the plaintiff deliberately undervalues or overvalues the claim for the purpose of
choosing the forum, the plaint cannot be said to -be correctly valued and it is the duty of the court to
return it to be filed in the proper court. The court may require the plaintiff to prove that the
valuation is proper. But if the court is unable to come to a finding regarding the correct valuation of
the relief, the court has to accept the valuation of the plaintiff.

The valuation of the suit for the purposes of jurisdiction has to be ascertained from averments
made in the plaint. In case of improper valuation, the court may order the return of plaint under O.
7, R. 11(b) CPC.

TERRITORIAL JURISDICTION

Sec. 16

The proviso to Sec. 16, however, provides that where a suit to obtain relief in respect of immovable
property can be entirely obtained through the personal obedience of the defendant, the suit may be
instituted either within the local limits of the court where the property is situate or in the court
within whose jurisdiction the defendant actually and voluntarily resides, or carries on business, or
personally works for gain.

 The proviso to Sec. 16 is based on the maxim 'Equity acts in personam'. Where the land is
situate abroad (i.e. outside the jurisdiction of the court) the decree could not be executed
against the land, but the person or personal property of the defendant being within the
jurisdiction of the court the decree could be executed in person.

 The maxim, “Equity acts in personam” means that the court of equity has jurisdiction to
entertain suits respecting immovable property, though the propperty may be situated
abroad, if the relief sought can be obtained through the personal obedience of the
defendant.
  The proviso provides an additional forum in such suits. Thus suits of such nature may be
instituted either where the property is situate of where the locus of defendant is fixed.

Clause (f) relates to the recovery of movable property which is actually under attachment or
distraint { seizure} of the court. This clause constitutes an exception to the general rule that
movable follows the person and the reason for this exception is that the property is under the
control of the court.

Q. A, B and C are three brothers living in Delhi, Kolkata and Kanpur respectively. They have a joint
plot of land in Shimla of which they are desirous of seeking individual shares by partition. Where can
the suit of partition be filed?

Sec. 17

The object of Sec. 17 is to avoid multiplicity of suits.

Sec. 18 uncertain [ bare act only]

Sec. 19 Place of suing for wrongs done to person or movable property

According to Sec. 19, such suits may be brought at the option of the plaintiff either where the tort is
committed, or where the defendant resides, or carries on business, or personally works for gain.

Illustrations

(a) A, residing in Delhi, beats B in Calcutta. B may sue A either in Calcutta or in Delhi.

(b) A, residing in Delhi, publishes in Calcutta statements defamatory of B. B may sue either in
Calcutta or in Delhi.

(c) A, residing in Delhi, publishes in Calcutta statements defamatory to B. The newspaper is

circulated in Bombay, Madras and Raipur. B may sue A either in Calcutta, or in Delhi, or in Bombay,
or in Madras, or in Raipur.

It may be noted that in a suit for recovery of moveable property under actual distraint or
attachment, the place of suing is court within whose jurisdiction the property is situate [Sec. 16(f)].
Movable property under attachment constitutes an exception to the general rule that moveables
follow the person.

Sec. 20 Residuary Section

It provides for all other cases not covered by any of the foregoing rules. All such suits may be filed at
the plaintiff's option in any of the following courts, viz.,

(1) where the cause of action, wholly or partly, arises; or

(2) where the defendant resides, or carries on business or personally works for gain; or
(3) where there are two or more defendants, any of them resides or carries on business or
personally works for gain, provided that in such case (a) either the leave of the court is
obtained, or (b) the defendants who do not reside or carry on business or personally work
for gain at that place acquiesce (agree to) in such institution.
Explanation-A corporation shall be deemed to carry on business at its sole or principal office in India
or, in respect of any cause of action arising at any place where it has also a subordinate office, at
such place.

Illustrations

(a) A is tradesman in Calcutta. B carries on business in Delhi. B, by his agent in Calcutta, buys goods
of A and requests A to deliver them to the East India Railway Company. A delivers the goods
accordingly in Calcutta. A may sue B for the price of goods either in Calcutta where the cause of
action arose, or in Delhi, where B carries on business.6

(b) A resides at Simla, B at Calcutta and C at Delhi. A, B and C being together at Banaras, B and C
make a joint promissory note payable on demand, and deliver it to A. A may sue B and C at Banaras,
where the cause of action arose. He may also sue them at Calcutta, where B resides, or at Delhi,
where C resides; but in each of these cases, if the non-resident defendant objects, the suit cannot
proceed without the leave of the court.

Sec. 20 thus ensures that justice might be brought as near as possible to every man's hearthstone
and that the defendant should not be put to the trouble and expense of travelling long distance in
order to defend himself in cases in which he may be involved.

A, residing in Delhi, requests his friend B, residing in Lucknow, for a loan of Rs. 20 lakhs. B asks A to
come to Lucknow and collect the cheque for the said amount. Accordingly, A collects the cheque at
Lucknow. A, however, failed to repay the loan. B wants to institute a suit for the recovery of loan
against A. Here, B can institute a suit against A at Lucknow where the cause of action arose, or at
Delhi where A (defendant) resides.

Scope of Explanation to Sec. 20

The true effect of Explanation attached with Sec. 20 were explained in M/s. Patel Roadways Ltd.,
Bombay v M/s. Prasad Trading Co. (AIR 1992 SC 1514): The words "at such place" occurring at the
end of the Explanation to Sec. 20 and the word "or" which is disjunctive clearly suggests that if the
case falls within the latter part of the Explanation i.e. where the defendant does not have a sole
office but has a principal office at one place and has also a subordinate office at another place, it is
not the court within whose jurisdiction the principal office of the defendant is situated but the
court within whose jurisdiction it has a subordinate office which alone shall have jurisdiction "in
respect of any cause of action arising at any place where it has also a subordinate office."

The Explanation is in the nature of a clarification on the scope of words "as to where the Corporation
can be said to carry on business."

If the intention was that the location of the sole or principal office as well as the location of the
subordinate office (within the limits of which a cause of action arises) are to be deemed to be places
where the Corporation is deemed to be carrying on business, the disjunction "or" will not be there.

Instead, the second part of the Explanation would have read "and, in respect of any cause of action
arising at any place where it has a subordinate office, also at such place." Thus, the Explanation
provides an alternative locus for the Corporation's place of business, not an additional one.
In a case, the respondent has its registered head office in Delhi. An agreement was executed
between it and the petitioner for execution of certain work at Rihand (U.P.). Certain disputes having
arisen between the parties, the same was referred to Arbitrator. An award was filed in the Court at
Delhi. One of the objections raised by the respondent was that the court had no jurisdiction as
worksite was at Rihand, work was allocated and executed at Rihand, agreement was executed at
Rihand and breach, if any, was also committed at Rihand. It was contended that as no part of the
cause of action has arisen within territorial jurisdiction of the Delhi court, it will have no territorial
jurisdiction to entertain the award made. The contention of the petitioner is that since
principal/corporate office of the respondent is situated at Delhi, this court will have territorial
jurisdiction. Negating this contention, the court held that suit for damages against corporation
having subordinate office can be filed in place where cause of action arose and court at such place
(i.e. Rihand) would have jurisdiction. Parties cannot confer jurisdiction on court where corporation
has its principal office.

Cause of Action

"Cause of action" means the cause or the set of circumstances which leads up to a suit. It may be
defined as being the fact or facts which establish or give rise to a right of action or the existence of
which entitles a party to seek redress in a court of law. The term connotes all categories of facts
which it is necessary (and not every piece of evidence) for the plaintiff to prove, if traversed, in order
to entitle him to a decree in the suit.

Q. A transport company has its head office at Delhi and branch office at Chennai, Jaipur and
Mumbai. A dispute crop up between Chetan and the company in respect of a transaction made
through Chennai office. Chetan files a suit in respect of this dispute against the company in a court at
Jaipur. How will the court decide?

[Hint. In view of the Explanation, the Jaipur court has no jurisdiction and the suit is required to be
filed at Chennai where the cause of action arises.]

OBJECTIONS AS TO JURISDICTION [SEC. 21]

It is well settled that the objection as to the territorial or pecuniary jurisdiction does not stand on the
same footing as an objection to the competence of a court to try a case (e.g. in relation to the
subject matter). While the former is regarded by the Code as merely technical and thus can be
waived by the party, the latter is a case of inherent lack of jurisdiction and cannot be waived and
thus a decree of a court without jurisdiction is a nullity.

Under Sec. 21, no objection as to the place of suing will be allowed by an appellate or revisional
court unless the following three conditions are satisfied:-

(1) The objection was taken in the court of first instance;

(2) It was taken at the earliest possible opportunity and in cases issues are settled, at or before
settlement of issues; and
(3) There has been a consequent failure of justice.

All these three conditions must co-exist .Thus, no objection by the defendant as to overvaluation or
undervaluation (by the plaintiff) will be allowed by the court unless these three conditions co-exist.

However, an objection as to subject matter of jurisdiction does not stand on the same footing. A
court cannot adjudicate upon a subject matter, which does not fall within its province as limited or
defined by law. If the court does not possess that jurisdiction, a judgment given, order made or
decree passed is absolutely null and void, which may be set aside in appeal, review or revision .

The object underlying Sec. 21 is to protect honest litigants and to avoid harassment to plaintiffs
who have bona fide and in good faith initiated proceedings in a court which is later on found to be
wanting in jurisdiction. Dishonest litigants cannot take advantage of this provision [ONGC v Utpal
Kumar Basu (1994) 4 SCC 711].

The principles of Sec. 21 apply to execution proceedings also.

Illustration - A files a suit against B to recover possession of a house. He values his claim in the plaint
at Rs. 8000. The suit is filed in court C, which has jurisdiction to try suits of a value up to Rs. 10,000.
The market value of the house is Rs. 12,000 but B does not object to the jurisdiction of the court.
The decree is passed in favour of A. In appellate court, B cannot take the objection about the
pecuniary jurisdiction of court C.

The policy underlying Secs. 21 and 99 of the C.P.C. and Sec. 11 of the Suits Valuation Act is the
same, namely, that when a case has been tried by a court on the merits and judgment rendered, it
should not be liable to be reversed purely on technical grounds, unless it has resulted in failure of
justice (Kiran Singh v Chaman Paswan AIR 1954 SC 340). Sec. 21 does not preclude objections as to
the place of suing being taken in the appellate court, if the trial court has not decided the suit on
merits (Pathumma v Kutty AIR 1981 SC 1683).

In Hira Lal Patni v Sri Kali Nath (AIR 1962 SC 199), the suit which ought to have been filed in Agra
Court was filed in Bombay High Court with the leave of the court. It was held that the objection to
such jurisdiction falls within Sec. 21. In this case, the respondent instituted the suit for recovery of
his commission in respect of transaction of shares to appellant on the original side of the High Court
at Bombay. The suit was referred to arbitration and arbitrator gave an award in favour of the
respondent. The High Court dismissed the petition. The appellant raised plea in appeal that entire
cause of action arose at Agra, so Bombay High Court had no jurisdiction'. On certificate the appeal
came to this court on question of competency of territorial jurisdiction of Bombay High Court and
the award.

Dismissing the appeal, the Supreme Court observed that consent or waiver can cure defect of
jurisdiction but cannot cure inherent lack of jurisdiction. Consent of parties could not operate
to confer jurisdiction on a court which was incompetent to try the suit. The objection as to local
jurisdiction of the court does not stand on the same footing as objection to competence of a court to
try a case and goes to the very root of the inherent lack of jurisdiction. In the present case, having
consented to resolve the controversy between parties through arbitration, the defendant deprived
himself of the right to question the authority of the court. The defendant is estopped from
challenging the jurisdiction of the Bombay High Court to entertain the suit and to make the
reference to the arbitration.

If the defendant allows the trial court to proceed to decide the matter without raising the objection
as to the place of suing and takes the chance of a verdict in his favour, he clearly waives the
objection, and will not be subsequently permitted to raise it. Thus, the defect as to the place of
suing under Secs. 15-20 may be waived.

Sec. 21-A
"No suit shall lie challenging the validity of a decree passed in a former suit between the same
parties or between the parties under whom they or any of them claim, litigating under the same
title, on any ground based on an objection as to the place of suing."

Thus, no suit (new) can be filed to set aside a decree passed by a court on an objection as to the
place of suing.

For example, a decree has been passed against B by a court in a case between A and B. B filed a suit
challenging the verdict on the ground that the former suit is not the appropriate place for disposing
of the case. The suit by B is not maintainable.

Q. 1. (a) A, a resident of Delhi owns a piece of land at Chandigarh. B has illegally and unauthorisedly
occupied a part of A's land. B is also residing in Delhi and carries on business at Delhi. A wants to file
a suit against B for the recovery of the possession of his land. Advise him if he can file the said suit in
Delhi.

(b) Rakesh's late grandfather has left behind a will in his favour with respect to two immovable
properties situated in Delhi and Ghaziabad. State whether Rakesh can file probate of will in Delhi.
[CLC-95(Jan. & Dec.)]

(c) X, Y and Z own a house at Delhi; a shop at Bombay and a firm at Ajmer in Rajasthan. They have
made a partition of this property by an agreement at Jaipur. X, being aggrieved by this partition, files
a suit for challenging this partition in a court at Delhi. Y and Z raised an objection that the suit should
have been filed in court in Jaipur. Decide.

A. 1. (a) In the case of immovable property, the place of suing is to be determined by the place
where the subject-matter (i.e. property) is situate (Sec. 16). In the present case, it is Chandigarh.

However, in the case where the entire relief can be obtained by the personal obedience of the
defendant, the same can also be instituted at the place of residence of the defendant or where he
carries on his business (Proviso to Sec. 16). In the present case, it is Delhi.

Thus, the suit may be filed at Chandigarh or at Delhi.

(b) According to Sec. 17, a suit to obtain relief respecting immovable property which is situate within
the jurisdiction of different courts may be instituted in any court within the local limits of whose
jurisdiction any portion of the property is situate, provided that in respect of the value of the
subject-matter of the suit, the entire claim is cognizable by such court.

In the present case, thus, the suit could have been filed in either Delhi or Ghaziabad.

(c) As provided in Sec. 16, suits for partition of immovable property or for the determination of any
other right to or interest in immovable property shall be instituted in the court within the local limits
of whose jurisdiction the property is situate. In terms of the aforesaid provisions, the suit can be
maintained at Delhi for the house only.

Q. 2. Where are the following suits to be filed:-

(a) X is living in Pune and Y, his brother in Bombay. X wants to file a suit for partition of their joint
property situated in Delhi and Bangalore.
(b) A enters into a contract for purchase of certain goods with B, the contract is entered in Delhi. The
goods were to be delivered to A by B at Bombay. Price of the goods was to be paid at Calcutta where
B lives and carries on his business.

A. 2. (a) Sec. 17 deals with suits for immovable property situate within jurisdiction of different courts
[See A. 4 (b)]. In the present case, the suit may be instituted either in Delhi or Bangalore.

(b) The suit can be filed in Delhi (place where the contract was made) or Bombay (place where the
contract was to be performed i.e. goods were deliverable) or Calcutta (place where the price was
payable/place where the defendant resides or carries on business).

Q. 3. (a) S, a seller from Delhi enters into a contract for sale of goods with the buyer B in Madras for
supply of goods at Bombay. The invoice which S sends to B has a line written on top of it 'Subject to
Delhi jurisdiction. B files a suit against S for damages at Bombay. Discuss the maintainability of the
suit.

(b) A contract was made for delivery of goods at Calcutta. The goods were to be delivered at Merit.
The contract contained the clause that if any dispute arises then Delhi court will have jurisdiction.
Suit for specific performance of contract was filed in Delhi. The same was challenged by defendant
on the ground that Delhi court has no jurisdiction. Decide.

(c) A who resides at Delhi entered into a contract with B at Mumbai for supply of certain goods at
Kolkata where B resides and carries on business. At the time of entering into contract, it was agreed
between A and B that in case any dispute regarding payment or delivery of goods arises, the suit will
be filed in Bangalore court. B failed to make payment of goods. A files a suit at Bangalore for
recovery of money. B alleges that Bangalore court had no jurisdiction to decide the suit. Is the plea
of B maintainable?

A. 3. (a) Exclusion of Jurisdiction by Agreement (Forum Shopping')

Consent can neither confer nor take away (oust) the jurisdiction of a competent court.

Where the court has jurisdiction, neither consent, nor waiver, nor estoppel, nor acquiescence can
oust it.

An agreement to oust absolutely the jurisdiction of a competent court is void, being against public
policy (Ex dolo malo non oritur actio),

But if two or more courts have jurisdiction to try the suit, it is open to the parties to select a
particular forum and exclude the other forums. And therefore, the parties may agree among
themselves that the suit should be brought in one of those courts and not in the other. Such an
agreement would be legal, valid and enforceable .

Generally three jurisdictions are available: the place of the making of a contract, that of its
performance and the defendant's place of business or residence. If out of these three jurisdictions,
at least one is left open, the contract would be legal, provided that the jurisdiction which is left open
is a convenient one i.e. available at reasonable expenses and not inaccessible .

Provisions relating to exclusion of the jurisdiction of courts are very strictly construed. The
exclusion is not to be readily inferred and must be explicitly expressed or clearly implied. It is
necessary that serious terms of this nature must be specifically brought to the notice of the parties
whose rights are sought to be curtailed. Something more must be done than merely printing the
terms on consignment documents. Further, the court may relieve a party from exemption clause
where the court finds that jurisdiction permitted by the agreement is so inconvenient that it would
be oppressive, inequitable and unfair for the party.

The Supreme Court has not only disapproved but strongly deprecated the practice and increasing
tendency on the part of the litigants of choosing a forum ('Forum Shopping") which may oblige
them by entertaining suits or petitions though they have no jurisdiction in the matter [Union of
India v Oswal Woollen Mills Ltd. AIR 1984 SC 1264; Morgan Stanley Mutual Fund v Kartick Das (1994)
4 SCC 225].

Decision of the Case in question

In the present case, the suit can be filed at Bombay, Madras or Delhi. However, on the top of the
invoice, it is written that "subject to jurisdiction of Delhi Court" which restricts the plaintiff B to file a
suit at Bombay. But the stipulation is not binding on him, in view of the absence of the word "only."
Thus, B can file the suit at Bombay.

(b) The contract in question fell under the jurisdiction of Calcutta and Meerut Courts. But the
exclusion clause in clear terms provides for the jurisdiction of Delhi Court. Thus, the suit will be
decided by the Delhi Court.

(c) In terms of the provisions contained in Sec. 20, the suit is not maintainable in Bangalore. It should
be maintained at Delhi, Mumbai or Kolkata. However, if there is any agreement or contract between
the parties, it should be followed. In the contract there is a clause for settlement of disputes in
Bangalore court. So, B's allegation is not maintainable.

Transfer of suits
As a general rule, a plaintiff is dominus litis and as such he has a right to choose his own forum
where there is more than one court in which the suit can be filed. But the said right is controlled by
the power vested in the superior courts to transfer a case pending in one inferior court to another or
to withdraw the case to itself for hearing and disposal.

Sections 22 to 25 enact the law as regards the transfer and withdrawal of suits, appeals, and other
proceedings from one court to another.

Where such courts are subordinate to different High Courts, the application shall be made to the
High Court within the local limits of whose jurisdiction the Court in which the suit is brought is
situate. This rule has been modified by the Supreme Court in Durgesh Sharma vs. Jayshree, 2008
(9) SCC 648, by holding that S, 23(3) has to be harmoniously construed with S. 25 of CPC andS. 25 of
CPC and S. 23(3) is subordinate to S. 25. Thus where several courts are under different high courts,
the application would lie before the Supreme Court.

Sufficient Grounds for Transfer of Suits

(1) To avoid multiplicity of proceedings or conflicting decisions (Indian Overseas Bank v Chemical
Construction Co.).
(ii) Reasonable apprehension in the mind of the litigant that he might not get justice in the court in
which the suit is pending, for example, because of biased judge ('justice not only to be done, but also
seems to be done') (Gujarat Electricity Board v Atmaram Sungomal Poshani AIR 1989 SC 1433).

(iii) Where common question of fact and law arise between the parties in two suits (Indian Overseas
Bank v Chemical Construction Co.).

(iv) Where balance of convenience requires e.g. where the property is situate or parties or their
witnesses reside (Arvee Industries v Ratan Lal AIR 1977 SC 2429).

(v) Where transfer avoids delay and unnecessary expenses (Shiv Kumari v Ramajor Shitla Prasad AIR
1997 SC 1036).

(vi) Where transfer prevents abuse of the process of court (Maneka Sanjay Gandhi v Rani
Jethmalani).

(vii) Where important questions of law are involved; or considerable section of the public is
interested in the litigation (Arvee Industries v Ratan Lal).

Parties to Suit/ Frame of Suit & Pleadings

Essentials of a Suit

(1) The opposing parties - joinder, misjoinder, non joinder, addition, deletion, transposition and
substitution of parties, representative suit.

(2) The cause of action -

(3) The subject-matter - It is the right or property claimed in the suit.

(4) The relief claimed - The relief claimed should be stated specifically in the plaint. It may be
stated in the alternative also. The relief claimed must be one which the court is able to
grant. When a person is entitled to more than one relief in respect of the same cause of
action, he must sue for all the reliefs.

O. 1 deals with parties to a suit. It contains provisions for addition, deletion, transposition and
substitution of parties; joinder, misjoinder, non joinder of parties and objections thereto. It also
provide for representative suit.

Joinder of Plaintiffs (Rule 1)- object of R. 1 is to avoid multiplicity of proceedings and

unnecessary expenses and further to have all affected or parties concerned with the dispute on the
record.

An act may be done by a single individual and it may affect one person only. Similarly an act may be
done by multiple persons and it may affect one or more persons. If an act is done by a single
individual and it affects only one individual, there is no question of joinder of parties. The question of
joinder of parties arises only where an act or transaction proceeds from two or more persons or
when it affects two or more persons.
The question of joinder of parties may arise either as regards the plaintiffs or the defendants
respectively. It depends upon the nature of act or transaction forming cause of action. For instance,
'A' and 'B' together causes injury to 'C'. If 'C' institutes a suit, he will join 'A' and 'B' as defendant in a
suit.

R. 1 of O. 1 deals with joinder of plaintiffs. It provides that several plaintiffs may be joined in a suit on
satisfaction of the following conditions:-

i.The right to relief in each plaintiff must arise out of the same act or transaction, or series of acts or
transactions; and

ii. If such persons brought separate suits, common questions of law or fact would arise.

Both the conditions are cumulative and must be satisfied together before the rule operates.

Illustrations:

i. 'A' assaults 'B'. 'B' may sue 'A' for the wrongful act. A question of joinder of parties does not arise
in this situation.

ii. 'A' enters into an agreement jointly with 'B' and 'C' to sell 100 bags of wheat. 'A' thereafter makes
a default and does not deliver the promised wheat. Both 'B' and 'C' have a right to recover damages
from 'A'. The right has arisen out of the same transaction namely, formation of single contract and
its breach and further if they bring separate suits, common questions of law and fact would arise.
Thus 'B' and 'C may file a suit jointly as plaintiffs against A for damages.

iii. An altercation takes place between A on one hand and B and his wife on the other. A assaults B
and his wife simultaneously. B and his wife may join as plaintiffs in one suit against A and claim
damages.

The test for the joinder of parties is not the identity of cause of action. It is the identity of the
transaction.

Co-Relation between Joinder of Parties and Joinder of Causes of Action:

The Apex Court in the case of Iswar Bhai C. Patel & Bachu Bhai vs. Harihar Behera and another, 1999,
signifying the co-relation between joinder of parties and joinder of cause of actions held that these
two provisions, namely, O. 1, R. 3 and O. 2, R. 3 if read together indicate that the question of joinder
of parties also involves the joinder of causes of action. The simple principle is that a person is made a
party in a suit because there is a cause of action against him and when causes of action are joined,
the parties are also joined.

Distinction between necessary and proper party –

A necessary party is one whose presence is necessary to the constitution of the suit and against
whom the relief is sought. In the absence of such a party, no decree or order can be passed.

A proper party, on the other hand, is one in whose absence a decree or order can be made but
whose presence is necessary for complete, final and effectual adjudication in the suit.
The Apex Court in the case of Balvant N. Viswamitra vs. Yadav Sadashiv Mule (D), 2004 AIR SC 4377,
highlighted the distinction between necessary and proper party holding that a necessary party is
one without whom no order can be made ;

a proper party is one in whose absence an effective order can be made but whose presence is
necessary for a complete and final decision on the question involved in the proceedings.

In M/s. Importers and Manufacturers Ltd. vs. Pheroze Framroze Taraporewala and others, AIR 1953
SC 73, the Apex Court held that in a suit for possession by a landlord against a tenant, sub-tenant is
merely a proper party and not a necessary party.

It has been ruled by the Apex Court in the case of Anil Kumar Singh vs. Shivnath Mishra and Gadasa
Guru, 1995 SCC (3) 147, that Sub-rule (2) of R. 10 of O. 1 says that "necessary parties are persons
who ought to have been joined as a party to the suit, a necessity to the constitution of the proper
suit without whom no relief or order can be passed. In order that a person may be considered a
necessary party, defendant to the suit, the conditions precedent must be:

(1) that there must be a right to some relief against him in respect of the dispute involved in the
suit; and

(2) that his presence should be necessary to enable the court to effectually and completely to
adjudicate upon and settle all the questions involved in the suit.
A person may be added as a party defendant to the suit though no relief may be claimed against
him/her provided his/her presence is necessary for a complete and final decision on the question
involved in the suit. Such a person is only a proper party as distinguished from a necessary party.

Power of court to order separate trials (Rule 2) - It empowers the court to order
separate trials in the following two situations:

i.Where it appears to the court that any joinder of plaintiffs may embarrass or

ii. Delay the trial of the suit

The court may put the plaintiffs to election or order separate trials or make such other order as may
be expedient. It refers to a suit brought by several plaintiffs in respect of the same transaction
giving rise to distinct causes of action and it is found that it is not convenient to dispose all of them
at one trial. In such a situation the court may put the plaintiffs to election by asking them beside as
to which of them will proceed with the suit or may order separate trials.

Rule-2 is thus a proviso to R. I which confers extensive power on the court for joinder of plaintiffs.
The rule intends to protect the defendant who may be prejudiced by joinder of distinct causes of
action in a single suit which cannot be conveniently tried together.

Joinder of defendants: Rule-3

Illustrations:

i. On account of collision between a bus and a car, 'A', a passerby is injured. The bus was being
driven by 'B' and car by 'C' respectively. 'A' may bring a suit joining 'B' and 'C' as defendants in one
suit claiming damages for the injuries caused to him.
ii. 'A', 'B', 'C' and 'D' each enters into a separate contract with 'E' to supply 100 bags of wheat. Each
one of them makes default and commits breach of the contract by failing to supply the promised
wheat. 'E' cannot join 'A', 'B', 'C', 'D' as defendants in one suit for damages because each contract
was a distinct contract and a different transaction.

The provision is enabling, permissive or directory and not obligatory or mandatory. The plaintiff
being dominus litis may choose to implead only those persons as defendants against whom he
intends to proceed at his own risk.

Procedure in Case of Misjoinder of Parties:

Mis joinder of plaintiffs - If two or more persons are joined as plaintiffs in one suit in contravention
of the provisions of the rule stated in O. 1, R. 1, the case is one of the misjoinder of plaintiffs.

Misjoinder of defendant- If two or more persons are joined as defendants in one suit in
contravention of the provisions of the rule stated in O. 1, R. 3, the case is one of the misjoinder of
defendants.

Misjoinder of parties -If in a suit, the plaintiff and defendants are joined in contravention of O1, R.1
and 01., R.3, the case is one of the misjoinder of parties.